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Carbon tax risks now even greater: Ridout

20-09-2011
by 
in 

The timing of the introduction of the carbon tax could hardly be worse, according to the Australian Industry Group.

AiGroup Chief Executive Heather Ridout says it is mistake for Australia to introduce a carbon tax given the volatile and uncertain domestic and global economic climate and the lack of an international consensus.

"In this environment the risks of imposing damaging costs on Australian industry are amplified, Ms Ridout says.

Ms Ridout says while the Government has dealt with some of the technical matters raised by Ai Group and others, their key issues of concern have not been addressed.

Ms Ridout again stressed that proposed fixed carbon prices are too high. 

“If it is to proceed the Government should build price flexibility into the legislation and the starting price should be no more than $10, she says.

“And for many manufacturers assistance measures are not well matched to address the upfront impacts.”

Ms Ridout claims there is still no clear strategy to cut back “the tangle of inefficient emissions reduction measures that has proliferated across Australia.”

"The high fixed prices from mid 2012 to mid 2015, are a major area of concern for Australian businesses, Ms Ridout says. “The set prices of $23 to $25.40 in these years are well out of step with international carbon prices, currently hovering between $16 and $18 a tonne in the EU Emissions Trading Scheme.

"The risks associated with these high prices are made worse by the gaps in the industry adjustment arrangements.  While the energy efficiency grants for less emissions-intensive manufacturers are welcome, they will take time to flow and reduce exposure.”

Meanwhile, manufacturers who fall outside the thresholds for free permit allocation have no assistance with the substantially higher energy costs many will incur from the middle of next year.

"Ai Group has raised these issues many times, Ms Ridout says. “There is still time to address them.  Fixed and inflexible prices can be amended. Assistance for less intensive manufacturers should be addressed by a swift and highly accessible rollout of the proposed $1.2 billion in grants.”

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