The Australian government’s carbon tax will permanently scar small business, according to VACC, which represents 5,500 small to medium businesses (SMEs) in the retail, service and repair sector of the automotive industry in Victoria and Tasmania.

“This tax will leave not so much a footprint, but a permanent stamp on small business,” VACC Executive Director, David Purchase.

As the peak automotive industry body in those states, VACC opposes the introduction of a Carbon Tax, as announced by the Federal Government last month.

“The Prime Minister and her policy advisers have overlooked the fact that small business will be caught between a rock and a hard place when the tax is introduced in July 2012. Small business owners will be hit from one side by big businesses passing down their costs, and they will be hit from the other as demand from consumers, reacting to higher household electricity and gas bills, will be forced to wind back their expenditure elsewhere.

“Depending on the nature of the business, small business owners will face the much stiffer winds of competition from overseas suppliers and others who will not have to pay this punitive tax. And, as if that is not enough, as home owners, small business owners will also face higher household energy bills,” Mr Purchase said.

“So far, the Federal Government has failed to convince small business owners that the carbon tax is anything other than a money grab. Most small businesses are doing what they can to make their workshops and offices greener. To then introduce a tax that will have a profound effect on their business and livelihood is not much of a reward, is it?” Mr Purchase said.

VACC is a member of the Australian Chamber of Commerce and Industry (ACCI). VACC is fully supportive of ACCI’s lead against the introduction of the Carbon Tax.

“ACCI, and all our members, understand business has an obligation to work with Governments to supply and deliver more efficient and lower emitting energy.

However, this chosen course of action deals a severe blow to local industries,” ACCI, Director of Economics and Industry Policy, Greg Evans, said.

“The decision to introduce a tax assumes that a carbon price is the only means available to reduce greenhouse gas emissions and encourages investment in low emission technologies.

A carbon pricing regime will be an addition to, and not replace, other existing regulatory measures to address climate change, including a renewable energy target and other green policy initiatives.

“From a business point of view, it makes no sense to unilaterally damage our economic performance and competitiveness, and yet deliver barely discernible benefits to the environment,” Mr Evans said.