Tuesday, September 02, 2008

Charities to pay high price for emission trading scheme, By Rosslyn Beeby - The Canberra Times - 2nd September 2008

Australian charities and community services will struggle to absorb new energy costs of up to $1.1billion as a result of the Rudd Government's proposed emissions trading scheme, new research says.

Organisations such as Meals On Wheels and not-for-profit aged-care centres will be among those hardest hit by a 16 per cent rise in the cost of electricity, according to Canberra-based social issues think-tank, The Australia Institute.

''While some industries, like airlines, can pass on higher fuel prices to their customers, it is much harder for charities to pass on their cost increases to the most vulnerable groups in Australia,'' author of a new research paper by The Australia Institute, economist David Richardson said. ''Unless the Government is assuming that donations to charity are going to rise when emissions trading begins, then there are going to be some big problems.''

The cost of emissions permits under the proposed scheme will impose around $1.5billion on state and territory governments. NSW will bear the brunt of the burden with additional costs of about $466million. The ACT Government will incur new costs of about $26million and Australia's local governments face a collective burden of at least $334million, according to the institute.

''As with state governments, unless local governments receive compensation from the Commonwealth, they will need to either reduce the quality of the services they provide to residents, pay their employees lower wages or increase the rates paid by their residents,'' the research paper read.

Mr Richardson said although the Federal Government had flagged compensation for households affected by rising energy costs, it appeared the community sector had been overlooked.

''Most people think of the community sector as being small and run by volunteers, but according to the Australian Bureau of Statistics, the sector employed 884,000 people and spent more than $68billion in 2007 providing services as diverse as Meals On Wheels to running thousands of aged-care facilities,'' Mr Richardson said.

''The cost of running hot water systems in the aged-care facilities alone is enormous.''

Mission Australia spokesman Paul Andrews said rising petrol prices had already pushed up costs for the organisation's services for the homeless. In Sydney, the cost of using four vans to pick up and transport homeless people to shelters across the city had risen from $800 a week for petrol to $1200, he said.

''We fully support the need to cut greenhouse emissions, but the costs to charities like us need to be recognised by the Government. Some of the extra costs we will face under an emissions trading scheme are pretty scary.''

Australian National University climate law and policy institute director Andrew Macintosh said the research paper showed charities and community welfare services were more financially vulnerable to carbon pricing than ''the big, polluting industries that currently have the ear of government and are arguing their case for compensation.''

Speaking at an Australian Industry Group forum yesterday, Federal Climate Change and Water Minister Penny Wong said the Rudd Government was '' willing to consider alternative approaches'' as part of the consultation process for its draft Carbon Pollution Reduction Scheme.

''In committing to provide assistance to emissions-intensive trade-exposed firms, however, the Government must also balance the competitive position of such industries with the rest of the economy.