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The carbon tax won't have any affect on retail prices, HA.

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  • #16
    tl;dr anything, just going to say that we used to eat at The Village Hotel in Mount Druitt and get their $6 rump steak meal. Was so good, get a big 250g rump steak that you cook yourself on the huge gas bbq's, then fill the rest of the plate with chips, pasta, salad and veggies.

    Since implementation of the carbon tax it's risen to $7, we assumed because of running 2 massive bbq's for a large portion of the day increases cost. Still a mad deal, if you're in the Mount Druitt area, check it out.

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    • #17
      Political parties of all complexions have ideological underpinnings that pop to the surface in the form of policy that causes many people to go "What the....why are they flogging this?" The problem is that they have this 'ideological baggage' that they cannot let go of, no matter how inappropriate or ill timed it may be. If only the parties could be a bit more pragmatic and just focus on the simplest practical solution to current and future needs of the country instead of doggedly pursuing their traditional social agendas in a variety of peripheral areas.
      My biggest concern for this country is what we are going to use to prop up our standard of living when the coal runs out. No level of government seems to be thinking more than 3 years into the future.
      The Carbon Tax just strikes me as another political abberation that is the wrong thing at the wrong time.

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      • #18
        Perhaps we need some balanced commentary here:

        The Carbon 'Tax' is designed to reduce energy consumption, not redistribute money
        Conservative parties are miilking this for all they worth with propaganda. They are blaming every price rise on this.
        At least half of the current rise in electricity prices don't come from the Carbon Tax but rises in electricity infrastructure costs (poles and wires) and increase in dividends and tax equivalent payments
        The Mining Tax helps to ensure all the squillions in profits earned by mining magnates from the boom doesn't flow into their own pockets and overseas. Don't kid yourself that they have the interests of working Australians at heart.
        Retails organisations can see carte blanche to raise prices and blame it on the CT.
        Wrong thing at the wrong time? Tell us what the right thing is and when its the right time for it.

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        • #19
          thanks flynn, i was losing faith...

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          • #20
            I was under the impression that the purpose of the Carbon Tax was to 'encourage' big polluting industries to reduce the level of their pollution. It follows that if their 'products' become more expensive due to the Carbon Tax, then consumers might look for substitutes. Whether they would reduce their consumption of those products is another issue. (Some will, some won't, I guess)
            I agree with Flynn's next few points about propaganda, electricity prices & the Mining Tax (another issue)
            The Mining Tax would be a very good thing (IMHO) IF the proceeds were used to develop some 'niche industries' to support our economy when the resource boom is over - unfortunately I have seen/heard no evidence of this.
            I have never kidded myself that big corporations (Australian or multi-national) care about anything except their profit. Nor do I think they have any special interest in Australia's future, 10, 20 50 years on.
            The right thing at the right time is policy that is well timed and well matched in terms of existing circumstances and the developing scenario (national & global). It is about identifying the most pressing issues to pursue for current/long-term benefit and not being distracted by peripheral issues or ones that, whilst important, are better addressed at a different time. It's a skilled judgement that should be made by talented elected representatives with due regard to the best expert advice available. My point is that our leaders seem to be distracted by peripheral issues and have an inability to see more than 3 years into the future.

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            • #21
              Originally posted by flynnaus View Post
              The Carbon 'Tax' is designed to reduce energy consumption, not redistribute money
              That's the rhetoric anyway.

              So if Australian products subject to cost increases because of a carbon tax are now more expensive and people then buy imported goods that have no carbon tax (in any country) - that is wealth redistribution right?

              And subsidising lower income earners for the effects of the carbon tax is also wealth re-distribution.

              IMO.

