Food manufacturers appeal to PM over carbon tax

A contingent of food and grocery manufacturers have appealed to Prime Minister Julia Gillard to ensure the Government’s carbon tax does not hinder an already struggling sector. 

Nineteen high profile players, including Nestle Australia and Bulla Dairy Foods, have co-signed a joint letter to Gillard, raising questions about the carbon tax, due for implementation on July 1, 2012.

The letter calls on Gillard to confirm the Government will ensure Australia’s food manufacturing sector will not be unfairly disadvantaged by a carbon tax.

Kate Carnell, chief executive of the Australian Food and Grocery Council, says the tax will increase the cost of food and grocery manufacturing in Australia.

Carnell says imported food and grocery items produced overseas, without the imposition of carbon taxes, would be cheaper than locally produced products facing the carbon tax through their supply chains.

She says manufacturers are already feeling the pressure of the price war between supermarket giants Woolworths and Coles, coupled with higher costs across commodities, energy and wages.

“Our businesses and organisations represent a wide spectrum of export and import competing sectors including… businesses that service and supply these sectors,” the letter says.

“Our representation includes small- and medium-sized businesses, many of which are located in regional Australia.”

“We agree that effective action to tackle climate change requires comprehensive and sustained action by all major global emitting nations, and that Australia must play its part.”

“A critical challenge in developing an Australian contribution to the global effort will be to ensure the international competitiveness of our export and import-competing business is not compromised.”

Despite the industry’s concerns, other businesses have shown their support for the carbon tax, with trucking and logistics company Linfox among 22 groups publicly supporting the idea.

“Rather than waiting around for the ultimate model, we think it’s important to make a start,” Linfox’s David McInnes says.

Other supporters include multinationals such as BP and Ikea, super funds like Catholic Super and Local Government Super, and local companies including AGL and Pacific Hydro.

Climate Change Minister Greg Combet has said business leaders are “better off inside the room” and should continue negotiating with the Government over the implementation of the carbon tax.

Despite Combet’s comments, Treasurer Wayne Swan has indicated jobs could be lost, conceding some polluting industries already face pre-existing challenges to their viability.

Meanwhile, Opposition leader Tony Abbott recently headed to the resources-rich Pilbara region in WA to urge miners to continue to demand their unions oppose the tax.

Abbott said workers’ main concerns about the carbon tax were the impact on jobs and the cost of living.

“Unions are finally understanding the impact the carbon tax will have on their members, who rightly fear for their jobs,” Abbott said.

“The Prime Minister should finally start listening, put the workers of Australia first and dump this toxic carbon tax.”