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Will a carbon tax wreck your business?

I’m watching the carbon pricing debate unfold and am still amazed by the circus that is Australian politics. The entire debate seems to have been hijacked by a star-studded TV ad. Instead of generating discussion about the affordability of the tax and its impact on the average household, the media seems to have dropped the issue and focused on the much more glamorous subject of Cate Blanchett.

We all know that Cate Blanchett is rich, beautiful and powerful. I believe that we are all equally aware that she probably doesn’t have to worry about her monthly electricity bill. So instead of slating her for raising her voice in the debate, let’s re-focus on the issue that really should be in the frame.

Protecting the environment and having a positive impact on climate change is essential, as is ensuring that families and small business already struggling with higher energy bills are not detrimentally impacted by these added cost pressures.  This year alone, thousands of families have been driven into fuel poverty, which is when their energy bill is more than 10% of the household income, and it’s not going to get any easier.

While tackling the thorny topic of climate change and the proposed carbon tax, the government must maintain focus on protecting the vulnerable. If the government isn’t careful, they are likely to create an ‘energy gap’ between the businesses and families who can afford higher energy bills—and have the apathy to do nothing about it—and everyone else who need all the support they can get to make energy bills affordable, both at home and in business.

There’s no doubt that the companies being taxed will pass this cost straight down to the customer. Energy bills are already high and could soar by up to 64% by 2013 under this scheme.

We estimate that with every 1% rise in fuel costs, around 3,500 more households in NSW alone will fall into the fuel-poor category. With the added pressures of post-GFC mortgage stress, how are families going to cope?

Can your business afford a further 64% increase in energy costs? Do you have this scheduled into your business planning?  And remember, if you’re planning to pass this onto your customers, your suppliers will be doing the same.

There are many good deals out there, but although these hikes will encourage suppliers to be competitive, electricity prices are still going to rise significantly.

Perhaps instead of demonising celebrities that endorse the tax, the media should be using its considerable influence to lobby government on developing policies to protect consumers and businesses that are going to be penalised by the tax.

Tim Wolfenden

Tim Wolfenden

Tim Wolfenden is the CEO of Make It Cheaper, an independent energy broker providing electricity price comparison services to businesses and residences. He specialises in developing successful e-commerce strategy, commercial negotiations, online product development, strategic planning, business analytics, SEO and SEM management and tweets as @aussieonline.

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