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              • #22
                Originally posted by flynnaus View Post
                Perhaps we need some balanced commentary here:

                The Carbon 'Tax' is designed to reduce energy consumption, not redistribute money
                It's designed to reduce energy consumption by redistributing money and tax burden (Cash 4 You, decreased low income taxes, higher medium/high income taxes, with the trickle down cost of the carbon tax priced into everything eventually) , and doesn't appear to be very effective at reducing energy consumption in the short or medium term.
                Household energy use has been on a long slow decline due to gradual replacement of lights and appliances with more energy efficient versions. I don't see the carbon tax accelerating this.
                As pointed out previously, it will likely have the "unforseen" effect of pushing manufacturing overseas to countries without a carbon tax. Net increase in world CO2 emissions due to increased transport, but a decrease in our own emissions, which is all that politically matters I suppose (until the loss of jobs becomes a political hot potato, but that's a time bomb for the next government)

                Conservative parties are miilking this for all they worth with propaganda. They are blaming every price rise on this.
                At least half of the current rise in electricity prices don't come from the Carbon Tax but rises in electricity infrastructure costs (poles and wires) and increase in dividends and tax equivalent payments
                Yes, Liberals are being dishonest with the impact of the carbon tax, and should be called out for it.
                Remember that Labor are also a conservative party, so that label should be used a little less liberally.

                The Mining Tax helps to ensure all the squillions in profits earned by mining magnates from the boom doesn't flow into their own pockets and overseas. Don't kid yourself that they have the interests of working Australians at heart.
                The mining tax, while being marketed as screwing over the rich magnates, had the side effect of reducing the ability of the states to control their own mineral royalty rates.
                The tax is also on profits rather than volume, compared to the existing royalty system.
                Do you really think that the big multinationals will not be able to shift profits around to show lower paper profits within Australia and avoid the tax?

                Retails organisations can see carte blanche to raise prices and blame it on the CT.
                They are, and should be taken to the ACCC.
                The example Andy gave of the electricity companies increasing the cost of their 100% green power plans because of the Carbon Tax is definitely something that should be investigated.

                Wrong thing at the wrong time? Tell us what the right thing is and when its the right time for it.
                I would have preferred to see a direct tariff on imports/exports of gas/oil/coal, as it would have been a simpler solution that also forces other countries that buy our coal to pay a higher price, coupled with a federal royalty rate for all minerals (on top of the state royalties) instead of the complicated mining tax, and that the funds from that be put into an infrastructure fund to build expensive things like high speed rail and clean energy projects.

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                • #23
                  I thought it's time for a bit of objective reflection on the mining industry in order to better understand the tax:

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                  • #24
                    Water quality is a big issue in this neck of the woods. We have always had very high quality water from the mighty Fitzroy River system but after the floods in CQ (about 2yrs ago) the water suddenly tasted very unpalatable. There was no mention of anything changing by the local Council but it eventually emerged that the local coal mines were discharging the water from their flooded pits into the upper reaches and tributaries of the Fitzroy. A number of Mining Companies have since been fined (minor smack on the wrist) for illegal discharges. The local and State authorities were quick to emerge as apologists for the Mining companies assuring us the water was not toxic but anecdotal evidence from locals suggested the opposite.
                    Nearby Mt Morgan mine (retired gold & copper mine - used to be the biggest open cut in the southern hemisphere) now has a massive pit that is filled with millions of litres of toxic water. The river that runs through Mt Morgan is bright milky blue-green. What do you do with a couple of million litres of toxic water? They are resigned to the fact that they are going to have to pump it out and purify it at the cost of millions of dollars. (the Mining company that created the problem is not paying for any of this - they are long gone)
                    I'm not even opposed to mining (even though it inflates the value of local real estate, fills the coast with cashed-up bogans, and takes all our tradesmen)

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                    • #25
                      Originally posted by Pavoniboy View Post
                      I thought it's time for a bit of objective reflection on the mining industry in order to better understand the tax:
                      Hehehe. I assume this is a tongue-in-cheek endorsement. Objective? Well, in a sense. Not that I'm pro-mining.

                      From About Us on thisistherealstory.com.au
                      These are the real stories about what Australian mining is doing to the economy. They are stories of a group of concerned satirists comprising of the Australian Satire Institute of Australia, the Chamber of Satire Studies (NSW), Queensland Satirical University, the Royal College of Japery (WA), Federal Council of Satirical Councils (Federal Branch). Together our member organisations comprise over 85% of all satirical output in Australia.

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                      • #26
                        I have no problem with the tax, I'm for it to protect the environment but how about making it an even playing field for the imports? brazil protect their local industry by heavily taxing imports, australia does the opposite. If we dont want manufacturing in Australia or mining or any kind of production then let's start plannig some kind of exit plan. Alternatively we need to put in some heavy investment in this countryon some clever innovations to clean up manufacturing. At the end of the day I still have to pay the bills and support my family. I don't want to end up a statistic without a job.

