Saturday, 19 November 2011

Tax Avoidance

by Linda from The Witches Kitchen

I am going to pay virtually no carbon tax, none directly and so little indirectly that the compensation in the carbon legislation that has just passed through the Australian parliament is going to be quite a windfall for me.

I am not naive enough to believe that the big polluters who will, from next year, have to contribute towards the cost of dealing with the mess they create, will not pass on the price. They'll probably even use it to gouge us, riding the misinformation campaign and counting on the public blaming the government. But they won't get much out of me. I can even see a whole heap of side benefit windfalls.

Our house is built, but even if it wasn't, it's not that big and mostly made from local wood, much of it recycled, and recycled fittings. The only things in it that would have an embedded carbon price are cement, nails, and roofing iron - and the steel industry is one that is going to be compensated so heavily it will not be paying any tax. It's true the carbon price will push up the square metre price for building, but there's no tax on labour or skill. So it makes sense to spend the money on a good architect or designer to get more space, rather than build a bigger house. Which should mean less sprawl, more smart design, and more green in the suburbs.

We live with stand alone solar power. Our solar panels have well and truly paid for themselves in cradle to grave accounting. Our very first pair, now nearly 30 years old, are still in the array. So our household appliances are already chosen for energy efficiency, and whenever there's a free energy choice that's the one we've got. So there's no clothes drier, rather a clothes line outside that makes the clothes smell lovely and sun-fresh, and an undercover one on the verandah on the western side of the house for rainy weather. (Outdoor clothes lines are common in Australia - lucky us - but the carbon tax does mean that any council would have buckley's of trying to outlaw them).

There's no air conditioner, rather some good roof insulation and a lovely big deciduous pecan tree shading the north east side of the house and the breezy east side verandah. There's no space heater, rather a slow combustion stove that keeps the house warm and doubles for cooking and to boost the solar hot water system in winter.

What electrical appliances we have are chosen for energy efficiency and long-life quality. Our fridge was bought second hand twenty years ago, and is due for replacing. The carbon tax will make the (expensive) high quality, very energy efficient one I want to buy more economical to afford. It will have a bit of embedded carbon price, but that will be more than made up for by the fact that producers of high quality, energy efficient goods will get a bigger market share as people factor in the cost of running them.

The TV and the washing machine are also second hand and chosen for energy efficiency. When it comes time to eventually replace them, the same story as the fridge will operate. I get so frustrated with fake goods made to look like the real thing, but actually made to break within hours of unpacking. Any carbon tax in those prices is the least of the worries. More of an issue is whether they actually work, or whether they are on a very short path between the factory and the dump. More incentive for manufactured goods to be made to last a lifetime or two is something I really look forward to, and if they're made to last, they're worth repairing - there's no tax on skill or labour.

I don't buy new clothes, virtually ever. Op shops are fantastic. Even underwear these days I am tending to make. I can make lovely lingerie out of beautiful fabrics for much less than Chinese made knickers with elastic that falls down after half a dozen washes.

Petrol (and diesel for farm equipment) isn't included (though I think it should be), and living rurally we use a bit of it. But we car pool a lot, and the move towards carbon pricing world wide is already bringing the very fuel efficient cars into the mainstream. It's the same story as the fridge. The E-Day electric car (Australian designed, Chinese made - hopefully well) will come on the market next year for $10,000 brand new.

And of course, my own focus is on food that is fresh, very local, in season and unprocessed. There's no carbon tax in anything that comes out of the garden, or that is cooked on my slow combustion stove or wood-burning hibachi. There's a little in the gas for the gas stove we use in summer, but the pressure cooker cuts cooking times right back. There will be a little bit of carbon price embedded in the refrigeration of the kangaroo meat I buy, and the same for dairy products. There will be a little embedded in the electricity for milling the flour and oats I buy to make sourdough, and in things like olive oil. But very little. The main embedded carbon price is in food processing - things like cake mixes and meal bases and breakfast flakes - and the carbon price is again the least of the worries with them. (I pay practically no GST either on food - fresh food is exempt and I buy so little processed food, I almost feel like I should pay supplementary tax).

And I guess it stands to reason. The point of the carbon tax is not to raise money but to change the market, so that those who want to buy stuff with lots of embedded carbon have to pay the real price for it, rather than have the rest of us subsidise them. Fresh, local, unprocessed, handmade, quality made, recycled, cared for, efficient, elegant, crafted, designed, beautiful doesn't have a whole lot of embedded carbon in the first place. That's what I'm going to spend my windfall on!