Carbon tax uncertainty should end

The excitement of getting the carbon tax through the lower house of Parliament seems to have done magical things.

As the results of the vote on the bill were announced in the House of Representatives, Prime Minister Julia Gillard was so excited that she kissed leadership rival Kevin Rudd.

Across the chamber, the Coalition reacted to the kiss with laughter. Indeed, the Opposition appears to be feeling pretty smug right now.

They may have lost the vote on the carbon tax, but Opposition leader Tony Abbott looks very confident about winning the next election and he has “pledged in blood” to repeal the carbon tax.

“We have a Prime Minister who is the great betrayer of the Australian people. She was absolutely crystal-clear before the last election – ‘There will be no carbon tax under a government I lead,'” Abbott told ABC radio this morning.

“We can repeal the tax, we will repeal the tax, we must repeal the tax,” Mr Abbott said.

“I am giving you the most definite commitment any politician can give that this tax will go. This is a pledge in blood. This tax will go.”

It’s all very colourful and very Tony Abbott – who can forget his pledge that WorkChoices is “dead, buried and cremated” prior to the last election?

But does the idea of repealing the carbon tax really appeal to what the Coalition likes to think of as its SME heartland? I am not so sure.

SMEs are definitely worried about the carbon tax, but not because they oppose the idea of it.

Instead, they are rightfully unimpressed that the Government has been slow to release modelling that will explain in detail the impact of the tax on SMEs.

As COSBOA chief Peter Strong told SmartCompany today: “Small business wants to know, what will it cost me as a truck driver, as an accountant, as a real estate agent? At the moment, we’ve got a general figure coming out from the Government. That’s easy to say, but we need more information.”

When SMEs get this information, they’ll be able to better judge the impact of the tax and start preparing for July 2012 when the new regime will come into force. Exactly how much work will be involved in this preparation process is unclear, although pricing will need to be re-examined within most businesses.

But once SMEs get ready and once the system is in place, I’m not sure whether small and medium businesses will actually welcome the prospect of the whole thing being repealed by an Abbott government.

Repealing the carbon tax would result in SMEs chopping and changing systems, reworking forecasts and internal modelling and potentially restructuring parts of their businesses – and all of this just 12 months after having done exactly the same thing to get ready for the carbon tax start date.

For SMEs, planning and strategising is hard enough at the best of times. Planning in an environment where political uncertainty is being heaped on top of economic uncertainty is ridiculous.

There is widespread agreement that Australia and the rest of the world will have to take action on climate change and put a price on carbon. This might not be the perfect time to introduce such a mechanism given global economic circumstances, but business needs certainty. Let’s get on with this transition and let’s make sure SMEs are well supported through it.