Businesses raise prices to pass on new costs

Greg Combet says small business groups have not been given enough information.FOUR in 10 businesses in manufacturing, services and construction plan to raise their prices immediately in response to the carbon tax, a survey has found.
Nanjing Night Net

As the government begins the tough job of selling its carbon tax, a survey by the Australian Industry Group concluded that price rises will be widespread, although there was still ”considerable confusion” about the scheme.

The survey of AIG 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 immediately.

From yesterday, almost 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 increase in power bills.

Businesses that do not directly pay the tax face a decision as to whether to pass on their power bill rises and cost increases from their own suppliers, or absorb those imposts.

Small business groups say they have not been given enough information on how they will be affected. The Climate Change Minister, Greg Combet, said last week that the average small business faced a price rise of only $5 or $6.

The survey finds wide variation in how the costs will be passed on. Only one in five cafes and restaurants said they would put up their prices from yesterday compared with 48 per cent of retail trade firms.

The Australian Competition and Consumer Commission has said it will be closely monitoring small business price rises.

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

Leave a Reply

Your email address will not be published. Required fields are marked *