It’s ”nonsense” that only big companies will pay the carbon tax - everyone is going to pay, and commercial property will be affected.
That was the message from consultant Peter Ramsay to a retailers property conference in Melbourne on Friday. The conference was sponsored by Lease Eagle.
Mr Ramsay said Treasurer Wayne Swan was wrong to say that only the top 500 companies would pay the carbon tax and that 97 per cent of families would be better off. ”It’s a bit of nonsense,” he said.
There would be some compensation (for individuals and some companies), and the 500 would ”directly pay”. This would cover waste disposal, non-coal mining, electricity generators, natural gas suppliers and transport - rail, aviation, shipping and on-site transport.
However, Mr Ramsay said retailers would be greatly affected. Electricity generators would pass on the carbon tax to consumers through higher electricity costs and higher rents, and the transport and manufacturing sectors would similarly pass on the higher costs. ”The entire supply chain will be impacted,” he said.
In the US, Wal-Mart had been asking suppliers for their carbon footprint for years.
Mr Ramsay said the structure of the tax - a mixture of compensation and subsidies - distorted what it was meant to achieve. ”There is no incentive to change behaviour,” he said. ”What we will have is a high cost per tonne.”
Internationally, the approach should be a level playing field - Australia should not just ”fly the flag”, as the country only produces 1.4 per cent of the world’s greenhouse gases. ”I’m not advocating doing nothing at all - I’m not a sceptic, I think climate change is happening - but I believe in facts, not spin,” he said.
If Australia did nothing, it would not have any impact on the world’s temperature. There should be a rational approach globally to get some real reductions. The US, China and India were taking some action, but their total emissions ”are actually increasing”. China was installing solar power, but also putting in new coal-fired power stations every week.
With retailers facing extra costs, Mr Ramsay said ”you need to be on the ball to try and contain these costs”. Retailers faced the added disadvantage that international competitors were not paying a carbon tax, coupled with the competitive pressures of online shopping.
Mr Ramsay said retailers needed to reduce their electricity costs by increasing energy efficiency. ”Consider installing LED lighting and sensor lighting,” he said. ”The largest energy savings are in upgrading heating/cooling systems and refrigeration.” Moving to a more energy efficient building was another option.
The trucking industry was exempt from the carbon tax until July 2014. ”Keep this in mind when negotiating long-term transport contracts,” he said. ”It would be prudent to revisit service contracts for logistics operations.”
Mr Ramsay said big landlords such as Westfield, Stockland and Centro expected retailers to contribute to the costs of air-conditioning and electricity. Clauses in leases passed increased costs on to tenants.
”Talk or negotiate with the landlord regarding whether there are rewards for increasing energy efficiency. Negotiate having a ‘green lease’.”
Mr Ramsay said retailers should reduce waste and make use of government incentive programs. For example, small businesses that have electrical bills up to $40,000 per year and fewer than 11 full-time employees were entitled to a 50 per cent rebate on an energy assessment, he said.
