The peak automotive industry body in Victoria has joined other leading Australian business groups in questioning the Federal Government’s intended introduction of a carbon tax from July 2012.

VACC represents 5,500 small to medium automotive businesses in Victoria and Tasmania, employing approximately 50,000 employees. Along with the Australian Chamber of Commerce and Industry (ACCI), it believes small to medium business owners will be compromised by a carbon tax and subsequent emissions trading scheme.

“Small to medium businesses in the automotive industry will be squeezed further if the carbon tax is introduced,” VACC Executive Director, David Purchase, said.

“They will be hit from above when big businesses pass their costs down the supply chain, and they will be hit from below when consumers are forced to cut back, in order to cope with the higher household electricity bills.

“How many times have we heard small business is the engine room of the economy? It is a catchy sound bite which politicians use and yet, small business seems to be the ‘acceptable loss’ when big policies are rolled out.

He said when business costs go up, as they inevitably will because of a carbon tax, prices go up and business becomes less competitive. Not only does this jeopardize the very existence of the business but it also puts jobs and livelihoods at risk.

Mr Purchase said “The timing of this tax is also ironic. The Australian Automotive Industry has never been ‘greener’. Manufacturers have introduced green technologies and alternative fuels to improve capacity and efficiency which have resulted in new cars in the Australian market recording their lowest ever carbon dioxide emissions. The retail, service and repair (RSR) sector is playing its part too. Businesses abide by various Environment Protection Authority (EPA) rules and regulations and most business owners have introduced further voluntary green work practices, like Green Stamp Plus.

While emphasising VACC is not opposed to Australia being a world leader on carbon reduction Mr Purchase said the go-it-alone approach by the Gillard Government will bring little gain on global emissions.

“Labor’s Carbon Tax is not only an election back-flip, but it is a big stick approach to our economy.”

“There has been no talk of small to medium business owners being compensated, even though many of them are low income earners and a tax sends out the message that this policy is more about revenue raising and less about doing the right thing for Australians and the environment,” Mr Purchase said.