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How will the carbon tax affect small business?

Now that Prime Minister Julia Gillard has laid out the plans for a carbon tax for Australians, small business owners are wondering how it will impact them.

According to Gillard, 80% of emissions will be cut within 40 years. From next year,500 of Australia’s biggest polluters will pay a carbon price of $23 per tonne, which will then rise 2.5% a year for the following three years after which time an emissions trading scheme will be introduced.

As a result of the scheme, she has also promised there will be less red tape and compliance for small business owners. The Government has also decided to increase the instant asset tax write-off from $5,000 to $6,500 for businesses with a turnover of less than $2 million a year.

Ripped off?
Stephen Cartwright, CEO of NSW Business Chamber is unsure of the carbon tax and whether or not it will actually support the environment, as opposed to simply shipping our jobs and emissions off-shore.

"Business is sceptical - and we have every right to be, as a scheme of this size and complexity has never been tried anywhere in the world," he said in a media release.

"We are also sceptical given the Government's poor record in implementing other schemes and programs in recent years. Our concern is that these new programs will actually achieve nothing other than increase regulation, establish new bureaucracies and curn tax dollars."

Peter Strong, Executive Director of the Council of Small Business Organisations of Australia (COSBOA), is also concerned small businesses will suffer at the hand of big businesses.

“What I can say on small business’ behalf is they don’t want to be ripped off by big business or be forced to do extra work or have extra costs,” he told Smarter Business Ideas.

According to Strong, COSBOA is planning to work with government to ensure more information will be given on how small businesses will be impacted by the carbon tax, so they can create business plans for the future.

“If I was a hairdresser, I’d like to know what my power bills would look like. If I was a drycleaner, no one has told me what it will cost per week for my business to run and I can’t do any planning without that knowledge,” he said.

“There are a range of people we have to look at separately to see what the impact would be on them. Normally when there’s a big change like this, a lot of big businesses use it as an opportunity to gouge higher profits from small business. “

What small businesses think


Anthony Jansen, owner of Gnarabar restaurant in Western Australia is particularly concerned about the increase in costs for his business.

“I guess like anything, the price of things will go up and we’ll just adjust our costs accordingly. When the banana plantation was wiped out, we either stopped using bananas for a period of time, or we factored it into the cost of the end product, which in the end, affects the customers,” he said.

“I guess it’s pretty straight forward to me; (the government) whacks a tax on it and we have to make it work. Whether we agree or not, it doesn’t matter.”

Catriona Pollard, owner of CP Communications is embracing the carbon tax and is happy to see the government taking action towards helping the environment.

“I think it’s a fair policy that is making the high polluters pay, which is a good thing. I don’t feel it’s going to impact small businesses too much and I don’t think it’ll impact individuals too much either,” she said.

“My thoughts are that it’s great that the government is doing something about dealing with the environment, and that the carbon tax, although it is a tax, is a positive step, because it’s highlighting the issue that we need to do something and we as a society need to pay for the carbon we’re putting in. As individuals and businesses, we need to step up and do something about the environment.”

Read a blog from small business owner Nick Savaidis on the carbon tax.




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