Ron Boswell (Queensland, National Party) Share this | Hansard source

I move opposition amendment (1) on sheet 5872:

(1)    Schedule 2, item 8, page 13 (after line 26), at the end of section 38B, add:

        (3)    Regulations made under subsection 38AA(1) must determine a food processing activity, to the extent that it is trade-exposed, to be an emissions-inten-sive trade-exposed activity. The partial exemption of an emissions-intensive trade-exposed food processing activity for 2010 and any later year is to be calculated to be equal to 90% of the additional renewable source electricity acquisition obligation of the activity during the relevant year.

        (4)    In subsection (3):

additional renewable source electricity acquisition obligation means the amount of renewable source electricity that the activity is required to acquire under this Act after the commencement of the Renewable Energy (Electricity) Amendment Act 2009 in addition to the amount of renewable source electricity that the activity was required to acquire under this Act before the commencement of the Renewable Energy (Electricity) Amendment Act 2009.

The amendment seeks to provide trade assistance to Australian dairy and livestock farmers and food processors. It seeks to protect Australian farming families against costs being passed backwards from food processors that would lead to substantial farm gate income losses. It seeks to protect the future viability of farming in Australia by providing assistance to Australian trade-exposed food processors, including dairying and abattoirs.

The amendment requires regulation to determine that food processing activities, to the extent they are trade exposed, be given a 90 per cent exemption from liabilities associated with the RET. It seeks the same protection for farmers as that given to industries such as cement, newsprint, glass and those sorts of industries. Processed agricultural products are among the most trade exposed in the world and any additional cost imposed on Australian production cannot be passed on to customers. These costs will inevitably be passed back to farmers.

Can I quote the case of the Murray Goulburn dairy cooperative. They are a high energy user and trade exposed. The RET squeezes their profit margins to the extent they will have a lot of trouble competing in export markets. They cannot sustain the cost increases and will be forced to pass the costs back to dairy farmers or actually go out of business. Murray Goulburn Co-Operative told the Senate Standing Committee on Economics that liabilities under the CPRS would result in income losses to its 2,500 farming members of between $5,000 and $10,000 and that the RET would impose an additional $1 million in 2010, rising to over $2 million by 2020. I have been told by regional Queensland abattoirs that the RET costs will start at $315,000 in 2010 and rise by $850,000 by 2020. Like dairy, these additional costs cannot be absorbed and will be passed back to the graziers.

The Australian Dairy Industry Council’s submission to the economics committee inquiry states:

Although dairy processing is highly trade exposed in most products – the main activities do not meet the cut-offs for EITE classification …

We believe this is a flaw in the CPRS system which will see less competitive food processing and farming in Australia and lead to carbon leakage. Our major competitors in the world dairy market will provide support for dairy processors and exclude farm emissions or will not have an ETS at all.

I refer to the Australian Financial Review article ‘Burke seeks to calm fears of farmers’. What he is saying in here, in short, is that we should synchronise our dairy industry with New Zealand. I understand that Senator Wong had a very delightful evening the other evening as she sat next to Murray Goulburn. She had an introduction to the dairy industry, and I am sure after an hour’s discussion that she would have been right across—