TREASURER Wayne Swan came out in defence of the proposed carbon tax this week, saying it won’t lead to job losses; but farmers across Western Australia have hit out at the tax, saying it will compromise profitability.
TREASURER Wayne Swan came out in defence of the proposed carbon tax this week, saying it won’t lead to job losses; but farmers across Western Australia have hit out at the tax, saying it will compromise profitability.
A report commissioned by the National Farmers Federation found that, after five years with a carbon price of $36 per tonne, the average WA grain farm would be paying additional annual costs of $36,882.
According to the NFF, this is an increase in costs of 4 per cent compared to a business-as-usual scenario, and would result in a 13.1 per cent reduction of net farm income.
“Australian agriculture has a high level of trade exposure, and any additional costs imposed on farm businesses make it extremely difficult for our farmers to compete in the global marketplace,” NFF president Jock Laurie said.
If the price were set at $23/t, WA grain farmers would face additional costs of $24,171, according to the report.
Research undertaken by the Sheepmeat Council of Australia and NFF predict that the country’s sheepmeat producers would suffer a 16 per cent loss in business revenue if the carbon tax were introduced.
WA Farmers said the proposed carbon tax should be rejected on the basis that these additional costs would make it much more difficult for the state’s farmers to compete domestically and internationally.
Mr Swan is of a different opinion, however; he said more cost would be incurred across broad industries without a carbon tax.
“Without global action, we will experience severe water shortages and higher temperatures, and the Murray Darling Basin could lose half of its annual irrigated output by the middle of the century – with consequences for food prices and the cost of living more broadly,” Mr Swan said.
In a speech made in Canberra on Tuesday, Mr Swan said he refused to let Australia become “an old world, high polluting technological backwater” and that a price on pollution was the next crucial frontier in economic reform.
He said employment was not at risk of being damaged in the wake of the tax.
“Modelling shows aggregate employment is approximately the same with or without a carbon price,” Mr Swan said.
“Employment continues to grow just as strongly after we put a price on pollution.
“By 2020, national employment is projected to increase by 1.6 million jobs, while at the same time growth in domestically produced pollution slows. For a government obsessed with jobs, this conclusion is crucial.”
By the treasurer’s estimates, real national income per person would be 16 per cent higher than current levels by 2020 – an increase of more than $8,000 in 2011 dollars. By 2050, Mr Swan estimates, that increases to about 56 per cent, or more than $30,000.
The modelling also shows real national income growing strongly under a carbon price, at an average annual rate per person of around 1.1 per cent until 2050 instead of 1.2 per cent.
“This means a carbon price would only reduce annual growth in GNI per person by about one-10th of onepercentage point,” Mr Swan said.
According to Mr Swan, a price on carbon goes hand in hand with other important policies for progressing Australia’s economy.
“We need to modernise our economic infrastructure, increase our capacity, and invest more in the education and training of our workforce. But crucially, we also need to price pollution, so that we can drive new investment in clean energy,” he said. “It is the most cost-effective way to decouple economic growth from emissions growth, building a low-pollution economy by making dirty energy relatively more expensive, and clean energy relatively cheaper.”
