Labor’s climate reporting rules will drive up the cost-of-living

Labor’s new climate-related financial disclosure policy is another attack on farmers and fresh food and will increase cost-of-living pressures on families.

Leader of The Nationals David Littleproud said new legislation, forcing entities to document their indirect greenhouse gas emissions in what’s known as ‘Scope 3’, will add another $2.3billion in costs that will have to be passed onto the consumer.

The changes will make food more expensive amid a cost-of-living crisis, while also causing confusion and uncertainty for farmers and businesses, when even the Biden administration refused to impose this on their economy.

“Labor’s Scope 3 measures are another example of Labor coming after the agriculture sector and making life harder for small businesses,” Mr Littleproud said.

“During a cost-of-living crisis, Labor is increasing the burden on the farming industry. We have genuine fears farmers will walk away and when supply goes down, prices go up, making groceries even more expensive at the supermarket checkout for families.”

While the legislation has now come into effect, entities will be required to begin disclosing Scope 3 emissions in their second reporting year.

Orange farmer and BiteRiot owner Fiona Hall said farmers are already faced with meeting the expanding regulatory and market requirements and Scope 3 emissions reporting is just another layer again.

“These requirements result in added administration and financial burden on growers, whose primary focus is growing premium produce for domestic and export markets sustainably,” Ms Hall said.

“Farmers already prioritise sustainability through practices such as efficient water use, reducing inputs where we can, adopting renewable energy where feasible.

“Our business already employs a part-time staff member to adhere to stringent food safety and ethical sourcing standards including Freshcare, HARPS, export monitoring, registration and compliance among others.

“These requirements are essential but increasingly burdensome, requiring us to employ a part-time specialist just to manage these obligations - a role that would need to become a full-time position with Scope 3.

“For smaller operations, the cost of employing specialised staff to manage these obligations is simply not viable, leaving the burden to fall back on the grower.”

Mr Littleproud added the new policy was confusing and would significant compliance costs with accounting and recording on-farm emissions once the ‘warm up year’ in 2025 is over.

For example, a large dairy processing business may be required to report on their emissions, but also require dairy farmers to report separately.

“The United States has completely removed its Scope 3 reporting requirement and for good reason.

“The Bill is a compliance green tape time bomb, with Treasury’s own figures estimating this measure will cost $1.3 million per year, per business, to comply with.

“Compliance costs will be passed onto small businesses. If you are a farmer who banks with a big company, or a manufacturer buying ingredients from a larger entity, the changes will directly impact you.

“This unfair and bureaucratic burden comes despite Australian farmers already having some of the best land management practices in the world. Given that there is currently no standardised method for calculating land and livestock emissions in Australia, how can industry have confidence in the proposed reporting system?”

Labor still can’t explain how many of the 1762 entities considered for this policy are part of the agricultural industry and if it includes entities up and down the supply chain.

A dissenting report from a Board Member in the Climate Related Disclosures paper also states its implementation is unworkable, with concerns about the cost relative to benefit overall for smaller and non-profit entities.