Michael McCormack (Riverina, National Party) Share this | Hansard source

Australia's largest abattoir will be slugged about $3.3 million a year from the combined costs of the carbon tax and higher electricity prices when the scheme comes in, unfortunately next year, and faces a bill of up to $9 million to cut emissions to reduce its exposure. John Berry, a director of JBS Australia, which owns Riverina Beef near Yanco—between Leeton and Narrandera, in my electorate—has had discussions with the Gillard government over the impact of the carbon tax on the company, which employs about 2,000 people and processes about 1,600 head of cattle over 11 shifts five days a week. That is, 500 people with more than 30,000 head of stock currently in the feedlot which uses world's best practice in everything it does.

Mr Berry warns that the carbon tax will create a two-tiered meat processing industry—of big abattoirs forced to pay the carbon tax without compensation and smaller operations which do not—and it will add costs to an industry which is one of the biggest employers in some rural and regional areas. JBS Australia also owns abattoirs at Dinmore, Townsville, Rockhampton and Toowoomba in Queensland, which may be above the threshold of 25,000 tonnes of carbon dioxide emissions a year. Mr Berry summed up the feelings of many when he said the carbon tax policy had been poorly thought through and that the Yanco facility was facing an additional cost of $5 to $6 extra per head of cattle which was not being borne by its domestic competitors and the big players in its key export markets. Exports make up the bulk of the company's production. Mr Berry said Yanco would be forced to pay the carbon tax—an estimated $678,000 slug—while smaller abattoirs owned by competitors would not face the $23 a tonne price on emissions.

I need to add that Cargill at Wagga Wagga, now co-owned by Teys Australia, is also extremely worried about the introduction of a carbon tax. The industry, despite the bulk of its output being produced for export, is unlikely to receive trade exposed industry assistance. Mr Berry has had talks with the Minister for Agriculture, Fisheries and Forestry, Senator Joe Ludwig, and staff from the office of the Minister for Innovation, Industry, Science and Research, Senator Kim Carr, and has invited bureaucrats from Canberra to tour a JBS Australia site. I hope it was not the case that he was talking to a wall. The company has calculated that the carbon tax will cost it about $1.8 million a year and it expects to pay $1.5 million in higher electricity prices while smaller operators in the industry will not be taxed.

On 30 September I toured the JPS plant at Yanco with Mr Berry, the Mayor of Leeton Shire Council, Paul Maytom, and a high-level Malaysian government delegation, which was headed by Senator Major General Dato' Seri Jamil Khir bin Baharom, who is a minister in the Malaysian Prime Minister's department. Riverina Beef is one of four JBS Swift owned Australian abattoirs which supply the Malaysian market with halal products from Australia. The standards required are very high, but it is a good market with a lot of opportunities, Mr Berry said. JBS Swift represents 25 per cent of beef sold in Malaysia and more than 30 per cent of offal. The group, which consisted of JBS Swift representatives as well as 12 guests from Malaysia, were given a tour of the Riverina Beef plant and feedlot. The Leeton Shire Council mayor, Paul Maytom, also attended as he is also concerned about the effects a carbon tax could have on the local government area.

It is typical of Labor stalling tactics to put off Mr Berry and his request to receive assistance on this carbon tax, knowing full well that it will not go away. This is in the year of so-called 'delivery and decision'. That is why the amendment to the Clean Energy Bill 2011 and accompanying bills to make the commencement of the carbon tax on a proclamation of the next parliament is so essential, so that people can have a say and companies such as JBS Australia can have confidence, knowing that such economy-changing legislation will not simply be forced upon them in such an undemocratic and unjustifiable way. JBS does not need to be thwarted in its attempts to help our balance of payments and to ensure that it continues to employ hundreds of good people in my electorate and other electorates and to ensure sustainability for the Leeton and Narrandera shires.

Mr Berry's concerns are echoed by the National Farmers Federation President, Jock Laurie, who fears that cost impacts on food-processing businesses will ultimately be borne by farmers through lower farm-gate prices for import-competing businesses unable to recoup losses through price rises brought about by this toxic tax.

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