REGIONAL families and Australia’s vast land-based industries will bear a disproportionate burden if the Gillard Government caves in to the Greens’ demands that fuel be included in any carbon pricing scheme, Leader of The National Warren Truss has warned.
“The Greens have the Gillard Government over a barrel and they know it,” Mr Truss explained.
“The flawed premise for the carbon tax is it will force people to change their behaviour – imposing maximum pain is a tact the Greens are intent on.
“But soaring fuel prices – which are always higher in regional areas – will do nothing to affect behavioral change because regional people have no other options. They are forced to travel vast distances as a matter of necessity.
Mr Truss said that the impact of higher fuel costs would be keenly felt across all the staple sectors of rural and regional industries.
“At the business end, we’re talking about broadacre farming, mining operations, tourism and road freight haulage … regardless of price hikes, they simply have no choice but to pay higher fuel costs. As for regional families, driving to work, getting the kids to and from school or going to the doctor, more often than not, involve lengthy road trips. Public transport is not an option. It does not exist.
“Fuel-use in regional Australia is inflexible and unresponsive to price movements because there are no alternatives. The ability to change vehicles or switch fuel technologies is limited at best. Even if farming is excluded, at least initially, under an ETS, it will feel the full brunt if fuel is included.
“Agriculture drives up to 40% of the GDP of regional economies. Once multiplier effects are taken into account this ratchets up to around 80% in many towns. The fortunes of those towns run parallel with the productivity and sustainability of the farms around them.
“This dependence on one sector makes the economic impacts of a carbon price much greater for regional Australia compared to city-based families or businesses.”
As Professor Ross Garnaut emphasised in his original report on regional impacts of carbon pricing:
"A significant proportion of the income distribution effects of climate change and climate change policy will come from changes in the industrial make-up of the economy over the longer term.
"Regional communities and industries are likely to be more vulnerable to these impacts than urban centres, due to their reliance on agriculture and other natural resource-based industries, and low levels of infrastructure stock. Regional communities, in particular farming regions, have already been subject to structural change to a much greater extent than metropolitan centres in recent history."
“High fuel prices already hit regional Australia hardest,” Mr Truss said.
“This will be compounded under a carbon tax as the direct costs of fuel and lubricants comprise, according to ABARES, around 9% of total farm cash costs, principally diesel.
On top of that, Mr Truss said that indirectly, fuel price also determines input costs such as fertiliser, crop contracting and freight for broadacre farms.
"When combined with fuel, these account for 25% of total costs. Labor and the Greens will tax Australian agriculture out of existence.”
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