Tax changes benefit businesses

Professor John Rolfe
Professor John Rolfe Contributed

CHANGES to the carbon tax look to improve conditions for local businesses according to CQU Professor of regional economic development John Rolfe.

For the first two years the carbon tax is set at $23/tonne, before going into an open trading system - initially the government had installed a floor price of $15/tonne, however this has now been removed and instead will be linked to the European price.

Professor Rolfe said Australia had among the highest carbon prices in the world.

"The problem is at the moment the European price is really low," Professor Rolfe said.

"The Australian price is so high that the Australian industries would be uncompetitive.

"The change will make our export industries a little bit more on the same playing field."

He said although the situation isn't perfect, this change should benefit local businesses.

"I think in general it's better for local business," Professor Rolfe said. "Not good, but better than the previous system because we are able to be sure that businesses aren't going to be more uncompetitive.

"Where there is a bit of difficulty is there is more uncertainty... particularly for a new power station - CQ needs to make really big investments."

He said the government needed to do something and had little choice.

"I don't think this government had too much choice," he said.

"The previous situation is worse for exporting companies... (if) rules changed suddenly they'd be $10/tonne less competitive.

"They solved one problem and created another... if the price goes down there will be a huge hole in the budget."

Topics:  carbon tax

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