Shipping restrictions & carbon tax may break Aussie cement
25th July, 2011
AUSTRALIA’S $2 billion-a-year cement industry and its 1,800 direct jobs are in the firing line under Labor’s carbon tax and new shipping rules the Gillard government is proposing to introduce.“The impact on the cement industry is a prime example of the wrecking ball Prime Minister Gillard is taking to Australian manufacturing under her carbon tax regime,” Leader of The Nationals and Shadow Minister for Infrastructure and Transport Warren Truss said from the Sunstate Cement facility at the Port of Brisbane in Queensland this morning.
“As local costs rise for domestic cement manufacturing, importing cement will become increasingly cheaper. The paradox is Australian cement production is a leader in low emission technology and any shift to imports will force global CO2 emissions to rise.
“In a flashback more than 30 years, Labor and the unions are re-writing the Navigation Act to force businesses that ship products around our coastline to use local union-dominated vessels.
“Right now it costs about the same to ship cement from China to Australia as it does to ship it from Adelaide to Port Kembla. Under the Gillard government’s sop to the maritime union, our biggest competitors in cement – China, Indonesia, Taiwan and Thailand – will dramatically undercut Australian suppliers on shipping costs alone.
“This is on top of Labor taking a jackhammer to the local cement industry with its carbon tax.
“Aside from water, cement is the most consumed substance on Earth, used to construct buildings, homes, ports, roads, bridges – most of the infrastructure we rely on to build communities and drive economic growth.
“In Australia the industry produces over 10 million tonnes of cement material each year, and does so with the world’s second lowest greenhouse gas emissions behind Japan. When you factor in transport from Japan, using Australian cement in Australia delivers the best possible CO2 result.
“But the carbon tax will price Australia’s cleaner cement out of the market, giving the green light to our international competitors to boost their higher CO2-emitting production and flood Australia with ‘dirty’ cement.
“With our population headed towards 36 million by 2050, Australia is not going to stop construction but, under a carbon tax, the Australian cement industry will be crushed by competitors who will not pay a carbon tax.
“New shipping restrictions and the carbon tax are, each in their own right, massive dead weights on Australian production – combined they are an absolute disaster. The result could see us totally reliant on imported cement – imports that will, in fact, add more to global CO2 emissions than sacrificing our industry will save.
“Labor’s shipping and carbon tax imposts make no sense economically or environmentally.
“As a trade exposed sector you might have expected that the cement industry will be compensated under the carbon tax, right? Wrong. The compensation package only applies to processing clinker (the first stage of making cement). The second milling stage to make what we know as cement receives no compensation.
“All up, the Australian cement industry is about to cop five huge hits through:
* carbon tax on direct emissions (only partially compensated);
* higher electricity prices under the carbon tax (up 10% in the first year alone and rising every year);
* higher fuel costs via the reduction to fuel tax credits for shipping (up 6.21 cents per litre);
* higher fuel costs via the reduction to fuel tax credits for heavy vehicle use (up almost 7 cents per litre); and
* the requirement to use unionised shipping at significantly higher than current market rates.
“None of our global competitors face any of these new cost imposts, let alone all of them.”
[ENDS]
