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Industry reacts swiftly to carbon tax

31-08-2010
by 
in 

 

 

Dick Warburon … ‘little benefit’

 
A survey of 621 manufacturing and construction businesses found 42 per cent would try to put up prices immediately following the introduction of the Labor Government’s carbon tax.
 
The Australian Industry Group survey was conducted across the manufacturing, services and construction sectors.
 
Businesses surveyed were asked about their plans to raise prices in response to cost increases related to the carbon tax.
 
Illustrating the competitive pressures facing many businesses, 42 per cent of the 621 respondents indicated they plan to try to recover their input cost increases by immediately raising their selling prices.  
 
This included:
 
  • 40 per cent of manufacturers
  • 40 per cent of service providers and
  • 44 per cent of businesses in the building and construction sector.
 
In the manufacturing sector, the proportion of businesses that will try to raise their prices ranges from 60 per cent among suppliers of construction materials to 11 per cent of food and beverage manufacturers.
 
Ai Group Chief Executive Innes Willox said businesses need to take particular care not to overstate the impact of the carbon tax in negotiating price increases.
 
Mr Dick Warburton, Executive Chairman, Manufacturing Australia said the carbon tax would deliver little benefit, if any, to the global environment.
 
“But it will be a significant detriment to the Australian economy through reduced competitiveness of Australian business, he said. 
 
“While some Manufacturing Australia members will receive allocated permits, the majority of manufacturers, many of whom are our customers, will not. They will face higher costs, particularly for energy and reduced competitiveness.”
 
Manufacturing Australia has urged the Government to amend the carbon tax legislation and called for greater industry collaboration to build a mechanism that is both good for the environment and good for business.
 
Mr Warburton said while industry agrees it should assist in helping to reduce greenhouse gas emissions, member companies already have, and will continue to have effective programs in place to reduce emissions – with or without a carbon tax.
 
The carbon tax may force manufacturers to pursue opportunities overseas where permitted emissions are much higher, thereby increasing global pollution, he said.

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