03-March-2011
Portfolio Media Releases
Topics: Carbon tax to lift GST and other taxes, problems with the Greens and Labor
E&OE
ANDREW ROBB:
Today it has been revealed that Australian consumers are going to face a double whammy as far as tax is concerned with the introduction of a carbon tax.
What we see is the carbon tax that is going to be embedded in every consumable item on the market and will actually lift the amount of GST people pay, the amount of stamp duty people pay, the capital gains tax people will pay.
It will lift the price of everything which will in turn will lift the tax returns. Introducing the carbon tax will surreptitiously increase by billions of dollars the tax take on a whole lot of other fronts. This is something that needs to also be aired when people consider the merits of the carbon tax and bear in mind again we will be on our own, no one else in the world is doing what we’re doing in such a comprehensive way, especially out competitors. None of them will have this tax, so not only are we going to face the carbon tax, but we are going to see a significant and major increase in lots of other taxes that people confront.
It could add thousands of dollars to the average new home. Think of all the items in a new home, the glass, the steel structure in many cases, the roofing, all of the appliances, all of these things are very heavily energy intensive in terms of their manufacture. So the carbon tax will be embedded in the price of all of those items and on top of that people will pay stamp duty which will be inflated by the higher price of the property, they’ll be paying GST on all of those items which will be inflated by the higher prices of the embedded carbon tax.
This is an issue, which again, under the radar, no mention of it, absolutely no discussion of this issue and yet it must be front-and-square alongside the merits of the carbon tax.
JOURNALIST:
Are you implying though that the government’s virtually doing this on purpose in introducing a carbon tax knowing it’s going to rake in more money?
ANDREW ROBB:
What I’m saying is the government’s talking about everyone being fully compensated well of course that’s a lie, there’ll be a group in the low-income area who will get compensation for two or three or four years, then it will go.
JOURNALIST:
How do you know that though?
ANDREW ROBB:
That was the implication when they last discussed it, that it would be a transition, that the money they would use to compensate would be a transitional compensation. There is no doubt that that compensation will progressively diminish. They haven’t said that but they did imply that last time when we had this debate and they have not told people that the introduction of a carbon tax will also increase the price of taxes applying in other areas, now surely, if they are going to be honest with people and transparent and talk about compensation, they need to acknowledge that there are going to be tax increases across the board.
JOURNALIST:
You said this has been revealed today, but isn’t it actually quite obvious, the GST, the way it works, the way capital gains tax is calculated ?
ANDREW ROBB:
There has not been one reference to this at any stage in this debate. It is obvious, when you think about it, but when the government is making such a big deal about compensation, most of middle Australia will get zero compensation, hundreds-of-thousands of small businesses will get no compensation.
Some of the big businesses will get some compensation, some of the trade exposed. But for many manufacturing industries, literally hundreds-of-thousands of small manufacturers will get no compensation, no compensation. Many of those are competing against either imports, which won’t have the tax applied, or they are trying to sell into export markets which don’t have the tax applied.
It has been quite duplicitous the way in which the compensation issue is being presented. Also a lot of that money that is being gained in taxes will be put back into potential innovative projects to reduce emissions, but the decisions will be that of bureaucrats in Canberra and if they weren’t stripping the balance sheets of companies, those companies themselves are the best placed to know how they will reduce their emissions. But the way this scheme is designed it will take tens-of-billions-of-dollars out of industry each year, strip their balance sheets give them no capacity to make investment in low emission technology and rely on the public servants making a decision about who’s best to get some of this government money.
They’ll be picking winners again and making all the mistakes that they have made with the management of other programs.
They are not good at managing programs you end up with billions-of-dollars of waste. What needs to happen is the companies, sure give them incentive to remove CO2, but allow their balance sheet to stay in good enough shape, so they can actually invest in new, low emissions technology.
JOURNALIST:
So do you think assistance needs to be broadened to try and take in the tax effect as well as simply the effect of rising power bills and the like?
ANDREW ROBB:
I’m opposed to the tax. It’s just madness that we would introduce a tax, a carbon tax amounting to tens-of-billions-of-dollars a year, when our competitors, none of our major competitors have got such an impost.
This is just shooting ourselves in the foot. It does mean we will suffer a lower standard of living, relocate to China and elsewhere. It will have no improvement on the environment. This is the stupidity of it. It will be futile as far as dealing with the environment. There will be no improvement because we will export jobs and export emissions.
So people ought to know the cost and what I’m saying is it’s not just the loss of jobs and the loss of emissions and the carbon tax cost. It’s also an increase in the tax take of so many other areas of government activity.
JOURNALIST:
There’s apparently been some backbench revolt within Labor over the Territories bill. Don Randall says he thinks people are realising it’s the green tail wagging the red dog. How would you put it?
ANDREW ROBB:
There’s been no doubt since the election that the green tail has been waving the Labor dog, but on this issue it’s a very sensitive issue. Clearly again there’s been this surreptitious activity by the look of it within the Labor Party and it’s a matter they’ve got to deal with I think. I think I will leave the Labor Party to sort its problem out with the Greens and within its own ranks itself and then we’ll see where it goes from there.
JOURNALIST:
Do you think it’s sustainable for the next three years though to have those competing forces?
ANDREW ROBB:
I think Julia Gillard seems prepared to do anything to hold onto power, including imposing massive taxes on the community which are futile, including tugging the forelock to everything that the Greens want. Politically I think it will be at great cost to the Labor Party.
JOURNALIST:
Is the debate getting muddied here over Territories’ self-determination because this bill wouldn’t remove the capacity of the federal parliament to actually veto these bills this has turned into a proxy debate about euthanasia and gay marriage?
ANDREW ROBB:
I don’t want to interfere with the government in its battles within its own ranks and between the Greens. Let’s see what comes out the other end of that before we start discussing the merits of any piece of legislation