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Monday, 21 May 2012
Page: 4848


Mr SCHULTZ (Hume) (21:30): A few months back I raised the issue of the impact that the impending carbon tax would have on businesses in terms of the rise in electricity costs. That was pooh-poohed in this House by the government. Last Friday a constituent came in who was a principal of a solar and electrical business, a small business owner, who employed five people up until December of last year. In July-August of last year that business was thriving and then the phones suddenly stopped ringing. He had at that time enough work programmed from June until the end of November to keep himself and his five employees going. Come December, however, he had to lay off the five staff. His business is very diverse and they cater for domestic, rural and industrial needs. He described the general public as frightened and not spending.

This experience is shared by many contractors right across the district with whom he has frequent conversations. There are small jobs that come through, but not much substantial development is being undertaken. People are scared. Once the phones stopped ringing for his own business, and once he had laid off his staff, he went to Orange for work. He worked for four months with a firm called Gozcon Electrical until he was laid off. Gozcon had about 30 staff and had intermittent contracts with Cadia Valley Operations. He also learnt of another contractor with Cadia Valley Operations who had to lay off 400-plus employees.

He is repulsed by this whole business, particularly the implications of him having to lay off five employees in the small community he lives in, which happens to be Cowra. There are further implications for the community once businesses like Sarah Jane Furniture, which I raised a few months ago, have a number of lay-offs. I understand that, if the increase in electricity costs are as great as they anticipate them to be, they will be looking at more lay-offs.

He is happy for me to pass on details to the House. In terms of his finances, last financial year his business's turnover was $2.2 million. The year before that it was $1.6 million. This financial year it will be lucky to have a $500,000 turnover. He tells me that from a family perspective they are getting by, but things are really starting to stretch as the months drag on.

I read an article in the Cowra Guardian on 9 May about how businesses will have to pass on carbon costs. It stated that the director of Cowra Meat Processors said that he:

… will pay up to $120 000 a year more for energy when the carbon tax comes into effect.

That is quite obvious, because they use a lot of power 24/7 running a lot of refrigerators and freezers. He said that there is nothing you can do about the increased costs and said:

We've already spent a lot of money putting [in] more efficient refrigeration to use less power, but that hasn't done us any good because power is going through the roof anyway.

In that same article, the secretary manager of the Cowra Services Club said:

… based on a 17.6 per cent energy price increase the business' electricity bill could grow by $45 000 per year.

It just goes on and on. It is a direct illustration of the point I made when I raised the issue of Sarah Jane Furniture, a manufacturer in Cowra that employs over 130 Australians. That company estimates that there will be an increase in its weekly power bill from $13,000 to $21,000.

When I raised this in a question in the House to the Prime Minister, the Prime Minister questioned the veracity of that figure. I instructed my constituent to get in touch with the department to get the department to tell him where his calculations had gone wrong, but the department was unable to do so. The department did not even know its own calculation process for the introduced carbon tax.

I raise these events today to illustrate to the House that this has not stopped. It is only the beginning and it is going to get worse, and there are going to be more people out of work, not only in my electorate but right across the country.