While distracting us with Scott Morrison's ministerial appointments over the past few weeks, the new Labor government has announced a $3 billion carbon tax on Central Queensland's industries.
Labor does not call it a carbon tax they instead use the Orwellian term "safeguard mechanism". But former Labor MP, Joel Fitzgibbon, described it right when he called it a carbon tax in February. Last week, the new Government released a discussion paper on how this new carbon tax would work.
In effect, 215 businesses around Australia would be forced to reduce their carbon emissions by doing so directly or by buying carbon credits. These businesses include smelters, refineries, coal mines and gas fields all through Central Queensland. Carbon credits cost money so this "safeguard mechanism" works like a tax.
In Central Queensland, there are 58 businesses that will be subject to this tax. They include the magnesia plant in Rockhampton, the aluminium smelter in Gladstone, the LNG plants on Curtis Island and 34 coal mines in the Bowen Basin. All up these businesses employ 18,000 people across Central Queensland directly and support thousands more jobs indirectly.
The Central Queensland businesses account for 25 per cent of the emissions from these 215 businesses. Labor's goal is to reduce the carbon emissions from these 215 businesses by 170 million tonnes by 2030. So CQ's burden will be to reduce emissions by about 43 million tonnes by 2030. At the moment, Australian carbon credits are selling for about $30 per tonne. So, at this price, the burden of this new carbon tax on us would be $1.3 billion.
However, Labor's new scheme will increase demand for carbon credits and that will almost certainly increase the price of them. In New Zealand, carbon credits cost $80 per tonne. If Australian prices go to that level then the tax burden for Central Queensland would be $3.4 billion.
No area of Australia would be hit harder than CQ by Labor's carbon tax. There are just two businesses in Brisbane subject to the new tax and just one in Sydney.
Where do these carbon credits come from? Primarily they are "generated" by locking up cattle country to save the planet. The cattle are destocked, the land often left to the pests and weeds and then we are hit by a double whammy. Our mines and factories have to pay for the carbon credits by shutting down the production of another great Central Queensland sector - the cattle industry.
I spoke to some people in Western Queensland this week who say that 40 per cent of properties have been destocked all in the name of carbon credits. The farmers get paid for this but the local town is devastated. Unlike normal farming, carbon farming does not need fencing contractors, truck drivers or a stockcamp. The knock on effect reduces custom for local hotels and shops.
And, after we shut down all of this production, what will be the benefit? We will apparently reduce our emissions by 170 million tonnes, an amount which China emits every 6 days. None of this will have any impact on the environment especially when Europe is reopening coal fired power plants and the rest of the world continues to increase the use of fossil fuels.
The big beneficiaries will be the banks. They are licking their lips about the creation of new "carbon markets" which offer new ways of charging fees and getting bonuses. Banks don't create wealth they only facilitate its creation. We are heading down a dangerous path when we penalise the real production of food, energy and metals to favour the artificial production of financial instruments.