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Carbon pricing your business

beautiful coast line

The carbon tax should be protecting beautiful places like this (Ricketts Point in bayside Melbourne)

Have you thought about how the Carbon tax will impact your business and pricing structure yet? Will you update your web content to mention carbon pricing?

Now that the lower house has passed the carbon tax legislation, we know it’s likely to be in place next July and have some idea about what is involved. For instance, next financial year carbon will be taxed at $23 per tonne and we’ve been told to expect a 0.7% increase in living costs (although some or all of this may be covered with tax cuts and increased Government payments). The price would change the following year, and beyond.

Carbon tax for small business

Small businesses won’t have to directly pay a carbon price like the big 500 corporates, but that doesn’t mean we are unaffected. At the minimum we will face increased power costs and (as I understand it) small businesses are not getting anything in the compensation packages.

How will this impact on your business? Can you absorb the increases or will you need to update your prices?

Personally it will be increased power costs that will affect my business, along with (potentially) higher supplier costs. Only I have no idea what ‘$23 a tonne of carbon’ means for my electricity bill.

For a business delivering goods, buying materials for manufacture or providing mobile services, the impact could really add up.

Capping price increases

As individuals, it is good to know that the ACCC will be watching for price increases above 0.7% (where labelled due to carbon tax) so we aren’t ripped off. As business owners, it’s tough – will our cost increases be less than 0.7%? can the business afford to pay the owner(s) more to help with higher living costs? can I increase my prices and increase additional costs (e.g. delivery) by 0.7% each and be operating legally?

It sounds simple – use a lot of carbon, produce a lot of greenhouse emissions, and pay for it. Implementing it into real business practices is going to be harder.

So what are your thoughts about small business pricing next year? Any idea how your business will deal with it?

PS You can learn more about carbon pricing, it’s value and climate change through COs Australia’s You Tube channel.

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