The Gillard government has foreshadowed a big-spending policy to help business through the transition to a carbon price, as the head of Toyota Australia warned the tax could put the local industry ”in a corner with nowhere to go”.
Industry Minister Kim Carr flagged tax breaks to business - not just the car industry - and ”co-investments” to be funded by the proceeds of permits.
He told The Age the government would develop plans for industries affected by the impost of a carbon price, and develop a ”balanced package” to protect manufacturing jobs.
Senator Carr - who recently saw his $234 million Green Car Innovation Fund fall victim to a savings drive for disaster relief - is clearly positioning in advance of looming cabinet deliberations to use the carbon price transition to secure millions in fresh industry aid.
”What underpins Labor’s philosophy is the need for an active industry policy,” he said. ”It means working with industry to ensure the necessary investments are in place.”
His comments are intended to quell substantial nervousness in the business community and at the same time placate unions, who fear the hit to manufacturing jobs. Industry policy is exactly what the ACTU is calling for and it is also suggesting tariffs be applied to imports from countries that place no price on carbon. The notion of carbon tariffs was savaged yesterday by Trade Minister Craig Emerson.
ACTU president Ged Kearney said there was a ”strong argument” for carbon tariffs to protect emissions-intensive trade-exposed industries.
Carmaker Toyota warned the carbon tax could endanger the future of the local car industry.
Toyota Australia president Max Yasuda put a price on the effect of a carbon price: a $25 per tonne tax would cost Toyota around $25 million.
Mr Yasuda - who is on the government’s business round table on climate change - warned yesterday the tax could put the local industry ”in a corner with nowhere to go”.
”If it is not planned and managed effectively, the yet-to-be-defined carbon tax has the potential to heavily impact local automotive manufacturing, which employs 47,000 people,” Mr Yasuda said.
The carbon tax would strip the profits needed to reinvest in new, more environmentally sensitive cars and manufacturing processes, he said, and place Australian operations at a disadvantage when competing against countries where no price is applied to carbon.
”The business is already under competitive pressure from overseas vehicle importers and Toyota Australia’s capacity to invest in low-emission technology relies on the profit the company makes. If under a carbon price, the business is trade-exposed and it cuts into our profit, we could struggle to find the capital to invest,” he said.
”Toyota Australia needs to know what the price of carbon will be, when emissions trading will commence and what transitional assistance will be provided to industry to protect important export markets and Australian manufacturing jobs.”
With the opposition campaigning against the tax, acting Prime Minister Wayne Swan also attempted to eliminate another headache for the government - signalling to independent MP Rob Oakeshott he would not want to see the carbon price dragged into a tax summit due later this year.
