Page 1756 - Week 05 - Tuesday, 1 May 2012
Next page . . . . Previous page . . . . Speeches . . . . Contents . . . . Debates(HTML) . . . . PDF . . . . Video
some economic jargon which even Mr Barr might understand, there will be first-round effects and there will be second-round effects and third-round effects. So the process will continue to work through our economy.
In the first round there will be price effects placed on around 500 businesses in Australia. Sixty are primarily involved in electricity generation, 100 are involved in coal or other mining, 40 are natural gas retailers, 60 are involved in manufacturing such as cement, chemicals and metal processing, 50 operate in a range of other fossil fuel intensive activities and 130 are involved in waste disposal. Contrary to the expectation of the federal government, these businesses will not be absorbing the cost of the carbon tax.
The second-round effects will be seen in the businesses to which the carbon tax is then passed on, and the customers of these 500 businesses will feel the effects of the carbon tax. One only needs to reads an article from the Financial Review from last Friday, 27 April in an article entitled “Tax won’t alter coal use: Verve”:
The head of Western Australia’s biggest electricity generator—and Australia’s 11th-biggest carbon dioxide emitter—has fired a parting shot at the carbon tax, saying it won’t trigger a switch from coal-fired power but will heap added costs on business.
Verve Energy managing director Shirley In’t Veld, who steps down on May 1, has also called on the state government to prove a proposed remerger of Verve with state-owned retailer Synergy will deliver claimed cost savings.
Ms In’t Veld told The Australian Financial Review in an interview the carbon tax was too low to encourage the generator to shift from coal-fired power to gas or renewable energy, but would force it to pass on the costs to its customers.
That is a practical assessment from the 11th largest emitter of carbon dioxide in the country about how they are going to deal with the tax.
The customers of these 500 firms comprise a mixture of users from across the spectrum of industry. Then we will see the third-round effects as these businesses pass on the carbon tax, and it is at this point that many final consumers—that is, you and me—will begin to pay the carbon tax. Of course, some businesses will have a longer production chain to move through before the final consumer is reached, but, do not despair, the final consumer will be reached in due course.
Whatever you do as the final consumer—buying essential services such as electricity, gas or water, buying groceries, buying building materials, including metal products, bricks, paint and so on, buying motor vehicles and other machinery—you will pay the carbon tax. You cannot escape it. It is problematic how the carbon tax will actually affect individual consumers. This depends, of course, on the individual’s pattern of spending.
The Australian government has done some modelling to try and estimate the effects of the carbon tax on families. The Australian government has estimated the carbon tax will lead to household expenditure increasing by an estimated $9.90 per week in
Next page . . . . Previous page . . . . Speeches . . . . Contents . . . . Debates(HTML) . . . . PDF . . . . Video