Guest comment with MCI Australia managing director, Ray Shaw

It is a fact that the carbon tax will increase the cost of holding business events in Australia, because inputs will increase in cost due to flow on effects of the tax and because there will be no federal compensation package to offset them. The question is, is carbon a black mark on business events?

In answering this, the only relevant questions are by how much, and what will it mean to the industry?

Let’s analyse some of the business events inputs. Sources suggest domestic airfares will rise from $3.50 per sector, while a 4-5% increase in petrol prices will also affect taxi fares. Train, coach and heavy transport is also expected to increase by up to 10%.

Meanwhile, Australian made food and beverage will increase due to higher grower costs, processing, transport, machinery and wages costs. The Food and Grocery Council predicts a worst case scenario of 3-5%, while a Sydney restaurateur stated that this, and other carbon tax related costs, would force plate prices up by around 10%.

Printing and promotional items are also heavy users of power, meaning higher manufacturing costs via rising energy costs and raw material expenses. Modelling released by AAP shows printed materials could rise by 3%. Energy costs, however, will be the main driver for prices increases which affect us all. Small businesses are expected to pay up to 10% more for electricity.

This all comes at a time where Australian business confidence is low. We need to factor in that it is harder to get sponsors and exhibitors and it is harder to convince corporates to spend on events. It is also likely that delegate numbers will drop due to funding issues in academia, medicine (hospitals) and science.

In my view, there will be a raft of small increases on almost all business events inputs, which will add up here and there. These will build progressively over the next 6 months and as a guestimate, it seems that typical conference budgets will see combined business input rises of around 3% or $30 per person on top of any CPI increases in that period. This is on top of whatever personal cost increases that a delegate/guest experiences.

Doesn’t sound like much – sure but add this to the increased costs of running sustainable events (becoming obligatory), higher costs of OH&S compliance, our high dollar, the Sydney convention centre closure and increasing cost pressures in general and it is looking like the gloss is coming off the Aussie business events market – at least for the next few years.