Carbon Tax on Tourism
CARBON TAX ON TOURISM
CARBON TAX
The tax levied on the carbon content of fuels is known as the carbon tax. Carbon tax is a type of carbon pricing. Fuels like coal, petroleum and natural gas release carbon dioxide (CO2) when they are burnt. This tax has been introduced to reduce the greenhouse gas emissions. These taxes can be regressive tax, in which they may affect low income groups directly or indirectly. This regressive impact on carbon taxes can be addressed by using the tax revenues to help the low income groups. The government sets a price per ton of carbon in the fuels. Carbon taxes are introduced on the 1st of July 2012 to reduce the greenhouse gas emissions. But from economic perspective, carbon taxes are having negative effect. Current charge of carbon tax in Australia is 23$ per ton. Rate of the price is scheduled to increase by 2.5% over the next 2 years, before moving to market base Emissions Trading Scheme (ETS) in 2015.
IMPACTS ON ACCOMMODATION SECTOR IN AUSTRALIA
In Australian Tourism, accommodation is a key sector. After education, tourism is the largest export sector in Australia. In 2010-11 the accommodation industry contributed $6.2 billion which is 1.3% of GDP. There are many small tourism companies operating in Australia with very low margins. Any slight rise in cost of operations can result in closing their business for many people. Due to carbon tax the cost of accommodation increased by 0.5%-0.9%. If we calculate this tax for average hotel with 200 rooms, the impact of carbon tax can reduce the margin from 7.2% to 6.4%.This results in reduction of profits by 6.6% to 11.8%. Due to this 6400 people have lose their jobs as the cost reduction ideas of tourism industry so far. Tourism industry suffered from weak demand since Global Financial Crisis (GFC) which also effected employment, cost structure and establishment costs due to high Australian dollar. The direct affect of this tax has been resulting in electricity and energy
CARBON TAX
The tax levied on the carbon content of fuels is known as the carbon tax. Carbon tax is a type of carbon pricing. Fuels like coal, petroleum and natural gas release carbon dioxide (CO2) when they are burnt. This tax has been introduced to reduce the greenhouse gas emissions. These taxes can be regressive tax, in which they may affect low income groups directly or indirectly. This regressive impact on carbon taxes can be addressed by using the tax revenues to help the low income groups. The government sets a price per ton of carbon in the fuels. Carbon taxes are introduced on the 1st of July 2012 to reduce the greenhouse gas emissions. But from economic perspective, carbon taxes are having negative effect. Current charge of carbon tax in Australia is 23$ per ton. Rate of the price is scheduled to increase by 2.5% over the next 2 years, before moving to market base Emissions Trading Scheme (ETS) in 2015.
IMPACTS ON ACCOMMODATION SECTOR IN AUSTRALIA
In Australian Tourism, accommodation is a key sector. After education, tourism is the largest export sector in Australia. In 2010-11 the accommodation industry contributed $6.2 billion which is 1.3% of GDP. There are many small tourism companies operating in Australia with very low margins. Any slight rise in cost of operations can result in closing their business for many people. Due to carbon tax the cost of accommodation increased by 0.5%-0.9%. If we calculate this tax for average hotel with 200 rooms, the impact of carbon tax can reduce the margin from 7.2% to 6.4%.This results in reduction of profits by 6.6% to 11.8%. Due to this 6400 people have lose their jobs as the cost reduction ideas of tourism industry so far. Tourism industry suffered from weak demand since Global Financial Crisis (GFC) which also effected employment, cost structure and establishment costs due to high Australian dollar. The direct affect of this tax has been resulting in electricity and energy
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