Tax warning to struggling local businesses: You’ll be carbonated

By John Van Klaveren
THE CARBON tax will push faltering small Geelong businesses over the edge, a city accounting firm has warned.
WHK Geelong principal Anne Lockwood urged businesses to check their carbon tax exposure immediately.
A MYOB Business Monitor survey last week revealed almost half of Australia’s small businesses were “uninformed” about the legislation’s likely impact.
Many local businesses were leaving carbon tax preparations to the last minute, Ms Lockwood said.
“Don’t wait to see what the impact will be. Go and ask your electricity provider and your inventory supplier.
“If a business is teetering on edge, and a lot are, this will push them over.
“I don’t think we know the full impact as yet, even though it starts on July 1, but businesses should budget for an average increase in costs of five per cent.”
Ms Lockwood said most business owners were aware of direct carbon tax cost increases like electricity but were in the dark on indirect costs.
“They haven’t thought about water, rates, rents, transport or waste disposal and most will face increased costs of product in their supply chain.
“Owners have to ask themselves whether their business is in a position to pass those costs on to their end user or if they have to absorb the increases.
“Businesses have not thought deeply enough about the indirect cost implications. There are hidden costs that people will face and will flow through over the next 12 months.”
Ms Lockwood advised businesses to analyse their costs and to shop around for lower-cost providers.
Harwood Andrews lawyer John Hannagan said businesses failing to prepare for the tax were confused or waiting to see its impact.
“But businesses don’t have the time to see what the impact is. They need to look at their contracts to see if the extra costs can be passed on to them and if they can pass rises on.”
Mr Hannagan said businesses also had to check whether they were eligible for funding under one of the carbon tax assistance programs.
“It’s not going to go away so you need to take some action now.”
Geelong’s Gordon Institute of TAFE has launched a carbon accounting and management course for small businesses.
The Gordon’s Darren Gray said businesses needed to begin preparing for the introduction of the tax.
“This is a way of meeting the needs of industry, with pathways to go on and do the Diploma of Sustainable Operations,” Mr Gray said.
“The Gordon is one of first to bring the most relevant units of this course to the Geelong market.”
Mr Gray said small businesses must improve their awareness of the tax’s hidden costs.
The accounting section of the course would help businesses substantiate claims made in reducing their carbon footprint, he said.
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