Carbon tax fears on the rise

first_img Facebook Twitter: @NeosKosmos Instagram Tony Giannakis, co-owner of Port Melbourne’s celebrated restaurant The Graham isn’t against the carbon tax as such. “Its intentions are good but it’s the application which is incorrect,” says Giannakis, who has carefully nurtured his business over the past 12 years to become one of south Melbourne’s top dining experiences. Previously the manager of Andrew Blake’s restaurant at Southgate, Tony took the plunge in 2000 to create The Graham. Of Cepahalonian heritage, he grew up in Middle Park, a stone’s throw from the hotel that he has reinvented with brother Peter. Since then, their elegant bayside restaurant and wine bar has quietly carved out its position as a seriously fine dining experience, with a slant on customer service that these days is hard to find. The introduction of the carbon tax for Giannakis like thousands of other restaurateurs, is the latest obstacle to threaten not just growing, but sustaining his business. While domestic consumers can access the government’s household assistance package to help offset the effects of the carbon tax, small businesses don’t have that option. Despite the government talking-up the help it is offering businesses – comprising an asset write-off limit increased to $6,500 and access to a $40 million Energy Efficiency Information Grants program, Giannakis is unimpressed. “We’ve been around since 2000. How much more asset depreciation is there to claim? It doesn’t gain me much. “We’ve calculated that our energy usage currently costs us nearly $30,000 a year. In five years this cost has probably doubled.” With commercial energy bills once again about to increase by between five and ten per cent, Giannakis is concerned. “Our business is dependent on phase power – coffee machines, dishwashers, cool rooms, and air conditioning – there’s no way to avoid this kind of energy intensive technology.” Whereas other industries will respond to the carbon tax by raising prices to the customer, Giannakis says that isn’t an option open to restaurateurs. “We can’t raise prices because this is such a price sensitive industry. The moment you hit over $20 for an entree, people don’t want to know. We have to absorb these costs. The problem is, how much can we absorb? “The national net average for profits in the restaurant trade is four per cent. If that figure goes down, there’s nothing left.” Giannakis points out that whilst the government’s intention is to motivate businesses to cut energy usage, there’s only so much any business can do. “Other than convert every halogen downlight to LED in the next few years, at a substantial cost, there’s nothing more we can do. We’ve had energy consultants in and been reducing energy use for the last five years.” Giannakis argues that the only hope is for the government to accept that to survive and grow as the carbon tax bites, small businesses need a helping hand. “Assistance has to come in tax concessions, and those concessions have to be real,” says Giannakis. Meanwhile in the manufacturing sector, many small businesses facing a sluggish retail economy and competition from imports made cheaper by the high value of the Australian dollar, see the impending costs of the carbon tax as deeply worrying. Stace Karakis, owner of Victorian furniture manufacturer Total Bedroom which employs 27 workers at its Laverton factory is despondent. “We’re struggling now to keep paying our bills and the carbon tax is going to make it even harder,” says Karakis. “If I wasn’t so committed financially I would have closed the company down.” Karakis, whose company supplies Harvey Norman, says that costs for manufacturers are increasing, even before energy costs have increased. “Our suppliers, companies like Wattyl are putting their prices up already. Of course I’m also concerned about our power bill. We’re currently spending about $10,000 a quarter on electricity.” “We don’t need the carbon tax. It’s not going to make a difference. Here we are selling coal to the Chinese to burn it, and what’s that produce? The government would do better to stop selling them coal and reduce their use of it that way, rather than charging us for carbon emissions.” Karakis believes that government intervention is crucial to sustaining manufacturing as the carbon tax rolls out. “We need some assistance from wherever we can get it. In the furniture industry there have been hundreds of companies that have closed down.” Just weeks in, uncertainty continues over just how expensive the carbon tax will be for small businesses. Quite what the final reckoning might be of the Gillard government’s arguably boldest and certainly most controversial legislation, remains to be seen.last_img

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