The cuts were announced by Prime Minster Kevin Rudd and Treasurer Chris Bowen yesterday to partly offset the $3.8 billion of tax the government would forego by lowering the fixed carbon price from $24.15 to a floating price of $6 to $10 per tonne.

The Coal Sector Jobs Package program, which was argued for by former resources minister Martin Ferguson, was aimed at providing transitional assistance to coal mines that have a high fugitive emissions-intensity.

The federal government announced the Clean Energy Future Plan in 2011. The CSJP was a central element of the Gillard government's comprehensive plan to move Australia to a “clean energy future”

The objective was to ease their transition to the introduction of a carbon price and thereby support jobs and the local communities that rely on the mines.

The program is administered by the Department of Resources, Energy and Tourism.

The CSJP had in initially aimed to provide over $982 million over six years for targeted transitional assistance to the most fugitive emissions-intensive or “gassy” coal mines to ease their transition to the introduction of a carbon price.

Chief executive of the Australian Coal Association Nikki Williams said a top priority for the coal industry was removing the application of the carbon tax to fugitive emissions from coal mines.

This design element adds an unprecedented and substantial cost to Australian exporters that none of Australia’s global competitors bear.

“An environmentally robust and economically pragmatic carbon abatement scheme would see Australia retain control of climate change policy settings,” she said.

“The proposed early shift to a floating carbon price merely puts Australia and its policies in the hands of European politicians, whose first priority will be the welfare of Europe, not Australia.