Lenore Taylor, political editor
theguardian.com, Monday 5 August 2013 17.09 AEST
Opposition leader highlights pledge to repeal carbon tax but is called out after miscalculating meat packing company's liability
Tony Abbott's estimate of JBS Australia's carbon price liability was 10 times the company's actual liability. Photograph: Chris Hyde/Getty Images
Tony Abbott’s first election campaign photo opportunity was at a Queensland meat packing company the opposition leader claimed was “under direct threat” from carbon tax costs of $5m, but which would actually face a bill of one-tenth that amount next year if Labor is re-elected.
JBS Australia’s Ipswich plant has a current annual carbon tax liability of about $1.9m for its 80,000 tonnes of emissions at the $24 carbon price.
As reporters at the scene reminded Abbott, the company received $4.8m from Labor’s Clean Technology Food and Foundries Investment Program to pay for half the cost of improvements that will cut emissions – at its current production levels – to 35,000 tonnes.
So if Labor is re-elected, in the first six months of next year the company’s liability would be half of an annual bill of about $840,000, or about $420,000. And if Labor then floats the carbon price – as it has promised – in the second half of the year, its bill would fall further. At a carbon price of about $6 the annual bill would be $210,000. That takes the total 2014 liability to about $525,000 – or about a tenth of Abbott’s estimate.
Abbott indicated that he was calculating both direct and indirect carbon costs, and extensions to the tax planned for the future.
“By the time the plant has paid its direct carbon tax costs, by the time this plant has paid higher electricity and gas prices because of the carbon tax, it's up for $5m a year in costs that its competitors simply don't face," he said. "And then of course if this government is re-elected there'll be the carbon tax hit on heavy transport and this plant takes in and puts out some 80 B-doubles a day so that's obviously going to be another big carbon tax hit on a plant like this, on the job securities of the workers at a plant like this.”
JBS Australia spokesman John Berry told Guardian Australia he would have preferred to invest the $4.8m in something that would grow the business. He was unsure whether the Coalition’s Direct Action plan would involve any incentives for the company to cut its emissions – which mainly come from methane produced by its waste water treatment.
Berry said the company’s carbon liabilities would increase if it was able to boost production.
Abbott used the first day of campaigning to highlight his pledge to make the repeal of the carbon price his first legislative priority by writing to the head of the Department of Prime Minister and Cabinet repeating his intention.
He also wrote to the chair of the $10bn Clean Energy Finance Corporation, Jillian Broadbent, repeating his request that the corporation make no further investment decisions now that an election has been called. The Coalition intends to abolish the CEFC.
The CEFC has already said it will not approve new investments during the caretaker period, but will remain open for business.
The CEFC – modelled on Britain's Green Investment Bank – is supposed to operate at little cost to the taxpayer by achieving a return on its lending similar to the cost to the government of borrowing the funds. It is supposed to step in to finance projects close to commercial viability which cannot otherwise get finance, either because commercial banks are unfamiliar with the technology involved or uncomfortable with the duration of the funding required.
The lending comes at a cost to the budget only to the extent that a small proportion is at concessional rates. The Coalition is claiming this cost as a saving of $350m in 2013-14, $450m in 2014-15 and $400m in 2015-16.
But Broadbent has told Guardian Australia that few “high-quality transactions” that had been brought to the CEFC were asking for concessional terms.
Tony Abbott confuses carbon costs at first campaign stop | Environment | theguardian.com
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