AUSTRALIAN Greens Leader, Senator Bob Brown, heralded it as “a big green day for Australia,” but the dairy industry has largely seen red over the successful passage of the Clean Energy Future bills (‘Carbon Tax’) through the House of Representatives last Wednesday.
“This is a historic day and we’re looking forward to the legislation’s passage through the Senate. The greening of Australia is well under way,” said Senator Bob Brown, applauding “this vital step towards tackling the climate crisis and building a cleaner, healthier Australia”.
Back in July the government said it would peg the carbon price at $23 a tonne and announced measures to compensate households and businesses for the expected increase in costs. Sixty per cent of taxpayers can expect to receive an annual tax cut of at least $300 or about $4 per week.
Much of the revenue generated by placing a price on climate-changing carbon emissions – and so encouraging polluters to reduce the amount of dirty power they produce and everyone to use less power – will be allocated to compensation for rising costs, such as electricity prices which will rise by an estimated $3.30 a week. Gas will rise by $1.50 a week and food bills by an average 80c a week. However, while figures released by the government show the average hits to households will be $9.90 a week, or $515 a year, average assistance will be $10.10 a week, or $525 a year. Most households will be better off. The government has provided an online ‘Household Assistance Estimator’ to help people with calculations about how the carbon pricing package will affect them.
The dairy industry, however, lifeblood of the South Gippsland economy, has grave concerns about the costs dairy farmers will have to wear once carbon pricing comes in on July 1, 2012.
Dairy farmer Max Jelbart, who milks 1000 cows at Leongatha South and a further 360 at Caldermeade, explained that the tax will have a massive effect on dairy farms even though the government says that agriculture is excluded.
“There will be large cost impositions on electricity and on road transport in and out of farms,” he said. “Half of Victoria’s milk goes to export and none of our competitors overseas have a carbon tax. It just won’t be a level playing field. There will be no exemption for agricultural processing and this will create quite an impost on milk factories.”
Mr Jelbart said that margins are already tight in the dairy industry and “this will be another impost”.
A fact sheet from the Australian Dairy Industry Council (ADIC) acknowledges that most dairy businesses will not pay the carbon tax directly.
“But, like all households they will have to pay increased prices for key inputs like electricity, packaging, etc,” notes the fact sheet. “In the case of dairy these additional costs are likely to be significant. Importantly, direct emissions from farm operations (fertilizer use, methane emission from cows) will not be subject to the carbon tax (or the subsequent ETS). So farmers will not to have to pay any tax on these emissions. Fuel used on farm will also not be subject to a carbon price. But the cost of electricity used on dairy firms will rise. The government expects electricity prices to rise by about 10% as a result of a carbon tax. Prices for other key farm inputs are likely to rise too…Given the trade exposed nature of dairy manufacturing, the status of overseas carbon policies and domestic supermarket power, it is very unlikely that dairy companies will be able to
recover any of these higher costs from the market place. The reality is these carbon costs will stay in the dairy supply chain and translate into lower farm gate prices for milk.”
TIMELY ENERGY AUDIT
Given the implications of the carbon tax for dairy farmers’ power bills, an event being held at Fish Creek tomorrow (Thursday) is particularly timely. South Gippsland dairy farmers are invited to an energy audit of Peter and Kerrie Collins’ Fish Creek dairy. Organised by the Young Dairy Development Program (YDDP) and The Future Ready Dairy Systems Program, the event is designed to show farmers how they can reduce their energy output without major investments in new equipment. YDDP Gippsland co-ordinator Kylie Barry said the event was a must for any dairy farmer who was looking to cut costs without compromising production standards. For further details, see story page 20.