Written by Schon Condon in April, 2011

Well the tax that would never come on this watch is, at least, on the table.

Let me first of all put this article into some perspective. My own stance is that I am one with a respect for much of the current findings and research that supports the case for “Climate Change”, acknowledging however that this planet has over its lifetime taken some significant swings from one extreme to another and as a consequence one thing that we must all accept is some form of change. I am also however, concerned with the fact of whether we are really focused on the critical issues. For example, what was the climate change impact of the recent spout of volcanic eruptions and is there an even greater catastrophic event capable of being predicted from the recent increases in seismic activity?

Fortunately, it will be brains with far greater experience than mine that will lead the research and formulate the debate on the various issues and my (and for many others their) responsibility not only to try to keep up but also endeavour to ensure that there is a balance to all aspects. Given the magnitude of the task it is clear that these efforts and this research will need to be well funded.

Like all things it will relate to the genuinely correct identification of the problem and then the application of the most expedient cost effective solution so as to bring timely remediation.

Now let’s get back to our Carbon Tax. This it would appear is what the Government is suggesting is the most effective readily available tool to deal with the current situation, albeit that we don’t know what the content or method of operation will be. The fact that it has been released without content is of less concern as it does give the country the time to provide input.

However, this is critically an issue that small to medium size businesses must focus on and has the potential of being as big if not bigger than the GST for some industries.

As with all taxes there are two fundamental issues, who will pay, and who will receive. The extending corollary to this then becomes to whom the impost can be passed onto, and it is here that the similarities to the GST can increase.

There are many small businesses in the market that manage to survive by simply not paying their fair quantum of tax. So the improvision of a Carbon Tax will potentially further enhance the survivability of such organisations and increase the susceptibility of those businesses complying with the law to unfair competition.

Next is where the funds are moved to. It is clear that there are some significant climate issues that need to be addressed, so if these funds are to be used to pay for the construction of eco friendly systems at fair prices; relevant, pointed and value for money research, or other relevant expenditure then the imposition of the tax, could potentially be justified. However if the funds represent monies that are lost to consolidated revenue, paid to expensive advisors for no really beneficial reason, scammed off by unscrupulous operators in a dodgy bid to fix the problem or raked off by other irrelevant institutions then the most likely long term sufferers will be the small and medium enterprises.

With a fragile economy, unstable climate, potential for interest rate increases and the likelihood of another tax SME’s must seriously review their plans and ensure that an appropriate level of contingency planning has been included.

I’m sure there are businesses that have survived worse than this and I’m sure those that plan will survive this.

2011 should only get better, at least let’s hope so!

PLEASE NOTE:  All information contained in the articles below was correct at time of publishing.