SIXTY per cent of manufacturers do not plan to pass the costs of the carbon tax on to their customers, sparking warnings from a leading industry group that the sector – already reeling from the high Australian dollar – will face even more pressure after the carbon-pricing regime begins on Sunday.
Australian Industry Group chief executive Innes Willox said a survey of manufacturers had revealed many felt they could not raise prices because of intensifying competition they faced locally and internationally.
Not passing on price increases “will result in a further erosion of margins and will put even more stress on this big employing sector, especially as it is a cost not being borne by most of their overseas competitors,” Mr Willox writes in The Australian today.
The AiGroup survey of 200 manufacturers found 40 per cent intended to try to put up their prices immediately when the $23/tonne carbon price begins from Sunday.
Of the manufacturers who intended to increase their prices, about 51 per cent would try to raise them on all items, 22 per cent would try to raise them on more than half and 27 per cent would aim for less than half.
Mr Willox warned that uncertainty about how businesses would be affected by the carbon tax “is undermining confidence and detracting from investment”.
Pricing plans varied across the manufacturing spectrum. Just 11 per cent of food and beverages manufacturers planned an immediate price increase, but up to 60 per cent of manufacturers of construction materials (including high-emissions products such as steel, cement and bricks) would try to do so.
The survey emerged as Julia Gillard and Tony Abbott clashed in parliament on the last sitting day before a six-week break and ahead of Sunday’s introduction of the government’s Clean Energy Future Package.
The Opposition Leader unsuccessfully attempted to have parliament censure the Prime Minister over her “lie” on the carbon tax. Mr Abbott accused Ms Gillard of breaching faith with the Australian people by introducing the carbon tax after promising not to do so before the 2010 election. “Not a single pledge will be taken seriously by anyone because this country is haunted by the big lie,” Mr Abbott said.