Business groups have made an 11th-hour appeal to the federal government to make amendments to its carbon price legislation, which is due to be voted on in Parliament tomorrow.
The Business Council of Australia (BCA), which represents chief executives from the nation’s top 100 companies, says the starting carbon price of $23 a tonne, rising to $25.40 in the first year, is far ahead of the current effective world price.
“The legislation imposes a hard start on Australian industries that cannot be offset by action to reduce emissions overseas,” the council’s CEO Jennifer Westacott said in a statement today.
“It is not economically sensible for Australia to see industries that would be competitive under an effective global carbon price forced into premature decline.”
Australian Industry Group CEO Heather Ridout agreed, saying Australian manufacturers were facing prices about 50 per cent higher than those in the European Union.
“This will place Australian manufacturers at a competitive disadvantage even relative to their European counterparts,” Ms Ridout said in a statement.
The $23 carbon price will start on July 1 next year.
Ms Westacott believes the legislation must be amended to include specific safeguards so Australia acts in tandem with other major emitting nations over time and adjustments can be made to keep Australia competitive.
“The legislation without the safeguards proposed by the Business Council of Australia is neither workable nor responsible and is a flawed approach to pricing greenhouse gas emissions,” she said.
The council is seeking a low starting price that reflects the international price, and guaranteed passage of the proposed steel transformation plan bill.
It wants improvements to the arrangements for trade-exposed industries to ensure they do not face additional costs their competitors do not face.
Other safeguards include a replacement of the 2050 emissions reduction target with a clause which states Parliament must agree on future targets subject to independent evaluation and community consultation.
Ms Westacott said Parliament should recognise the pressures many industry sectors are facing.
“Without these safeguards the legislation is a risk to the Australian economy,” she said.
Ms Ridout believes the carbon price should be no more that $10 in 2012-13 and that manufacturing adjustment programs need to be fast-tracked so they can get ahead of the game and reduce their exposure to the carbon tax.
“The federal government should, as a matter or urgency, articulate a clear strategy that will see all levels of government cut back the tangle of inefficient emissions reduction measures that have proliferated across Australia,’ she said.
