Hmm. Who to believe? The people actually running these businesses, or a Government with a bizarre grasp of market economics?
Electricity costs will soar by 10 per cent in the new financial year as a result of the tax, according to official Treasury estimates, and recyclers warn the increases will send them broke.
A Federal Government spokesman told the Herald Sun last night recyclers should pass on higher electricity prices to households, who would be compensated for the carbon tax.
But energy-intensive recycling companies, which melt waste plastic for re-use, say they will go out of business unless they match the price of cheap imports.
Even without the cheaper imports, the recyclers would be in trouble. The compensation to households does not go to everyone. Moreover, the compensation is not specific to any purchase. That means that while someone might be overall no worse off, they may still decide not to spend their money (plus compensation) on products that have jumped in price and which suddenly seem relatively more expensive.
Or put it this way. Your income rises, say, 1.5 per cent with compensation, but some particular product goes up 3 per cent. Are you more likely or less likely to buy it?
Again questions arise about the advocacy of Heather Ridout, who for too long as done too little to fight a damaging and utterly pointless tax:
TWO weeks ago the most powerful peak industry and employer groups in Australia hooked up on a conference call to try to forge a united front against the government and exert pressure on it to defer or alter the carbon tax.
They wanted to send a strong message to Julia Gillard, but what happened next left a few of the participants bemused and angry, especially over the role of the outgoing head of the Australian Industry Group, Heather Ridout, whom they hold responsible for scuttling chances of a consensus position against the government…
Initially, discussion centred on a possible joint approach to the government to cut the price to $10 a tonne, a position Ridout publicly advocated early last month when she claimed the $23 was tantamount to a “tax on industry” and, given the high dollar, industries could “ill afford” to pay it.
However, on the conference call, Ridout sounded as if she had caught a dose of the wobbles. Either that or someone had clearly explained to her political realities.
According to sources, she said she was unsure it was even worth tackling the government on the $10 price because it had shown no signs of moving, and perhaps the group would make more headway if it pressed the opposition to negotiate with the government.
But Abbott shows signs of moving? Ridout, now appointed to the Reserve Bank board, once again seems strangely unwilling to take on a Labor government over disastrous and irrational policies.
Andrew Bolt’s columns appear in Melbourne’s Herald Sun, Sydney’s Daily Telegraph and Adelaide’s Advertiser. He runs the most-read political blog in Australia and hosts Channel 10’s The Bolt Report each Sunday at 10am. He is also heard from Monday to Friday at 8am on the breakfast show of radio station MTR 1377, and his book Still Not Sorry remains very widely read.