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Wednesday, 25 May 2011
Page: 4523

Mr JOHN COBB (Calare) (11:43): I rise to speak on the Carbon Credits (Carbon Farming Initiative) Bill 2011 and related bills. I have to say at the outset that just because it has the words 'carbon farming' in the title it does not necessarily mean that farmers will be able to gain any traction out of it. The legislation is incomplete, misleading and certainly open to distortion by the carbon tax and an emissions trading scheme. I have to say that we thoroughly support direct action and we thoroughly support carbon farming and the opportunities that it can give agriculture, but this bill is mutton dressed up as lamb. For those who are unacquainted with the phrase or are vegetarians, that really means a 50-year-old trying to dress up like a 20-year-old. The term sounds good and you would imagine the legislation is but, as the shadow minister said, there are no ground rules within this legislation. There are no fences. We do not know what we are dealing with apart from the fact that it is a carbon farming initiative bill.

The Labor government want parliament to vote on a carbon farming scheme despite there being no detail and, while the coalition most definitely supports carbon farming and direct action, there are serious flaws. For example, the bill is reliant on regulations which are yet to be presented and will be done at Labor's and the Greens' pleasure. We will not support legislation that does not provide adequate detail or that leads to perverse outcomes for farmers unless, perhaps later in the Senate, the government can come up with amendments which deal with all these issues—and there are a lot of them. How are they going to do that when we do not know what the situation is regarding a carbon tax or an ETS in the future?

Under the direct action plan, the coalition will reduce CO2 emissions through biosequestration in general and, in particular, the replenishment of our soil carbons. Under our plan, farmers will be entitled to tender for additions in soil carbon. Significantly improving soil carbons also helps soil quality, farm productivity and water efficiency and should be a national goal, regardless of the CO2 abatement benefits. However, under the government's approach, the carbon farming offsets bill will be completely skewed by the legislation that may follow. It will undoubtedly lead to the wholesale conversion of prime farming land from agriculture to trees. We do not know the details of the tax or the ETS, so how can we assess this bill on whether it can be modified to account for the impact of it?

The offset bill allows for the creation of Kyoto and non-Kyoto credits. As only Kyoto credits will be recognised—in other words, eligible—for trade in an ETS, the voluntary market for non-Kyoto credits, the most attractive to farmers and the ones supported by the coalition's direct action plan, will be worthless and will collapse. Voluntary offsets are currently at about 15c per tonne on the Chicago exchange. Under an ETS with a fixed carbon price the CPI, like managed investment schemes, will skew the market in favour of trees which will be shut up and can never be harvested.

Mr McCormack: You can't eat pine trees!

Mr JOHN COBB: You cannot export them in the ground either. The current legislation introduced into the parliament following the recent consultation paper on the CFI highlights the endemic lack of policy skills in the current government. While the bill introduced into parliament does attempt to address the financial additionality clause—'additionality'; that's a new one—it seems the government has learnt little from the consultation process. Perhaps the consultation process gives us some clues as to why this bill is totally inadequate, as it stands, for dealing with this issue. I am amazed that a bill that is supposed to provide opportunities to farmers only had consultation opportunities in capital cities. That may be okay for the green lobby groups but, in case the government has not noticed, there are not many farms in capital cities. This is symptomatic of Labor's failure to turn rhetoric into good, positive policy and substantive action.

There needs to be much more certainty in this legislation before we can even consider it. The absence of key information is extremely concerning. Farmers and regional communities deserve some answers before this legislation is considered. There are still no positive and negative lists—what is in and what is out—for carbon activities. How do we ensure that Labor does not rule out all the good offset opportunities through regulation? It will have the Greens, who are in power, also pushing. How can we pass a blank cheque, as the shadow minister said? If we do this we are passing a blank cheque, which will then give Labor and the Greens an opportunity to decide the future of agriculture.

At Senate estimates, officials confirmed there is not yet a definition of 'common farming practice'. This is a very important issue. We are also told that what is deemed as common practice in farming may well be determined on a region-by-region basis. Yet the department could not say how this would work and what size the regions would be. In other words, they do not have a clue. They have not even set their minds to it. We know that without the detail on common practice the Greens and others will move to exclude farming practices and ensure tree planting that closes down agriculture is the only option for farmers. Anything that has been done once could be deemed as common farming practice and therefore excluded from the provisions, and so excluded will be the opportunity for farmers to make a buck when the rest of the community demands something. In this case, a minority government demands something.

