AXING THE CARBON TAX THE MOST BENEFICIAL TAX REFORM
20-September-2011
The Prime Minister has announced plans for tax reform to help struggling manufacturers yet can’t see the obvious reform required – axe the carbon tax.
Addressing the Ai Group’s annual dinner the Prime Minister said:
“When the tax system hinders investment in a struggling business or discourages lending to a business with a new idea, it does more than add to patchwork pressures – it harms national productivity as well.”
Coalition MPs have collectively made thousands of visits to manufacturing businesses in recent times and manufacturers consistently place the carbon tax at the top of their list of concerns. Manufacturers say that the carbon tax will add cost pressures to their operations and give a leg-up to imported products competing in domestic markets. Additionally, many manufacturers are telling us that they have already shelved plans to invest in local plant and machinery due to competitiveness risks brought about by the carbon tax.
Media reports today indicate that the carbon tax will add significant risk to the viability of a local aluminium manufacturing sector.
Australia’s biggest aluminium producer, and Victoria’s largest exporter, Alcoa, faces increases in costs of more than $40m yearly due to the carbon tax, not all of which will be covered by compensation under the Government assistance package. The carbon tax poses a specific and legitimate threat to Alcoa and raises fears of job losses which would have a devastating impact on both the local and national economy.
There is no point in tinkering with changes to the corporate tax system when the overwhelming majority of manufacturers have one simple message on reform – axe the carbon tax.