Friday, 20 May 2011 13:05

Scepticism mounts on carbon tax

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THERE IS a mounting chorus of dissent against the Federal Government's carbon tax.

This is reaching levels comparable to those we saw in 2009 and 2010, when the policy contributed to the downfall of an Opposition leader and a Prime Minister and the debate was about an emissions trading scheme.

As wide as the criticism of the carbon tax has become, I can only speak for the farm sector when I say that Queensland rural industries have very deep concerns about the current direction of this policy.

Farmers are practical people and they can generally accept when difficult reforms are necessary and in the long-term best interests of the nation. But so far, the Government has failed to provide a credible argument that the carbon tax is a necessary reform for the future.

Farmers are equally sceptical about suggestions that difficult reform automatically translates into necessary reform.

Dealing with the weather every day, farmers accept that they are exposed to climate variability and climate change. But we also think that if we are going to tax Australia's carbon-dependent industries – of which we have many – then we want to be able to see what this is going to do to reduce greenhouse gas emissions and global warming.

We haven't been shown that. Arguments about 'leading the world' only fuel the suspicion that Canberra has become disconnected from the realities of regional areas and has overinflated Australia's importance – when compared to the emissions of developing economies such as China and India. Especially when Australia only contributes less than 3% of global greenhouse gas emissions.

The Australian Government is there to look after Australia's national interests. If we need to do our part in reducing global emissions, then we need to see a global effort – not a unilateral one.

The farm sector is rightly concerned about the flow-on effects of a carbon tax.

Recent media reports state that Treasury has modelled that a $30/t carbon price would cost households $800 per year. Households are being told they will be compensated through the scheme; but what about farm businesses? Even if direct farm emissions are excluded from being taxed, the indirect costs stand to be huge.

If it costs an extra $800 per year to run a home, I dread to think how much more it would cost to run poultry sheds, or a dairy, or a network of electric irrigation pumps on farm.

While the Carbon Farming Initiative is being sold as the solution to farmers' concerns about increased costs, there is still very little detail about how it will work and how practical it will be. Certainly the jury is still out on soil carbon sequestration as a means of offsetting costs.

Beyond the farm gate, when you consider the energy inputs required in food processing, the carbon tax would place huge cost pressure on the entire food value chain.

Kate Carnell, CEO of the Australian Food and Grocery Council, confirmed that the carbon tax would make Australian products less competitive and cost jobs.

I am also concerned by another preliminary CSIRO study indicating that a $36/t carbon price would see farmland in the Murray Darling Basin planted to trees. If it became economically attractive to plant trees on productive farm land then our ability to grow fresh food close to consumers would be crippled and local consumers will find themselves paying for food to be imported or at the very least transported vast distances to market – ironically burning carbon all the way.

Any greenhouse gas reduction incentives need to work with existing land use and encourage low emission farming systems that incorporate trees into economically strong farming businesses.

The carbon forests legislation clearly needs to be changed to recognise multiple, small plantings on riparian zones for example – rather than simply provide incentives for large scale forestation often on cropping land.

Ultimately, farmers are prepared to do their part when it comes to sensible climate change policy, but we need an outcome that does not impact upon farm viability and profitability. Above all, it must not jeopardise Australia's ability to produce quality food and fibre at competitive prices.

Gary Sansom is president of the Queensland Farmers Federation.

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