Farm Business and Regional Development Committee Members
Chair - Peter Tuohey
About the Committee
The Farm Business and Regional Development Committee (FBRD) is the policy development committee that tackles much of the government policy issues that directly affect the commercial farmer's bottom line. The FBRD committee members comprise of a vast pool of experience and expertise. Many within the committee have been involved with the VFF for over 15 years.
The FBRD deals with a range of issues from Local, State and Federal taxation to heavy vehicle regulation. However, to sum up the primary objective of the FBRD in one sentence would be to:
Ensure that the business environment for Victoria's farmers is fair and encourages sustainable farm sector growth.
The Carbon tax and the State based VEET scheme are government created markets that increase the cost of electricity. While agriculture emissions are exempt from the scheme , the Carbon price is estimated to increase electricity expense by10% for farm businesses with this causing a significant impact particularly for dairy and horticulture producers due to their high electricity needs.
As agriculture is a trade exposed industry, any additional costs threat the sectors ability to compete against other producer that do not face a carbon price.
The VFF is equally concerned with the State based VEET scheme. Tis scheme, designed to offer energy efficiency credits to organisations that provide energy efficiency products result in higher energy prices. The cost of the products are subsidised by electricity distributors that pass on the cost to energy users. There are very limited options for farms to take advantage of the products on offer, but they are hit with the higher energy price.
Fire Service Property Levy
The VFF fought successfully to get the FSL removed from insurance and replaced with a charge on property. The VFF advocated the charge to be on the building asset value, unfortunately the State government determined to place the charge on CIV, which disadvantages farmers. Since farming can be a land intensive industry there are serious concerns with this approach.
The VFF have been calling on the State government to impose a levy rate on farms that is equal to that of residential property. The overall impact of this rebalancing would be a dramatic step towards equity between these two landholder groups and will have a very small impact on individual residential landholders in rural Victoria.
Our analysis shows that the rebalancing would translate to an approximately increase in FSPL of $20 for residential land holders (from $133 to $156) and a reduction of FSPL of $160 per assessment (keeping in mind farmers receive multiple assessments) for farms.
The Multi Party Climate Change Committee, as established by the Federal Government, has recommended the establishment of a Carbon Tax in the short term (to be July 1, 2012) before an emission trading scheme 3 – 5 years later.
While agriculture emissions are exempt from the scheme there is concern that the indirect costs will be substantial. With fuel excluded the major cost impact will be on electricity use. It is estimated that this could cost dairy producer $6,000 per year.
As agriculture is a trade exposed industry any additional costs threat the sectors ability to compete against other producer that do not face a carbon price.
All policy needs to be supported by logically probative evidence based. As there is no evidence a tax on carbon will impact climate change it should not be pursued.
Road Pricing Reform
There is currently a strong push to move road use pricing towards a mass-distance-location regime, where the price associated with road used will vary based on the weight of the vehicle, how far the vehicle has travel and where that travel has taken place. The VFF is concerned that a move to an MDL system of road pricing will deliver a worse situation for farmers that currently generally have low compliance costs and little room for variation in the freight task.
The freight task in Australia is diverse between the sectors and within the farming sector the task is diverse once again. A road pricing regime needs to have low compliance costs, be transparent and provide sufficient funding for road maintenance (particularly local roads).
A well designed hypothecation of fuel excise will close the loop for funding road maintenance and deliver adequate funds for maintenance requirements.