Food for thought - will the ETS hit us at the checkout?
Big retailers are scared, it was reported this morning, to say what they think about the checkout-counter effects of the Federal Government’s plan to help save the planet with its emissions trading scheme.
The supermarkets are worried they will enrage environmentally-conscious customers if they dare to so much as suggest there might be some unpleasant side-effects to the ETS.
In case you’ve missed it, The Australian reported retailers are worried the cost of groceries will go up, by about 5 per cent, under the Rudd Government’s plan.
First, it’s pretty pathetic that retailers feel they can’t express their concern for fear of reprisals. People are sensible enough to listen to a supermarket CEO without thinking he or she is a walking Exxon Valdez. Any hippie worth the name shouldn’t be shopping in places like Woolworths anyway.
But second, we know only about the retailers harbouring secret concerns. Sorry to go all Michael Jackson Earth Song, but what about airlines? What about farmers? What about fast food outlets? What about Bunnings?
What other sectors of the economy believe there will be unexpected costs they will have to pass on to consumers?
Junior climate change minister Greg Combet said today the retailers’ figures were plain wrong. Treasury modelling, as he said, predicts a food price increase of about 0.1 per cent in the first year.
This Treasury modelling on the hip-pocket impact of the Emissions Trading Scheme is impressively detailed. You can see the details here (PDF, 900KB) – but essentially it estimates the cost of the scheme to pensioners, single people, sole parents, families with various amounts of children – on a wide range of income levels – and then explains how much each would be expected to get back from the government under budgetary countermeasures like Family Tax Benefit and pension increases.
And the hip-pocket impact is very clearly designed to make richer people pay more. As the table shows, the Government argues it will cover all increases in the costs of living for people on lower incomes.
When it gets to middle incomes, a single person earning $65,000 a year can expect an increase in the cost of living of $617 a year. Government assistance will total $430 a year, making this single person have to find around $200 a year to break even while playing their part in Australia’s grand plan to play a leadership role in reducing global carbon emissions.
Fair enough, right? Saving $200 a year isn’t that hard. Hey, you could start shopping at Costco, which opened in Melbourne today and sells three litres of full-cream milk for less than $3. If the prices of certain things rise, you can change where you shop or - as Jon Kudelka suggested this morning on page 1 of The Australian, reprinted above - just eat less.
This all depends, though, on the Treasury modelling being accurate. A source in the Food and Grocery Council said today their information was based on estimates from various suppliers on how the scheme would affect their prices.
Combet said the Government had every confidence in the Treasury modelling. But with respect to Treasury, we can be sure some of these businesses have a clearer idea of how their bottom lines will be hit than an economist sitting in a Canberra office.
The Government would be wise to allow a frank, open discussion about what people expect out of the ETS – even if they want to say they think prices will go up. A scheme this big needs a massive supply of public information and a sustained campaign warning excited businesses against price rorts.
Otherwise, if prices do suddenly spike once the scheme is in place – expected to be 2011 – there’ll be hell to pay.
Read all about it
Up to the minute Twitter chatter
@mooks83 sophisticated response. Think the kids parents saw it differently
More class from 9's footy show, lampooning a baby that allegedly looks like Sterlo with a pic swiped from Facebook http://t.co/BGoYP6Pn68
The latest and greatest
Good morning Punchers. After four years of excellent fun and great conversation, this is the final post…
I have had some close calls, one that involved what looked to me like an AK47 pointed my way, followed…
In a world in which there are still people who subscribe to the vile notion that certain victims of sexual…