SHADOW treasurer Joe Hockey has backtracked from his comment that businesses affected by the abolition of the carbon tax would be compensated on a case-by-case basis.
Many Australian businesses involved in clean energy and other sectors are benefiting from the price on carbon dioxide emissions, which will move to an emissions trading scheme in 2015.
Asked on Monday what a coalition government would do to compensate those businesses, Mr Hockey told reporters in Launceston: "We will consider it on a case-by-case basis and we have allocated funds under our Direct Action plan to deal with initiatives that are under way."
Mr Hockey later said businesses would get incentives to cut emissions rather than compensation.
He told AAP in a statement the coalition's Emission Reduction Fund (ERF) would "provide incentives for businesses to cut emissions on a case-by-case basis, decided on the lowest cost per tonne of abatement".
"The coalition will not be paying compensation for repeal of the carbon tax," Mr Hockey said.
In addition, a coalition government would provide $150 million for "geothermal, tidal and solar towns and schools".
In his earlier remarks, Mr Hockey said the cost of the tax to households and business was "far greater than any money that is coming out of Canberra to compensate individual businesses".
He said the best way to improve the bottom line of all businesses was to get rid of the carbon tax.
Climate Change Minister Greg Combet said Mr Hockey had admitted that repeal would trigger compensation claims from companies which have made investment and business decisions based on a price on carbon.
The coalition was struggling to show how its policy would cut emissions by five per cent by 2020, he said.
"Now Mr Hockey has revealed that he would raid Direct Action to compensate businesses, it is clear that a coalition government would do nothing to invest in clean and renewable energy or to cut carbon pollution," Mr Combet said.
The coalition has pledged to abolish the carbon tax as its first priority in government and permanently shut down the $10 billion Clean Energy Finance Corporation fund.
Instead, its ERF would be given $3 billion for clean energy projects.
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