Govt ducks questions on carbon tax impact on processing

Jon Condon, 13/10/2011

The Federal Government failed to provide direct or meaningful answers to questions about the carbon tax impact on the meat processing sector in the Senate this week.   

New South Wales Nationals Senator John Williams asked Sen Penny Wong, representing the Minister for Climate Change and Energy Efficiency, about what assistance is available to meat processors under the now-mandated carbon tax.

He pointed out that processors already faced massive energy costs and industry levies, and were generally the largest employers in their region. He pointed to the risk to thousands of processing sector jobs when the carbon tax is introduced in July next year. He also asked why the government was exposing the meat processing industry to costs its competitors in the United States and Brazil would not face.

Senator Wong deflected the questions and talked in general terms about the government’s jobs program, but not specifically about any assistance to the meat industry.

Asked why the government was denying industry proper consultation, the Minister again refused to give a direct answer.

Sen Williams said after Tuesday’s sitting that meat processing industry would take cold comfort from the non-answers given by Sen Wong on how the processing industry would cope under the burden of a carbon tax.

Last week, JBS Australia provided further figures on how the carbon tax would impact its largest processing plant, Dinmore, near Ipswich, which has the capacity to process about 3400 head per day and employs about 2000 staff.

JBS director John Berry said a carbon tax plus higher electricity charges would add an estimated $3.3 million each year to Dinmore’s operating cost. JBS operates a total of 11 processing plants across eastern Australia.

JBS had estimated that it would cost about $9 million to implement programs to cut emissions to reduce its carbon exposure.

Mr Berry again warned that the tax would create a two-tiered processing industry – big abattoirs forced to pay the tax without compensation, and smaller operators that did not.

He said the carbon tax policy had been poorly thought-through, and would add $5 to $6 for every beast processed through the Dinmore plant – a cost that would not be borne by smaller competitors in Australia, or processors overseas.

Dinmore is understood to be responsible for emissions totalling about 80,000t of carbon dioxide a year, attracting a $23/tonne price on emissions, representing a cost of about $1.5m per year. Higher electricity charges linked to carbon tax would cost a further $1.8m annually from next July.

The plant’s emissions come mostly from coal and gas-fired boilers and methane from waste treatment ponds.

A plan to ease emissions, including capturing methane from the ponds to provide some energy which could be used to generate a little power, had been scoped at between $6 to $9 million, he said.


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