By ROBERT WALLACE

TCCI Chief Executive

THE late leader of the Australian Democrats Don Chipp famously said that minor parties were needed to “keep the bastards honest”. However, in the current parliaments, state and federal, the minor parties are NOT working to ensure the government keeps its promises. In fact, they’re doing exactly the reverse.

A couple of recent examples demonstrate very clearly that minority governments are not working well, either for Tasmania or the nation.Locally, we have the Green Ministers distancing themselves from Premier Giddings’ tight Budget and indicating that the harsh expenditure cuts, supported by the TCCI and business generally, would not have occurred had the Tasmanian Greens been responsible for the State’s finances.

Well, the Greens are responsible and as a partner in Government, Ministers McKim and O’Connor participated in framing the Budget and cannot escape accountability.

On a national level, the passage of the carbon tax package, through the House of Representatives also provides clear proof that minority government in Canberra is not serving the majority well.

Coinciding with the Lower House passing the legislation, new, independent research shows that small and medium businesses and their employees are likely to suffer the most under the carbon tax.  The research, from global economic and strategic consultants Castalia, finds that energy intensive SMEs are likely to suffer cuts in profitability of between 10 per cent and 20 per cent under the carbon tax.

The research demolishes the idea that only 500 big companies will pay the tax. It points to trade exposed small and medium businesses being significant losers. They will be unfairly squeezed by costs passed down the supply chain but will be less able to pass those costs onto consumers because of competitive pressures.

The Greens insistence on this carbon tax package shows clearly that minority influence in the current parliament is forcing the Gillard Government to break its promise to the Australian public not to introduce the tax under the current circumstances.

Australia is taking a huge uncalculated risk moving ahead of our competitors by introducing an economy-wide carbon tax that will cost jobs and do nothing itself to improve the global environment because of carbon leakage.

Global trade will simply shift the production of carbon-intensive goods to countries with a cost advantage, being those with no price on greenhouse gases.

Given the heavy (and arguably necessary) household assistance, this carbon tax will not be effective at cutting emissions but it will just fill Government coffers with tax revenue.

There are serious concerns within the investment community that the $10 billion Clean Energy Finance Corporation will distort an otherwise predictable pipeline of renewable energy investment.

The Government knows the tax itself will not be effective. The heavy lifting to cut emissions within Australia will be the costly direct action to close brown coal power stations and the regulated national Renewable Energy Target of 20 per cent by 2020.

Through the imposition of a carbon tax - the price extracted from Prime Minister Julia Gillard to gain Greens’ support for her minority government - Australia is imposing a cost on its own industry in circumstances where governments in competing nations including the United States, China, Canada, Brazil, India and Indonesia are not imposing similar costs.

This grossly distorted and mis-timed carbon tax does not have a mandate from the majority of Australians. Carbon pricing should be deferred until our major competitors agree to act and when a Government is given a democratic mandate by the Australian public.