No carbon repeal bonanza?

The dastardly carbon tax has been blamed for increases of 50-80 per cent in energy bills, 5 per cent lifts in grocery costs and all sorts of other rises. So why is industry now telling us there'll be no repeal bonanza?

Based on the assorted claims over the past five years from Abbott and his colleagues, plus the tabloid media and the Australian Chamber of Commerce and Industry, after repeal of the carbon tax we could all look forward to buying a roast from the local butcher and walking out $80 richer, seeing our electricity bills halved, and even saving a few bob on a glad-wrapped watermelon (Down, down! The crazy repeal price bonanza, September 12). 

So I was incredibly disappointed to hear from business groups other than ACCI (what specific businesses do they precisely represent, by the way?) that we might not get to see a Boxing Day sales bonanza come six months early in 2014.  

First it was the Australian Industry Group, whose membership is manufacturing-centric, being a spoiled sport.

They told the government:

An AiGroup survey earlier in 2013 found that 70 per cent of businesses in the manufacturing, services and construction sectors were unable to pass through any of their carbon-related energy cost increases to customers. The remainder of the sample were able to pass through small amounts of their carbon cost. Across all businesses, just 6 per cent of total carbon costs were estimated to have been passed on to customers.

They also dared to suggest that energy prices might actually not go down much at all:

Energy prices have risen and are continuing to rise for other reasons, particularly large increases in electricity network costs and a dramatic increase in wholesale gas prices; the proportionate impact of removing carbon costs will likely not match the impact of their introduction.

I was further disappointed to learn from the Energy Supply Association that the Coalition government now only predicts a 9 per cent reduction in power bills. This left me completely confused because the Coalition had talked about the carbon price causing 50-80 per cent price rises in the past few years. And this 9 per cent seems eerily similar to what the prior government had claimed based on Treasury modelling, which back a few years ago I was told was just a pack of rubbish.

Worse than that, the Energy Supply Association said I might not see any reduction in prices:

…note that at 1 July, if the legislation is passed by this parliament, that there are a range of other factors that will also be informing the direction of power bills at the time. So consumers may or may not see a full 9 per cent change. It might be different in either direction depending on the nature of those other changes.

So that was a bit disappointing about power prices, but I’d also seen Abbott touring fish markets, butchers and even the Weet-Bix factory warning about the carbon tax, so maybe there was better news about my grocery bills. On this, the Australian Food and Grocery Council said that while the “government and the community may have expectations that food and grocery prices will come down immediately after abolishing the carbon tax”, most businesses had been unable to pass it on. Therefore, the food and grocery council said:

"There will not be an across the board reduction in food and grocery prices once the carbon tax is repealed."

This was especially disappointing given Kate Carnell, while head of this council, had happily been quoted by the Daily Tele and Herald-Sun the day after the carbon price design was revealed saying that prices would rise in the vicinity of 5 per cent or more.

And then the Business Council of Australia topped it all off, noting:

“It must also be recognised that the proportion of the carbon price that has been passed through may be less than the full carbon price depending on the nature of the industry and contract. This has implications for government and community expectations about the scale of price reductions.”

Surely they couldn’t be suggesting that the community’s expectations about the impacts of the carbon price are based on exaggerated claims? 

Abbott couldn’t possibly have been elected on the basis of a great big lie of his own, could he?