A carbon tax is an option that needs to be looked at, says Ai Group Chief Executive Heather Ridout.
However, Ms Ridout warned: “We need to acknowledge that all of the competitiveness issues that are associated with an emissions trading regime are also present with a carbon tax.
“From that point of view there is no real advantage in using a tax Vs a trading regime.
"When the CPRS plan failed late last year the issues facing industry did not go away.
"Firstly, in the absence of a national plan, we face underinvestment in electricity generation, a rise in costs as capital equipment ages and the threat of electricity shortages a few years down the track.
"Secondly, Australian industry is currently facing a death by a thousand cuts. Everyone seems to have their pet idea and most are incredibly costly for business and for households.
“The proposals developed by the Victorian Government over the past month or so are a case in point. These include a potentially intrusive licensing regime for industrial projects.
“Many of the proposals in the ‘feel-good’ renewable energy space also fall into this high cost category and business is facing large increases in energy prices because of the Commonwealth Government’s renewable energy target.
“With very few exceptions these proposals do not include arrangements to ensure that competitiveness is not eroded," Ms Ridout said.