![Queensland Senator Ron Boswell says renewable energy taxes will push many primary producers to the brink. Queensland Senator Ron Boswell says renewable energy taxes will push many primary producers to the brink.](/images/transform/v1/crop/frm/silverstone-agfeed/2030900.jpg/r0_0_600_400_w1200_h678_fmax.jpg)
HUNDREDS of primary producers and supply chain partners nationwide will confront a financial crisis unless renewable energy charges and the carbon tax are scrapped.
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That is the assessment of Queensland Senator Ron Boswell and his Coalition colleagues in Canberra, as the battle for votes heats up in a tightening election contest.
Despite the Federal Government's defence that Queensland's maintenance cost of the electricity network is to blame for the escalating prices, Senator Boswell is adamant that extra charges to meet the government's renewable energy targets are the main culprit.
His attack has been backed by several commodity groups across the state, who say they face declining profitability, job cuts and even closure due to the skyrocketing bills.
"According to the Queensland Competition Authority, the renewable energy targets (RET) and the Solar Bonus Scheme add $169 to the average domestic electricity bill. That is almost as much as the $190 added due to the carbon tax," Senator Boswell said.
"As Queensland Energy Minister Mark McArdle has pointed out, the RET and the carbon tax now make up 18.9 percent of the average $1900 annual electricity bill.
"That's for domestic power bills. It's many times more expensive to operate a modern, mechanised farm and food-processing business.
"The more mechanised our primary industries become, the more they depend on electricity and the more those power prices impact on operations.
"Dairy farmers are facing big increases and there are stories about irrigators around Bundaberg who can't afford to turn on their pumps. This is serious."
Secretary of the Bundaberg Regional Irrigators Group, Dale Holliss, said because the food and fibre produced by members were export dominated, it was impossible to pass significant price increases to the end consumer.
"Irrigators are price takers and are generally competing on an international market," he said.
In the past five years, the group has seen irrigation electricity prices escalate far in excess of CPI, while a QCA SunWater irrigation price review has indicated that average energy costs will increase to 40pc of total annual operating costs for the Bundaberg Irrigation Distribution System between 2012 and 2017.
With the likelihood that sugarcane growers will reduce their water use in response, resulting in a 5 to 10pc loss of production, this would in turn lead to a loss of jobs in growing, harvesting, transport, milling and associated service sectors.
"Cost increases of this magnitude will have a significant impact on future sugar industry gross margins and threaten the longer term future of agriculture in the Bundaberg region," Mr Holliss said.
In the meat-processing sector, increased electricity prices are likely to have the biggest impact on cattle producers, according to Tom Maguire, general manager of corporate affairs for Teys Australia.
"Australia used to be in the fortunate position of producing cheap energy, which gave us a competitive edge," he said.
"The renewable energy targets and carbon tax have eroded that and put us under pressure. Our overseas customers won't accept extra costs, so in essence, we can only afford to pay producers less."
Teys Australia has six beef-processing plants around Australia, including plants at Rockhampton, Biloela and Beenleigh, and processes 1.5 million head a year.
"We need to utilise electricity," Mr Maguire said. "The government sets temperatures for chilling and so on. It's very regulated and we don't have much discretion. It's not just big manufacturers that these taxes hurt, but cattle producers as well."
He said the company's electricity charges were already well into six figures.
Senator Boswell said he had seen figures for an abattoir in a regional centre that showed without the carbon tax and RETs, the total electricity bill for one month was $33,000. With carbon tax and RETs, it was $42,900 - an increase of 30pc.
"The monthly increase was $6050 for carbon tax and $3860 for RETs, or $9900 in total.
"Over the full 2012-13 financial year, those two taxes pushed up the abattoir's electricity bill by $118,000, from $396,000 to $514,800."
He gave an example of a seafood processor in Queensland's South East paying combined carbon tax and RETs of more than $40,000, which couldn't be passed on to customers.
"The necessary cost recovery won't come from using less power, but simply employing one less staff person," he said.
Federal Climate Change Minister Mark Butler said the RET was a small factor in the energy price hike.
"The real reason behind rising electricity prices in Queensland is the massive increase in the cost of upgrading and maintaining poles and wires in the State Government-owned network," he said. "Network prices in Queensland increased by 18pc less than two weeks ago."
Mr Butler said investment in renewable energy was an essential part of Australia's action to address global warming, and that in the past 12 months, renewable energy generation had increased by 25pc, with carbon pollution down by 7pc.
He said global warming and the effects of climate change threatened the future of agriculture in Australia.
"For the vast majority of small businesses, the carbon price makes up less than 10pc of their electricity bill and 0.2pc or less of their sales revenue."