Adjournment Debate – Isis Canegrowers

Monday, 17 March 2014

Mr PITT (Hinkler) (21:03): I rise to speak on an issue of great concern in my electorate of Hinkler. The situation confronting canegrowers is dire. The region has endured two major floods in three years and is now in the midst of the worst drought in more than two decades. The impact of these natural disasters on the local economy is significant. There are 600 cane farms across the region which employ about 800 people and generate $230 million a year for the local economy. This does not include the thousands of people indirectly employed by the sector and those working in sugar mills.

I recently met with Isis canegrowers and local chamber of commerce representatives at Childers who told me that farms and businesses are on the brink of collapse. One grower at the meeting described his predicament as a ‘death spiral’. Growers are actively discouraging their children from pursuing careers in agriculture. Banks are threatening to foreclose, and people in the sugar industry have no money to spend, which means other Childers businesses are also feeling the pinch.

This has been the Isis region’s highest water usage season since 1991. They are currently 100 per cent reliant on irrigation. The cost and the man-hours required to irrigate and keep their crop alive is taking its toll. Remaining viable would require, at the very least, an immediate 33 per cent reduction in electricity and water costs. This year alone, electricity will make up a third of their operational costs.

Growers are operating as efficiently as they possibly can. Previously, they irrigated at night to utilise cheaper tariffs while minimising evaporation. The night tariff has increased to such an extent that it is no longer financially beneficial to irrigate at night. We need to give them an incentive to irrigate at night so that we are maximising the utilisation of our generating assets. Despite using only centre-pivot low-pressure irrigation, which is one of the most efficient methods of irrigation known, one grower said his electricity bill for the last quarter was $135,000, plus $44,000 in water charges. There are not too many canegrowers who make $200,000 in a year, let alone almost $200,000 in a quarter.

Isis growers expect to produce just 840,000 tonnes of cane in the 2014 season, compared to 1.5 million tonnes in 2012. Some have chosen to simply turn the tap off altogether and call it quits. They say they simply cannot afford to absorb the annual prices set by the Queensland Competition Authority and Australian Energy Regulator. If the Newman government accepts the QCA’s recommended 16.3 per cent increase in 2014-15, tariffs 62, 65 and 66 will have increased by 96 per cent since 2009. The Network or N-component, which is set by the AER and passed on by the QCA, represents about half of the current electricity price.

Over the decades we have invested billions of dollars in water infrastructure in a bid to improve industry viability. What was the point if we are now charging growers so much for electricity they cannot afford to use any of it? You should not have to rely on your prayers to be successful in agriculture. What are we doing about it? Repealing the carbon tax will wipe about 10 per cent off their electricity bill. The growers argue that such a reduction will not be nearly enough and they fear the 10 per cent will simply be eaten up by future tariff increases. Unfortunately, Labor in the Senate is standing in the way of the growers getting some relief.

In February, we announced that we would review the Renewable Energy Target to determine its impact on carbon emissions, energy markets, prices, businesses and Australian households. When Labor was in government, its RET of 20 per cent created an excess of solar users across the country without any consideration of need, market conditions or existing generation capacity. What people do not realise is that it is not the government subsidising solar users, it is electricity users. In other words, the people who cannot afford to install solar are subsidising those who can. There is not enough time today to detail all of these factors, but basically electricity users are paying between $30 million and $40 million per productive megawatt plus a further 40c to 65c per kilowatt hour for other people to have solar. My constituents installed this in good faith and we should honour those contracts.

Repealing the carbon tax and reviewing the RET is a good start, but it is not enough. We are working with the Council of Australian Governments for reforms to place downward pressure on energy prices. An energy white paper will look at regulatory reform and set out a coherent and integrated approach to energy policy.

To the cane growers in my electorate, I know you are exhausted. I know you feel your concerns have gone unheard for too long, but, please, make a submission to that white paper, because no Aussie farms means no Aussie food. As a former cane farmer, and a registered professional electrical engineer in Queensland, I am not sure that is an Australia I want to live in.

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