ETS costs imminent

If you think the Emissions Trading Scheme doesn’t apply to farming until 2015, think again, says ACT MP John Boscawen.

From July 1 costs on most farms will rise by thousands of dollars due to an ETS induced 4c/litre rise in fuel prices, and a 5% hike in electricity charges.

New Zealand now stands alone in implementing such a scheme and he says he would like to see farmers and the public protesting in the streets to persuade Government to ditch it.

“Why are we penalising our farmers? Our farmers have enough problems competing internationally without this,” he told Rural News.

“Look at Korea: it’s our second biggest market for beef but we face a 45% tariff on our exports there.”

France’s recent reversal of its carbon tax plans, continued uncertainty over whether Australia will implement its version of an ETS, and Canada’s statement it will not honour its Kyoto commitments, all mean it would be madness for New Zealand to go it alone, says Boscawen.

“This House was told time and time again last year that we would not lead the world; we would be a fast follower and our emissions trading scheme tax would be based on that in Australia. Yet, what has happened since then? Australia hasn’t passed an ETS tax and looks unlikely to do so and neither China nor the US has any intention of introducing one either… it’s crazy to continue to force this expensive experiment upon us.”

Earlier in his speech he said it was all very well for Key to tell farmers agriculture was excluded until 2015, “but what the Prime Minister didn’t tell farmers was that they would be paying an ETS tax on their petrol and electricity from July 1 this year and it would be much more than anything they would pay for their animals…”

Of the estimated average $10,000/year cost of ETS to a dairy farm, three-quarters relates to petrol, electricity, and processing emissions, says Boscowen. Half of that $7500 comes in from July 1 this year, the balance in 2013.

Farmers should not be placated by suggestions the scheme could easily be reversed in a year’s time if competitors don’t follow suit, he adds.

“What ETS does is it creates property rights. Once you do that it is very hard to take them away unless you pay compensation.”

Federated Farmers president Don Nicolson echoes Boscawen’s concerns.

“A cynic would argue we are already paying some of these [ETS] costs.”

Of the $22.3 billion agriculture contributed to the economy to April last year, only 6.2 cents in every dollar remained for farmers as net profit to pay tax, personal drawings and capital reinvestment.

Boscawen says ACT is confident it can get Government to back down on implementing the next phase of the scheme.

Rural News-  article by Andrew Swallow 6 April 2010