Carbon tax misfires

I imagined there would be riots when the average Australian family faced a 10% cut in income as a result of the carbon tax. But for some reason, nobody seems to be making a big deal about it.

I suspect it’s pretty quiet because although mine is a very average family (two kids and a dog), we’re not on the political radar.

The carbon tax is expected to slug us around $5000 per year – a whopping 10% of the average dairy farm family’s income. As reported in The Land and the Australian Financial Review:

The three majors that will pay the new tax from July 1 are already investing in low-carbon technologies but Murray Goulburn Co-operative estimates rising electricity prices will cut the annual income of the average farmer by $5000 a year, The Australian Financial Review reports.

“Profit in the average dairy business in recent years has averaged $50,000,” one MGC general manager, Robert Poole, said. “So that represents a 10 per cent cut. For the average dairy farmer, the tax is going to cut hard into their profits.”

How can this be? Well, because even though I plant 1000 trees or more on the farm every year and have built some of the most carbon-rich soils in the country (up to 22% organic matter content), I cannot participate in the poorly framed Carbon Farming Initiative.

The milk processor we supply, Murray Goulburn, will face increased costs of $10 million per annum and will pass those costs onto farmers – guaranteed. It is guaranteed to do so because MG is 100% farmer-owned so the buck quite literally stops with us. Our fertiliser, fuel and electricity prices will also rise.

Ironically, if MG was spewing out far more greenhouse gases, we might not face this crippling tax because “emission intensive” businesses that export just 10% of their products are considered “trade exposed” and given special concessions. MG exports around half of our milk but because it’s not that “emission intensive” (aka dirty), it misses out on concessions.

Please, can somebody explain the logic behind this?