The carbon tax details to be revealed Sunday, but business still divided

Prime Minister Julia Gillard is set to finally unveil details of the proposed carbon tax on Sunday but business remains deeply divided on the issue.

Labor and the Greens look to have the numbers to push the legislation through Parliament but the Australian Chamber of Commerce and Industry has warned that increased costs come at a bad time for businesses already battling high interest rates, an appreciating dollar and soft consumer demand.

“More exposed businesses will find it increasingly difficult to cope with further cost imposts including the proposed carbon tax and the prospect of rising interest rates,” Greg Evans, director of economics and industry policy at the ACCI said.

Peter Strong, of the Council of Small Business of Australia, says he is looking forward to the announcement with “bated breath.”

“I hope to heck small business gets lots of mentions,” Strong says, adding he was pleasantly surprised that SMES have been exempted from fuel price charges.

Strong is calling for all sides of politics to engage with people and back up their promises with details and costings.

But a business group representing more than 50 companies including AGL Energy, GE and property group Grocon says it supports a price on carbon.

The group, which has set up a website called Businesses for a Clean Economy, says on the site “as major Australian and international corporations and representative associations operating across the Australian economy we strongly support the introduction of a well-designed carbon price to support the transition to a low-carbon economy.

“As the costs of action are outweighed by the costs of delay the carbon price should be implemented as soon as possible.

“A price should be accompanied by appropriate transitional assistance for households and trade-exposed industry as well as complementary measures that reduce emissions at least economic cost.”

The legislation, set to be introduced after the winter break in parliament, has qualified support from key independent MPs Tony Windsor and Rob Oakeshott, who pushed for SMEs and households to be exempted from a tax on fuel.

Independent MP Andrew Wilkie broadly supports a price on carbon but says he is keeping an eye on the detail, particularly compensation.

“People on low incomes must be properly compensated, high emission trade-exposed industries such as the zinc works in Hobart must be fairly treated, Tasmania’s potential to be an important source of carbon offsets must be accommodated, there must be a high level of investment in renewable energy sources and Tasmania’s existing reliance on hydroelectricity must not be disadvantaged,” Wilkie said.

Full details will not be revealed until Sunday’s address but it is expected that compensation for the coal industry – $250 million per year – will be lower than it was under Labor’s dumped carbon pollution reduction scheme. There were also reports of loan guarantees to coal-fired power station operators.