Palmer signals trouble ahead for direct action scheme

The Federal Government’s plan to replace Australia’s carbon price with an incentive-based ‘direct action’ policy has run into opposition, with the Palmer United Party (PUP) declaring it would not support it.

The fledgling political party, which is expected to hold the balance of power in the Senate from July 1, has labelled the proposed $3.2 billion scheme “a waste of money.”

The government wants to provide incentives to companies that reduce emissions, but PUP leader Clive Palmer said the money should be spent on pensions instead.

“We’ll be voting against direct action, whatever form it’s in,” Mr Palmer told the ABC.

Federal Environment Minister Greg Hunt said legislation establishing funding for ‘direct action’ would be tied to the budget and that it was unlikely the budget would be blocked or there would be a constitutional issue.

The comment sparked criticism from Mr Palmer, who also opposes the carbon price introduced when Julia Gillard was prime minister.

“That is nothing short of blackmail, raising fears that it has the potential to become a constitutional matter,’’ he said.

“If the government does this we will reconsider our position on repealing the mining and carbon taxes and this would create the potential for triggering a double dissolution election.

The ‘direct action’ policy is made up of an emissions reduction fund, which will bankroll private sector initiatives to reduce carbon emissions.

The government has also pledged to support projects ranging from soil carbon technologies and abatement to putting carbon back in soils.