The Productivity Commission has challenged the Federal Government to provide clearer guidelines on how it intends to compensate Australian companies disadvantaged under the proposed carbon price scheme.

In a carefully worded research paper, the Commission has asked the government to clarify the objectives of the assistance package.

The paper flags potential problems around the large number of reviews to be conducted in the scheme’s early years on the competitiveness of Australian companies.

Red meat processing is heavily export dependent, and current estimates suggest 14 to 18 plants could attract direct liabilities for carbon emissions. However the current formulae for assistance to Emissions-Intensive Trade-Exposed industries does not cover meat processing because the sector does not meet the energy intensity thresholds set by the Government.

The Commission’s comments echo claims by industry that the legislation was not sufficiently clear about ensuring all companies were not disadvantaged globally.

A clear object in the Act is to maintain the competitiveness of Australian industries. Large export beef processing facilities would attract direct costs of more than $3 million each year, worth up to $10 a head, industry calculations suggest.

• The Productivity Commission’s full paper, titled “Carbon Policy Assistance Reviews” can be viewed here