Food for thought - will the ETS hit us at the checkout?

Daniel says:

04:44pm | 17/08/09

I’m starting to get annoyed with the articles we see every day saying how the emissions trading scheme is going to cost money to industry X. I mean, isn’t this the whole point? Costing money so that there is an incentive to lower that cost? Would this not mean that more environmentally friendly food would cost less than the pollution causing food, and thus be more attractive to the customers? Or am I completely missing the point here?

steve says:

05:12pm | 17/08/09

I note they always refer to the “first year”, the first year in which the cap is established and the impact set to “soft”.  What happens in years 2-5 when they set the lmpact to “stun”.  I would like to see the modelling on what its going to add to the cost of budget essentials such as electricity, food, transport over a 5 year period.  Businesses are not going to be able to reduce their carbon footprint overnight—they are going to measure it, cost it, and pass it on to the consumer.  That’s us.

Tom says:

06:37pm | 17/08/09

How can it not hit food prices? The real issue is how will the Australian food sector both farmers, manufacturers and processors who are heavily trade exposed and are to receive no free permits be able to compete on a ‘level’ playing field with other major agriculture exporters.

Not only will Australian food products have a carbon ‘tax’ placed on them when they compete overseas, importantly or competitors will not have any carbon tax placed on them in the domestic market.

The net result will be major supermarkets which control roughly 75% of the food market in Australian will simply import more from countries like China, South Africa and continents like Asia and South America which will not have a carbon tax on them. How can this be good for the environment?

ANDIKA says:

06:53pm | 17/08/09

What a croc!
Of course food will go up once the ETS is introduced and if you believe Treasury’s model then you’d also believe in fairies in the garden.
The ETS will act like a GST on food. But unlike the GST whereby the final user pays, everyone via the production link will have to pay. This is the price we all must pay so Rudd & Co can occupy the moral high ground and embrace this man-made climate change BS.
The only thing that will go down once the ETS is introduced is our standard of living.

iansand says:

06:55pm | 17/08/09

Have you only just worked this out?  Did you think that the cost of carbon trading will come out of the magic News Limited money tree, like your pay packet?  Higher cost of inputs means a higher cost at the end of the process.  Even if the conversion to more efficient energy use will reduce costs prices will not fall.

Farness says:

07:34pm | 17/08/09

Finally the truth hits home.

It’s the Emissions Tax Schemme cleverly disguised until now as the Emissions Trading Scheme.

I run a $12m electricity consuming business. My service charges will just go up so I can maintain the same work force and similar profit margins that allow re-investment and growth. Unfortunately my employees will be suffering from reduced buying power due to the new Rudd-Wong taxes on goods and sewrvices.

rufus says:

07:42pm | 17/08/09

Farness - whatever the ETS is,  it is not simply a tax scheme. All government revenues are redistributed in the same sector of the economy. Trading, in other words.

Bruce says:

07:55pm | 17/08/09

ETS is much like the Titanic without a rudder. No body knows where it is going to end up, but when it does hit something, its going to hit hard !! No doubt our pockets and rising inflation.

Rich says:

07:58pm | 17/08/09

I earn over 80k p.a. and understand that I won’t qualify for any government assistance to offset the impact of the CPRS. Fair enough, I have no complaints on that front.

What I can’t understand is how the assistance provided to the low and middle-income households is greatly in excess of the forecast impact.

It seems that the ‘rich’ are being asked yet again to wear all of the burden of this scheme, whilst the Rudd government uses the taxpayers’ funds to bribe the ‘working families’. Socialism at it’s finest…

Farness says:

08:06pm | 17/08/09

The trading will mainly benefit the large accountanting firm, consultants, banks and the like.

The scheme is a tax like a levy is a tax and an excise is a tax. It’s Rudd’s beloved working families that will pay with less disposable income as prices rise. The wish for compensation will prove to be just that in due time.

cat says:

09:28pm | 17/08/09

Another problem is that there can be no definitive answer on how this foolhardy scheme is going to impact, as the gov’t hasn’t got all the ‘bugs’ worked out yet. How can they possibly estimate whether it’ll be a 1% or 10% hit? Kruddy basically admitted to Turnbull’s questioning on Friday, that it would be about 5% and he refused to answer the question about the lack of information on his little ‘pet’ project.
@Daniel,
Yes it’s going to cost all industries…are you or someone you know employed by one? You might want to start kissing up to the boss.

James says:

03:00am | 18/08/09

It would seem that instead of applying the pain evenly to all Australians the Government intends to punish those in the higher income brackets again. Whilst it would seem reasonable to price carbon as a way of reducing the intensity of carbon rich fuel use, the subsidy provided to lower income earners means that they will not see as much of the pricing signal. Given also that we are entirely dependent on coal for baseload power and that nuclear power is not to be allowed it will all have little impact. What we should be doing is going nuclear for power, using carbon rich fuels solely for transport.
Renewables will never provide an adequate baseload power supply as they are far to variable.

