Small business push for carbon price modelling
Friday, July 15, 2011/
Industry groups are calling for greater clarity on carbon price policy, claiming the small business sector has been left in limbo with regard to how the tax will impact on bottom lines.
Andrew Conway, chief executive of the Institute of Public Accountants, says carbon price modelling is urgently needed to assess the impact the tax will have on SMEs across a range of industries from retailers from manufacturers.
“It has been one week since the government’s release of the carbon price policy yet small business owners are still no closer to knowing how it will impact on them,” Conway says.
Treasury modelling shows the cost of living will increase by 0.7% in 2012-13 compared to a price increase of 2.5% as a result of the GST.
The price of most goods will increase by less than half a percent as a result of the carbon price, which is less than half a cent in every dollar.
Despite the modest projections Conway says it will become vital for SMEs to identify new ways of delivering their products and services more efficiently to help to minimise impacts on bottom lines.
Peter Strong, executive director of the Council of Small Business of Australia, says he is anticipating further details from the government with regard to carbon price modelling.
“COSBOA has reviewed the announcements on carbon pricing and wants information on how this will affect people in their own businesses,” Strong says.
“Which sectors will be affected the most? Will the two-speed economy become worse? Will home-based businesses be affected? What will the real impact be on the self-employed?”
The Victorian Employers’ Chamber of Commerce and Industry also called for greater clarity, claiming small business risks becoming “the forgotten sector”.
“The government has drip-fed announcements through the media without talking to the small business sector, leaving small businesses to work it out for themselves,” a VECCI spokesperson says.
“There has been little modelling of the impacts on small business … victorian state government modelling shows a cost to the state economy of around $2.5 billion and of up to $1000 for the average small business such as the hairdresser, bakery and pizza shop, via increased power costs.”
Strong and Conway believe the small business sector will be the ultimate decider at the next election with Conway referring to small business owners as “the government’s jury”.
Strong says “in the end, it’ll be small businesspeople who decide with their 2.5 million votes at the next election”.
“What we need now is information to inform that vote. We need to know exactly what will happen to businesses in the various sectors,” Strong says.
“We need detailed modelling of how the tax will affect different small businesses as well as case studies and information for small business to use in business planning.”
COSBOA has identified some of the businesses in need of modelling and case studies:
- Real estate agents.
- Owner-drivers and couriers.
- Hairdressers and drycleaners.
- Home-based businesses.
- Independent contractors across all trades.
- Restaurants and fast food outlets.
- Small supermarkets and convenience stores.
- Small accountancy firms.
- Independent service suppliers.
- Small engineering firms.
- Small manufacturers.
- Independent businesses in the auto industry.
- Independent service stations.