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Opposition: Carbon tax will swamp rural families, businesses

by Beef Central, 10 July 2011

The ripple effects emanating from the carbon tax will grow to engulf every business and household as the costs magnify and the tax ratchets up, Leader of The Nationals and Shadow Minister for Infrastructure and Transport Warren Truss has warned.

“Those reverberations will be most severe in regional areas, where families, businesses and entire communities will carry a disproportionately higher tax load. Most of the lost jobs will be in regional Australia but Labor, the Greens and Independents don’t seem to care.

In a press statment on Sunday, Mr Truss said the tax would effect many sectors of the nation and the economy:

Public transport

“The tax will add 10% to the electricity costs of running public trains and trams in the first year alone of a carbon tax. These cost increases can only mean reduced and more expensive public transport services in the cities. It is ironic in the extreme that, under Labor’s tax, there is more incentive to drive to work in untaxed petrol cars than take public transport.
Rail and marine

“The end of the exemption from fuel tax credits for the rail and marine operators will mean from 1 July 2012 they will cop a new 6.21 cent per litre tax, which will have a dramatic impact on national transport costs and efficiency.

“It will not just be an impost on products going out of regional Australia – which generates two-thirds of Australia’s export base, but also on the price of goods being freighted into regional towns. That’s another whack for regional businesses and families at the same time as making our exports less competitive.

“As for shipping, under the new 6.21 cent per litre slug on coastal shipping – from Perth to Sydney, from Melbourne to Cairns – everything will be more expensive, but if you want to ship those same goods in from overseas they won’t incur this tax.

Heavy vehicles

“The reduction in fuel tax credits for heavy vehicles, again by almost 7 cents per litre from July 2014, will cost the industry and its customers $510 million in 2014-15 alone, massively compounding the cost of all road freight transport for regional Australians and flowing through to the costs of everything we buy – and because of the greater distances across regional areas, those costs will balloon even further.

“The Transport Workers Union estimates the tax will cost truck drivers up to $200 a week more in fuel costs. These additional transport costs will inevitably be passed on to consumers. Many trucking operators based in regional areas are already struggling under increased registration charges and general price increases since Labor came to power.

“Again, this new tax will hit public transport with buses becoming more expensive and, ironically, encourage people to opt for the car.
Aviation

“The near doubling of excise on aviation fuels from 1 July 2012 will inevitably lead to the end of many regional air services, which generally operate on lower margins. This will make it exponentially more expensive to travel within Australia, ironically making travel further afield to other countries cheaper while incurring a higher carbon footprint.

“This new tax will make domestic and international tourism in Australia less attractive. Australians holidaying in Bali won’t pay the tax, but those travelling to north Queensland will. It’s another kick in the guts for our struggling tourism industry, which is already experiencing hard times.

Groceries

“The Prime Minister’s modelling of grocery price increases does not include the extra transport costs. Anyone who goes to a supermarket knows prices just keep going up and Woolworths and Coles are among the companies that will pay the most carbon tax.

“Every consumer knows prices are rarely consistent across the board and they don’t stay the same for long. Regional people already pay a premium for goods, so their starting point for price hikes will be higher.

“On groceries, bureaucrats in Canberra predict small price increases, but they add up fast in the real world. And when the companies who manufacture food say prices will go up around 5%, we know it’s them, not bureaucrats, that build in the costs that we ultimately pay at the checkout.

Electricity

“Electricity prices will go up 10 per cent in just one year thanks to the government’s carbon tax, but it’s simply a reality that regional Australians already pay more for electricity. In regional NSW its 25% higher than Sydney, in regional Victoria 30% higher than Melbourne, regional Queensland 6% higher than Brisbane, regional South Australia 10% higher than Adelaide, regional WA 30% more than Perth and regional Tasmania 16% higher than Hobart.

“Regional businesses and households can expect significantly higher electricity bills.
Jobs

“It’s impossible to manage the family budget when the jobs forecast to be lost as a result of the carbon tax will predominantly be in regional areas, because that is where the mining, manufacturing and electricity generation jobs are.

“Access Economics predicted 28,000 jobs would be lost in regional Australia – but that is only the beginning.

Income tax

“Today the Prime Minister announced an increase in the tax-free threshold from $6,000 to $18,000. What she didn’t trumpet is that she is also increasing the tax rate applying to lower income levels from 15 to 19 cents, and from 30 to 33 cents, which will clawback much of the assistance families can expect.

“This increase in income tax is another example of a shifty government, giving compensation for its tax impost, then using a tricky slight-of-hand to take it back again.
Road construction

“The tax will also add greatly to road building costs. Labor will now need to find an additional $400 million just to maintain its existing road program or it will need to cut back on its promised road projects. The federal government says it will spend more than $8.6 billion on roads between 2011-12 and 2014-15, but it will now deliver less bitumen.

“Local councils will need an additional $17.5 million per year to maintain the Roads to Recovery program just to achieve the same results (currently a $350 million per year program).

Costs and impact on environment

“At $23 per tonne, this carbon tax will raise about $9 billion per year making it the toughest carbon tax in the world.

“The Productivity Commission has highlighted that no other country has imposed an economy-wide carbon tax or emissions trading scheme. To put this in perspective, Europe’s emissions trading scheme, covering 18 countries, raises $500 million per year (or around $1 per person). Labor’s carbon tax will raise around $400 per person.

“And, ultimately, it’s all for minimal environmental gain. The Prime Minister says Australia will reduce carbon emissions by 160 million tonnes.

“But according to the government’s own modelling our carbon dioxide output will actually increase and, of the reductions achieved, two-thirds will be purchased from overseas.

“It goes to show you can’t trust this Prime Minister.”

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