Carbon Taxes Do Too Work: Australian Edition

From Matthew Leigh:

The Herald contacted Bradbury, who like many small businesspeople is struggling to work out what price increases he will face as a result of the tax. He said he made his 8000 extra pies a year estimate on the basis of what he would need to do to cover an 18 per cent electricity increase and a 5 per cent increase in all his other inputs, if he did not raise his pie prices.

A 5 per cent increase is well above Treasury\’s calculation of a 0.7 per cent increase in the consumer price increase.

Bradbury, who makes about 140,000 pies a year, says he\’s waiting to see actual price rises before any adjustment to the cost of his pies. He has also installed more efficient ovens, which might offset some of his increased power bills. In other words, it might be an 8000-pie hit, but it very likely won\’t be, and it certainly won\’t be if he passes on some of the extra costs.

As Matthew says:

More efficient ovens? That looks to me like a real-world example of someone changing their behaviour in response to a tax, in a way that will help the environment.

As he goes on:

I wonder if Murphy would consider that tax avoidance.

Quite possibly.

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