Waz says:

08:33am | 18/08/09

I don’t understand how this ETS is going to actually turn off and replace burning of fossil fuels. It just seems to be a giant tax. On the general principle that, when you tax something you get less of it. It seems obvious, indeed it’s deliberately targeted, to increase inflation sharply across the economy. But, I don’t see anything that suggests any current incineration will stop and be replaced in full. “Maybe 5%” is a pissant reduction, if it exists at all (which I doubt), 5% is barely 1 or 2 years normal growth.
I do hope the ETS is defeated until it has hard science and fully disclosed public explanations and measures behind it. Amazing I find myself in agreement with both the Greens and the Nats. Both say this will do nothing of any substance to reduce or replace emissions.

josh says:

08:44am | 18/08/09

Why should we all pay extra so Mr Rudd can sleep soundly at night.  This is another scheme to rob us of money so the higher ups look better to the rest of the world

eag says:

09:17am | 18/08/09

The Supermarkets will of course be worried about putting up prices with an element of profit no doubt.Move towards local shops,local producers, Farmers’ Markets and producing your own and you’ll proof yourself and your income against most happenings in a world that expects the public to swallow the biggest cons ever.

eddie says:

09:54am | 18/08/09

Every time the ETS or any sort of measure to reduce the impact of human polution is mentioned the same gang posts the same crap about it being a tax grab, there being no connection between pollution and global climate change, skyrocketing prices and unemployment. If anyone seriously believes we can keep pumping poison into our air, sea and rivers in the massive volumes we currently are, and not see serious long term consequences they are seroiously deluded. To make a serious reduction in pollution is going to require many changes to our industruial processes, that will cost money. We can choose our direction now. either pay more and invest in a low pollution future and cut global human population from now on and ppossibly have a planet to hand to your offspring and theirs or ignore the evidence, say it is all just a tax grab and there is nothing wrong and leave future generations with a lifless rock.

Steve says:

12:15pm | 18/08/09

The Employment Tax System ETS will increase the cost of everything that uses power and fuel so it must affect the cost of groceries. On top of that the Big retailers will not be able to resist the temptation to increase margins over and above this cost increases, because the market is already conditioned to expect price rises. The biggest problem is it the ETS only effects local manufacture, cheap imports will still be cheap imports and the local farmer will still be shafted by the big duopoly buying cartels. Then in 2013 the Govt will tell the farmer that his cows fart too much and he will have to pay a tax to keep what they already own. All this is in order to stop the planet turning? Does anyone seriously believe imposing a tax will change the weather?

Anthony says:

12:54pm | 18/08/09

How about all the fools who actually believe we are causing dangerous warming pay more for everything so they can feel better about ‘saving the planet’, and the people who have a brain and rational thought just continue living our lives? It’s quite unfair that the government is so determined to push their highly religious agenda onto the public. So much for separation of Church and State! (I guess that excludes the Green religion)

Grant says:

04:04pm | 18/08/09

Somehow people have to realise that having an ETS is not going to make one scrap of difference to the planet. But will certainly make a difference to our hip pockets GUARANTEED !!!!!

watto says:

09:46pm | 18/08/09

Who believes big retailers for starters - they are taking us for a ride. (The average overweight Australian eating 5% less would be a good thing and save billions in health?) Noone complained when the GST took 10 billion plus, out of the economy and was used as a middle class slush fund. Another tax. More fat profits for some.

James Flinders says:

05:36am | 30/12/09

In December, the New York Times recently ran an article claiming that “carbon will be the world’s biggest commodity market, and it could become the world’s biggest market overall. Currently valued at over $30 billion, the carbon trading market is set to skyrocket to over $1 trillion as the price of carbon becomes more and more valuable.

This means that the ETS values and the tax components thereof will change and increase, so saying the average person will be better off by $x amount is an outright lie the table shown above is a starting point only. I have worked in the carbon trading industry in Europe and Britain and it has always led to lowered standards of living for the average person while making coporations,carbon traders and governments rich. The system has failed in the EU. The inclusion of other gases apart from CO2, deemed a pollutant is also to be introduced in 2013. The average worker will be about $4000 - $6000 worse off per year.

At Australia’s current emissions (580 million tonnes p.a.) and working population (10.6 million), a carbon price of $A225 would correspond to a cost per working person of more than $A12,000 per year, or around 25 per cent of the average after-tax earnings. Even if we halve our per-capita emissions by 2030, the cost would still be at least $6,000 each year per working person.

The modelling from the treasury is flawed and is just plain wrong, the failed EU ETS that Kevin Rudd would have us join is just a back door tax grab. Benefits from having a greener home can be done by direct incentives and actions not by taxes. So before the spin starts the government should do the ‘working families’ the courtesy of telling the truth.