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Inevitable: Qantas, Virgin Airlines Passing Australia’s Carbon Tax Along to Consumers

By Doug Powers  •  July 11, 2011 09:45 AM

**Written by Doug Powers

Australia is debuting a carbon tax much like the one Al Gore has proposed for the United States. A few details:

In Australia, the federal government launched plans for a $23 per tonne tax on carbon, which will affect the country’s 500 largest polluters commencing July 1, 2012. “By 2020 our carbon price will take 160 million tonnes of pollution out of the atmosphere every year,” said Australian PM Julia Gillard. ” That’s the equivalent of taking forty five million cars off the road.”

The government will exempt farmers, small business, families and road transport from the scheme, which will feature a carbon tax from 2012-2015, switching to an emissions trading scheme in 2015.

When we read about carbon taxes on “polluters,” the stories are accompanied by who is exempt from the taxes. The fact is, nobody is exempt — with the possible exception of the corporation getting hit with the tax. One example is the airline industry in Australia, which is simply doing the obvious and passing the tax along to consumers:

Qantas and Virgin both say they will be passing on the cost of the carbon tax, with average fare increases of at least $3.

Australia’s two biggest airlines are among the first major companies to give an indication to investors about the cost to the company of the carbon price, and how that impact will be passed on to customers.

The airlines say they will bear the full brunt of the $23-a-tonne starting price on carbon, which is being passed onto domestic airlines in the form of a higher jet fuel excise, without receiving any Government compensation or transition assistance.

Qantas says the estimated impact of the increased fuel costs is between $110-115 million next financial year, which it says will be passed on in full to customers in a transparent way.

Other industries will do the same. This is the inherent irony in the global warming scheme. These taxes are purportedly put in place to ultimately help protect the people at the lower end of the economic totem pole who will be “hardest hit” by global warming, but they’re the same people who are going to get stuck with the bill. The lifestyles of Al Gore or his pal Sir Richard Branson will not be negatively impacted.

**Written by Doug Powers

Twitter @ThePowersThatBe

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