The survey found that most respondents believed that rises of 20 per cent in electricity costs and 10 per cent in raw material and freight costs would cause, on average, a 10-14 per cent decline in output, a 14-27 per cent decline in profitability and an 11-15 per cent decline in employment in the sector.
If these results are replicated across the entire printing industry, then there could be a decline in industry output of between $990 million to $1.4 billion, industry profits could decline by $53 million to $102 million, and total industry employment could fall by 5,500 to 7,500.
The survey respondents also indicated that a carbon price would have a significant effect on costs, with electricity and gas bills currently making up on average 5 per cent of operating costs. Paper represents 20-50 per cent of operating costs of which 60 per cent is sourced from Australia and would be affected by the introduction of a carbon price.
Some respondents also indicated that offshore competition would prevent the pass-through of any carbon costs, which could lead to some plant closures or production moving offshore as “carbon leakage”.
Printing Industries has used the survey results as part of a submission delivered to the Federal Government outlining the peak body’s policy position on the proposed Carbon Price Mechanism.
The submission stated that the printing industry’s import penetration at an aggregated sector level currently stands at 12 per cent with some individual sectors facing an even higher import penetration. With the trend pointing towards increased import competition, the submission advocates that any industry with import penetration rates of 10 per cent or more should be deemed by the government as being trade exposed and receive adequate levels of compensation/support.
Printing Industries National Manager for Policy and Government Affairs, Hagop Tchamkertenian, said while the printing industry is not a high emitting industry and over the past two decades had succeeded in considerably reducing its environmental footprint, the proposed carbon tax would have a negative impact on the industry if compensation or support was not forthcoming.
“Using the same estimates that the government’s Chief Climate Change advisor, Professor Garnaut, has used for electricity increases, our survey respondents indicated that industry output would fall on average by 9.9 per cent; profitability by 14.1 per cent and employment by 11.1 per cent,” he said.
“The industry impact gets larger once we start adding likely cost increases eventuating from raw materials and freight and transport."
Mr Tchamkertenian said Printing Industries had made it clear to the government that while it supported moves to mitigate the potential impacts of climate change, it was concerned about the potential impacts on its members if the government failed to adequately compensate/support the printing industry.
He said that in order to counteract the effects of a carbon price, the government must create a level playing field for local printing businesses by providing financial assistance in line with other trade-exposed industries.
“Funding should also be provided to the printing industry to realise the significant opportunities to reduce emissions through energy efficiency projects.
"The government should consider providing funding for training programmes, research and development, and uptake of energy efficient technologies by printing businesses in order to reduce overall emissions and transition the sector to remain competitive in a lower-carbon economy,” Mr Tchamkertenian said.
Printing Industries' submission also argued that in the absence of financial assistance for the industry, a carbon tariff should be imposed on imported printed matter originating from jurisdictions that do not have emissions trading schemes or carbon taxes, reflecting the carbon costs incurred by local printers.
Printing Industries Association of Australia
www.printnet.com.au
