Australia’s New Carbon Tax is Raising Prices and Government Dander

Posted by PITHOCRATES - July 8th, 2012

Week in Review

The carbon tax has arrived in Australia.  It’s raising the cost of doing business.  And raising prices.  Surprisingly, there’s not a whole lot of love for this new tax (see ACCC to probe Brumby’s for advising stores to ‘let carbon tax take blame for price rises’ by Lanai Vasek posted 7/4/2012 on The Australian).

LABOR has accused the Brumby’s bakery chain of “reprehensible” behaviour after the company advised franchisees to “let the carbon tax take the blame” for price rises.

The consumer watchdog will investigate after Brumby’s managing director Deane Priest advised store owners in her June newsletter to “take an opportunity to make some (price) moves in June and July”.

“Let the carbon tax take the blame, after all your costs will be going up due to it,” she said…

“This sort of behaviour is reprehensible. Anyone who is found to have been jacking-up prices unnecessarily and blaming the carbon tax will be subject to enforcement by the ACCC…

“Businesses are entitled to increase their prices as they see fit. It is business as usual, so long as any claims or representations made about the impact of the carbon price are truthful and have a reasonable basis…

If a business is found to have made a false or misleading claim regarding the carbon tax, the ACCC’s website says the watchdog has the power to issue infringement notices of $6600 for a corporation (or $66 000 for a listed corporation); take legal action against a business for breaches of the ACL; seek court-imposed penalties of up to $1.1 million for serious breaches of the ACL or injunctions to stop a business from making certain carbon price claims.

The controversial tax came into effect on Sunday with an initial starting price of $23 a tonne. It will move to a floating price emissions trading scheme from 2015.

My, the government appears a little testy about their carbon tax, don’t they?  Probably because they know what a fraud it is.  The people don’t want to pay it.  The businesses don’t want to pay it.  And paying it won’t do a thing to save the planet.  It’ll just transfer a lot of wealth from the private sector to the public sector.  Which is why governments like the carbon tax.  Well, that.  And the fact that you can say whatever you want about the good the tax is doing to save the planet.  I mean, if they say that the tax is responsible for preventing a 0.7 degree rise in global temperatures how are you going to argue against that?  There is no way to measure this.  There’s just no way to connect empirical observations of temperature to fiscal policy.

Weather is a whacky thing.  America just suffered through a week-long heat wave following a warm winter and a dry spring.  Proof the global warming alarmists say of global warming.  Yet Britain is suffering their coldest and wettest summer since they began record keeping.  So whatever is happening with the weather isn’t happening globally.  And it’s not climate change.  It’s just the weather.  Sometimes it’s hot.  Sometimes it’s cold.  Because there are a lot of variables that create our weather.  With sunspot activity and volcanic eruptions being high on the list of influencing factors.  While man is farther down that list.  Much farther.

That said few governments can pass up a new tax.  Especially one that has such a noble purpose.  Such as saving the planet.  And they don’t take kindly to businesses telling their customers how much the new carbon tax will cost them.  For no business ever pays a tax.  Their customers do.  And every time the government raises taxes business have to pass it on to their customers in their prices.  Because they have to cover all of their costs in their prices to remain in business.  And taxes are a cost of doing business.  As far as raising their prices higher than the carbon tax?  Well, their competition will tend to that.  That’s the beautiful thing about free market competition.  It always makes a business’ price the right price.  For if it’s too high they will lose business to their competition.  And that will happen without any government investigation. 

It is a beautiful thing.  Free market competition.

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