Queensland Senator Ron Boswell today questioned the National Association of Forestry Industries (NAFI) strategy of supporting ongoing Federal tax incentives for carbon sinks, as potentially destroying farming communities and forcing food production to become more costly.
“The strategy paper, ‘Playing a Greater Role in Australia’s Future,’ calls for an increase in “Kyoto” timber plantations from the present 800,000 hectares (p. 17) to 2 million hectares by 2020 (p.13). To aid this 1.2million hectare increase in plantings the paper encourages the continuation of market distorting tax deductions,” Senator Boswell said
“The target of 1.2 million hectares is significant when considering it is 3 times the area currently under sugar production in Australia or equivalent to the combined total amount of land in Queensland that is currently producing wheat, sorghum and barley, the figure becomes more concerning.” (ABS Principle Agricultural Commodities Australia, 2006-07)
“Managed Investment Schemes (MIS), who already receive 100% tax deduction for establishing timber plantations, have targeted prime agricultural land in high rainfall areas including large chunks of sugar and fruit growing land.”
“These tax measures have distorted land prices in major agricultural belts to the extent that the farmer cannot compete in the marketplace against the tax deduction that these cashed up MIS’s receive,” Senator Boswell said.
“A newly legislated tax deduction for carbon sinks will only exacerbate the problem of market distortion and will mean that food industries will be vulnerable to buy up by large high emitting companies who receive an unfair tax advantage.”
Senator Boswell said “there is a Senate Inquiry already underway investigating legislation that allows for 100% tax deductibility for Carbon Sinks and it will include examining the effect these tax breaks will have on agricultural industries.”
“Already the sugar industry has lost huge tracts of farming land to MIS’s and as a result unions have made submissions to the inquiry concerned about jobs being at risk because of unfair tax breaks.”
“This is the classic argument of food versus trees and I believe that both industries should compete on a level playing field rather than one having a tax advantage over another.”