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Business groups fail to bring members up to speed on CPRS.

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Business groups fail to bring members up to speed on CPRS

Tuesday, July 21, 2009

Source: Senator Ron Boswell

“How can business peak bodies confidently represent their members on the CPRS when their members do not know how the CPRS will affect them?” asked The Nationals’ Senator Ron Boswell today following the release of a KPMG study for the Australian Industry Group.

“The Ai’s Heather Ridout has been actively lobbying for the CPRS when her own study reveals that a large proportion of her members do not know what the CPRS means to their business.”

“The KPMG survey shows that:-

· Only 15% of businesses surveyed were confident they had knowledge of all key elements of the CPRS;

· Almost one-third of businesses had no knowledge of the main elements of the proposed Scheme; and

· Only around one-third of respondents have assessed cost impacts.”

[Source: Gearing Up: Business Readiness for Climate Change, July 2009, The Australian Industry Group]

Senator Boswell said that it was extraordinary for business leaders to take important policy positions without input from an informed membership.

“It begs the question whether business members of peak groups actually agree with what their leaders are saying.”

“The government’s emissions trading scheme (ETS) aims to be the most important structural change to the economy in history which will increase the input costs of every single business in Australia. Power price rises in particular will damage every single enterprise’s bottom line yet the KPMG survey shows that too few businesses have any idea of what is waiting in the CPRS wings.”

Senator Boswell laid responsibility for the lack of knowledge of the CPRS at the feet of both the government and some peak business groups.

“Neither the government nor these business organisations have bothered to inform Australian businesses of the practical ramifications of implementing the CPRS. “It is obvious why the government doesn’t want anyone to know. They are trying to hide the bad news.”

“As for peak business groups like the Business Council of Australia and the Australian Industry Group - they have from the beginning adopted a policy of working with the government rather than telling their members the facts of life under the CPRS.”

“It is alarming that so few businesses have any idea of what they’re getting into with the ETS. With the GST, everyone knew the basics of what was involved and how it would affect their business. But with the CPRS, only a minority know and are prepared for the sizeable jolt to their operations.”

“What have these peak organisations been doing to look after their members’ interests if they haven’t even informed them of the implications of the CPRS?”

Senator Boswell said that some business groups were conflicted on the CPRS because members were divided between service enterprises which would benefit from brokering the billions of dollars to be churned through the economy and those manufacturing, construction and energy producing businesses that would be heavily taxed under the CPRS.

“Many businesses (44% of the KMPG survey) also seem to have the idea that they are in line for free permits even though they have not undertaken a formal assessment of the CPRS. Incredibly, one-third of businesses expecting free permits do not expect to have direct liabilities under the CPRS.”

“Whatever gave these businesses the idea that the government was giving them something for free?”

Senator Boswell said that it was urgent for businesses to rapidly scale the learning curve of the CPRS. “Then I think we’ll see some new instructions for their so-called spokespeople on CPRS policy.”