Mark Coulton (Parkes, National Party, Shadow Parliamentary Secretary for Water Resources and Conservation) Share this | Link to this | Hansard source

I rise tonight to speak of an issue that is of grave concern to the town of Kandos in my electorate—and it is of concern not only to Kandos but to Australia as a whole. It is a concern over the Rudd government’s proposed emissions trading scheme and the effect that it will have on the cement industry. The cement industry is one of the industries in Australia that is trade exposed and it is traditionally quite a large emitter of carbon. Up until this point there was an indication that under the new emissions trading scheme the industry would be given 90 per cent permits. What that means is that, of their emissions, they would end up with a 10 per cent tax to pay. That in itself would damage their competitiveness with overseas imports and restrict their ability to invest, but the cement industry were working towards having that 10 per cent tax.

Last week the Department of Climate Change came out with their proposal on the cement industry. They are saying that it is not the cement product that will get the 90 per cent permit; it is the process of making cement that will get it. So the process of cooking the raw product and making the cement will get a 90 per cent permit—not the quarrying and not the final grinding from clinker into cement. This means that they will be on a 70 per cent permit, or 30 per cent exposed. They cannot handle a 30 per cent emissions trading tax. It means they will close down. Not only cement in Kandos but all cement in Australia will not be able to compete with overseas companies. Last night in a Senate estimates committee, Senator Wong reiterated that cement would get a 90 per cent permit but did not go on to explain that it is for the process, not the final product.

Since 1990, the Australian cement industry has reduced, through technology, its greenhouse emissions by 25 per cent, which is no small feat. There is further room for the cement industry to improve that position on greenhouse emissions, but unfortunately this proposal will restrict the capital it will have to do that with. It will mean that any investment in cement production will go overseas to Asian countries close to Australia, countries where they will not have this impost, and cement will be lost to Australia.

We speak about these things in the abstract here, but Kandos and cement are intricately entwined. They have been making cement in Kandos since the 1800s, and for the people who work there Kandos and cement are as one. There are people who have worked there for generations, and the main reason for the town of Kandos existing is cement. What will those people do when cement is imported from overseas? What will the people of Kandos do? Where do the people of Kandos fit into this world of emissions trading? It is not only the 110 people who work at that plant; it is the quarriers, the transporters and the railway people who transport it into Sydney as well. It is going to have a massive effect.

Already, because of the global economic downturn, kiln 5 at Kandos has been closed down. The staff at the plant are taking holidays and leave; they are trying to hold the employees at that plant and reduce production. That is just from the effects of the global downturn. The effect of a 30 per cent tax on the Australian cement industry will be devastating not only for the economy of the town of Kandos but for the Australian nation as a whole.