Oliver's Insights - Impact of the carbon tax on the Australian economy and markets
20 July 2011 - Click here to see the Key points and read more
• The macro economic impact from the Government's Clean Energy Future plan is unlikely to be large. The price effects will probably be minor, at around 1% and the Reserve Bank of Australia (RBA) is likely to look through them. There might be a slight near-term, negative impact on growth as a result of continuing uncertainty, but this is likely to be reversed next year as compensation payments are received. Longer-term, the impact on economic activity is expected to be minor as the economy adjusts and the clean energy industry grows in importance.
• It's hard to see major investment implications at an asset class level. However, carbon pricing will have a significant impact at the sectoral and stock specific level in the share market. A company's level of carbon emissions are becoming an additional factor investors can't ignore.
