Despite a double-dissolution threat, business groups relieved by carbon tax repeal draft

Prime Minister Tony Abbott’s plan to present the government’s carbon tax repeal legislation before the end of the year has been met with relief by business and industry groups.

While the move could spark a double-dissolution election due to disagreement in the Senate, industry bodies are keen to see a speedy resolution.

The government released a draft of the package on Monday, and it was signed by federal cabinet yesterday. The draft is open to public feedback until November 4, and the Prime Minister has pledged to introduce the legislation in November, when the new parliament convenes for a month.

The government wants the legislation to come into effect from July 1, 2014. The Coalition says the removal of the tax will save households around $550 in the 2013-14 financial year as a result of reduced gas and electricity bills.

It also pledges the repeal of the tax will remove around “440 pages of legislation”, while reducing business compliance costs by about $100 million annually.

However, the legislation will be difficult to pass, as new Opposition Leader Bill Shorten has pledged to fight for Labor’s carbon tax system, while the Greens have also pledged to fight the legislation.

Australian Industry Group chief executive Innes Willox said the draft was a “welcome start to the dismantling of the carbon tax”.

However, Willox said “much work still needs to be done around its impacts and the replacement scheme”.

“Since the carbon tax began in July last year it has imposed costs on Australian businesses and the broader community well in excess of the costs associated with efforts in other countries to reduce greenhouse gas emissions,” Willox said.

He said the Ai Group will consult with members over the draft legislation and explore the “inevitably complex issues” related to the repeal.

“These issues require close and careful consideration. With the government not intending the repeal to take effect until July 1, 2014, and with the Direct Action green paper still some time off, we anticipate there will be a need for further consultation and refinement well past the November 4 cut-off date proposed today.”

Council of Small Business Australia executive director Peter Strong told SmartCompany this morning he wanted a decision made on the legislation with no fuss.

“We’d like to see it done quickly…certainty is what small businesses live on,” he says.

Strong says COSBOA had been relatively ambivalent about the carbon tax because it was not a prime focus of the small business community.

“We have much bigger problems we want to see action on.

“Don’t keep confusing people, can we just get it done either way.”

Queensland Resources Council acting chief executive Greg Lane said the draft legislation was a boost of confidence for the struggling coal industry in Queensland.

“Before the federal election, the QRC called for a globally competitive approach to emissions reduction,” Lane said.

“Currently, Australian coal mines are paying the world’s biggest price on carbon – $24.15 a tonne in 2013-14.”

“The biggest impost for the coal industry is Australia’s unique approach of applying the carbon price to unavoidable fugitive methane emissions released during coal mining.

“Queensland’s coal industry will remain at a competitive disadvantage in the global marketplace while this tax – that delivers no environmental gain – stays in place.”

Australian Retailers Association executive director Russell Zimmerman also welcomed the draft legislation, focusing on the potential boost in savings for families that could in turn be spent on retail.

“We are confident as retail businesses find savings from the abolition of the carbon tax that retailers will pass those savings on,” he said. “The ARA welcomes the ACCC being asked to monitor savings being passed on so major utilities, suppliers and landlords will pass savings onto retailers who will in turn pass them onto customers.”