Big Red’s red tax

Big Red … and the secret 500, or 400, or whatever

What does a dollop of Heinz Big Red tomato sauce have to do with the Carbon Tax? What does a Peach Melba? What about baked-beans on toast—or a Pear Flan? Or a Spaghetti Bolognaise? If you eat any of these, or thousands of other basic food products—and the ingredients are Australian made—there’s a 90% chance you’re going to get whacked!

That’s from the dirty big Carbon Tax secret that you’re not being told about. 

The refusal by the media and Members of the Federal Parliament to aggressively question the secrecy surrounding who is on the list of the so-called 500 top “polluting” companies, raises serious doubts about the quality of scrutiny being undertaken in regards to the proposed Carbon Tax. The original Rudd Pollution Reduction Scheme suggested 700 companies would be hit.  Then Julia Gillard stated it would be Australia’s top 1000 polluters.

Then the figure dropped to 500 companies. 

On August 10, 12 days ago, the Secretary of Climate Change, Blair Comley told Senate members that the figure could be “more in the order of more like 400” but then admitted that “the 400 figure is not solid”. So, as the only “solid” indication of what the heck is going on is the document produced by the Commonwealth Parliamentary Library, entitled “Which 500 companies pay the tax?”… let’s stick to the 500 figure. (The library only names the first 340, but that’s enough.) 

The release of the names of the 500 companies that the Gillard government proposes to tax, and indeed the industries that they represent, is vital if any careful examination of the tax and it’s impact is to take place. Creating a list of 500 (or whatever) faceless, nameless companies is a cynical exercise in deceit and a way to keep from an unaware public, the actual impact of the Carbon Tax. As well, part of the so called Clean Energy Future plan, we were led to believe, was to "name and shame"— whatever happened to that idea? 

So until someone, somewhere, demands — and gets — from Prime Minister, Julia Gillard and her Climate Minister, Greg Combet, the release of the names that are on the 500 list, it can only be speculated upon as to who they are. So let’s do a little bit of speculation. 

Was the decision to close the Heinz tomato sauce processing plant in the Victorian town of Girgarre, with the loss of 146 jobs, anything to do with the proposed Carbon Tax? How would you know? You wouldn’t. But it must have been at the back of someone’s mind. 

Heinz announced two months ago that it planned to shut the Girgarre plant and operate out of New Zealand its production of tomato sauce for the Australian market, because it was cheaper to do it there than in Australia. From next year there will be only one major source of Australian-made tomato sauce left. The big question about Heinz’s Big Red is whether the decision to close the plant had anything to do with the company’s inclusion on the “unofficial” list of Australia’s top 500 polluters? Heinz-Watties is number 208 of the dirty polluters. 

Again, the closure of the SPC Ardmona plant at Mooroopna, owned by Coca-Cola Amatil, with the displacement of 150 workers raises questions as to whether the proposed Carbon Tax was a factor, there too. With the company claiming a high Australian dollar and SPC’s reduced export share, the looming Carbon Tax must have been a consideration in the decision … surely? And, as for Coca-Cola Amatil, it’s number 203 on the polluters list. 

Again we can only speculate as to why Julia Gillard and Greg Combet won’t confirm which companies are on their target list. But the answer to that question seems to be fairly obvious. 

Firstly, the government is desperate to imply to the Australian public, and parliament, that food companies are not included in the Carbon Tax proposal. In their Securing a Clean Energy Future (Chapter 3) they clearly state “of the 500 businesses” to be taxed: 

around 60 are primarily involved in electricity generation;
around 100 are primarily involved in coal or other mining;
around 40 are natural gas retailers;
around 60 are primarily involved in industrial processes (cement, chemicals, metal);
around 50 operate in a range of other fuel intensive sectors;
and the remaining 190 operate in the waste disposal sector. 

Not one word mentioning that 30 of Australia’s largest food manufacturing companies and retailers, representing the vast majority of food sales in Australia, are to be carbon taxed.

Not a word about the water authorities, Australia Post and Telecom — nor transport. 

So what is the true impact of the Carbon Tax on both the public, business and industry?

It seems impossible to believe that Heinz and Coca-Cola didn’t factor in the impending Carbon Tax when examining the operational costs at their respective factories at Girgarre and Mooroopna—prior to their decision to close them down. Presumably cooking up vats of tomato sauce creates quite a bit of CO2, so with a tax of $23 a tonne, there is an additional cost of production that they had to consider. But again, that is just speculation. 

Curiously, New Zealand’s processing tomatoes are poor in colour so Heinz will be importing tomato paste from Portugal and California to jazz up the look of their NZ Big Red sauce. I guess we’ll never spot the difference—back here in a country where the tomatoes are red. 

It does though, lead to speculation as to what many companies in Australia are considering to do about the impending tax. In April this year Shell announced plans to shut down it’s Clyde refinery, with the loss of 300 workers and 200 maintenance contractors. The company stated the availability of cheaper fuel products from Asian refineries led to their decision. The Shell refinery at Clyde, Sydney, supplies about 50% of NSW fuel needs. Remarkably, at the time, the Federal Minister for Resources, Martin Ferguson, issued a statement that said “…the future of the Clyde refinery was a commercial decision for Shell” and that “he didn’t have concerns about security of supply” (from Asia, or for NSW?).

Again, the decision by Shell came when the Carbon-Tax-Star-Chamber was meeting to work out the details of the Carbon Tax and ETS. Did the plans by Julia Gillard to introduce a not-on-my-watch Carbon Tax, influence Shell’s option to shut down Clyde? Shell comes in on the Parliamentary Library’s 500 list at number 46 so Shell is a big potential payer of the Gillard/Brown Carbon Tax. With a possible annual Carbon Tax bill of around $45 million for its Australian operations, it’s tempting to speculate that the Carbon Tax was somewhere high in Shell’s deliberations regarding whether to spend $70/$80 million upgrading Clyde, or just close it down. 

Indeed, Minister Ferguson’s lack of concern about NSW loosing 50% of its fuel-production capacity might have something to do with seeing a high-polluting manufacturing industry, shift off-shore—speculatively speaking, that is. But if the lack of interest by the Gillard government in Australia loosing such a strategic asset was centred around the notion of exporting pollution, then a whole new side of the Carbon Tax game is exposed. 

With a new financial year starting, which will see the world of the Carbon Tax emerge, it is worth speculating (sorry) as to what is going on in board-rooms across the nation. There will be examinations as to how to avoid the Carbon Tax. If those discussions, and plans, lead to a more energy-efficient business practices, that might be a good thing. 

But if the plans involve forcing manufacturing and other industries off-shore; Australian businesses destroyed by cheaper, un-carbon-taxed products—or Australian businesses simply closing down—the Brown/Gillard plans will be an absolute disaster. 

One thing is certain. Food and other household cost will soar and there will be no government compensation for that. Every company on the 500 list will either pass on the Carbon Tax, reduce value for money, or head for China. One way or another we are all going to get it in the hip pocket. And without the 500 list we’ll never know who hit us. 

At least the economics of climate change aren’t settled. Pass the Big Red, please! It doesn’t have a $23 carbon tax. 

Well, that’s a saving!