THE Gillard government has suffered a serious blow to its carbon tax sales pitch with the Productivity Commission saying it is not able to compare the burden on Australian industries with competitors overseas.
Labor commissioned a comparative study of the ''effective'' total price imposed by carbon taxes, regulations and subsidies in key economies to help make the case that Australia was not moving ahead of the rest of the world, and limit assistance to trade-exposed industries.
But the Productivity Commission chairman, Gary Banks, said such comparable measurement was ''highly problematic''.
The Coalition leader, Tony Abbott, addressed about 3000 angry demonstrators at a ''no carbon tax rally'' outside Parliament House.
Some were climate change sceptics, bearing banners declaring ''Carbon dioxide is plant food'' and ''carbon dioxide is a harmless trace gas, you are fraudulent criminals''.
Mr Abbott, standing in front of a sign that said ''Ju-liar Bob Brown's Bitch'', told the cheering crowd the issue was not the science, but the tax.
''I say to you in all honesty there are a lot of diverse opinions about climate change and I don't think this is about climate change. Climate change happens, mankind does make a contribution. It's important to have an intelligent response, not a stupid one, and an intelligent response to climate change … doesn't mean a great big new tax,'' he said.
''As I look out on this crowd of fine Australians I want to say that I do not see scientific heretics. I do not see environmental vandals. I see people who want honest government.''
Mr Banks said the data he could provide in his report, due by the end of May to meet the government's rushed deadline of getting legislation into Parliament by the August sittings, would be only ''a first step'' towards assessing the impact on competitiveness of policies in different countries.
His revelation came as tensions boiled over in Canberra in the increasingly bitter climate policy debate.
After seeing pictures of Mr Abbott's speech, the Greens leader, Senator Bob Brown, wrote to the Prime Minister, Julia Gillard, saying he was ''appalled'' Mr Abbott would stand in front of a banner that was so ''offensive'' and he hoped the Opposition Leader would apologise.
But the Coalition frontbencher Senator Barnaby Joyce said it was Labor who should apologise because a Labor backbencher called the demonstrators "extremists'' when they were ''good ladies and men'' exercising their democratic rights.
Writing in the Herald today Ms Gillard called on the silent majority of Australians to make their views heard.
''We know that the majority of people want action on climate change and want a sensible, rational approach to change. They should make their voice heard and not allow themselves to be drowned out by smaller groups with a loud voice,'' she says.
Ms Gillard, who received a petition with 12,500 signatures calling for climate change action yesterday, said ''neither extreme'' should be allowed to hijack the debate.
And in another update of his report, the climate adviser Professor Ross Garnaut called on the government to spend between $2 billion and $3 billion a year encouraging research, development and commercialisation of low emission technologies. He said a carbon price on its own would not drive sufficient investment in research and extra incentives were essential.
Meanwhile the government has announced that Treasury has begun detailed modelling of a carbon price, which would be made public when completed.