Business leaders argue carbon tax should be redesigned to mirror plans in other countries

Business leaders argue the carbon tax should be redesigned to mirror plans in other countries, rather than scrapped.

Business Council of Australia chairwoman Jennifer Westacott told the Australian Financial Review a sector-by-sector approach, similar to that used by the European Union, should be used, recognising some sectors had greater capacity to act faster than others.

“We have a scheme that covers most of the economy at the highest price in the world and with no flexibility to respond to a potential worsening economic situation and a continuing lack of action on the global stage,” Westacott said.

The Gillard Government has arbitrarily set the price of carbon at $23 a ton when the world market rate was about $10 a ton.

The current scheme may not be “properly designed”, but Westacott stopped short of calling on the Government to delay its implementation until a better alternative was developed, according to the AFR.

Businesses compliance costs are about $80 million a year, according to government estimates.

Westacott said these were costs many companies would incur anyway, as part of their sustainability strategies.

“The point I’m making is that businesses are already doing that because it represents good business, it is going to lower costs and because they understand their leadership role.”

Mineral Councils of Australia spokesman Ben Mitchell said the number of permits auctioned to trade-exposed industries should be increased, as competitor countries adopted comparable schemes to prevent a loss of competitiveness.

“All international schemes, current or planned, are based on a model where virtually all permits are allocated without charge to the traded sector during a lengthy transitional period.”

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