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Business welcomes carbon tax repeal

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Business groups have welcomed the scrapping of the carbon tax, however the effects of the decision which finally passed the senate yesterday will be mixed.

In a joint statement, Innes Willox, Chief Executive, Australian Industry Group, Jennifer Westacott, Chief Executive, Business Council of Australia, and Brendan Pearson, Chief Executive, Minerals Council of Australia welcomed the move as the first step in moving towards an emissions reduction policy that works for the economy and the environment.

Innes Willox said in a separate statement that industry particularly welcomed revisions made to provisions to pass on savings to consumers in the form lower prices.

"The amendments proposed last week would have inadvertently required thousands of businesses to produce carbon tax repeal substantiation statements, at considerable cost in staff time and money, under threat of heavy sanctions. That would have hit everyone from caravan parks and shopping centres to car dealers and whitegoods suppliers,” he said.

As the ABC reports, accounting and consultancy firm Deloitte said the repeal will not result in the immediate end of emissions-related paperwork.

Companies affected by the tax will make their final payments in February and will also have to adjust their contractual arrangements, supply chains and pricing policies in accordance with regulations.

The SMH reports that there are 371 entities which currently pay the carbon tax. However, many of these also receive compensation to help them deal with the tax. While they will no longer need to pay the carbon tax beyond February, they will also no longer receive that compensation.

Coal-fired power producers receive this compensation and so do high energy users such as those in the aluminium industry.

In fact, according to the SMH, because they receive such generous compensation some aluminium producers will actually lose money as a result of the tax repeal.

As the ABC reports, the Tasmanian Opposition claimed the carbon tax repeal will cost Tasmania $70 million per year because of the state’s strong renewable energy sector, which includes Hydro Tasmania.

"We were getting the pay back that we deserved in terms of our investment in renewable energy over many decades," former Premier Lara Giddings said.

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