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Small businesses remain fearful of carbon tax impact

Wednesday, 10 August 2011 | By Michelle Hammond
Two thirds of Australian business owners still believe the carbon tax will hurt their business, according to a new poll, despite a general rise in public support for the scheme.

 

The MYOB Business Poll, based on a survey of 3,500 business owners, shows 65% believe the carbon tax will have a negative impact on their business.

 

The poll reveals carbon tax concerns are more pronounced in mining and tourist regions, with Queensland leading the way as the most concerned state, followed by the Northern Territory, NSW and WA.

 

This is consistent with the higher number of rural business owners who believe the carbon tax will hurt their business (67%), compared to 61% of city-based businesses.

 

MYOB chief executive Tim Reed says while it makes sense to put a price on carbon, it couldn’t have come at a worse time for small businesses.

 

“Selling it as a new tax was never going to go down well with Aussie business owners in the current economic environment,” he says.

 

“Most businesses understand the logic of putting a price on carbon but are concerned by the Government’s decision to exempt many carbon-heavy companies.”

 

“They fear the tax will push business costs up and that Australian shoppers will feel out of pocket, which will compound losses at the cash register.”

 

Shadow Small Business Minister Bruce Billson agrees the carbon tax will further damage the already-struggling retail sector, citing recent statistics from the Australian Retailers Association.

 

“The ARA’s survey found 83% of retailers are expecting consumers to spend less as a result of Labor’s carbon tax, with a further 85% of respondents believing the carbon tax will have a negative impact on business profitability,” Billson said in a statement.

 

“The survey also found over one third of retailers will be forced to pass on price increases to consumers, and jobs will be lost.”

 

However, the situation might not be as bad as people think, with a recent Newspoll showing public support for the carbon tax has risen 6% since the details were announced.

 

The impact of the tax is further downplayed in NAB’s latest business survey, which is based on data from more than 400 firms.

 

While business conditions weakened in July, with confidence remaining subdued due to ongoing economic uncertainty, the carbon tax doesn’t appear to have contributed to the retreat.

 

“Business confidence remained at subdued levels, with the US debt situation – coupled with the negative impact of the high Australian dollar and continued cautiousness of households – eroding confidence in a number of service sectors and manufacturing,” the report says.

 

“As the first reading of business confidence post the carbon tax announcement it appears that, to date, the latter has had little impact on confidence.”