SmartCompany poll gives carbon tax plan the thumbs down

SmartCompany readers have spoken and it appears that Prime Minister Julia Gillard has a big job ahead of her to sell the carbon tax.

More than half of respondents (52%) say the package will hurt their businesses and 30% say it’s too early to say.

Just 11.5% say the package will have a positive effect and 6.5% say it will have no effect.

Of the 340 respondents a whopping 82% say the package doesn’t provide enough support for SMEs and fewer than one-quarter (22%) say they support the package.

Respondents weren’t just scathing about the Government’s carbon tax package, with most questioning the need to act at all.

To the question “Do you agree that Australia needs to tackle climate change by putting a price on carbon?” 71% of respondents said no.

Seventy-three percent said the package does not provide enough support for exposed industries and 64% said the package does not provide enough support for households.

The tax, to be introduced next July and priced at $23 per tonne, is estimated by Treasury to boost total household costs by $9.90 per week compared to average household assistance of $10.10 per week.

Underlining the difficulty of addressing the issue of global warming while keeping the economy strong, criticisms of the carbon plan ranged from there being too much business compensation to not enough.

The Government household compensation plans – in which the tax-free threshold will be increased to more than $18,000, but household compensation will peter out in the higher income brackets – copped criticism for being too weak or being wealth distribution.

Criticisms of the plan in responses to the SmartCompany poll included:

• “There is no support for SMEs in this package.”
• “I would like to see no compensation or everyone be compensated equally. Don’t discriminate against people because they are successful. Tax scales should not be consistent for everyone.”
• “I believe the Government has under-estimated how much goods and services will increase.”
• “(The compensation) should have the same objective as GST – if you pollute then you pay.”
• “Support for small retailers. This will make consumers even more frightened to spend.”

But there were several messages of support:

• “Great start. They had to start somewhere.”
• “A message to all Australians: You either pay a little now or your children pay a lot more later.”
• “Very well implemented.”
• “We all need to expect to pay for the use of carbon. Encouraging all of us to consume more carefully and to drive investment in alternatives has to cost money. This is a big step forward and one to be congratulated and celebrated.” 
• “I think it is a terrific policy and linking it to some well needed tax simplification was particularly good. Now Australia can get on with it.”

SmartCompany readers want more detail, especially on the transition to an emission trading scheme, and greater sensitivity to SMEs, who complained early on that they were locked out of talks with the Government to put a price on carbon.

As one reader put it, there should be “respect for the reality that the flow-on effect in any economic change has an impact on that sector”.

Another reader suggested that revenues should be used to promote the environment and provide support and funding for companies that undertake R&D and invest towards alternative sources of renewable energy, while another says a calculator showing the cost of not taking action on climate change should be established.

The survey follows comments from Westpac Banking Group that the tax will have a smaller impact than the introduction of the goods and services tax.

“It raises just one third of the income that the GST and so too the impact on prices (a 0.7% boost to the CPI in the first year 2012-13 versus 2.5% with the introduction of the GST) will be smaller,” Westpac says.

Westpac also said there should be no implications for monetary policy and a “minimal impact on overall economic growth or jobs”.

“Treasury modelling suggests that the tax will have a minimal impact on growth and employment. However this does not mean there may not be significant adjustments within and/or between industries,” the bank says.

“What matters is how households and business adjust their near term expectations to these changes.”