Why cut a nearly undetectable tax?

[***super_nova***]

Prepare for a price shock. Australia's inflation rate is out on Wednesday and the market is expecting 1.8 per cent. That's an annual rate of 1.8 per cent - a September quarter result so breathtakingly low it's close to the quarterly rate of 1.4 per cent for the previous September quarter.

The September quarters are the big ones. They are when electricity price rises hit the index. That one year on from the carbon tax a September quarter inflation result could be so low throws into an entirely different light Tony Abbott's claim that the price impact of the carbon tax would be ''almost unimaginable''.

''Almost undetectable'' might be a better description. This month energy consultant Hugh Saddler of Pitt & Sherry told Fairfax Media it had been ''almost impossible'' to see the impact of the carbon price when it was introduced, and it would be no easier to see what happened if it was removed.   The near invisibility of the ''great big new tax on everything'' creates both political and administrative problems for Abbott. And a minefield for businesses.

The Bureau of Statistics agreed.

Read more:  http://www.smh.com.au/business/why-cut-a-nearly-undetectable-tax-20131020-2vuvd.html#ixzz2iJT127dZ

[catsnknots]

I wonder if the mass closure of many businesses that use high amounts of energy has been taken into account?? 

I know of at least 3 businesses that have shut up shop that would have an immediate impact of electricity use... and one of those is a steel manufacturing business and the other two are huge agriculture businesses... 

and do we want inflation so breathtakingly low??? I thought that we need inflation at a decent level as it shows growth in industry??? 

[newstart2380]

Great answer cat, I agree

[just_me_karen]

Which businesses closed? I think that's not true, statistically business closure was NOT higher following the introduction of carbon pricing. Id suggest any businesses that closed were just the norm...or people who were doomed to failure due to their inability to sell what people want. I.E. they were going to fail, no matter what. To save face, or due to insufficient grey matter to understand business, they externalise the blame.

They remind me of those foolish people who claimed massive power bill increases, without declaring they were comparing a winter bill to summer haha. I bet they vote liberal, they sure match the demographic requirements.

[lakeland27]

they forget what they make up and what is in fact the case (as usual)

[spotweldersfriend]

You can fool 51% of the electorate most of the time.

[alexander*beetle]

That;s a bit harsh don't you think Karen. Businesses fail for all sorts of reasons. The main one being cash flow. That is, people not paying their invoices within a reasonable time. It's a swings and roundabout thing. Joe Blogs doesn't pay his invoice so Harry Happy can't pay his bills and so on. If you're a small business and have many people not paying withing the prescribed time, you can be carrying thousands of dollars of other people's debts.

You can't put it all down to inept business owners.

[topsidesoul]

Was Whyalla 'wiped off the map"?

Pretty sure Tony Stated Whyalla would be wiped off the map........liar

[just_me_karen]

That's true Alexander, but I was talking about the ones Cat Mad mentioned....those who didn't run their business properly and then blamed the carbon price.

[monman12]

SN: "Prepare for a price shock. Australia's inflation rate is out on Wednesday and the market is expecting 1.8 per cent. That's an annual rate of 1.8 per cent - a September quarter result so breathtakingly low it's close to the quarterly rate of 1.4 per cent for the previous September quarter."

Wednesday (also from the SMH)

"inflation has risen strongly in the September quarter, boosted by petrol prices, international travel and property and utility rates, further reducing the odds of a Melbourne Cup day interest rate cut, analysts say.

The headline rate lifted by 1.2 per cent in the third quarter, higher than economists' expectations of 0.8 per cent. The June quarter headline rate was 0.4 per cent.

The stronger-than-expected rise sent the Australian dollar to a new 4½-month high of 97.45 US cents."