Business Council of Australia fear carbon tax could drive production offshore

The Business Council of Australia said the proposed Federal Government’s carbon tax could damage the country’s export competiveness and drive production offshore. 

In a letter to Prime Minister Julia Gillard, 45 companies spanning mining, energy, agriculture and food said they had no capacity to pass on carbon costs, with rising input prices due to supply chain problems after floods in eastern Australia and the strong Australian dollar.

As business executives stepped up their campaign against the tax, voters are also growing increasingly hostile fearing the tax would raise the cost of everything from food to electricity.

A Fairfax newspaper poll of 1400 people in April  and published in Fairfax newspapers on Monday, found that 59 percent of respondents opposed the plan, up 3 percentage points from the last survey in March.

The Business Council said in a letter, a carbon policy without adequate compensation for Australian industries could force production to move offshore to countries with less rigorous climate policies.

It also said a carbon tax would have limited impact on global greenhouse emissions as Australia only accounted for about 1.5 percent of emissions.

Business Council President Graham Bradley said,  "In framing our carbon pricing policy Australia should act in tandem with international action, not ahead of it.

"To do otherwise means that important manufacturing, agricultural and resource-based businesses will be disadvantaged." 

The Federal Government is looking to introduce  the carbon tax in July 2012, with a move to an emissions trading scheme three to five years later, in order to curb emissions and fight global warming.

Emissions-intensive exporters such as steel companies BlueScope and OneSteel and the coal industry have already raised concerns that a carbon tax would hurt their international competitiveness and cost thousands of jobs.

Read more here.

Meanwhile, the Australian Logistics Council (ALC) has joined the chorus as a signatory to this letter to the Prime Minister.

One of the aims of ALC is to work with government and industry on appropriate policies to ensure Australia has safe, secure, efficient, sustainable and internationally competitive supply chains.

Members of ALC have agreed that the freight transport & logistics industry must play a part in minimising emissions, however they too raise concern about any proposal that would reduce the international competitiveness of Australian supply chains.

Read more here.