WAIT FOR THE CARBON TAX FACTS URGES SMALL BUSINESS MINISTER
Written on the 21 March 2011
STATE Small Business Minister Jan Jarrat has urged business owners to wait until the facts are detailed before taking a stance on the Gillard Government’s proposed carbon tax.
There are concerns the tax could sink struggling retailers and add an estimated $300 per year to electricity prices, 6.5 cents per litre to fuel and increase the price of groceries.
Queensland's business community has voiced concerns over the impost, which they say will ‘hit SME in the hip pocket’ after having been already knocked for six following the floods and cyclone in the state’s north.
Leighton Holdings Limited CEO David Stewart has called for resolution of demarcation issues between Federal and State Governments and clarity on the issue.
“We need clarity on the carbon tax – Leighton Group supports the Government’s objective to reduce carbon pollution, but we’re concerned the current proposal could be tainted by the political imperative to do a deal, rather than what’s best for the nation,” says Stewart.
“We also believe that the revenue generated from a carbon tax should be spent mitigating against the risk of climate change, not on compensating trade-exposed industries and households.”
But the Minister has urged business owners to be pragmatic until details of the proposal have been finalised.
“When we get the details of the proposed tax, we will undertake a thorough analysis of its contents and potential implications to ensure Queensland’s interests are put ahead of everything else,” says Jarratt.
“Then we can determine whether or not it is worthy of our support. I will be putting Queensland first. I will be advocating hard for adequate protection for Queensland’s small businesses and Queensland jobs.”
Jarratt, recently appointed to lead the small business, manufacturing and tourism portfolios by the Bligh Government in a cabinet re-shuffle, says action must be taken to preserve Queensland’s natural assets.
“The issue of climate change is something we need to get right because the cost of doing nothing is just as high, if not higher, than taking some action,” she says.
“Queensland is home to some of the most beautiful natural environments on earth and it’s imperative to our economy that we protect these. The World Heritage listed Great Barrier Reef alone is worth about $5 billion to the Queensland economy. It is a precious natural icon and we are its guardians. I personally take this responsibility very seriously."
CEO of Gold Coast-based specialty coffee retailer Zarraffa’s Coffee and conservationist Kenton Campbell, says any tax will be have to be passed on to the consumer.
“The simple fact is (that) business in Queensland doesn’t need this. In this state alone we have endured multiple natural disasters with lasting impacts in the business community that were followed up with a tax,” he says.
“The carbon tax will add insult to injury, by not delivering a long term solution to the carbon issue and indiscriminately weakening businesses across all industries that will not be able to carry increased costs on top of last year’s federal pay reforms and other recent hikes in levies and taxes.”
With 46 franchises across Queensland, Campbell’s key concern is on the impact on small to medium businesses – particularly retailers that rely on transportation of products.
“At a time when the whole of Queensland has been through the GFC, natural devastation and a large downturn in tourism the CTS couldn’t come at a worst time. The idea of an additional tax of any kind right now puts a potential impost on small to medium business that are not under the umbrella of franchising and/or big business for support,” he says.
“Last year it was announced wages are to be increased 20 per cent over five years. This increase targets both the tourism and retail sectors and is already having a grave effect on small to medium business who ultimately having to make staff cut backs.
“In terms of my business, less jobs means lower disposable income which directly impacts the bottom line of coffee retailers. The imposition of the tax on business will affect Queensland greatly.”
Shadow Minister for Climate Action, Environment and Heritage, Greg Hunt says it’s the last thing Queenslanders need following the devastation caused by natural disasters.
“The tax will hit small business in the hip pocket with higher costs for electricity and fuel, and that’s at a time when some Queensland businesses are struggling to make a buck because of floods and the cyclone,” he says.
Climate Change Minister Greg Combet and his advisor Ross Garnaut argue that Australia needs to do more to reduce its emissions because it lags behind the rest of the world.
But Nationals Senator Ron Boswell says the claims ‘simply don’t add up’. He says the push, now endorsed by the Greens, would be a ‘nightmare outcome for agriculture’, other primary industries, and mining, where fuel rebates are crucial.
“The so-called multi-party Climate Change Committee, which is actually a Bi-party committee, has already called for transport to be included in the carbon tax,” says Boswell.
“That puts petrol and diesel right in the Greens sights and if that impost - of 6.5 cents per litre for petrol – more for diesel - based on a $26 carbon price - was accompanied by an end to the excise rebate for farmers, miners, fishermen, and indeed most businesses, the impact would be diabolical. It all just goes to show the Greens are living in cloud cuckoo-land.”
Boswell highlights a recent report commissioned by the Labor/Independent/Greens Climate Change Committee, carries a litany of examples of major world economies either scaling back their existing commitments or providing limited details on carbon reduction programs they are planning. There is little evidence of programs which have actually been implemented.
In 2009, the French Parliament passed a carbon tax on oil, gas and coal consumption which equated to $24 per tonne on households and businesses. The bill was subsequently disallowed by the French Constitutional Council.
Japan’s introduction of its Basic Act on Global Warming Countermeasures has been delayed for domestic reasons.
Brazil’s national Plan on Climate Change which outlines a national policy for energy efficiency to reduce electricity consumption by around 10 per cent in 2030 is not yet legislated.
Canada has no national energy efficiency target.
“This evidence adds to recent admissions from several of the world’s largest economies which cast doubt on whether global action for carbon emissions reduction will ever be achieved,” says Boswell.
US President Barack Obama has backed away from a cap and trade emissions system citing it was only one approach to reduce emissions. New Mexico has pulled out of the Western Climate Initiative – a pact involving a number of US States to introduce emissions trading starting in 2012. California’s poor financial state is expected to throw into doubt its previous commitments on an ETS.
China’s emissions are predicted to double in the next 10 years however details of its carbon reduction policies are light on detail.
India’s Special Envoy on Climate Change declared after the failed Copenhagen talks that there is ‘no legal obligation on the part of India, under existing international instruments, to take on binding emissions reduction obligations, now or in the post 2012 period’.
Prime Minister Gillard’s plan to bring in a carbon tax from July 1 2012 and move to an ETS in 2015-16 will rely on information contained in the soon to be released report from the Productivity Commission comparing carbon price models of other major world economies.
“Australian families and businesses cannot afford another tax – this time in the form of a carbon tax,” says Boswell.
“It’s expected the Prime Minister will first introduce a modest carbon price of around $10 per tonne and ratch it up to around $30 per tonne when we move to an ETS. For every $10 per tonne increase of a carbon tax, the price of fuel rises by 2.5c/l. A carbon price of $40 tonne will see the price of electricity rise by nearly 50 per cent.”
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