Carbon tax debate in the building industry continues to escalate, with the Government labeling Housing Industry Association arguments false, and the Australian Institute of Architects now taking a stand.

Institute CEO David Parken today asserted their support for putting a price on carbon, as part of the transition to an emission’s trading scheme.

“The fact of the matter is that what we want to do as a society is move towards a low carbon economy; the government has set a target to be carbon neutral by 2060 and we accept the carbon price as a first step.

“What we say is that the building industry, particularly commercial and residential, needs even more incentives.”

Parken said arguments that housing prices would go up were inneffective: "My question to Master Builders Australia and the HIA is: what is the alternative?"

Earlier this week, the HIA stepped up its criticism of price on carbon emissions, saying that while full details are yet to be released, the significant negative impact of a carbon tax on new housing and Australian jobs is clear.

Among the concerns are that compensation measures for the tens of thousands of small medium and larger trade exposed manufacturers have to date been off the agenda. Also that building materials and products will go up in price, or be sourced from overseas.

“It is inevitable that jobs in Australia’s residential building sector and building product manufacturing sector will be lost under a carbon tax,” said HIA Chief Executive — Association, Graham Wolfe.

“The Federal Government’s intentions are clear — make businesses pay for the carbon emissions they produce,” he said. “What we don’t yet know is how much”.

“This means that Australian manufacturing will pay through both a carbon tax and higher input costs — electricity, gas and fuel prices,” he added.

“Details on the Government’s compensation arrangements for emissions-intensive trade-exposed operations are at best sketchy, while compensation measures for the tens of thousands of small medium and larger trade exposed manufacturers have to date been off the agenda,” said Wolfe.

Wolfe adds: “If production goes offshore, so too will Australian jobs. Building materials and products will go up in price, or be sourced from overseas — or both."

The HIA estimates the cost of an average new home will increase by over $6,000 under a $20 per tonne CO2-e price, less the yet to be confirmed compensation measures, which are estimated to lower the additional cost by less than 15 per cent.

A spokesman for the Minister for Climate Change and Energy Efficiency Greg Combet, said the HIA runs two contradictory arguments.

“It claims the carbon cost of building a new house will be passed on to consumer,” he said.

“But it also claims manufacturers who make the materials used for building a new house are “trade-exposed” and therefore unable to pass on those costs and will shed jobs.

“The truth is that the government is considering generous assistance to trade-exposed emissions-intensive industries which will shield them from the full carbon price and support jobs and competitiveness.

CSIRO estimates of the embodied energy in a new house show over half comes from cement, aluminium, steel, copper, glass and plastics.

“All of these products qualified for 94.5 per cent assistance, or shielding, from the carbon price under the former Carbon Pollution Reduction Scheme,” the spokesperson said.

“A few weeks ago, when the HIA first published its estimate of a $6000 cost impact on a typical house, they completely ignored this and assumed there would be zero shielding or assistance for companies which make building materials.

“After the government pointed out this obvious error, the HIA has gone back to the drawing board and now says the shielding will only lower its cost estimate by 15 per cent.

“But with more than half the embodied energy in a house shielded from 94.5 per cent of the cost of a carbon price their arithmetic still doesn’t stack up either.”