Half of firms say they aren't feeling heat of carbon tax
The findings, from almost 18,000 respondents, come as the Rudd government weighs up cutting the carbon price by bringing forward the shift from a fixed price to a floating one sooner than July 1, 2015.
Of the firms surveyed, 45 per cent said the carbon price - which rose from $23 per tonne of carbon dioxide to $24.15 at the start of July - was negative for their business, with one in seven describing the impact as "very negative". DBM said 47 per cent said there was no effect.
The reported effects varied across industries, with the impact described as negative by 67 per cent of mining businesses and 59 per cent of manufacturers. By contrast, firms in education, finance, health and property reported negative impacts for between 31 per cent and 38 per cent of respondents.
"There is real polarisation - with very different results between the service industries and those which produce things or use a lot of energy, such as transport," said Tim Honcoop, account director at DBM.
Businesses with an annual turnover of $50 million tended to become less negative about the tax as the survey progressed. Those reporting a negative impact dropped to 33 per cent from 39 per cent.
The report contrasts with a survey released last month by the Australian Industry Group showing that - negative impact or not - most companies had not reduced the carbon intensity of their operations during the first year of the carbon tax.
Among the reasons for the limited response was that companies had already taken steps to improve energy efficiency after several years of rising gas and electricity prices. Some said they were too cash-strapped.
The Australian Industry Group survey also found some firms were not cutting emissions intensity because they expected the carbon price to fall - possibly to zero - raising doubts about the return on any investment in energy saving.
The Coalition has vowed to scrap the carbon tax, if elected, while the Rudd government is considering whether it can move to a floating price linked to the European emissions market - trading at less than $6 per tonne as of Thursday - sooner than mid-2015.
Frequently Asked Questions about this Article…
DBM Consultants surveyed almost 18,000 firms and found mixed results: about 45% said the carbon price had a negative effect on their business (with one in seven calling it "very negative"), while roughly 47% reported no effect. The study also noted larger firms generally reported the least impact.
Energy‑intensive industries reported the largest negative impacts: 67% of mining businesses and 59% of manufacturers said the carbon price hurt them. By contrast, service sectors such as education, finance, health and property reported lower negative effects (about 31% to 38% of respondents).
The survey showed a size effect: businesses with annual turnover around $50 million tended to report less negative views over time. Among that group, the share reporting a negative impact fell from 39% to 33% as the survey progressed.
A separate Australian Industry Group survey found several reasons: many firms had already made energy‑efficiency improvements after prior rises in gas and electricity prices, some were too cash‑strapped to invest further, and others expected the carbon price to fall—possibly to zero—reducing the perceived return on energy‑saving investments.
At the start of July the fixed carbon price rose from $23 to $24.15 per tonne. The Rudd government was weighing bringing forward the shift from a fixed price to a floating price linked to the European emissions market (which was trading at under $6/tonne at the time). The Coalition has pledged to scrap the carbon tax if elected—both political options create policy uncertainty for businesses and investors.
DBM Consultants' research covered almost 18,000 respondents and was conducted over the past year, providing a broad cross‑section of business views on the carbon tax.
Yes — DBM highlighted a real polarisation: service industries generally reported smaller impacts, while businesses that produce goods or use a lot of energy (like transport, mining and manufacturing) reported much higher negative effects.
The key takeaways for investors are: sector matters (energy‑intensive firms are likelier to feel the hit), many companies hadn’t cut emissions intensity in year one so cost exposure could persist, and policy uncertainty (possible move to a floating price or repeal) can materially change corporate cost forecasts. Investors should monitor company disclosures on energy costs, emissions intensity and how policy developments might affect future profitability.
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