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                        • #27
                          Originally posted by Rocky View Post
                          I was under the impression that the purpose of the Carbon Tax was to 'encourage' big polluting industries to reduce the level of their pollution. It follows that if their 'products' become more expensive due to the Carbon Tax, then consumers might look for substitutes. Whether they would reduce their consumption of those products is another issue. (Some will, some won't, I guess)
                          Not exactly. Public companies essentially have an obligation to shareholders to maximise profits. So for the people running these companies, even if they have a personal desire to reduce environmental impact, it's not always easy to justify expenditure on things that don't directly (or, immediately) improve economic performance. The carbon tax provides an easy mechanism to do so.

                          In my professional life (as a consulting engineer) I have seen the impact of this first hand with some of my clients (from oil companies no less!); even back in 2010 when Rudd was trying to introduce the ETS.

                          From another perspective, it presumably also provides a competetive advantage to companies who have already invested in, or are developing, processes/technologies which result in a lower lifecycle carbon dioxide emission.
                          I think we need to take a wider view of our environmental impact and encourage sustainability in general (and prevent general nasties from polluting our environment), but the Carbon Tax is a start that 10 years ago I'd have never expected. Even if it is perhaps a slightly half baked idea.

                          I used to wonder how my parents generation did so little to prevent us being in the position we are; I recently realised my generation isn't doing much better...
                          Last edited by MrJack; 25 August 2012, 11:55 PM. Reason: Added quote.

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                          • #28
                            Originally posted by MrJack View Post
                            Not exactly. Public companies essentially have an obligation to shareholders to maximise profits. So for the people running these companies, even if they have a personal desire to reduce environmental impact, it's not always easy to justify expenditure on things that don't directly (or, immediately) improve economic performance. The carbon tax provides an easy mechanism to do so.
                            That thought process is correct for companies that are not directly competing against imports. When you are in a highly competitive industry, you do not have the luxury of putting up prices. What you do is essentially absorb the costs. The "justification" even if you can 100% categorically show that it is carbon tax (and you must) does not mean a thing when you have like product in the market from low cost countries already at a lower retail price to your product. How much does "made in Australia" and "carbon taxed" appeal to the consumer nowadays? We are ALL consumers. Given a like product that retails for around $1000, the overseas product is $850 (good currency exchange etc) and the made in Australia is now $1050 with ALL the justification of being carbon taxed, will you consciously make the decision to buy Australian made, GST and Carbon Taxed? Overseas does not necessarily mean China, it could mean Eastern Europe such as Turkey etc (labelled Made in Europe).

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                            • #29
                              Originally posted by MrJack View Post
                              Not exactly. Public companies essentially have an obligation to shareholders to maximise profits. So for the people running these companies, even if they have a personal desire to reduce environmental impact, it's not always easy to justify expenditure on things that don't directly (or, immediately) improve economic performance. The carbon tax provides an easy mechanism to do so.
                              Well, sort of. The board of a company has an obligation to act bona fide in the interests of the members of the company. This does not necessarily translate to maximising short term profitability (particularly if that creates long-term risks). I guess the overall point is sound though....there are limits to which directors can impose their own moral/ethical judgements on the firms with which the are associated.

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                              • #30
                                I think it's got very little to do with competing against anything.

                                If you are assessing an investment to reduce emissions and it costs $5m (Net Present Value) to upgrade a system or use an alternative product or material, while the NPV of the carbon tax it would save is $6m, then you have justification.

                                Yes, your costs are $5m greater than without the tax in place, but the intent of the tax has been achieved and the mechanism has been effective. Provided you are still in business...

                                Personnally (speaking as a non-expert in economics) I prefer the Norwegian model where they reward companies who invest in technologies and R&D with tax reductions.

                                Competing against overseas imports will always be a problem for a developed country like Australia with a high cost of wages and a small market/workforce. Unfortunately, reducing costs means doing things smarter and more efficiently; likely through increased automation and/or smaller workforce. Generally not something popular with those working in the industry, and by extension politicians.

                                Things might be different with the current generation coming through; people tend to move employers or occupations more frequently and re-skilling isn't as scary. A more flexible workforce would hopefully allow for more flexible business practices.

                                As they say, you can't have your cake and eat it too.

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