Govt Fuel Measures Will Have Little or No Impact on Farmers & Contractors
IFA President Francie Gorman said that the cuts to agri diesel in the fuel package announced by the Government today are derisory and will have little or no impact at farm level.
“IFA was clear that the only effective way to address costs at farm level was to reduce carbon tax, but the Government seems to have deemed this to be untouchable,” he said.
“By refusing to reduce carbon tax, the Govt only had excise duty and the NORA levy as levers and only reduced the tax on agri diesel by five cents, with much bigger cuts in other categories.”
“We estimate the proposed cut will reduce green diesel prices by about 3% while the price of green diesel has increased by 50% over the past three weeks. This will do little or nothing to help farmers and agri contractors deal with the escalating cost of fuel,” outlined the President.
Carbon tax makes up 17c of the 22c tax on agri diesel. In the last two years carbon tax has increased by almost five cent per litre. It’s due to go up by 2.3c on May 1st.
“This is a classic example of the Government giving with one hand while taking with another,” he said.
Agri contractors play an important role, providing year-round services to farmers and they are fully exposed to carbon tax on agri diesel.
“The carbon tax cannot achieve its aim of encouraging substitution to non-carbon fuel sources as there are no alternatives available for agricultural vehicles,” he said.
“The reality is that food prices will have to increase to cover these extra costs. Already last week we saw a significant horticulture producer go out of business. Food prices will have to go up to cover these cost increases,” he says.
