The House of Representatives has passed the legislation for the introduction of a Carbon Tax from 1st July 2012. Small business operators need to start thinking about the impact that the Carbon Tax scheme will have on their business operation.
Whilst it is true that the price on carbon will be paid by the emitter, (this is basically restricted to about 500 corporations), the cost effect will affect every small business operator. This is because the carbon cost will be passed through the economy by the emitters in various ways. Higher power prices and production costs will be the main areas affected by the Carbon Tax but there will undoubtedly be others including local government rates. One of the real issues for SMEs to think about is – if you have long term contracts, will you be able to adjust prices because of the extra costs that you will undoubtedly incur as a result of the Carbon Tax? If you have long term contracts, then we suggest you discuss these contractual issues with your solicitor. Also, if you are the recipient of a long term contract from a supplier, does the contract allow you to reject an increased supplier cost based on the carbon tax? If you are in this category, we suggest you discuss this issue with your solicitor. The scope and coverage of the Carbon Tax means that some industries will have to pay the carbon tax and others will not, at least for now. The industries which will have to pay the Carbon Tax include:
- power generation;
- industrial facilities;
- mine emissions;
- some transport operations such as shipping, aviation and rail;
- non transport fuel use (eg. non transport LNG [liquefied natural gas] and diesel); and
- non legacy waste (after 2012).
The industries that are not included, at this stage, are:
- agriculture and land;
- biofuels;
- household transport and light commercials; and
- fuel used on land and international aviation.
The tax is generally paid by the producer of the emission, but the cost will be passed through the community. Households receiving taxable incomes of less than $60,000 per annum will receive some inducements from the federal government. People earning over $60,000 per annum will not have any adjustment.
