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Gillard rejects reports of Westfield carbon charge clause

Thursday, 15 March 2012 | By Michelle Hammond

Shopping centre giant Westfield is reportedly introducing a charge clause in lease agreements for its retailers to offset the costs of the carbon tax, but Prime Minister Julia Gillard has rejected the claim.

 

According to a News Limited report, Westfield has included a “carbon or greenhouse gas emission charge” in lease agreements with 11,885 retailers across the country.

 

It said the clause allows Westfield to pass on any “carbon or greenhouse gas emission-related charge and recover the same from the lessee at cost”.

 

The report said other shopping centre owners are expected to insert similar clauses. Retailers fear such clauses will add thousands of dollars to their annual rent and power costs.

 

But Prime Minister Gillard has rejected the report, referring to a statement by the Shopping Centre Council of Australia, which says the clause is not new.

 

The statement also says the clause does not directly refer to a carbon tax, and started appearing in lease agreements years ago when talk began about legislation to combat greenhouse emissions.

 

“Discussions about combating greenhouse gas emissions has been around for a while, right back to the days that Tony Abbott was standing alongside John Howard backing a carbon price,” Gillard said.

 

StartupSmart contacted Westfield for comment, but a reply was not available before publication.

 

However, the SCCA says the reality is that when the carbon tax comes into effect on July 1, shopping centre electricity charges will likely rise.

 

“If the lease permits the recovery of such outgoings, this will mean some retailers will be paying higher prices for their electricity,” the SCCA said in a statement.

 

The SCCA said it was no surprise that after years of public debate about a carbon tax, certain business costs for both landlords and tenants would increase.

 

“And, therefore, the prices of some goods will inevitably rise too,” it said.

 

Meanwhile, Opposition leader Tony Abbott has used the Westfield controversy as an opportunity to attack the carbon tax, saying “the whole point of the carbon tax is that it hits everything”.

 

“Because everything involves power and transport, everything is going to be more expensive as a result of the carbon tax,” Abbott said.

 

The carbon tax will begin at a fixed price of $23 a tonne before moving to a floating market-based system in a few years.