The Australian Securities & Investments Commission reports there were 10,632 company collapses for the 12 months to March 1 – averaging 886 a month – with the number of firms being placed in administration more than 12 per cent higher than during the global financial crisis.
While the high Australian dollar is seen as the main factor behind manufacturing closures, experts say the carbon tax is adding to increasing cost burdens for many firms struggling to stay afloat.
Peter Macks, principal of Adelaide-based insolvency firm Macks Advisory, said the carbon tax was “quite debilitating” for a number of hotel operators who he said had been “struggling for a long time”.
“It is very tough operating at a profit,” Mr Macks said.
Todd Gammel, a partner with HLB Mann Judd, likened the carbon tax to pulling a leg out from underneath a chair.
“For companies which have exposure to energy, and other factors which are affected by the carbon tax in a significant way, the carbon tax and the costs related to it are having a significant impact on the ability of these companies to continue,” Mr Gammel said.
Australian Chamber of Commerce and Industry chief economist Greg Evans said: “Rapidly escalating energy prices caused by the carbon tax and other green programs are taking their toll on many Australian businesses.
“In energy reliant industries it is already showing up in job losses, deferred investment and in the worst cases, business closures,” Mr Evans said.
“These are the enterprises that are energy reliant, face competition from larger players or overseas, yet received zero compensation from government when the onerous tax was introduced.
“We accept business is under pressure a number of fronts including the impact of a high exchange rate, however what business operators find hard to deal with is deliberate policy actions of government designed to increase the cost of doing business,” Mr Evans said.
“It defies logic to adopt a policy which even the Treasury acknowledge will lower our standard of living and be harmful to national productivity.
AMP Capital chief economist Dr Shane Oliver said the carbon tax was contributing to the demise of firms across the economy.
Source. HT: Grace Collier via Twitter.