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The carbon tax will damage the international competitiveness of many businesses and the resources sector, WA industry groups say.

Prime Minister Julia Gillard announced the carbon tax package today, promising to reduce Australia’s carbon footprint by 160 million tonnes by 2020.

She announced a carbon price of $23 per tonne to begin on July 1, 2012, rising at 2.5 per cent a year.

Chamber of Minerals and Energy of WA acting director James Edwards said in Perth today the Federal Government had exposed the resources sector to international disadvantage through its carbon tax.

“What we need to make sure is that our industry remains competitive compared to our global competitors,” he said.

Mr Edwards said Australian companies would face significant costs that trading competitors did not face and he was concerned about the industry being driven offshore.

He said the industry already took measures to reduce emissions.

WA Chamber of Commerce and Industry chief economist John Nicolaou said the carbon tax was the wrong policy at the wrong time for Australia because no other country was considering introducing an economy-wide price on carbon.

“A policy of this magnitude could harm the economy at a time when we can least afford it,” he said.

Mr Nicolaou said CCI was concerned that Australia’s international competitiveness could be compromised and the tax would add to the cost of doing business and discourage new investment.

He also said small businesses were ill-prepared for the introduction of the tax in less than a year.

However, a spokeswoman for iron ore company Fortescue Metals Group said the carbon tax would add less than one per cent to their operating costs.