Business counting carbon tax
ABOUT half of Australian companies have either seen little impact from the introduction of the carbon tax on their energy costs or are yet to calculate the effects, according to surveys by the Australian Industry Group.
About 49 per cent of businesses in the manufacturing, construction and services sectors reported an immediate increase in prices of at least some of their inputs after the introduction of the carbon price on July 1, the AiGroup report found.
A follow-up survey of 485 businesses in November, however, found that a third of manufacturers and construction firms and as many as one half of service sector respondents "did not yet have enough information" to gauge the impact of the new tax.
Businesses estimate energy costs have increased by an average of 14.5 per cent because of the carbon levy. Some of that estimate, though, may be because firms incorrectly blamed the tax for wider increases in power bills, such as for new poles and wires.
For instance, manufacturers attributed 85 per cent of the total electricity price increases since July on the carbon prices. "However, other data suggest that for smaller electricity users, network will account for close to one half of the total electricity cost increase from 1 July 2012," the report found.
Australian Industry Group chief executive Innes Willox said some of the over-estimation of the carbon price effect was because of "a real sense of apprehension" about its impact.
"We put it down to the publicity around the tax . . . so companies were bracing for the worst," Mr Willox said. "They're still getting hit by big rises - it's a matter of where the rise comes from."
The AiGroup did not estimate the contribution of higher energy prices to total costs, although its findings indicate the increases from the carbon price are in line with Treasury forecasts.
"The AIG report confirms that carbon pricing is a manageable economic and environmental reform - in contrast to Tony Abbott's scare campaign that it would be the death of entire industries and regions," a spokesman for federal Climate Change Minister Greg Combet said.
"AIG's survey found the impact of the carbon price on electricity costs for most businesses is an increase of around 2¢ per kilowatt hour - which is exactly what the Treasury modelling predicted," the spokesman said.
According to the Australian Bureau of Statistics, producer price figures show electricity costs rose 6.7 per cent in the September quarter. Some of the increase is in the pipeline, though, as firms assess the full effects, Mr Willox said.
Energy bills are likely to rise further as higher electricity and gas costs flow through, much of which is unrelated to the carbon price.
While painful for many firms, the higher energy costs are not as big an issue for many companies as the higher Australian dollar.
"The No. 1 pressure by far is the impact of the dollar," Mr Willox said. "That is skewing business models" by making it harder to export and sucking in imports, he said.
The ability of firms to pass on higher energy prices, including the carbon tax, varies by industry.
Construction companies, for example, reported the new tax had lifted total energy costs 14.8 per cent but they were also the most able to pass on higher charges to their customers, the AiGroup report found.
The food industry is struggling the most, with 90 per cent reporting higher energy costs but only 10 per cent of food-processing firms able to pass the cost along, with the dominance of the big retailers a factor.