Best of 2012, #3: Carbon Tax's Business Impact
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Despite Opposition Leader Tony Abbott’s best efforts over the past year, the carbon tax has officially been implemented in Australia. As of 1 July, the top 500 companies who emit more than 25,000 tonnes of carbon annually are to be taxed $23 per tonne, with a portion of the funds going back into green programs and household usage compensation.
In order to counteract the carbon-offsetting fees now burdening their accountants, these top-polluting businesses will likely look to increase the cost of the goods and services they provide: namely, energy and power. Millions of households will receive compensation to help cover their increased energy bills, but how will this impact Australia’s small (5-19 employees) and medium (20-200 employees) size enterprises (SMEs) who will not benefit from the compensation plan?
Awareness Among SMEs
According to the MYOB Business Monitor survey conducted back in February, nearly half of the 1,043 total SMEs questioned said they were still in the dark about the effects this new legislation would have on their business.
MYOB CEO Tim Reed was floored by the survey’s results when they were revealed in late May, just over one month before the tax was due to take action.
“This is a major piece of legislation that will have a lasting effect on all business owners. It is deeply concerning that our research has found such a low level of awareness about the carbon tax impact on business amongst SMEs, the engine room of our economy,” said Mr Reed in a statement accompanying the survey results.
For many SMEs who have done their homework and weighted the additional costs, the outlook isn’t particularly positive.
“The effect [of the carbon tax] is even greater, as this tax hits small businesses at the core,” said Julie Sweet, who has run her Sydney-based web business Certificatesonline for the past eight years with just a handful of employees. “The price of electricity rising is one thing as a result of carbon tax, yet staff and taxes associated with employees is another; all more and more obstacles placed in the path of small business owners, disabling us.”
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