Carbon tax blamed for record insolvencies

ASIC data has shown company insolvencies for the last 12 months at record highs, with the carbon tax blamed by some for contributing to the number.

ASIC data has shown company insolvencies for the last 12 months at record highs, with the carbon tax blamed by some for contributing to the number.

News Limited papers report that there were 10,632 company collapses in the year to March 1, a rate 12 per cent higher than during the Global Financial Crisis, with manufacturing and construction contributing a fifth of this number.

“For companies which have exposure to energy, and other factors which are affected by the carbon tax in a significant way, the carbon tax and the costs related to it are having a significant impact on the ability of these companies to continue,'' Todd Gammell of HLB Mann Judd told News Limited.

Penrice Soda, the only manufacturer of soda ash in Australia, cited the carbon tax as a factor in its collapse and decision to become an importer rather than a maker of the chemical. It will shut its factory over the next few months, with 70 jobs to be cut, and mentioned the tax as the “straw that broke the camel’s back”.

"It's a million dollar hit to our business overall,” said Penrice CEO Guy Roberts. “You can argue that the carbon tax pushed us into the red I would argue that the carbon tax contributed materially to the loss in the first half."

The NSW government has meanwhile claimed that the carbon tax has cost the state $580 million in increased energy prices, $355 million in stranded carbon costs to electricity assets and a $237 million hit the the state’s budget.

Federal industry and climate change minister Greg Combet has disputed this, telling News Limited that the NSW government had been given $1.5 billion in dividends and tax-equivelaent payments, "And is providing very little of that back to households."