Today I invited Federal Opposition Leader Tony Abbott and Member for Fadden, Stuart Robert MP, to visit my company Zarraffa’s Coffee to view our operations and speak about the Carbon Tax issue.
It was a great opportunity to speak with Mr Abbott about the impacts of the Carbon Tax and his vision for providing a future where businesses can be successful.
The issue, which I have taken a stance on previously (see media release below) has larger impacts for all people and being Australian-first believe it will stifle business growth and provide an ineffective solution to the larger carbon issue.
While we at Zarraffa’s have seen growth across the board in our store numbers and turnover the Carbon Tax is an impost to our expansion plans, placing unnecessary burdens on our franchisees and ultimately our customers.
To date we have absorbed the rising cost of doing business, resulting from wage reforms and other rising costs, and the added pressure of the carbon tax puts undue pressure on our franchisees, making it harder to operate small businesses in this country.
Unlike the GST, something I was equally vocal about, we cannot simply pass along the cost and the subsidies that are being offered by the government will do little to cover the shortfall when all is said and done. There is also the issue of the effectiveness with carbon being just one of the elements to wreak havoc in the environment.
Through my own investigation and support of conservation initiatives, (see some of my other blog posts for more details), I believe that carbon is just one element impacting our natural world. Pollution is equally problematic, and strategies and infrastructure to reduce this factor are just as important.
I congratulate both Mr Abbott and Mr Robert on their initiative to visit with our business and by talking with business owners in general. By consulting them on their needs, they are able to understand the real impacts to our operation and I believe deliver a more effective strategy that addresses our environmental concerns – one that is tempered with rational business foresight and acts in the interests of our nation.
Thursday 14th March, 2012
CARBON TAX IMPACTS RETAIL LEASES
The CEO of Zarraffa’s Coffee has spoken out today about the real cost of the Federal Government’s Carbon Tax, revealing special conditions to cover the expenses of the tax in the fine print of the specialty coffee chain’s leases with one of Australia’s largest retail property groups.
Mr Campbell said that in recent lease negotiations with one of Australia’s prominent retail property groups, special conditions had been inserted stating:
“…the Lessor may pass this carbon or greenhouse gas emission related charge onto and recover the same from the Lessee at cost”
Mr Campbell has spoken out about the special conditions in an effort to warn other businesses owners to be wary of these added costs that will be bring additional pressure to bear on the retail sector.
“If one of Australia’s largest retail property groups has started planning for a rise in costs, others will soon follow suit”, he said.
“Carbon Tax adds insult to injury, by not delivering a long term solution to the carbon issue and indiscriminately weakening businesses across all industries that will not be able to carry increased costs on top of Federal Pay Reforms and other recent hikes in levies and taxes.”
“In our industry it won’t be long before coffee is an expensive commodity as we shoulder Carbon Tax impacts across transport, power, rents and so on. The tax will have a compounding effect as each link in the chain to providing a simple cup of coffee costs that bit more.”
Mr Campbell was sympathetic to the bind another tax places on landlords, who have no choice but to pass on the expense, and said that it is now a very real imposition on all businesses that will ultimately have to be passed on to the consumer.
“We acknowledge that landlords are only making a business decision to pass on the impacts of the tax to ensure their own viability and the real truth is that most businesses will have to do the same with the Australian people wearing the end result.”
Zarraffa’s Coffee is a 50 store operation, with head offices and a roastery based on the Gold Coast and Mr Campbell warns that the Carbon Tax may be the final undoing of many small to medium businesses.
“Essentially the Carbon Tax is an inflationary measure and a graft and the government needs to start talking to business owners who will be most affected by it. There are other ways to cut emissions and within our company we have been changing our operations and corporate culture over the past five years to great effect making both carbon and cost savings in our business.”
Mr Campbell says the Federal Government needs to use the ‘carrot’ not the ‘stick’ approach to make a real difference in the carbon issue.
“Incentives for power reduction are just one strategy to motivate businesses to embrace carbon reductions. The solution does not have to be a penalty system; it’s possible that a rewards based scheme can do more to shape standards of practice and business culture, with regards to emissions, in the longer term.”
In response to the Government’s promise of a tax rebate to business in order to offset the carbon costs, Mr Campbell said that what was being proposed was a token gesture and not nearly enough.
“I know how hard it is to get through a financial year as a new business and my first five to ten years were tough. Expecting businesses to slog it out for an entire year for a rebate that doesn’t even start to cover the new costs imposed by the tax is just ludicrous.”
“Shouldering the difference between the carbon tax costs and a nominal rebate, is really the difference between making it for many business owners and their families – period.”
Mr Campbell warned that the logical end of result of additional costs to businesses would unfortunately result in staff cut backs and layoffs in order for businesses to remain open.
“Everything will cost more as businesses pass on the tax to consumers. From major expenses such as home loans to life’s little luxuries like the simple cappuccino, Australian people will have to dig deeper into their pockets to cover the cost of this tax.”