Australian Business Body Adopts Carbon Tax Resolution

by Mary Swire, Tax-News.com, Hong Kong

08 April 2011

The Australian Chamber of Commerce and Industry (ACCI), comprising of all State and Territory Chambers of Commerce and 28 National Industry Associations, has passed a resolution on the country’s proposed carbon tax.

ACCI notes the architecture of a proposed carbon tax transitioning to a trading scheme announced by the Australian Prime Minister on February 24, but it remains opposed to a unilateral carbon tax in the absence of similar policy action by major emitting nations and Australia’s export competitors, which it says will impose a significant cost to the Australian economy without any discernible benefits to the environment.

Also, in order to ensure Australia’s abatement is achieved through least-cost means, especially in the absence of a multilateral framework, it says that its policy response should:

• Place Australia on an equal footing with the rest of the world and in particular with its major trading partners and other competing resource and energy producing countries. Any unilateral carbon price will be detrimental to the country’s international competitiveness, export jobs and economic expansion opportunities, it says.
• Ensure that Australia continues to have access to affordable, clean, efficient and sustainable energy supplies. The feasibility of all fuel choices to assist base-load requirements should be properly weighed and considered.
• Not be considered in isolation from the wider objectives of developing a prudent energy policy approach. Thus, the Government should, ACCI says, immediately release the energy white paper it has prepared to help inform the debate about the scale of Australia’s future energy requirements and the likely energy sources available.
• Support improvement in energy efficiency (both in its supply and in demand management), the development and deployment of new technologies, as well as assess the capacity of the economy to deal with changes in energy fuel mix over time.
• Address the barriers to individuals and firms energy efficiency uptake, including the lack of available and accessible information.
• Review, monitor and harmonize current climate change related policies across different sectors and jurisdictions under a national approach.

ACCI rejects calls made by some unions to introduce a border tax adjustment that would apply to imported products to account for the loss of trade competitiveness of Australian goods arising from the unilateral application of a domestic carbon tax. It believes that such a course of action would have serious implications for international trade policy reform and says that the trade liberalization agenda should not be linked in any way to climate change policy responses.

The organization proposes to update previous consultancy work which examined the impact on earnings for various SME manufacturing enterprises.

ACCI is also considering consultancy work examining, amongst other issues, the wider economic implications of a pre-emptive carbon pricing regime, its effect on productivity growth, the impact on energy markets and alternative proposals which can deliver emission reductions more efficiently.

It considers a major tax trade off would be required so as to prevent negative implications for businesses including SMEs and other trade exposed enterprises, and says that it will continue to develop options in this area.

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