 |
 |
| Monday, 02 July 2012 |
|
Enter the " Carbon Tax " |
|
Dear All,
As you would be aware, from July 1, the Federal Government imposition of an equivalent price for Carbon (the so called "Carbon Tax") on certain businesses and the importation and manufacture of specified products came into effect. AFIF has put together a brief overview to help members in the early stages of this new legislation:
The Government has advised us all that: it is an emissions trading scheme with a fixed price on permits for the first three years. Permits are bought and sold, but at a fixed price. A 'carbon tax' implies that the government would simply tax companies for their carbon emissions and is not the same as a system where permits are tradable, and in some cases provided for free.
But euphemistically we are all calling it the 'Carbon Tax' because of the overall effect.
The fixed carbon price of $ 23.00 per tonne of CO2 will initially directly affect the top 500 polluters as determined by the Australian Govt - those are usually manufacturing industries that have a heavy reliance on coal in particular and will see these entities seeking to recover the cost of buying carbon credits to offset their usage, until they can redesign their manufacturing processes to be less reliant on carbon producing inputs.
The flow-on effect to our industry of the imposition of the scheme:
There are a number of direct affects on the imposition of the carbon price on trade, including the legal obligations for synthetic greenhouse gases and we have issued a Bulletin with Fact Sheets about this as follows:
http://www.afif.asn.au/pdf/2012/news/new_legal_obligations_synthetic_greenhouse_gas.html
In addition, there are new rules for non-transport gaseous fuels, which are: Liquefied Petroleum Gas (LPG); Liquefied Natural Gas (LNG); or Compressed Natural Gas (CNG) and generally used other than in an internal combustion engine of a motor vehicle or vessel, or used in forklifts mainly off-road. LPG and LNG avoid it for one year and the heavy vehicle industry will not have a carbon price imposition until 2014. However Compressed Natural Gas (CNG) will have a levy imposed straight away. For some transport service providers, including rail operators, a reduction in diesel fuel tax credit entitlements due to the determination of a price on carbon will require them to impose a Carbon Cost Surcharge. The attached letter from Pacific National is a good example of how a business has openly declared it's increase in input costs to arrive at the new surcharge. In addition their process will be audited by an independent external auditor to verify the surcharge and ensure they are complying with legislative obligations and legal requirements.
Referring to the effect on our members and their business costs: the Federal Govt has issued special powers to the ACCC to monitor increased charges relating to the imposition of carbon pricing and will investigate where necessary. AFIF has already taken issue with one Container Shipping Line asking them to explain how they determined the application of a per container fee increase which is documented as relating to the 'Carbon Tax'.
In terms of the application of fees and charges related to the carbon pricing, the Australian Competition and Consumer Commission (ACCC) has summarised it as follows:
"While businesses are free to set their own prices, if they make claims about the impact of the carbon price these need to be truthful and have a reasonable basis. A business that makes a good faith, reasonable approach to calculating the carbon price for their business has nothing to fear from the ACCC. However businesses seeking to mislead consumers by making false price claims about the carbon price can expect a call from the ACCC."
In terms of your own business input costs and whether this will require you to increase some of your fees: carefully study the bills you receive from the effective date of July 1, 2012 and ascertain firstly, if there is a reference to an increase as a result of carbon pricing or 'the Carbon Tax', that this charge appears fair and reasonable (see help below). If not, or if there is insufficient detail, ask for information as to how the new fees / charges have been determined and if you are not satisfied, then you have a right to refer the matter to the ACCC. This principle should then apply to yourselves when determining whether you need to increase your fees and charges in regard to the Carbon Pricing legislation.
The ACCC have provided a Guide to Business at the following address:
http://www.accc.gov.au/content/index.phtml/itemId/1017091
The ACCC have also established a 'Hotline' for consumer and business complaints. Info as follows: http://www.accc.gov.au/content/index.phtml/itemId/1059606/fromItemId/142
AFIF will continue to learn more about the imposition of a carbon pricing and relay information and guidance accordingly. Kind regards,
Brian Lovell |