A review of the United States’ Waxman-Markey climate change bill by Australia’s Parliamentary Library has exposed some interesting facts on safeguarding industry.
Handed down on Monday, the parliamentary report on the US Emissions Trading Scheme (ETS) says: “Industries with proportionally high import or export values are potentially fully shielded from the scheme until the majority (greater than 70 per cent) of global production in that sector is subject to emissions pricing.
“The (Waxman-Markey) bill allows for up to 100 per cent compensation for all direct and indirect costs to industries that are assessed as emissions intensive and trade exposed.”
This bill – backed by US President Barrack Obama – is exactly what Australia’s food and grocery industry has been calling on the Prime Minister to adopt for months in relation Australia’s ETS legislation.
Time and time again, Australia’s largest manufacturing sector, food and grocery – which employs 200,000 Australians – has pleaded with Rudd to embrace a similar industry safeguards to protect Australian food manufacturing jobs.
But he’s simply not listening or not interested.
Obama applauded the Waxman-Markey bill – drafted by US Congressmen Henry Waxman and Edward Markey expected to go before Congress in August – as a “historic leap” after passing a Congress energy committee last month.
It’s fascinating that forward-thinking Obama understands the need to protect jobs.
But the Prime Minister still doesn’t get it – despite vowing he “didn’t want to be Prime Minister of a country that didn’t make anything”.
If he doesn’t wake up to the dangers from a flawed ETS, unfortunately Australia is doomed to become a country where we won’t manufacture very much at all!
An ETS – in its current form – will gut local jobs because Australian-made food and groceries will become less competitive on supermarket shelves.
For example, in the absence of a global emissions trading agreement, a can of processed fruit from Australia will be more expensive while the same can from China won’t be affected because it won’t be hit by a carbon cost.
Unless our competitors in the Asia Pacific region are subject to the same input costs, Australian-made goods will be at a significant disadvantage.
Across the supply chain from the farm to the fork, there will be increased costs, resulting in higher food, beverage and grocery prices – up to five per cent and it maybe even higher.
The Government has also failed to deliver any modelling on what the ETS will mean for average families in terms of essentials like bread, milk and fruit and vegetables.
Food spending represents 20 per cent of the weekly household and ETS-induced food and groceries will hit families hard.
Of course, food price hikes are heavily at odds with Rudd’s pre-election promise of lowering supermarket prices to provide relief for working families.
That’s why Kevin Rudd must change his tune and rework the ETS.
Industry stands ready to work with the Government to re-examine the legislation by adopting a consumption-based approach or the Waxman-Markey model.
Either approach will help safeguard industry, jobs and families.
Kate Carnell is Chief Executive of the Australian Food and Grocery Council.
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