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Tuesday, 11 August 2009
Page: 4549

Senator ADAMS (9:21 PM) —I rise this evening to speak to the Carbon Pollution Reduction Scheme Bill 2009 and related bills. To start with, I would like to highlight the concerns relating to the Rudd government’s Carbon Pollution Reduction Scheme bills. It is very important to Australia’s economic survival that we look towards a global solution and not simply an Australian solution. We are producing only 1.4 per cent of the world’s CO2 emissions and yet we are trying to hold economic and carbon-emitting powerhouses such as China and India to ransom. Australia’s emissions trading scheme must be on par with the rest of the world and be part of a global agreement. Otherwise it will be a case of our country being at such disadvantage it could affect all of our exports and therefore in the long term our economic longevity. Our emissions trading scheme must take into account what is happening globally, or the competitive position of Australia could be severely damaged.

Do we want to see Australian jobs, investment and CO2 emissions being exported to countries that do not have a price imposed on carbon? Australian jobs are the most important aspect in all of this and should not be forgotten. In recent months companies have publicly indicated the cost of this proposed scheme in terms of jobs. The Minerals Council of Australia has found over 66,000 jobs will be lost. Rio Tinto has stated that, put simply, the CPRS as proposed will cost jobs. Xstrata predicts that between 5,000 and 10,000 jobs nationally may be lost. BlueScope and OneSteel say hundreds of jobs would be lost across the country and 12,000 jobs that the Port Kembla Steelworks supports would be under threat. Ford Australia believes the ETS will drive jobs overseas. Jobs will be lost throughout Australia, and this is a disaster. The government constantly dismisses any research relating to jobs, but this is no longer a credible response. States and territories have done their own research; businesses have done their research. It is time for the government to listen to this research and to look at the concerns from businesses across Australia.

The coalition have stated that we will offer bipartisan support to the government for the carbon abatement targets we take to Copenhagen in December. This would, therefore, allow Australia to attend a conference with a united Australian position for a global commitment to addressing climate change rather than to arrive with legislation that could conflict with everything other countries, including the United States, might suggest. The desire for Mr Rudd and Senator Wong to rush this legislation through prior to Copenhagen is deeply flawed and could greatly affect our country’s future economic reputation. It would be premature for Australia to be locked into an emissions trading scheme that is not in line with the rest of the world. It is important that Australia continues to have a global perspective and an external view rather than focuses internally. Although the safety of our economic future is imperative, this can only be ensured by going to Copenhagen with targets for discussion, not legislation.

I now would like to turn to the uncertainty around the 2015 deadline for the introduction of a CPRS for agriculture. As a former farmer of 38 years, like my colleague Senator Nash I believe agriculture should not be part of the CPRS. Instead, the government should allow agricultural offsets. Australian farmers will still feel the impact of the CPRS through the price rises in fuel and transport, chemicals, fertilisers, electricity, farm inputs and other goods and services. A large problem with including agriculture in the CPRS is the sheer number of businesses who individually produce only small amounts of carbon emissions. The greatest impact of the CPRS on agriculture would be in relation to livestock production. This would result in an increase in production costs, decreased demand and therefore decreased production.

The agricultural sector has reduced its emissions by 40 per cent since 1990 through various measures, some voluntary and some not. The involuntary measures have come at a significant cost to many sections of the industry. I know myself that with farm practices like no-till, reducing burning of stubbles, planting perennial grasses and planting many trees along creek lines we have done our part, as have all the farmers in my area. They certainly keep doing this. Younger farmers are taking up many different initiatives. They are really handling the agricultural sector’s emissions. I commend them for this. They are all looking for different ways to keep up this practice. Unfortunately, as Senator Wong cannot come clean on whether or not agriculture will be included in this 2015 deadline, it is having a huge effect on the stability of the farming communities and also regional employment. Buying another property or looking to invest in different aspects of farming is all on hold. I would implore her and her government to make a decision so that we all know just where it is going. If the CPRS is introduced for agriculture that sector will change dramatically. It could be the death of our regional towns.

Covering direct emissions from agriculture within the ETS is inappropriate. There is a potential for economic and social impacts leading to significant detrimental environmental outcomes in areas such as water run-off, biodiversity and Australia’s inability to continue to make a contribution to global food and fibre supplies. This is something that Australia excels in. If we have this penalty put upon us, we will not be able to continue to produce food and fibre as we have in the past. The international goalposts have been shifting, with the United States, the United Kingdom, Canada and European countries having ruled out covering their direct agricultural emissions under a cap-and-trade scheme.

Two-thirds of Australian farm produce is exported, and this will mean that Australian farmers will be isolated if agriculture’s direct emissions are covered within the ETS. I have some data from the National Farmers Federation on the impact. The farm cash income for an average beef farm would fall by over 60 per cent if agriculture’s emissions were covered by the ETS cap with a carbon price of $25 per tonne of carbon dioxide. On an average beef-sheep farm, the income would fall by 47 per cent, and on an average sheep farm it would fall by 30 per cent. With wool prices as they are, I think this might be the end of the wool trade.

If agriculture is included and Australian and New Zealand agriculture is covered by an emissions trading scheme and other countries are not, it puts us at a disadvantage. As a gauge, with agriculture covered by the emissions trading scheme at $25 per tonne of carbon dioxide and not accessing free permits, a beef producer with a thousand head of cattle would be required to pay approximately $237,000 per annum for permits, a sheep producer with 3,000 sheep would be required to pay approximately $15,000 per annum for permits and a grain farmer producing a thousand tonnes of grain would be required to pay approximately $3,500 per annum for permits. Research undertaken by the Australian Meat Industry Council indicates that additional costs of the ETS for meat processors from 2011 will be of the order of $5.64 per beef animal and 78c per sheep. Similarly, dairy farmers estimate that their direct costs from ETS would be between $6,000 and $9,000 per farm in 2011, rising over time. So the impact on agriculture is not only economic; areas such as regional employment, trade, water and environment will also be affected. The agricultural sector needs assurance that its export competitiveness will not be placed at risk as a result of the ETS. Farmers are vulnerable to increasing costs that will result from the implementation of an ETS.

The Rudd government now has no alternative but to respond and eliminate all uncertainty around the 2015 deadline. This will enable Australian farmers to proceed on an equal footing with all trading partners. The world population is expected to increase 50 per cent by 2050. That will be nine billion people to feed. Therefore, as our international counterparts are excluding agriculture’s direct emissions from their schemes, it is vital that we do the same. Our farmers need to be provided with certainty. The Rudd government must commit to not covering agriculture now or in the future.

Australia confronts a food security responsibility. If we accept ETS coverage of Australia’s farm sector, 1.6 million Australian jobs and $32 billion a year in farm exports will be at risk. Agriculture requires an alternative approach which will provide them with an incentive based means of reducing emissions and best management practice where they can continue to make contributions. As I have said before, this is improving all the time. Growing vital food and fibre production will continue. Farms, as biological systems, emit carbon, but unlike other sectors they also absorb it back into soils, pastures, crops and trees. Australian farmers are already world leaders in low-emission farm systems, and I would encourage them all to continue in this way. Once again I say that it is very important that the Rudd government commit to not covering agriculture now or in the future as part of the emissions trading scheme.