Opposition criticises carbon tax ‘lottery’

Beef Central, 18/05/2012


The list of companies hit by the Federal Government’s carbon tax confirmed it will cut businesses competitiveness and production, not emissions, shadow agriculture minister John Cobb, said in a release issued this morning.

“This poorly designed carbon tax, with an arbitrary threshold, has produced a lottery: some meat processors, dairy companies, food manufacturers, sugar refineries and fertiliser companies have made the Government’s list, while others have not," Mr Cobb said.

“This approach by the government is flawed and sends the wrong message to industry. Targeting the largest emitters just encourages companies to decentralise to stay under the threshold set by government," he said. 

“The irony is, that the carbon tax will likely increase emissions as larger efficient operations are carved up into smaller less efficient business units with less production per unit of emissions."

“At the end of the day the world’s population is heading towards 9 billion people so we need to produce enough food to feed the world. Emissions policies must encourage increased production per unit of emission not just cut production."

“Murray Goulburn Dairy Cooperative is already factoring in their annual carbon tax hit of $10 million and attempting to minimise its impact through job cuts and an operations restructure. 

“As 80 per cent of our dairy produce is exported, Murray Goulburn will have to compete with smaller domestic dairy processors and international businesses that don’t pay the world’s biggest carbon tax.

Australian meat processors, JBS and Teys face a similar dilemma with reduced competitiveness. JBS expects five or six of its plants to be tax-exposed. There is a braod expectation across the industry that those additional costs will be passed back to the livestock producer, via lower slaughter stock prices.  

The Australian fertiliser manufacturing industry would also subject to these new costs and competition issues, Mr Cobb said. This will indirectly afffect more livestock producers. 

"We have already heard Australian suppliers are finding it more profitable to import rather then produce fertiliser requirements. If this is the case, emissions will increase as fertiliser is transported longer distances."

“Trucking companies will also be subject to the carbon tax through a reduction in their fuel tax credits. The Australian Trucking Association estimates that this will cost the trucking sector $510 million in 2014-15 alone. Truck operators are already under significant financial pressure from higher registration charges and fuel costs as imposed by Labor."

“These greater transport costs will then be passed-on to consumers, meaning increased costs for everyone at the check-out. For smaller transport companies this additional strain will impact on their ability to continue operations."

“Unfortunately, instead of encouraging industry to work smarter, the legislation will force businesses to restructure to avoid paying the tax," Mr Cobb said.

“The carbon tax will apply to everything we buy and will do nothing to change the climate. It is a $9 billion a year new tax on ordinary Australians; a 10-30pc increase in electricity bills and a 9pc rise in gas bills in the first year alone; thousands of lost jobs; higher marginal tax rates for low and middle income earners; and a $4.3 billion hit on the Budget bottom line."

“Like all Australian shoppers, I am increasingly concerned about the impact of the Carbon Tax, especially along the agricultural supply chain, and what this will mean for our farmers. The Government has come up with a tax which is oblivious to agricultural realities. Together with the Greens and Independents they will paralyse the country and see Australia increasingly reliant on imported food.”



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