CPRS design needs broader consideration: ACCI

Business group calls on Government to amend design and timing of Carbon Pollution Reduction Scheme

October 15, 2009

The Australian Chamber of Commerce and Industry (ACCI) has called on the Federal Government to amend the design and timing of the Carbon Pollution Reduction Scheme (CPRS) to alleviate possible repercussions for SMEs.

Speaking to the annual meeting of the Plastics and Chemicals Industry Association in Melbourne yesterday, ACCI Chief Executive Peter Anderson explains there are various ways for countries to reduce their carbon footprint.

"An ETS is only one such option. In many of our competitor nations it has not found favour and is unlikely to be applied, no matter what happens in Copenhagen in December.

"Ultimately the solution to the transition is technology. Government should not tax industry to compel change to methods of production unless it can assure industry that the preconditions for change exist - that is, reliable technology exists to substitute for existing means of production, and that industry is in good enough shape (including access to capital finance) to afford that technology," he says.

While the CPRS arguably has some in-built flexibility to deal with such matters, Anderson says the impact on the competitiveness of Australian industry "remains an overriding concern".

ACCI calls for the release by Treasury of the costing of the alternative cap and trade proposal by Frontier Economics, so that small and medium businesses can assess the viability of a proposal that could minimise higher electricity and energy costs.

Anderson also asks for a new round of microeconomic and regulatory reform, pointing to the dividend of past reforms and current policy now at work in cushioning the economy from the worst impacts of the global economic downturn.

"While global recessions are bad for business, there is opportunity to make a purse out of a sow’s ear," he says.

"As a nation and as households we have spent this year cashing in the dividend cheque of past economic and fiscal reform. We will be reckless as a nation and negligent towards our industry and our families if we don’t now build that safety net back up."

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