Several building products and materials companies have announced they will increase their prices in line with the Government’s price on carbon.
Companies reacted to the expectation that the tax would increase their costs by saying they will need to pass on the slug.
Brickworks issued a press release saying the tax will negatively impact housing affordability by increasing building product prices in Australia.
The company predicts the proposed $23 per tonne carbon tax would have an impact of $12.8 million on its Austral Bricks division earnings in its first year of operation. It intends to increase prices to fully recover the cost of the tax with price rises of up to six per cent.
Brickworks also claimed that as products that are classified as trade exposed, such as steel and cement, will be heavily compensated, it will lead to price benefits when compared to clay bricks that will not receive any compensation.
It has been reported that CSR also expects to increase prices in its range of plasterboard, bricks, roof tiles and fibre cement products to recover costs.
And Cement producer Adelaide Brighton said it would consider importing more of its material from offshore after revealing the tax could slash its net profit by millions next year.
Deutsche Bank analyst Emily Behncke was quoted in The Australian predicting profit declines for builders Boral and CSR.
Behncke estimates Boral will suffer a full-year 2013 dip of 4.8 per cent, or $17.3m, and CSR's profit will fall 8.8 per cent, or $13.3m.
There has also been industry resentment reported that the government had pushed the climate change benefits under the now abandoned insulation scheme, yet insulation production was not covered by the current carbon tax regime.
Boral, CSR and Fletcher Building all produce insulation, which will not be covered by the full assistance package under the carbon tax.
