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November 7, 2011

Australia’s large emitters brace for carbon tax

The Australian parliament has passed the carbon tax bill that imposes a levy of A$23 ($23.8) a tonne for the country’s 500 worst polluters.

The Australian Senate approved the tax in a 36-32 vote, following a 74-72 vote last month in the House of Representatives.

The new tax will hit several business sectors including the countries’ booming mining sector.

The new tax has been widely opposed by some stakeholders and its recent approval has been interpreted as support for the government’s climate and global warming agenda.

KMPG Australia chief executive Geoff Wilson told the International Accounting Bulletin the new tax will have a, “significant effect on many businesses in Australia particularly the high carbon emitters”.

“We are already seeing a significant upturn in advice clients need on the future regime. Because we now have an established starting price for carbon that is finding its way into key investment decisions that Australian businesses are making,” he said.

BDO Australia managing partner Tony Schiffmannsaid the firm has already done some work in helping clients understand the coming legislation.

“It will impact the largest companies directly and our early indications show that other smaller companies will also be impacted, but not materially,” he said.

Deloitte Australia chief executive Giam Swiegers said some of the firm’s clients are looking at the new law favourably and some a bit less

“We are already seeing a surge in helping our clients understand the implication of the new tax and seeing several opportunities for us,” he added.

The new carbon tax will come into effect in July 2012 and move to an emissions trading scheme from July 2015.

The Australian government is also considering introducing mining tax legislation.  Recently Prime Minister Julia Gillard’s government introduced legislation into parliament for a 30 percent tax on coal and iron-ore profits.

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