Australia’s largest and most representative business group has reaffirmed its opposition to a carbon tax or trading scheme prior to the operation of a global mitigation agreement.

The Australian Chamber of Commerce and Industry (ACCI) expressed in a statement yesterday that it does not support an introductory price of $10/tCO2 as under the influence of the Australian Greens this will rapidly escalate to much higher and even more damaging levels for business and households.

Mr Greg Evans, Director Economics and Industry Policy said a lower introductory carbon price provides no comfort to business as this is still a significant incremental cost with an established pathway and mechanism to much higher levels.

“ACCI represents 350,000 Australian businesses and the vast majority of these are small and middle sized firms which will struggle to afford higher energy prices and the higher costs of many business inputs,” he said.

“The current rebalancing of the Australian economy brought about by the strengthening terms of trade is placing large scale adjustment pressures on sectors such as manufacturing and many other exposed sectors where it will not be possible to pass on the cost impact of a carbon tax.”

According to Mr Evans, businesses can’t absorb another hit on their profitability on top of dealing with currency appreciation, rising interest rates, subdued levels of household spending and the already significant impact of hikes in energy charges.

“Perversely the carbon pricing regime will heavily impact on the more vulnerable sections of industry and in many instances given their business size they will be excluded from meaningful compensation arrangements,” he said.

Mr Evans agrees with the need to contribute in reducing emissions, but he said Australia needs to rethink its approach on carbon mitigation and prior to a world agreement adopt far less harmful approaches by using technology and efficiency measures.