ENERGY dependent regional industries rejoiced this week when the much debated carbon pricing scheme was axed in the Senate.
The coalition government, with the help of Palmer United Party senators and independent crossbenchers, fulfilled an election promise last Thursday when the carbon tax was scrapped, effective as of July 1, 2014.
It was a case of third time lucky for the bill when the Senate voted in favour of axing it 39-32.
Following the vote, the government introduced the main part of its Direct Action Plan, the Emissions Reduction Fund (ERF), into parliament.
One of the regional employers who will benefit from the scrapping will be Cootamundra abattoir G.M. Scott, which has 13 chillers and a blast freezer, processing 3500 lambs and 200 cattle daily.
Chief executive officer Len Jones said the carbon tax had increased costs by three to four per cent.
“Our resource costs are enormous, our energy costs are in excess of $1.5 million to $1.6m a year, and the carbon tax was adding to that and costing us productivity and profitability,” he said.
“Our competitors overseas don’t have that sort of cost involved in their processes, so you are behind the eight ball before you even start in an international sense.”
Horticulture also felt the pinch when it came to maintaining competitiveness with overseas markets.
NSW Farmers horticulture committee chair Peter Darley said the carbon tax had been a burden particularly for those with fruit in cold storage or drying their fruit.
“The loss of the carbon tax will be a huge benefit to horticulture, on the provision our energy suppliers do reduce their prices back to prior-carbon tax times,” he said.
“Since the carbon tax we have had a 20pc increase in energy costs... and we can’t pass those costs on so that was just another knife in us in regards to our ability to survive.”
Mr Darley said it was crucial the Australian Competition and Consumer Commission (ACCC) watched the pricing of electricity closely to ensure savings were passed on to consumers.
NSW Irrigators Council chief executive Mark Mackenzie said power costs for irrigators had risen 300 per cent in the past five years.
“(That’s) a huge increase in an industry that unavoidably at times is a big consumer of energy,” Mr Mackenzie said.
“The fact is like all other farmers it is extremely difficult to pass that price onto our consumers – we are price takers, not price makers – and if we are in export industries that are based on irrigated agriculture, Australian producers are at a severe disadvantage when the carbon tax flows through.”
He said irrigators’ electricity costs had risen between six to 11 per cent since the introduction of the carbon pricing scheme.
Australian Dairy Industry Council (ADIC) chairman Noel Campbell said the carbon tax made the industry less competitive in an international market by adding to the cost of production.
“We need government policy that helps the dairy industry to be as cost-effective and competitive as possible, while still achieving our goal of reducing emissions,” he said.
However, he said it remained to be seen whether the ERF, would offer much of an incentive to the agricultural sector to reduce emissions.
But not everybody has counted the scrapping as a win.
Shadow environment minister Mark Butler, in a joint statement with leader of the opposition Bill Shorten, said future generations of Australians would be hurt by the decision.
University of NSW electrical engineering and telecommunications visiting fellow Hugh Outhred said the repeal of the carbon tax represented a “dereliction of duty”.
“The coalition plan to replace a ‘polluter pays’ policy with a ‘pay the polluter’ policy will exacerbate the budget imbalance while being simply inadequate to the task,” he said.
Lifting energy efficiency to keep big costs down
IRRIGATORS and cotton growers will work towards increasing energy efficiency on-farm through a new pilot project.
The scheme will produce case studies from selected irrigation properties to educate the industry on better power efficiency.
NSW Irrigators chairman Richard Stott, “Avondale”, Whitton, said the project would show what the increasing cost of electricity was doing to agriculture and how it affected the price of food and fibre.
“It is quite a large impact, just the increase of electricity prices and the burden of the carbon tax on top was an enormous cost – in our own operation, where we pressurise water for drip irrigation and pump water out of the ground, we were paying an additional $50,000 for the season,” he said.
The project, supported by NSW Irrigators Council, Cotton Australia and the NSW Office of Environment and Heritage, will look at improving inefficiencies in irrigation systems.
The project will look at irrigators who consume more than 160 kilowatt hours a year of power, with a bill of more than $100,000.
“These are not the biggest pumpers; it is the mid-size irrigator where we think people have had significant increases in power and where we would see the most immediate gain in changes to this,” said NSW Irrigators chief executive Mark Mackenzie.
According to Mr Mackenzie, the cost of power was in the top three issues of importance to irrigators, and it had a flow-on effect to other areas of production, with more water efficient systems not being used because of the energy consumption.
