Carbon Tax major threat to agriculture
28-June-2012
Farmers will be hit with a $3.2billion increase in annual costs under the Gillard Government’s Carbon Tax, paying more for power, fertilisers, chemicals and packaging, Federal Member for Parkes Mark Coulton stated in Parliament.
IBIS World released a report on the Carbon Tax and the impact it will have on Australian industries. The report forecasts agriculture to negatively impacted, with dairy farmers coping the brunt of the tax.
“It has become apparent that for the vast majority of farmers the biggest threat to their future is not climate change, but the Government’s Carbon Tax.”
“This report found that, even though agriculture was initially exempt from the carbon tax, the agriculture industry will be damaged by the carbon tax in the 2012-13 year to the tune of 6.4 per cent, going up to $50 billion in years to come.”
“The carbon tax will affect farmers, even though agriculture is exempt, through increased costs of energy, fertiliser, chemicals and packaging. Indeed, I had a correspondence with a poultry farmer in my electorate, in the town of Gilgandra, who is facing increased costs packaging their eggs because of the costs imposed by the carbon tax.”
Mr Coulton used his time in Parliament to criticise the Government’s Carbon Farming Initiative stating there is no incentive for farmers to participate, and pointed to the Conservation Tillage Refundable Tax Offset as an example of this.
“There has been a lot made of the Carbon Farming Initiative, but I have to say it is proving to be a very, very inadequate program just in implementation. For instance, there is a 15 per cent rebate for zero-till equipment purchased after 1 July.”
“However, the Australian Taxation Office has decided that, to obtain the 15 per cent offset for your no-till equipment, you actually have to purchase both the tool bar and the air cart, despite the fact the air cart essentially plays no part in the no-tillage aspect.”
“What has happened is that many farmers already have adequate air carts and only need to purchase the tool bar itself, but therefore they are ineligible for this tax offset. It is just a crazy thing that a farmer is expected to spend an extra $50,000 to $80,000 on an air cart when they do not need to.”
“This is like having a rebate of 15 per cent on a caravan but you can only get that if you purchase the car to pull it.”
Mr Coulton said farmers in the Parkes Electorate have been using conservation tillage methods for many years and that the idea that farmers would sign up for the CFI to make money is a false one.
“The aim of zero-till farming is obviously to increase the organic material in the soil and to reduce the loss from erosion, whether from water or wind. So the driver is an agronomic one, a production one and ultimately an economic one because of the increased production and more efficient practices.”
“The production and the savings will always outweigh what they make from the carbon, and certainly there will not be enough money made out of trading carbon to offset the increase in fuel costs.”