Carbon tax axing – what’s the result?

The repeal of the carbon tax has stolen plenty of headlines
recently. Mike Lorge looks at what is it likely to mean for the nation’s
manufacturers.

The repeal of the carbon tax means you can focus more
heavily on keeping your environmental credentials in check.

The carbon tax has been at the centre of plenty of debate
over recent months – not the least when the decision was made to repeal it on
17 July.

Many industries were affected by the decision; manufacturing
is just one of them. The announcement was met with mixed reactions – what’s the
effect likely to be on manufacturers? Reducing cost pressures.

Like many industries, costs are rising for the nation’s
manufacturers, making it more important than ever for them to focus on your
bottom line. The removal of the carbon tax is expected to lead to a decline in
energy costs, which will no doubt come as good news across the sector.

Unlike some industries, manufacturing is at the mercy of
trade and export strategies, making it more important than ever to keep costs
under control.

One of the other major issues is that manufacturers often
rely on international trade ties to keep themselves operational. The carbon tax
increased costs associated with transactions, no doubt leaving some trading
partners to go in search of alternative arrangements as costs soared.

Companies had found themselves unable to pass on the tax
through higher costs, leaving them little choice but to shoulder the burden
presented by the carbon tax.

This usually means looking for alternative cost cutting
measures, which has the potential to lead to a decline in the quality of the
offering or customer service provided. As a result, manufacturers were left
with a delicate balancing act of keeping their customers happy while minimising
expenditure wherever possible.

Increasing efficiency

It would also be fair to say that business productivity can
improve now the carbon tax has been rescinded. It’s one less regulatory burden
to keep up with, enabling business owners to focus on other areas of their
operations.

There are still plenty of other environmental considerations
that need to be made. Large-scale manufacturers must realise that the National
Greenhouse and Energy Reporting scheme will remain in place, which requires
them to report carbon emissions, as well as energy consumption and production.

There’s also the Emission Reduction Fund, which has the
potential to open up new funding to manufacturers and other industries.

Even though the carbon tax might now have been withdrawn,
companies still face reporting obligations until October. Final payments should
be made by February next year and you need to be aware that non-compliance
penalties will continue to be in force.

Staying ahead of the curve is essential no matter what
business you’re in, and the repeal of the carbon tax means you can focus more
heavily on keeping your environmental credentials in check.

How ERP software can help

Carbon tax or no carbon tax, it’s essential that businesses
keep costs down and improve efficiency as much as possible.

This is where enterprise resource planning (ERP) solutions
can really come into their own. Imagine having an overview of everything going
on in your business through a single product that’s both user-friendly and
intuitive – that’s what ERP has to offer.

A good ERP system should be flexible and able to adapt to
changes in the legislative environment, which may become more important as
issues such as the carbon tax continue to be addressed. The Renewable Energy
Target is also up for discussion at the moment, so you have every need to make
sure your business is ready to adapt as and when it’s necessary.

There’s no substitute for being well prepared in business no
matter what policy changes might be thrown your way, so make sure your
manufacturing operations are ready with ERP software.

[Mike Lorge is Managing Director of Sage Business Solutions]