AUSTRALIA’S meat processors say the government can’t decide whether abattoirs are in farming or manufacturing – a quandary that is placing 148,000 Australian jobs at risk.
The Australian Meat Industry Council (AMIC) says unparalleled pressure on Australia’s red meat processing sector is threatening its productive base. It warns that without major change, the industry and its jobs may not exist within 10 years.
Spokesman, Gary Burridge, says Australia’s most efficient meat packing plants will be hit hardest by the coming carbon tax – incurring a penalty of $6 to $8 for every animal processed.
“They do not emit enough carbon to attract the significant financial support that the steel, concrete and similar large scale manufacturing industries have access to,” he said.
“Meat processing is part of agriculture but we are really part of the manufacturing sector as well. We are often forgotten.”
Mr Burridge told a Senate hearing in Sydney that processing meat in Australia costs twice the amount it costs in competitor nations such as the US and Brazil.
The meat industry is a major regional employer. Eighty percent of Australia’s meat processing facilities are located in Local Government areas with a population of less than 50,000 people. “The mining boom is driving higher wage expectations coupled with high levels of employment and labour shortages,” Mr Burridge said. “Running a low margin meat processing business in regional Australia is becoming less viable.”
Labour costs had increased without offsets in productivity. Additional on-costs such as workers compensation and new superannuation contributions had added to the burden.
With more than 70 percent of Australian beef (about 950,000 tonnes) exported into competitive international markets, AMIC says the burden of rising costs is falling onto farmers. “It is producers who will ultimately wear the brunt,” Mr Burridge said.
At the hearing, AMIC presented a list of ten problem areas, in which changes were required to improve the competitiveness of the sector:
Rising input costs – raw materials, energy and transportImpact of the carbon tax – which hits hardest in bigger, more efficient worksMarket access – the failure to secure export opportunitiesHighe r wage demands due to the mining boomInefficient taxes including State-based payroll taxInadequate, inefficient transport infrastructureExchange rates – the value of the dollar has doubled in 10 yearsRegulatory costs – eg: increased AQIS charges that do not apply overseasResearch and Development costs - low margins limit commercial contributionsGST – promised offsets on livestock purchases have not been delivered Mr Burridge said payroll tax and other state-based taxes did not apply in overseas facilities, including those receiving and processing sheep and cattle from the Australian live export trade.
“Live exports to markets like Indonesia and the Middle East are processed in facilities which do not incur such a tax, further destabilising any level playing field between our sectors,” he said.
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