TASMANIA will not be compensated for the hit to its budget caused by the loss of the carbon tax, Federal Environment Minister Greg Hunt says.
Hydro Tasmania announced a record $238 million profit this week, $70 million of which came directly from the carbon tax that Prime Minister Tony Abbott has vowed to scrap as one of his first acts in government.
Greens leader Christine Milne yesterday said the loss would affect Tasmania's ability to deliver basic services, and called on the federal government to compensate Tasmania as part of its $300 million a year direct action climate policy.
``The competitive advantage for our state is in our renewable energy asset,'' Senator Milne said.
``There is nothing in direct action . . . that is going to do anything for Hydro Tasmania, anything for the Tasmanian budget.''
Senator Milne said the majority of Tasmanians were compensated for the introduction of the carbon tax and the state would be worse off without it.
Premier Lara Giddings expressed her concern about the effect the loss of the tax would have on Tasmania's budget, but stopped short of calling for compensation.
But Mr Hunt said the carbon tax had increased the cost of living and Tasmanians would be better for its abolishment.
``We are not proposing compensation to businesses as a result of the carbon tax repeal,'' he said.
Rudd government environment minister Mark Butler also ruled out compensation for Hydro Tasmania when he visited Tasmania during the election campaign.
Tasmanian opposition energy spokesman Mathew Groom said Hydro Tasmania's record dividends had come at the cost of high power prices in Tasmania, and scrapping the carbon tax would lower power prices.
Ms Giddings said power prices were set to drop 5 per cent on January 1, independent of the carbon tax.
She refused to criticise Hydro for its practice of selling wholesale electricity to Tasmanian customers through Aurora Energy at twice the price it sold to some mainland electricity companies..