Issue 145 - The Australian Chamber of Commerce in Hong Kong.

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6 | AUSTRALIA FOCUS Inhale now: Australia puts its price on fresh air On July 1, Australia became the world’s most expensive place to emit greenhouse gases after a tax of AU$23 tax per tonne was placed on carbon. Although only 300 companies will be forced to pay, the burden of the tax will flow through the entire economy as businesses pass on any increased costs. The most visible effect is likely to be on domestic power bills after energy companies jack up prices to offset ballooning tax exposures. Among others, the mining, transport and steel industries will be affected. The Government is facing a massive scare campaign from the Opposition but has told low and middle-income earners not to worry because tax receipts will be used to compensate them for any higher costs. Prime Minister Julia Gillard has argued the carbon tax is necessary if Australia, which is the world’s largest greenhouse polluter per head, is to meet its obligations on greenhouse omissions. Opposition Leader Tony Abbot has called it a “toxic tax” and has promised to repeal the legislation should he win the next election. If opinion polls can be believed, this is a very real possibility. According to a Nielsen poll taken in early July, just after the tax was introduced, Labor’s Primary vote was just 28 per cent, compared with 48 per cent for the Coalition. Speaking to an AustCham business lunch in Hong Kong recently, Treasurer Wayne Swan admitted that the introduction of the tax along with the Mineral Resources Rent Tax (MRRT) had contributed to Labor’s dismal position in the polls. “We came back in as a minority government and proceeded to put in place some big significant reforms like carbon pricing and then you get a negative opposition… they’ve run negative and they’ve run hard and they’ve done it in that environment, and I think they’ve had a fair bit of impact,” he said. A Nielsen poll taken in the days after the tax was introduced found support for it had dropped to an all-time low of just 33 per cent. Projections for the total impact on daily living costs range from benign to significant. Treasury has estimated that an average family will pay $9.90 more per week in the first year of the scheme’s introduction. It is still much too early to work out the real costs however opponents and the media have been searching for any signs of rising prices. The Managing Director of Brumby’s bakery was forced to resign after being caught urging his employees to blame price rises on the carbon tax. Then about two weeks after the tax was introduced, the Australian Competition and Consumer Commission (ACCC) released figures on the number of complaints it had received during that period. More than 600 complaints or enquiries directly related to the tax were received in the first 10 days after it was introduced. In total the ACCC received more than 8000 general complaints for that period. Deputy Chairman of the ACCC Michael Schaper told the ABC that out of the 600- odd carbon tax complaints, it was actively investigating 20. “I can't give details about any of those specific investigations,” he said. “I will point out though that of the complaints more generally that we've received, clearly the biggest group have been about energy retailers and in addition to that a number of other sectors such as construction, land fill and refrigerant gases.” Reserve Your Seat Now! 600 complaints or enquiries directly related to the tax were received in the first 10 days In a recent editorial The Economist magazine said that despite “birth defects” in implementing the carbon tax and the MRRT there were “merits in their conception”. “(It will allow) the government to lower taxes on work, by raising the threshold for income tax,” the magazine said. It added: “Other governments would do To enquire about advertising, submit an article, comment or respond to austcham news, please contact Karen at communications@austcham.com.hk or call +852 2522 5054.
well to emulate and improve upon Australia’s efforts to shift the tax burden from hardearned wages and profits to unearned rents and uncompensated harms”. That view is in the minority in Australia right now and unless Gillard can change that, she and her colleagues could well find themselves in a minority in the next parliament. The obsession from both sides for finding statistics to back their case is likely to continue right up to the election campaign - where the issue will be a significant factor because of the Opposition’s promise to scrap the tax. There are doubts in some quarters that the Opposition would actually go through with the promise however senior Liberal Christopher Pyne insisted to Sky News that they were serious and that the next election would be a referendum on the carbon tax. “We are telling the Australian public right up front, we will abolish the carbon tax... you couldn't be any clearer than that,” he said. In the weeks after the tax was introduced both government and opposition MPs fanned out across the country to spread their message. Climate Change Minister Greg Combet summed up the government’s message to the ABC. "This is a reform that is perfectly manageable, one that is a responsible thing to do," he said. While the Opposition arguments seem to be gaining most traction there are glimmers of hope that with the right strategy, Gillard might be able to turn public opinion her way. - Michael Wray AUSTRALIA FOCUS | 7 MEMBER CLASSIFIEDS Director of Finance & Accounting (Hong Kong) WINDS Group is a fast growing innovative global Performance-Textiles supply chain company, now seeking a young, pro-active and dependable Finance & Accounting professional to manage its global treasury function. WINDS Group employ 4000+ staff, servicing global brands like: ASICS, PUMA, DIADORA, RUSSELL ATHLETIC, SKINS, SPALDING, PEARL IZUMI, etc. The position reports to the CEO in Hong Kong HQ and comes with ultimate Group P&L and Balance Sheet consolidation responsibility. It is the most senior financial position in the company, leading a global team of 30 staff. Email applications with Cover Letter & CV to Mr. Hopkins at: 4windsrecruitment@windsgroup.com w w w . w i n d s g r o u p . c o m Office Space for Rent Quiet professional office in prestigious refurbished "green" building • Flexible lease terms and pricing • Full wireless access • Pantry • Use of meeting rooms • Some administrative support Call: Teresa Tam Tel: 852-3588 0023 Email: teresatam@primasia.hk www.primasia.hk Australia Registered Tax Agent in Hong Kong Holistic Business Consulting Pty Ltd. Chartered Accountant We specialise in tax planning for Australian Expatriates, tax returns preparations, private rulings for deductions. Call Tommy Ip on +85269018136 or email holisticbus@gmail.com www.MyOztax.com
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Issue 145 - The Australian Chamber of Commerce in Hong Kong.

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