The debate about an Emissions Trading Scheme continued apace this week.

Discussion swirled around the merits of a pollution tax versus the ETS and today we have seen the Australian Industry Group suggesting that the introduction of the ETS be delayed until 2012.

Either way you slice or dice it be it a carbon tax or an ETS there is going to be considerable cost to the economy.

At Agitate! we have already written of the impost any scheme will have on the economy and jobs.

But of real concern is the precipitate haste that any scheme is being entered into.

Delaying the introduction of a scheme by two years is neither here nor there if the rest of the world fails to act.

All that will occur is that jobs will be lost and the economy damaged.

We have already pointed out that the effects wrought by climate change are irreversible for the next thousand years.

There is no need to rush into any scheme – particularly as Australia acting unilaterally can make a jot of difference.

Time should be taken to act in concert with the rest of the world and to devise the best way ahead.

To this end we believe more consideration should be given to ameliorating the damage that will be done to jobs by the introduction of any scheme.

Under the ETS some industries will be benefit more than others. The system of permits and subsidies is skewed. Some industries are still going to lose out and jobs will go.

Perhaps there is a better way.

The ETS will raise approximately $11bn in revenue which will be used to over compensate consumers and subsidise some industries.

At Agitate! we believe a better approach would be to use the $11bn to abolish payroll taxes which currently account for $14bn of state revenue. This we believe would be a superior outcome to that which is being proposed.

Payroll tax cascades through the economy and distorts activity. Ultimately the consumer pays and the unemployed are left with less chance of a job.

Moreover a scheme to abolish payroll tax would encourage a more rational structure of companies so they didn’t try to avoid paying the tax.

Further it would make the operations of companies that cross state boundaries that much simpler. If we are to have a national IR system and (hopefully) OHS system then surely the intricacies of different state rates and exemptions to payroll tax should be abolished.

This debate is already underway in the USA with the Chairman of FedEx Corp who is also on the Energy Security Research Council recommending a pollution tax as opposed to a cap and trade approach with the proceeds going to reduce payroll tax.

We have the time to be innovative in our approach. We cannot afford to let ideology undermine our economy.