In brief - There are practical steps you can take to turn the
carbon tax risk into an opportunity
It's less than four months to the 1 July 2012 start date of
the carbon tax. Here are four things you can do to make sure your
business is ready.
Estimate your exposure to the carbon tax.
Pass through carbon costs where reasonable and
Resist carbon costs that are unsubstantiated
Utilise the various governmental initiatives
to gain additional benefits.
Carbon tax exposure
Around 60 per cent of Australia's carbon pollution will be
covered by the carbon price. The businesses most directly affected
are involved in electricity generation, natural gas retailing,
mining, processing, waste disposal and transport. About 500 of
these will need to purchase carbon permits or reduce emissions.
Other businesses, particularly those engaged in domestic
aviation, shipping and rail transport will face, for the first
time, an "effective carbon price" via increased fuel
excises and reduced fuel tax credits.
Even if you don't fall into those categories, you could be
affected as carbon costs are passed downstream, particularly if you
are a heavy consumer of carbon price sensitive products like
electricity, gas, cement, certain chemicals and metals, waste
disposal and domestic transport.
Passing on carbon costs
One potential solution is to
pass on carbon costs (assuming that there is no impediment to
you doing so).
If you claim price increases due to the carbon tax, you need to
be sure that they aren't overstated or based on grounds that
are not reasonable and substantiated.
It is also prudent to avoid talking to competitors about carbon
price adjustments because this could be regarded as
Resisting carbon mark-ups
Attempts to pass carbon costs on to your business should be
If they are unreasonable or unsubstantiated then you may be able
to resist paying them.
To complain about attempts to pass through carbon costs
unlawfully, contact the ACCC.
Government initiatives, grants and programs
It's not all doom and gloom! Your business may be entitled
to government funding, finance, tax concessions or other benefits
to help invest in low pollution technologies or to be more
environmentally friendly. Particular opportunities are on offer
manufacturers involved in activities that are
emissions-intensive and trade exposed, including aluminium, steel,
glass, zinc, pulp/paper, plastics and chemical manufacturing (via
Jobs and Competitiveness Program)
small businesses (by increasing the instant
asset write-off threshold to $6,500 and other
businesses that establish large renewable
energy solutions, such as wind or solar farms, or
hydro-electric power stations (by selling certificates (LGCs)
Large-scale Renewable Energy Target (LRET))
businesses that install smaller renewable
energy solutions such as solar panels and water heaters
and wind or hydro systems (by selling certificates (STCs) through
Small-scale Renewable Energy Scheme (SRES))
The article examines the regulation of the oil and gas industry and breaks down the regulatory process state by state.
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