A new report from the Australian Chemical Industry Association (ACIA) shows that Australia’s chemicals industry is at risk of a “financial crisis”.
The ACIA’s report has also revealed that the government has not been able to find a solution to the chemical industry’s $1.8 billion in “economic damage” caused by the government’s carbon price and the carbon tax.
The carbon price, which the government is considering rolling out over the next few months, was supposed to deliver a $US40 billion boost to the Australian economy over the medium term, but it has so far failed to deliver.
The ACIO report said that a carbon tax will “further exacerbate” the crisis by putting a “huge amount of money into the pockets of a small number of high-income households”.
The report noted that the carbon price “will reduce the disposable income of Australians and will also lead to significant losses for low-income Australians”.
The COAG’s climate policy is a “losing strategy”, said ACIO president Mark O’Brien.
“It is the wrong way forward for Australia, the wrong time to be putting this huge amount of energy into a climate strategy, and the wrong approach to deal with climate change.”
The ACIWA has already called on the government to take immediate action to address the carbon prices, saying that the “economic impact of the carbon pricing on the Australian industry is expected to be negative”.
“A $US50 per tonne CO2 price would have a significant impact on the economy, which would require a significant change in the way that we think about the carbon market,” the report said.
The report found that “more than 90 per cent of the industry’s annual revenue” would be impacted by the carbon-price price, with the impact “largely concentrated in industries such as chemical manufacture, chemical products manufacturing, chemical and chemical services, and chemical and pharmaceutical production”.
The Australian Chemicals Association has previously criticised the government for its carbon pricing policy, which it says “has a large impact on small businesses and individuals”.
The industry’s chief executive officer, Ian Gee, told the ABC that the industry “absolutely” believes the carbon policy will cause “serious economic damage” to the industry.
“The carbon price has a big impact on a small part of the market,” Mr Gee said.
We believe the carbon cap and trade will cause serious economic damage to the entire industry.”