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Australia Australia's Prime Minister Tony Abbott speaks during a session at the annual meeting of the World Economic Forum (WEF) in Davos Jan. 23, 2014. (REUTERS/Ruben Sprich)  

Australia’s inflation rate hits new high under carbon tax

Australia’s inflation rate was the highest it had been in two years after consumer prices jumped in the December quarter. Aussie conservatives have blamed the country’s carbon tax for the jump in prices.

“The inflation rate continues to be impacted by Labor’s carbon tax,” said Australia’s Treasurer Joe Hockey said on Wednesday. “Labor senators should stop standing in the way of cost-of-living relief for Australian families and vote to repeal the carbon tax when parliament resumes.”

The Aussie left-wing Labor Party imposed a tax on carbon dioxide emissions in the summer of 2012. The policy contributed to job losses and rising prices throughout the country, according to reports, and helped the conservative Liberal-National coalition win a landslide victory last year by opposing the tax.

The country’s consumer price index for the December quarter rose by 0.8 percent, nearly double what economists predicted. This pushed the annual inflation rate from 2.2 percent to 2.7 percent, pushing the upper limits of the Australian Reserve Bank’s inflation target. This is the highest inflation rate in two years.

Economists say that bad weather driving up produce prices and a falling Aussie dollar are to blame for the inflation, but conservatives have put most of the blame on the carbon tax — which raises energy bills.

When Prime Minister Tony Abbott came into office last year, he made it a top priority to repeal the country’s carbon tax. It has been labeled as the world’s most onerous carbon tax and has been blamed by conservatives for the country’s economic woes.

Abbott’s coalition argues that repealing the carbon tax would boost economic growth and save families $550 (in Aussie dollars) on average per year.

“The carbon tax is bad for the economy and it doesn’t do any good for the environment,” Abbott told The Washington Post. “Despite a carbon tax of $37 a ton by 2020, Australia’s domestic emissions were going up, not down. The carbon tax was basically socialism masquerading as environmentalism, and that’s why it’s going to get abolished.”

The left-wing Labor and Green parties, however, refuse to repeal the tax and will hold the balance of power in the Aussie Senate until July.

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