By Claire Reilly
A carbon tax will hit retailers, but it will also give them the opportunity to adapt and strengthen their businesses to become more competitive, according to the head of one of Australia’s leading retail advocacy groups.
Executive director of the Australian Retailers Association, Russell Zimmerman, spoke exclusively to Current.com.au and discussed the ramifications of Australia's new carbon pricing scheme, which was announced by Prime Minister Julia Gillard on Sunday.
“Well the retail market is in decline, so retailers are the people that are going to wear the carbon tax well and truly,” said Zimmerman. “I think the tax cuts averaging $10.10 per week will leave very little margin for error – it won’t go far enough to absorb the other costs people are going to face.
“Retailers generally speaking are fairly high users of energy. If you look at consumer electronics retailers, other than their store lights and their stores running all the time, a lot of them have a lot of TVs and equipment running. And a lot of them are large footprint.
“If you’re talking about stores like Harvey Norman, they carry very large footprints in their stores so they’d be extremely high energy users. There’s still a lot of costs involved for retailers at the tail end, and I’m not sure whether they’re going to be able to recoup those costs.”
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However, Zimmerman also conceded the new scheme would offer retailers the opportunity to make their businesses more environmentally friendly, and to take advantage of funding assistance offered by the Federal Government.
“I’m pleased with the $40 million package that they’ve put out [referring to the Government’s $40 million Energy Efficiency Information Grants program].
“It basically shows how retailers can reduce energy costs, and provides recognition for carbon neutral businesses through the Low Carbon Australia scheme. It will be an opportunity for the retailers to work together with the Government.
“There’s an opportunity for retailers to look at how they can reduce their costs, and I know of retailers who have already done it. You can look at things like lighting – there are a lot of those new LED lights which are so bright and so powerful, and you can reduce your costs dramatically with them.
“And if you can pull your costs out and reduce your energy costs then you’ve got a chance to be in front of your opposition, because your actual costs are going down in business.”
Zimmerman also offered advice to retailers on ways to take advantage of Government funding.
“My advice is for retailers to look at their business, particularly small businesses, because there’s an opportunity to pick up on the increased investment allowance. I’d be saying to retailers, find those costs and reduce them so you can get that one-off write-down for capital expenditure.
“There’s an opportunity there to look around to and see whether local state governments are offering any kind of opportunities for getting into partnership with them and getting some funding. If it’s available, use it while you can.”
Retailers can find more information on the Australian Government’s initiatives at the Clean Energy Future website: http://www.cleanenergyfuture.gov.au/helping-business/.