Industry welcomes negotiations on 'flawed CPRS

By: Jason Whittaker

The Coalition’s announcement outlining amendments to Labor’s ‘flawed’ emissions trading scheme has been welcomed by the Australian Industry Group (Ai

The Coalition’s announcement outlining amendments to Labor’s ‘flawed’ emissions trading scheme has been welcomed by the Australian Industry Group (Ai Group).

Opposition Malcolm Turnbull unveiled plans over the weekend to reportedly save thousands of Australian jobs and limit increases in electricity prices for small business.

The Shadow Cabinet and Joint Part Room agreed on Sunday to a package of amendments that will form the basis for good faith negotiations with the Rudd Government.

Key amendments to Labor’s Carbon Pollution Reduction Scheme (CPRS) and the commitments required from the Government sought by Coalition include:
  • Amend the CPRS to provide a single level of assistance for emissions intensive trace exposed (EITE) industries at 94.5 percent until 2012 and 90 percent thereafter
  • Lower the threshold for assistance from the CPRS proposal of 1,000 tonnes of CO2 per $1 million of revenue to 850 tonnes of CO2 per $1 million
  • Continue to provide assistance to Australian EITE industries at 90 percent until 80 percent of their international trade competitors have also implemented carbon abatement measures
  • Include primary food processing such as dairy and meat in the EITE scheme
  • Permanently exclude agricultural emissions form the CPRS
  • Exclude coal mine fugitive emissions from the CPRS.

AiGroup Chief Executive Heather Ridout says it is crucial for business to have its voice heard in discussions between the Government and Opposition.

"It's important and welcome that the Federal Opposition now has a mandate to negotiate and an agenda to negotiate around on the Government's proposed Carbon Pollution Reduction Scheme," Ridout says.

"The Opposition has picked up many of the concerns of business, particularly in relation to trade exposed industries. There are very high costs in prospect for trade exposed businesses," she says.

"These costs will not be borne by their competitors in other countries. Putting in place appropriate fortification which will enable us to contribute to global emissions reduction while not damaging investment and jobs in Australia has to be given high priority."

According to Ridout, the issues around the coal industry, food industry and electricity generation are "very problematic".

"We have been urging both the Government and the Opposition to take a harder look at these areas," she says.

"In terms of the timetable for the negotiations, as Ai Group has consistently argued, we believe that significant enhancements need to be made to the current CPRS Bill before it is enacted. While business is dealing with a degree of uncertainty around this issue, we need first to get the legislation right."

The Ai Group has advocated five areas where improvements should be made to the Government’s current approach, including: measures to reduce the competitive disadvantages that will be faced by trade exposed businesses, refinement of proposed measures to EITE industries and reinforcement of arrangements for electricity generation sector.

Greater certainty should also be injected into the CPRS according to the Ai Group, including firmer and more transparent conditions before moving beyond the unilateral 2020 target of reducing emissions to 5 percent below the 2000 level.

The final point being advocated by the Ai Group is to adopt clear and effective programs to reduce the amount of regulatory measures relating to emission reduction and energy efficiency operating at different levels of Government.

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