In 2011, just before the introduction of the $23-a-tonne carbon tax, SmartCompany took a look at some of the fortunes that could be impacted by it.
Now that the tax is gone – having been replaced by an emissions trading scheme which will likely lead to far cheaper carbon emissions – it’s a good time to check in with some of the Rich Listers who have a lot riding on being able to create carbon cheaply.
For three of the fortunes we thought were most likely to be hit by the carbon tax, it had no to little impact. Regardless of whether these Rich Listers sold out or kept hold of their carbon-intensive assets, two years later, they’ve all ended up ahead:
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The Barro family
One of the industries most affected by the carbon tax is concrete production, as the chemical process that makes cement produces huge amounts of carbon dioxide.
The carbon tax was a danger to the fortune of the Melbourne-based Barro family, which made its fortune in concrete. Patriarch David Barro died in 2009, but his children still run Barro Group, which has a 27% stake in listed cement manufacturer Adelaide Brighton.
In 2011, BRW estimated the family’s fortune at $700 million. Now, after two years of the carbon tax, their fortune sits closer to $800 million.
That’s mostly due to Adelaide Brighton, whose shares have risen 40% since July 2011. The company has benefited from the resources boom, and all the construction that went along with it. That seems to have had a bigger effect on its bottom line than the carbon tax.
In February, Adelaide Brighton’s management said the carbon tax had taken between $3 million to $5 million off its bottom line. The company’s total full-year net profit was $154.2 million, up 3.9% on the year before.
The Millner family
Another wealthy Australian family exposed to the concrete industry is Sydney’s Millner family, which first made its fortune in the Washington H. Soul Pattinson pharmacy in Pitt Street.
Today the family still controls a few pharmacies, but most of its wealth comes from its investments, including its large investments in Brickworks, which, unsurprisingly, makes bricks and other construction materials.
The carbon tax could have hurt them, but Brickworks’ share price has gone up nearly 30% since mid-2011. At its latest mid-year profit briefing in March, the company revealed that its building products division fell 3%, due to tough conditions in the housing industry.
But the company nearly doubled its earnings in its land and development division, which offset the losses, meaning the company could say it had raised revenue 14.7% in the half-year to March.
The Millner family were worth $722 million in 2011, according to BRW. The magazine said they were worth $896 million this year.
Terry Peabody’s fortune rests on his waste management services business, Transpacific Industries. Waste disposal sites were one of the key areas identified by the government as likely to be hit by the carbon tax.
He was worth $540 million in 2011 (it was over $1 billion a few years earlier). Now, BRW estimates he’s worth $575 million. In March this year, he quietly sold out of Transpacific Industries, after being sidelined by its new owners, private equity group Warburg Pincus.
They gave the company an $800 million bailout in 2009, after its high debts nearly bought it undone during the GFC.
Peabody still held a shareholding for a few more years, but he doesn’t anymore. Now, his main assets are in the far-less carbon-intensive industry of wine production – he owns a 300 hectare winery in New Zealand.