8 AUGUST 2012
The first “fixed-price” phase of the Federal Government’s national carbon pricing scheme (the Carbon Tax) commenced on 1 July 2012. The Carbon Tax is a significant economic reform which presents many legal and commercial risks for businesses that supply or purchase emissions-intensive or energy-intensive goods or services.
In the “fixed price” phase, the carbon price will commence at $23 per tonne in the first year, increasing to $24.14 per tonne in the second year and $25.40 per tonne in the third year. Businesses falling within the category described above should conduct a review of their existing contracts to determine whether they provide for the passing on of the costs associated with the Carbon Tax. Businesses should also consider the need to ensure appropriate contractual provisions are in place to pass on these costs in future contracts.
There are also several legal risks associated with the passing on of the costs associated with the Carbon Tax. The Australian Competition and Consumer Commission (ACCC) has wide powers to ensure that businesses do not make misleading claims about the impact of the Carbon Tax on their prices. These powers include the ability to investigate price increases, issue infringement notices for $6,600 or commence legal action with fines of up to $1.1 million. Earlier this month the ACCC took action against Brumby’s Bakery after it told its franchisees to start raising prices in June and blame the increases on the Carbon Tax.
We would be pleased to assist you in both reviewing your existing contracts and updating your standard form contracts to ensure appropriate protection exists to pass on the costs associated with the Carbon Tax.
You are a valued Kinneally Miley contact, for more information related to this Legal Update please contact us.
[contactsbox] [leftcolumn]Contact Partner: Francesca Petroccitto
Direct Telephone : 07 3210 5771
Mobile Telephone : 0402 293 644
francesca.petroccitto@kinneallymiley.com.au