Isra-Mart srl : Business against $40 carbon price

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A $40-A-TONNE carbon price would "clearfell" the business community, the Chamber of Commerce and Industry says.

Confidential research, commissioned by Resources Minister Martin Ferguson, shows coal will remain the cheapest energy option unless the price reaches $40 a tonne.

The Federal Government has rejected the $40-a-tonne figure while the chamber says such a price is simply not affordable.

"That would be like clearfelling the Australian business community," the chamber's economics director Greg Evans said today.

He called on the Federal Government to abandon a carbon price or emissions trading scheme altogether.

"Our view is no carbon tax or emissions trading scheme is viable in the Australian economy at the moment given the weakness in our numbers," he said referring to ACCI's May survey of small business which showed general trading conditions and confidence continued to decline during the March quarter.

"The economy isn't strong enough to deal with a carbon tax and it makes a lot of sense that we shouldn't move ahead of the rest of the world on this issue."

A carbon price of $40 a tonne would do nothing to reduce energy prices because it would not encourage gas-fired power stations, Mr Evans said.

"All it would do is add to energy prices and make Australia less competitive," he said. "It wouldn't actually change the mix of energy."

The survey outlined ongoing concerns in the business community about the rising costs of energy.

As well business was "increasingly spooked" by rising interest rates and higher taxes, including the flood levy and the potential carbon tax.

Mr Evans said there were better ways than an accelerated tax write-off, contained in last week's budget, to help small business.