Isra-Mart srl : Fears carbon tax will cripple trade

www.isra-mart.com

A $40-A-TONNE carbon price would cripple 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 not affordable.

"That would be like clear-felling the Australian business community," the chamber's economics director, Greg Evans, said yesterday.

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," Mr Evans said, referring to ACCI's May survey of small business which shows 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 sense that we shouldn't move ahead of the rest of the world on this issue."

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

Opposition Leader Tony Abbott said that, at $30 a tonne, a carbon tax would add about $400 to the price of a car and cost industry billions of dollars. "The (Government) said the carbon price would be well short of $40 a tonne when it first starts - underline those words 'when it first starts'," Mr Abbott said.

Treasurer Wayne Swan said the Government was still discussing the design of the carbon price with industry.

"Any price will be well south of the ($40 a tonne) figure reported today, and it will be a fixed price for a period," he said.

South Australian Greens Senator Sarah Hanson-Young has said a carbon tax might need to one day reach $100 a tonne to make renewable energy competitive.

This equals an average rise in household costs of $2028 a year without any government compensation.

Ms Hanson-Young's press secretary refused to answer a questions on how the senator took action herself against climate change.