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

I move:

That this bill be now read a second time.

I table the explanatory memorandum, and I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows—

The Bill seeks to amend the Renewable Energy (Electricity) Act 2000 by providing assistance to Australian dairy and livestock farmers and food processors. The Bill also seeks to protect Australian farming families against costs being passed backwards from food processors that would lead to substantial farm gate income losses. The Bill seeks to protect the future viability of farming in Australia by providing assistance to Australian trade-exposed food processors, including dairying and abattoirs.

The Bill 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 Renewable Energy Target (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.

I refer to the case of the Murray Goulburn Dairy Co-operative. The Murray Goulbourn Dairy Co-operative is 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 Dairy 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 …

I 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.

In speaking to my bill, I refer to the comments of the shadow minister for climate change, environment and water, the Hon. Greg Hunt, relating to the Renewable Energy (Electricity) Amendment Bill 2009. He said that if the government was willing to consider the opposition’s amendments then the legislation would pass.

The government did in fact undertake to agree to a number of those amendments but it did not agree to those dealing with food processing. The Coalition supported the bill, which was passed, but feels very strongly about the need to protect farmers from adverse consequences of the renewable energy target—hence my private senator’s bill, which I hope the government will permit a second reading and vote.

The case to give food processing activities the same exemption from the RET as aluminium and other industries—that is, 90 per cent—is compelling. If the same treatment is not given to food-processing activities to the extent that they are trade exposed then the Australian dairy industry, livestock farmers and food processors in particular, and farming families in general, will unfairly suffer. If food-processing costs incurred because of the RET were passed back to farmers, this would lead to substantial farm gate income losses. All of this will impact on industry viability, such as food cannery firms, our food security and rural jobs.

In not accepting the amendments at the time of the passage of the original bill, we believe, the government erred. Hence, I am presenting them in a private member’s bill, enforcing the argument that there is a need for farmers to have the same degree of protection that other industries are going to be given by the government.  I commend the bill to the Senate.

I seek leave to continue my remarks later.

Leave granted.