Tony Abbott will rue carbon stance: Julia Gillard

JULIA Gillard has warned that business, industry and stakeholders will turn on Tony Abbott once the carbon tax is law.

JULIA Gillard has warned that business, industry and stakeholders will turn on Tony Abbott once the carbon tax is law and demand the Opposition Leader abandon his pledge for its repeal.

The Prime Minister told The Weekend Australian that legislating the package would transform the issue. It would become a test of business and financial certainty, with the Coalition threat amounting to "the worst of all possible worlds".

"I would be astounded if stakeholders support (Mr Abbott's) repeal," Ms Gillard said during an interview to mark her one-year anniversary in office.

"Whatever view stakeholders have expressed in the run-up, the loss of certainty and the mechanics of trying to unwind a reform as big as this means they will say to Tony Abbott, 'Don't do this, don't repeal it'.

"Wherever I go, businesses express a view about carbon pricing, some strongly in favour, some not in favour. But the over-arching thing people say to me is that, for them to make decisions about long-lived investments, they need to see certainty.

"They can't make . . . smart investment decisions if there are just unknowable risks. Tony Abbott's threat to repeal this legislation is just one of those risks."

Ms Gillard's comments came ahead of another round of meetings of the multi-party climate change committee over the weekend. The committee is due to finalise by the end of this month details of the carbon tax, which would come into force on July 1 next year. Despite tensions within the committee, Ms Gillard was confident the package would be passed.

She warned that while Mr Abbott could abolish the carbon tax compensation he could not remove all the tax's price impact.

The Prime Minister said Mr Abbott's pretence that he could do this was "unbelievable". She said his position was the equivalent of Labor saying in 2001 that by repealing John Howard's GST "we could have made every retailer in Australia put every price sticker on every good, in every shelf in every shop in the nation, down by 10 per cent the next day". She ridiculed the idea as absurd.

Asked about Kevin Rudd, Ms Gillard criticised, by implication, his governing style. She made clear she didn't just replace Mr Rudd, but aimed to replace his approach to the office. In words likely to provoke Mr Rudd, she said: "We work differently (now) and that's because I choose to work differently. We have proper cabinet decision-making. I think we have a collegiate sense about the government.

"Of course, as Prime Minister I'm first among equals and drive the government's agenda. But I want proper methodical work practices and that's what we do."

On her alliance with the Greens, Ms Gillard said that it applied only for the current minority parliament.

She "wouldn't envisage" the alliance extending into the next parliament.

Ms Gillard was confident this parliament would run its full term, denying Mr Abbott an early election.

The Prime Minister said she had "deliberately decided" on a reform agenda to cover the first two years. In the third year, the public would judge the carbon tax by its "lived experience of these reforms".

Ms Gillard was anxious to kill expectations that legislating the package would immediately transform politics. "Life isn't like that. This will still be a hard debate for many months to come."