Carbon tax must not hurt industry competitiveness

Posted by Josette Dunn on 17th September 2010

A decision on a carbon tax in Australia must not harm the competitiveness of Australian export and import-competing industries like food and grocery manufacturing, the Australian Food and Grocery Council (AFGC) said today (17 Sept).AFGC supports putting a price on carbon in Australia so long as it does not give any country an unfair competitive advantage over Australia.

AFGC Chief Executive Kate Carnell said implementing a national emission framework is one of the most complex policy development processes in decades and Australia needs to get it right.

“There must be a national consultative approach to a carbon tax without exposing industry to costs not faced by regional competitors, the best way we can do this is via a consumption-based model – similar to the Carmody approach* – rather than a production based approach,” Ms Carnell said.

Ms Carnell said with major increases in food and grocery imports of up to 40 per cent over the past five years, leading manufacturers are under constant pressure to consider alternative locations overseas, which undermines the future viability of food and grocery manufacturing industry in Australia.

The food and grocery is Australia’s largest manufacturing sector, worth more than $100 billion annually in turn-over to the nation and accounts for 9 per cent of Australia’s international trade valued at $449 billion in 2008-09.

“Under the Government’s previous consumption-based emissions approach, from the farm to the fork, there would have been increased costs, resulting in higher prices. Ultimately, industry wants an emissions reduction approach that will help safeguard maintain industry competitiveness, thereby safeguarding communities, jobs and families – and the future of a robust and growing food and grocery manufacturing sector in Australia.”