We have no idea yet what the methodologies for carbon abatement are going to be. There is a major imbalance in the methodologies. What exists for tree planting assistance needs to be given to the farming sector to develop methodologies for genuine farm carbon abatement activity to help meet the rigorous requirements of the offsets integrity scheme.

Another concern is the duration of abatements. The 100-year life of credits also gives rise to problems when carbon stores are prematurely disturbed by natural on non-natural events, where proponents are required to re-establish or regenerate the carbon store or relinquish carbon credits. Over a 100-year life cycle it is highly probable that carbon stores will be affected by an event which releases the carbon store, leaving the proponent liable for them. Those wishing to take part may be unaware of the long-term implications of signing up for these abatements so there needs to be an education program for those wishing to participate, advising on pitfalls and the implications of 100-year offsets. Farmers have a history of signing up for schemes, such as certain banks did 20 or 30 years ago in offshore money, and they came a cropper on it. I am not going to vote for something that does not make these things clear. I am not going to vote for something unless—and this is the biggest if in the parliament—they can come up with amendments to take care of all these concerns. We are not going to give a blank cheque to the Green-Labor alliance to decide the future of farming. There is no detail on any such education program from the government. Further, ABARES says its work on the CFI is due next month, after the legislation is supposed to be voted on. That will be handy! How can the government and stakeholders consider important data from ABARES when the study commissioned by the government is not complete. Perhaps the government does not want us to see it.

The government arrogantly expects us to deal with this legislation before we have any understanding at all of how it will be quantified or any impacts it will have on the agricultural sector. I am sure the farmers in the Hunter will be thrilled to know that the studies being done on their behalf will be made available after the legislation becomes fact. Labor's plan will cause the wholesale transfer of food production land to trees in Australia's best farming areas—trees which cannot be harvested in any form. We will see big companies coming in to regional communities, buying up highly productive farmland—for example, in the Hunter Valley or Gippsland—and shutting it up for trees.

This is much worse than commercial forestry as no employment will be required, and the flow-on impacts of job losses will be huge. With a global population predicted to be nine billion people by 2050 the world will need more food, and Australia is well placed to provide it. We do not want to become the carbon tip of the world so that other countries can continue to prosper. Let us not make any mistake: we believe in the opportunities, particularly for marginal land, to take advantage of this type of situation. We believe in direct action but we do not believe in an open cheque to allow Australia's best farmland to no longer be productive.

A leaked CSIRO report featured in the Sydney Morning Herald claims that a carbon price of $36 a tonne is likely to see the whole lower Murray-Darling Basin converted to trees, starting with a carbon price as low as $11 a tonne. That needs to be out in the public for consideration before the bill is considered. Tree planting is good and there has to be a place for it in the direct action plan, but there must also be appropriate controls to ensure that large tracts of good food-producing land are not lost for it.

Australia is a big country and there is plenty of scope to plant trees in marginal country where farming is less viable and where there are co-environmental benefits in relation to salinity, erosion and woody weeds. Tree-planting has a place if there is a mosaic reafforestation that is compatible with farming. But this legislation does not address those issues. This is a blank cheque. After the consultation process, Labor has said that, in the interests of local communities and the nation's future food security, food-producing land will be protected and issues such as interception from forestry will be addressed. We have heard all this before, though, in relation to the Basin Plan, where I think the current government policy is not just affecting farmers. Like this legislation it has the ability to totally devastate farming communities—wholesale. The government say they consider the economic and social impacts of their actions, but they are playing games and only paying lip service to these issues. In the Basin Plan the government said that removing a third of our irrigation would result in the loss of only 800 jobs. They do not care for agriculture. When they bought Toorale Station at Bourke, that was a hundred jobs in one hit, and all they bought was 13,000 megalitres.

They do not care for agriculture and would like to see Australia become the carbon tip of the world, with large multinationals buying land which is cheap by world standards and taking it out of production while they continue to pollute. I do not trust this government to get it right. They have made so many mistakes with so much taxpayers' money in 3½ short years—in fact, in about 2½ years they ran up a bigger net bill than Hawke and Keating could run up in 14 years.

Why would we want to hand a blank cheque to Labor and the Greens to decide the future of farming? I will reserve my final judgment until the Senate hands down its report but, as it stands, this bill is most definitely not in the interests of rural communities.