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Toowoomba Council Worried By Carbon Tax

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Toowoomba Mayor Paul Antonio

Toowoomba Mayor Paul Antonio

June 12, 2012

Toowoomba Regional Council Mayor Paul Antonio has expressed concern over the effect the incoming carbon tax is likely to have on local government, citing a 10 per cent increase in electricity costs within an estimated overall rise around 20 per cent.

“While we are aware of our obligations under the Clean Energy Legislation with substantial work already undertaken to identify our reporting obligations, as well as the possible impacts of the proposed Carbon Pricing Mechanism, it is fair to say that we are concerned,” Cr Antonio said.

“We are working on an estimated 10 per cent increase in electricity costs due to the Carbon Pricing Mechanism alone, as well as an additional increase around 10 per cent as part of our suppliers’ predicted price path.

“For 2012/13, the carbon tax increase is estimated to be in the order of $1.2 million. About $724,000 of this increase will be in the Water and Waste Services Group and $200,000 will be associated with street lighting.

“Council also is expecting incidental cost increases for services and products that use electricity in their manufacture or delivery.

“The final dollar figure is elusive with reports from other local governments throughout Queensland varying between manageable and astronomical.

“Council’s Waste Management Services branch is affected directly by the Carbon Pricing Mechanism due to the cost of emissions from its waste collection and disposal activities.

“Given the geographic size of the Toowoomba Regional Council area, we are particularly interested in the effect our landfill operations will have on the bottom line.”

The quantum of the costs each year is dependent on the annual emissions and the carbon price for the relevant year, however the liability for waste disposal each year will continue well into the future.

Cr Antonio said strategies were being developed to fund this long-term liability and would form part of Budget and policy discussions on how council and residents would pay for the federal government tax.

Chief Executive Officer Ken Gouldthorp agreed the carbon tax represented a significant Budget issue.

“It is particularly concerning that council will need to accept a carbon tax liability from the first of July without a definitive calculation of the costs involved,” Mr Gouldthorp said.

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One Response to Toowoomba Council Worried By Carbon Tax

  1. Kathryn Spencer

    South Burnett Regional Council is also worried by Carbon Tax.

    from interview with CEO at SBRC

    Firstly what is the Carbon Tax? It’s a tax on fossil fuels, especially those used by motor vehicles. It’s intended to reduce the emission of carbon dioxide i.e. greenhouse gases.

    Secondly, why do we have a carbon tax? “We as a community in Australia are conscious of the need to reduce our carbon footprint and this is a good thing” deems Ken McLoughlin, CEO of South Burnett Regional Council.

    As from the 1st July 2012 Carbon tax will be levied on all ratepayers including Councils. Will the Carbon Tax make any difference to the emissions of greenhouse gases? Who really knows for sure!! What will be its impact on the SBRC budget; what will be the impost on the rates that we, the ratepayers will have to fork-out?

    Ken McLoughlin stated, “I would also point out that the Carbon Tax will impact on our bottom line from July this year. And despite the being under the 50,000 tonne threshold of emissions using current criteria, we are not exempt from the increase in costs of products that have incurred the Carbon Tax.” The items that the carbon tax will affect the Council directly will be fuel, electricity, water treatment & waste.

    “This tax will increase costs particularly in respect of road materials and suchlike. ” Indirect charges for materials e.g. bitumen etc will be more expensive for the Council to purchase.

    The Council is forced to pass this tax onto the ratepayers. It has no choice. For the budget, which the Council is working on at present the costs for Carbon Tax are ‘up in the air’. The 50,000-tonne level threshold of emissions could be reduced and that’s their main concern. Currently the SBRC is at 30,000-tonnes emissions plus an expected 1% increase in costs for materials that will flow through into the rates.

    If for instance, the threshold is reduced to 30,000-tonne the Council will then have to pay $23 /tonne using current criteria and this per/tonne amount could also rise at a later date. No one knows for sure at this point in time.

    Ken McLoughlin also said “Carbon Tax, right or wrong, poses unique challenges for organisations in respect of planning business in the future. It is difficult enough to balance a budget in these times but it is even more difficult when uncertainty pervades decision making, which the carbon tax causes. For instance, the threshold of 50,000-tonne per organization is arbitrary and can be changed without long-term lead-time. Further, despite the best efforts of economists, who sometimes get it wrong, the estimates of indirect flow-on costs of carbon could vary widely. In Council’s business we use a lot of electricity & fuel and have to dispose of our region’s waste & sewerage. All of these have major impacts on Council’s carbon emissions and hence the bottom-line.”

    So what then? All of us are going to have to pay more for our household electricity and fuel. Retailers will be paying more for these as well and those increases will be passed on to consumers and everything will rise and so will the rates. It’s a given. So tighten your belts everyone and prepare for the worst-case scenario.

    It’s upon us now. No amount of ranting and raving about whether this tax is a hoax or a blessing in disguise will make a lick of difference. It’s happening. Council rates WILL rise as will everything else that is transported, heated, cooled, cooked and treated.