With the release of the Governments new carbon tax to the public, millions of businesses are struggling to find out how they will be hit, with many implicating that they will need to pass on extra costs to consumers.
Agriculture will not be taxed under the new carbon tax, with the Government making the industry exempt. The agriculture industry is set to receive benefits, with the Carbon Farming Initiative to provide “economic rewards” for farmers where credits are created for each tonne of pollution stored or reduced.
Agricultural industry body AgForce welcomed $400 million pumped into new carbon mitigation R&D but says it may be hit by future changes to the tax and that elevated costs for electricity will impact on farmers.
Agforce are supportive of the $400 million dollars created by the new carbon mitigation R&D but has indicated that it may be hit by future changes of the tax and that elevated electricity costs will impact on farmers.
The body believes the average farmer will be hit about $1500 per year.
With the IT Industry being the most electricity dependent in the country this will result in higher costs that will more than likely be passed on to the consumers. Businesses such as data centres will find their costs to increase.
The mining industry has warned that exposure to the carbon tax will result in hundreds of job losses even with billions of dollars available to assist over the next few years.
Executives from Rio Tinto and Blue Scope say funding is not going to the right mines and many will be forced to pay billions that will eat into profits.
With so many exporters exposed to the mining industry the carbon tax will affect them for sure.
“We are deeply concerned the proposed carbon tax fails to shield Australia’s export sector and leaves it at a disadvantage compared to international competitors,” Rio Tinto managing director David Peever said.
One of the main targets of the tax the manufacturing industry will be greatly affected by the tax. Companies operating in steel, coal and mining will end up paying the most. The AIG has warned of job losses within these sectors.
$1.2billion in incentives has been set aside for manufactures to help make their operations to become more efficient through research and creation of new technologies that reduces emissions.
Manufacturers will be able to apply for funding under the new Clean Energy Finance Corporation to research new green projects and a further $3.2 billion in funding will be available for deploying that tech.
The dependence of fossils fuels within the transport industry will result in many major companies becoming affected by the carbon tax. Qantas have signalled that they will need to pass on higher fuel costs to consumers.
With many industries depending on the transport industry such including tourism, mining and agriculture it will prove to have a knock on affect.
Retailers have warned that they will need to pass on higher costs to consumers – Myer chief Bernie Brookes said costs will increase by between $3-6 million. No doubt other large retailers such as David Jones will need to pass on costs, with margins already stretched thin due to ongoing discounts.