AiGroup warning on carbon tax

31-08-2010

 

The Australian Industry Group has warned businesses not to misrepresent the extent to which the carbon tax is behind any price increases.

While businesses are understandably concerned about the impacts of the carbon tax on costs and profitability, they should not mislead customers, AiGroup CEO Innes Willox said.

Mr Willox warned businesses they may find themselves on the wrong side of the Australian Competition and Consumer Commission (ACCC) if they make misrepresentations.

“All businesses are entitled to try to lift their prices to recover extra costs associated with the carbon tax, he said. “The ACCC has no role in monitoring or limiting the extent to which businesses can attempt to do this. However, the ACCC does have a role relating to misrepresentations that businesses might make if they overstate the extent to which the carbon tax is pushing up their costs and forcing them to raise their own prices.”

Mr Willox said the carbon tax has implications for both the few hundred businesses that will actually pay the carbon tax and the many others downstream.

“Those who pay directly include energy producers, heavy industrial businesses, coalmines and some council tips,” said Mr Willox. 

“In some cases businesses with these direct liabilities will pass on at least some of the tax they pay to their customers in the form of higher prices.

“For most other businesses, the major impact on their costs will come from increases in the prices they pay for electricity, gas and some of their non-energy inputs.

“As is always the case when costs rise, as the carbon tax flows through, business owners and managers will assess whether they can raise their own prices to avoid a reduction in their profitability.”

Mr Willox said businesses have every right to try to recover extra costs in the market place – provided the price rise is legitimate.

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