Barnaby Joyce (Queensland, National Party) Share this | Hansard source

The National Party have been very clear on the measures pertaining to carbon sink forests. In fact, we lost Senator Nash from her shadow position because of our position on this. It is extremely important that we remain consistent in our opposition to carbon sink forests. We are not going to be fighting every time a TLAB comes up. We have put our position on the record twice. I think everybody can work out from that exactly where we stand. We do not intend for it to be used as a wedge in the future. In this instance we were happy to approach Senator Milne when we saw the amendment on sheet 5906 tabled because it does reflect our sentiments.

The amendment relates to tax deductibility for carbon sinks. I say to the people who sent us here that we will not be supporting—and we will do everything in our power to make sure this does not happen—taking prime agricultural land out of food production and moving it to a carbon sink. That is wrong. It works against market principles. It is against ethical principles. It is an infliction on the local economies where this comes about, and I refer specifically to Tully and other cane-growing areas. A mill needs certain tonnage for it to operate. Policies such as these put that under threat. Last time this came up we tried as hard as we possibly could to get an exemption for prime agricultural land, but it went nowhere. Therefore, we had no other option but to oppose it.

Unless humankind is going to evolve into a higher form of termite, there is no point in carbon sink legislation taking prime agricultural land out of production. There is the potential for 20 million hectares to become carbon sink forests. In the regular parlance of regional areas, that is 50 million acres. That is larger than our wheat crop. This is an absurd predicament for our nation to be put in.

We looked at the legislation at the start—and there was discussion around it—and it did say that capital expenditure was tax-deductible upfront for a carbon sink forest. Expenditure is either capital or income—there is no other place for it to be. Capital expenditure includes the price of the land. It is a capital item. It goes on the books as capital. We asked for that to be better prescribed in the legislation, but it was not, so it remains there. This remains a problem.

It is terribly important when people like Senator Nash lose their position over this that our position remains consistent. The National Party has no problems with carbon sink forests. If people want carbon sink forests, they can have carbon sink forests, but why do they have to have an upfront tax deduction for them? If they believe they stand the test of market principles then put them on the market with other things, such as sugarcane, pineapples, beef, wheat and sheep.

When you create an imperfection in the marketplace you put other people who live in the same district and have to compete with them at a distinct disadvantage. It is peculiar that on one side of a fence a person will be growing food to feed a very hungry world and be involved in the tax system like everybody else while on the other side of the fence a person will plant a forest and produce nothing for the hungry world but get an upfront tax deduction. That is bizarre. We have to bell the cat on this one and say, ‘If you want a carbon sink forest, go right ahead, but stand in line with everybody else and make sure that it stands the principles for which it is put forward.’

If this legislation achieves its objective of 20 to 30 million hectares of carbon sink forests, it could bring about the decimation of so many regional towns. Sugar mills will reach their critical mass of tonnage and shut down. All the rest of the sugar farmers will suffer because of the sins of some who exploit a perverse section of the tax act. People will go out of business not because of the global recession or global warming but because of a peculiarity in the tax act. That is not right. That is not just. Obviously, once the sugar mill closes, the chemist will leave and the school will close. The National Party will always fight for the people who are left behind, even though they are small in numbers, in these enclaves of poverty and destitution that are brought about by the unnecessary hand of government coming into their lives.

Similarly, the wholesale or complete purchase of water licences in a certain area causes massive problems. You can purchase some of a water licence from an area, but if you go into an area and purchase the whole of the water licence, then it is all very well for the person whose water licence is sold but it is not very good for all the people who live in the fibro-and-iron or weatherboard-and-iron houses in the towns that surround it. They are left with no hope and with no future. It is not a fair or a just outcome.

In the case of this legislation, it is not about purchasing the water licence; it is about a mechanism for turning the construct and the application of the land into something which does not support the regional economy in any way, shape or form. If it is a carbon sink forest, I imagine we are not milling it, therefore there are no timber jobs. If it is a carbon sink forest, therefore we are not cultivating it; therefore we do not need an economist, we do not need a sugar mill, we do not need a chemist, we do not need a school, we do not need the infrastructure. In the National Party we believe in the support of regional towns and we are the party of regional Australia, so as a core position we could not support a movement in the tax act that would be completely and utterly to the detriment of people living in that regional area. And, to add insult to injury, the benefactor of the carbon sink forest will possibly be someone living in an urban metropolitan area, maybe even overseas. It would be taking the wealth associated with that area that benefited the people in that area and, by a movement in the tax act, moving the benefaction of that area to a person in an urban area or overseas and, in the same breath, removing the capacity to produce food to feed a hungry planet. It just does not stack up as a piece of legislation.

We implored the government to be part of the process of moving strategic amendments so that that would not be the case. We were willing to find a middle ground. We said: ‘If you want to have a carbon sink forest on lesser agricultural land, sure, let’s work out how we can do that. If mankind can put a man on the moon, I am sure we can devise an amendment that will fulfil that proposition.’ But we ran up against an almost die-in-the-ditch mentality, one of: ‘Thou shalt not discern or describe prime agricultural land. We can’t go forward with this amendment because it’s too difficult.’ Apparently it is not too difficult to give people an upfront tax deduction, but it is far too difficult to excise prime agricultural land so that we can go back to these regional towns and say, ‘You are not at threat; this is going to be used on lesser agricultural land.’ Everybody always used as a metaphor that it was only going to use lesser agricultural land, that it was going to be used in deserts and up ridges and in caves which no-one goes to, and they would say, ‘Don’t worry, it’ll never affect you.’ The reality is that it does. The reality is that the application of the legislation has been and is being seen as applying to prime agricultural land. That is where it is going. Why? Because people want to utilise what provides the greatest capacity to increase their potential for a carbon credit by bringing about the greatest increase in the weight of carbon per acre of land. Where are you going to do that? You are going to do that in areas which enable the growth of carbon, which is seen in trees, and that is land with the appropriate soil, the appropriate rainfall and the appropriate area—and, ladies and gentlemen, that is prime agricultural land.