While not producing significant carbon emissions, the building and construction industry will be significantly impacted by the imminent carbon tax. This is the view of influential organisations in the sector, including the Master Builders Association and Housing Industry Association (HIA). The controversial tax, ratified by the Clean Energy Act 2011, is due to commence later this year on 1 July. 

Industry View

The HIA has estimated the practical implications of the tax, indicating that it will add $35 to monthly repayments on an average new home mortgage and some $10,000 over the life of the loan. The Master Builders Association contends that the tax will see supply costs rise with a probable reduction in investment activity in the sector. They also highlight that the long term impacts are harder to determine, especially when compensation for consumers and industry is inevitably phased out. The fear is that Australian industry will ultimately suffer as the building sector turns to cheaper imported materials.

What is the Carbon Tax?

In the Australian context the carbon tax is an initiative of the federal government to tax companies that release carbon as a result of the burning of fossil fuels. The 500 biggest national carbon emitters – classed as producing in excess of 25,000 tonnes - are liable for the tax.

It is essentially an incentive for these companies to adopt cleaner processes and technologies. The theory behind this approach is for government to channel the revenue derived from the tax to encourage cleaner technologies. A portion of the tax will also be allocated to some of the most intensive polluters – primarily miners and energy companies – to ensure they remain competitive globally.

For individuals, who will inevitably bear the brunt of energy and material price rises, there is assistance in the form of means tested tax breaks and payments for welfare recipients.