A Brisbane Senate Inquiry hearing has heard that jobs are at risk in the sugar industry and land markets have been distorted by tax breaks for Managed Investment Schemes (MIS), according to Queensland Senator Ron Boswell.
“The hearing heard CSR representative John Pratt give evidence of land prices being inflated by as much as $4000 per hectare or between 20 to 50 percent due to the massive tax incentives that MIS’s enjoy,” Senator Boswell said.
The Inquiry being held by the Senate’s Rural and Regional Affairs and Transport Committee is gathering evidence regarding the Implementation, Operation and Administration of the Legislation Underpinning Carbon Sink Forests.
“The inquiry heard powerful evidence from Tully Sugar Mill Chairman, Dick Camilleri who said that workers objected to paying taxes so that the government could give MIS’s a tax break that would potentially put them out of a job,” Senator Boswell said.
“The inquiry also heard from representatives of the Australian Sugar Milling Council, CSR, Canegrowers and Property Rights Australia who gave consistent evidence that similar tax deductions, already enjoyed by MIS’s, distort the market to the extent that landholders from other industries find it difficult to compete,” Senator Boswell said.
In their submission to the Inquiry the Australian Manufacturers Workers Union (AMWU) stated that: “Since 2006 the AMWU Sugar Delegates’ Committee has been increasingly concerned with the loss of productive cane land to MIS (managed investment scheme) tree plantations. This land, which is vital to maintain critical density and volume for Mill viability, is currently under pressure for use by taxpayer subsidised forest plantations. These Subsidies create an artificial and unfair advantage to the scheme providers and scheme promoters. Further we believe that forestry MIS land use is not driven by commercial or environmental benefits but rather to cater for a short term tax offset benefit to high income investors”
“The Australian Sugar Milling Council CEO Max Craigie told the inquiry that there are around 3500 full time and 1500 seasonal workers in the 26 sugar mills and throughout Australia.”
“I would not like to see these 5000 sugar industry jobs, which contribute wealth to regional economies, put at risk because companies that are planting trees have a massive tax advantage over those who produce sugar,” Senator Boswell said.
“I have nothing against landholders taking advantage of establishing carbon sink forests as an extra income opportunity; however they should do this on a level playing field with other food and fibre producers and not be supported by the Australian taxpayer.”
“This is the classic argument of food versus trees and I believe that both should compete on a level playing field rather than one having a tax advantage over another.”
“This is a lemon of a law that will potentially see prime agricultural land locked up for years all because of a tax deduction.”