Key industries warn of price rises, right now

Four in 10 businesses in key sectors have warned of immediate price hikes under the carbon tax.FOUR in 10 Australian businesses in the key sectors of manufacturing, services and construction plan to hike their prices immediately in response to the carbon tax, a survey has found.
Nanjing Night Net

As the Gillard government began the tough job of selling its carbon tax, a survey by the Australian Industry Group concluded that price rises would be widespread, although ”considerable confusion” remained about the scheme.

The survey of Ai Group members found that 40 per cent of manufacturing businesses, 40 per cent of services businesses and 44 per cent of construction businesses planned to increase at least some of their prices from yesterday.

Also from yesterday, nearly 300 big carbon emitters – mostly power generators and mining companies but also many local councils – began paying the $23-a-tonne carbon tax, which will flow through the economy in the form of price rises, notably an average 10 per cent hike in power bills.

Businesses that don’t directly pay the tax are faced with the decision as to whether they will pass on their power bill rises and cost increases from their own suppliers, or absorb them.

Small business groups have complained they have not been given enough information on how they would be affected. But Climate Change Minister Greg Combet told The Age last week that the average small business faced price rises of only $5 or $6.

The Ai Group survey found wide variation in how costs would be passed on. Just one in five cafes and restaurants said they would hike prices from July 1 but 82 per cent of communication services companies said they would raise their prices, as did 48 per cent of retailers and 60 per cent of construction materials companies.

The survey came as the political stoush over the carbon tax shifted gear, with the government predicting that once the tax came in, fears over its effect on consumers’ hip pockets would prove unfounded.

Prime Minister Julia Gillard and Opposition Leader Tony Abbott kicked off their respective two-week carbon campaigns, trading barbs over whether Mr Abbott would fulfil his vow to repeal the tax if he became prime minister.

Mr Abbott said: ”So Australia, this campaign is now on. It is now on. What do you think of this carbon tax? What do you think of prime ministers who tell lies before elections? Well, this is your chance to pass judgment on this bad tax put in place by a bad government.”

Ms Gillard told the ABC’s Insiders program that Mr Abbott was bluffing when he repeatedly swore over recent days to make it his first priority on day one of a Coalition government, to begin the process of dismantling the carbon price.

John Connor, chief executive of the Climate Institute, said yesterday marked the ”historic end of a free ride for carbon emitters”.

This story Administrator ready to work first appeared on Nanjing Night Net.

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