Small businesses fear price rises

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Australian Broadcasting Corporation

Broadcast: 11/07/2011

Reporter: Andrew Robertson

The carbon tax package contains compensation for many business groups but there is little overt assistance for small business.


PHILLIP LASKER, PRESENTER: Australia's biggest employer says it's bracing for the carbon tax fallout.

Small business watched from the sidelines as the big players and powerful lobby groups took their concerns to the Gillard Government.

Now, many small operators are expecting the new world to be one of higher costs and lower profits.

Our reporter Andrew Robertson has been gauging their reaction.

ANDREW ROBERTSON, REPORTER: At Hills butchers at Maroubra in Sydney's eastern suburbs, owner Ian Ovenstone wonders what lies ahead in the carbon tax world.

IAN OVENSTONE, OWNER, HILLS BUTCHERS: The costs are going to go up on deliveries, you know, the price of fuel's going to go up, diesel, petrol. Everything's going to go up.

ANDREW ROBERTSON: Including one of the biggest inputs for a butcher shop full of refrigerators, which is electricity.

IAN OVENSTONE: It's already jumped 17 per cent and this'll just make the price of electricity go even higher.

ANDREW ROBERTSON: Costs Ian Ovenstone says he'll have to pass on to his customers and hope they'll pay.

Next door to Hills Butchers at G&L Mixed Business, there's an equal amount of uncertainty about the carbon tax.

LAILA DABLE, CO-OWNER, G&L MIXED BUSINESS: I think we do need a solution in the long run. We might need something like that. But I think it's a bit of a shock for the people right now until they sort of get to understand what's going on.

ANDREW ROBERTSON: Like Ian Ovenstone, Laila Dable thinks costs in her business will rise, but she also fears a double whammy as her customers come to grips with the carbon tax.

LAILA DABLE: Customers seems to react to all different situation and they slow down on buying and things like that. So, until they come to fully understand and then they start spending again.

ANDREW ROBERTSON: Increased costs from the carbon tax are a concern across many parts of the small business community. The Council of Small Business of Australia is calling on the Government to help educate the sector.

PETER STRONG, EXEC. DIR., COSBOA: What we've got to get out to small business people as soon as possible is information that they can use to do their business planning, and the information they can use to develop some optimism about the future, and at the moment there's a lot of pessimistic business people out there.

ANDREW ROBERTSON: A second worry of COSBOA is that its members in big shopping malls will also carry the can for their landlords.

PETER STRONG: Our concern is that you're going to have Westfields will push more costs onto their small business tenants and less costs down onto Coles and Woolworths and the like, which makes us less competitive, which means that we'll have a two-speed economy that's getting wider in the gap.

ANDREW ROBERTSON: The carbon tax has drawn a mixed response from the small business community.

While people such as Ian Ovenstone and Laila Dable are concerned, a surprising number of small business people I contacted today said they hadn't even considered the tax yet or any impact on their bottom line.

At the other end of the spectrum, some small businesses are very much in favour of the tax.

CAROLINE PIDCOCK, CEO, PIDCOCK PTY LTD: The business that I offer, which is sustainable architecture, which helps people set themselves up to have homes and buildings that will use less electricity and achieve greater comfort, I think my business will actually be greatly improved and I'm delighted about that.

ANDREW ROBERTSON: Caroline Pidcock believes any carbon tax-related cost increases in her architecture practice will be minimal. She points out that as her company is at the forefront of green design, it's already making substantial cost savings from its voluntary attempts to reduce its carbon footprint.

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Small businesses fear price rises

Small businesses fear price rises

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