Jenny McAllister (NSW, Australian Labor Party, Assistant Minister for Climate Change and Energy) Share this | Hansard source

You asked two questions, I think, there. Trade exposed baseline adjusted—perhaps I can take you through all of it. It is the subset of trade exposed facilities that can demonstrate that their costs are above a specified threshold. Facilities will have a different framework depending on whether the facility is manufacturing or non-manufacturing, which is why I made reference to the need to make such a determination in the rule. That differential treatment between manufacturing and non-manufacturing reflects stakeholder feedback on the differences between the two in terms of their margins and their capital intensity. For non-manufacturing, the proposed threshold will be based on scheme cost as a percentage of facility revenue. As a I indicated for manufacturing, the proposed threshold will be based on scheme cost as a percentage of facility EBIT. That simply reflects the differences in the way that these businesses are organised. Either way, trade exposed baseline adjusted facilities can apply for a lower baseline decline rate. The policy rationale for that is that these facilities face concentrated impacts under the scheme and present a genuine risk of carbon leakage. So the minimum baseline reduction for non-manufacturing activities will be two per cent, and it will be one per cent for manufacturing. That baseline would be locked in for three years.