LABOR'S carbon tax will remain "lead in the saddle bags" for beef processors despite this week's changes to the scheme, according to Australian Meat Industry Council (AMIC) spokesman Tom Maguire.
Mr Maguire, a long-running critic of the tax as Teys Australia's corporate affairs manager and as the head of AMIC's climate change committee, said Climate Change Minister Greg Combet's announced overhaul would do nothing to soften the blow for meat processors.
Mr Maguire was responding to the Gillard government's decision to scrap the planned $15 floor price on carbon permits and to link Australia's carbon price scheme to Europe's emissions trading scheme from 2015 - a position that was apparently reached after weeks of secretive talks between key government figures and the Greens who have been concerned that a very low carbon price would not be enough to drive investment in cleaner energy such as wind, solar and wave power.
A statement from Mr Combet, who is scheduled to speak at an AMIC forum in Adelaide next Wednesday, said the link with Europe meant that Australian companies could start buying European permits - which are now trading at $9.80 - right away to meet their future liabilities.
This could make the carbon price cheaper overall for Australian businesses, though the European price is likely to rise by the end of the decade as the European Union moves to make restrictions of its own.
And from 2018 - or possibly sooner - Australian companies will be able to sell credits in Europe, the largest emissions trading scheme in the world.
A linkage means that carbon permits can be traded back and forth between Australia and Europe. The idea is that the free market then finds the cheapest possible way to reduce carbon.
Mr Maguire said the European scheme had "tanked" in the past which required rescuing, a situation other analysts also fear could repeat given the continent's sovereign debt woes.
He said the government's constant changes to the carbon tax merely eight weeks since its introduction would have no benefit for the processing sector.
"We're still disadvantaged - it's only the dynamics of the disadvantage that will change and beyond that I can't offer a lot more because we haven't been given the detail," Mr Maguire said.
"What we do know is this - our key trading competitors do not face this carbon price but we do and we're still expected to compete strongly in the international marketplace.
"Frankly, it's lead in the saddle bags for the processing industry."
Opposition Leader Tony Abbott said the changes showed the government was all at sea on the carbon tax.
''You can't fix it. You've just got to scrap it,'' Mr Abbott told reporters in Rockhampton.
''We haven't had the carbon tax for two months yet and they've admitted there is a fundamental flaw at the heart of the carbon tax.''
Mr Maguire's position on the carbon tax has not shifted since it was introduced by the Gillard Government on July 1, with the carbon price fixed at $23 per tonne for companies that emit above the 25,000 tonne threshold.
The price is then flagged to rise slightly over the next two years when it becomes a "floating" price emissions scheme.
Speaking on behalf of Teys Australia, which has six processing plants around the country but only two above the 25 kilo tonne limit at Beenleigh and Rockhampton, Mr Maguire said the company was facing a combined carbon tax bill for both plants of $1.4 million to be paid by June 30 next year.
He said that company heads were still to make a decision on whether the Beenleigh plant in the outer suburban fringe of Brisbane would need to be closed "for a matter of days" prior to the end of this year in order to reduce the site's carbon emissions.
He said the company was progressing a large carbon mitigation project for both sites in order to access matched government funding for emissions reduction schemes announced earlier this month.
The project involves covering both plants' wastewater lagoons to capture the gas, which in turn could then be potentially used for energy generation.
He said approval would be known in October but the benefits were unlikely to be realised in time to save the company from the government's carbon tax slug.
"It takes about 12 months to get anything moving once you have the approval because of the amount of Federal and State regulation you still need to get through," he said.
Source: farmonline.com.au
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