Carbon price schizophrenia?

Unions and industry lobby groups are making a range of contradictory statements about the need for wage increases due to the carbon price.

In today’s Australian newspaper we learn that the Australian Industry Group has asked Fair Work Australia to restrict the next rise in the minimum wage to less than the rate of inflation, because, “The cost of the carbon tax [on workers] will be far less than the compensation they receive.”

So one of Australia’s leading industry associations is suggesting that the Australian Government might not be lying after all when it claims most households will end up better off after the introduction of the carbon price. Surely this must be some kind of mistake.

Is this the same Australian Industry Group that said the carbon price would be devastating for the economy because it was set higher than the European carbon price? Even though on a worst case scenario for trade-exposed industry this would equate to an additional cost equating to less than 1 per cent of these businesses’ revenue after all the free permits they'll receive.

Is this a lobby group that purports to represent many of the same companies that the Australian Chamber of Commerce and Industry also claims to represent?  And yet the ACCI, in responding to union demands for carbon price related wage increases, largely agreed with their overall point and said that the carbon tax is “bad for workers” and should be abandoned.

It should also be pointed out that the union lobby is no better on this issue. We have the ACTU claiming the carbon tax will help create jobs of the future and will not have a noticeable impact on costs within the economy. But then several of its prominent members demand wage increases to account for higher cost of living associated with the carbon price, because compensation will be insufficient.

As I observed in a prior article (Carbon prices and the economics of self-interest - 2 March) the only thing that’s consistent about lobby groups’ statements on the carbon price is the self interest of their members.