VIC and TAS manufacturing to suffer under carbon tax

Manufacturing activity may have grown for the first time since April this year, but Australian manufacturing businesses in Victoria and Tasmania will reportedly be worst off under the Government’s new carbon tax policy.

Tasmania

On a visit to Rio Tinto Alcan in Bell Bay on Monday Assistant Treasurer Mathias Cormann said manufacturing businesses across Tasmania will struggle under the carbon tax.

Cormann said the new tax will “push up the cost of everything” and will make the Tasmania’s as well as the nation’s manufacturing industry less competitive internationally.

The result, he said will cost jobs, hurt small and medium sized businesses but do nothing to help reduce global emissions.

Cormann said the carbon tax will also improve the competitiveness of overseas polluters over Australia’s “most environmentally efficient equivalent business in Australia”.

"If the carbon tax is passed by the Federal Parliament it will help big emitters in places like China take market share from businesses like Rio Tinto here in Bell Bay,” he said.

Victoria

The comments follow earlier statements by the Victorian Government that Ballarat’s manufacturing industry will be hard done by under the carbon tax.

Acting Victroian Premier Peter Ryan said struggling small businesses in regional Victoria, including regional manufacturers, will now face even higher electricity costs as a result of the Government’s carbon policy, according to a report by the ABC.

Ryan said Bendigo, Ballarat, Geelong, and Latrobe Valley, which gave a strong manufacturing base, will be affected.

Increase in company adminstration

Online business site Startupsmart has reported that figures released by the Australian Securities and Investments Commission (ASIC) revealed 8802 companies had entered into external administration during the 11 months to May this year – a 4.4% increase on the previous year.

The report states that Victoria, where manufacturing is a major industry, the number of companies being placed in administration has increased by almost 10% on last year for the period.

Just this month Australia’s largest envelope maker, Australian Envelopes, headquartered in Notting Hill, Victoria, entered into voluntary administration after management announced the company had run out of money.

According to the administrator PPB Advisory, the manufacturers suffered significant losses this past year due to the overall decline of the paper goods industry and its shift away from snail mail, despite having increased its market share to almost 45%.

The envelope maker has also been criticised for its poor management and for not advising staff on the company’s negative performance for some time.

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