QUEENSLAND and NSW are the major beneficiaries of $1.9 billion of land sector emissions reduction contracted by the Federal Government as the carbon farming industry seeks to play a greater role in growing jobs and investment while assisting the transition to net-zero emissions, said the Carbon Market Institute (CMI) today.

There are signs corporate demand to purchase emissions reduction may be increasing to fund compliance and carbon offsetting needs. But since the repeal of the carbon pricing mechanism in 2014, the Commonwealth has been the dominant purchaser through the Emission Reduction Fund (ERF).

CMI has analysed Clean Energy Regulator data of the ERF’s contracted abatement in the land sector, otherwise known as carbon farming. It found there are 392 single-state carbon farming projects across Australia* contracted to generate at least $1.9 billion over 16 years.

Projects include activities protecting or regenerating native forests, managing bushfires in Australia’s savanna to avoid late season high intensity burns, capturing and destroying the methane from effluent waste at piggeries and building soil carbon through changed farming practices.

Queensland is leading the charge with 129 projects worth $794.9 million, and NSW is right behind with 159 projects worth $728.7 million.

The findings come as Australia’s carbon farming industry prepares to discuss plans to urgently scale-up jobs and investment, while maintaining integrity, at the CMI's 5th annual Carbon Farming Industry Forum today September 10 and next Friday September 17.

CMI CEO John Connor said, “Carbon farming is a vital new agricultural opportunity to help Australia achieve net-zero emissions before 2050, it is adding extra commodity revenue streams for farmers and assisting international market access for agricultural and other export industries.

“Since the repeal of the carbon pricing mechanism, the ERF has ensured the survival of this fledgling industry with Queensland and NSW being the major beneficiaries followed by Western Australia. Other states are moving to develop carbon farming sectors. 

“While the ERF has been the major driver of carbon farming in the last half decade, the 2020s will likely see the expansion of voluntary and compliance corporate activity. Carbon farming needs to grow alongside decarbonisation initiatives to achieve urgent emission reductions and it needs to do so with high integrity and transparency.

“These will be the issues focused on today at the first day of the 5th Carbon Farming Industry Forum. Next Friday’s sessions will focus on carbon farming’s additional social and environmental benefits, as well as the importance to agriculture of carbon as a revenue stream and as a means of assisting to demonstrate the sustainability of agricultural products to export and domestic markets."    

GreenCollar chief commercial officer Dave Moore said, “Carbon farming projects not only have economic benefits, but also environmental and social impacts.

“We’ve got a really good opportunity in Australia given our landmass and our mature offset scheme, that we can drive quite significant investment into regional communities with job creation, training opportunities and farming infrastructure investment. 

“There’s also a good opportunity to bring Traditional Owners and local communities much more fairly into the centre of conversations around projects -- listening to them and taking on board what they want to see in these projects.”

Land-based project by State (excludes multi-state projects)

Value of land-based projects by State (excludes multi-state projects)

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GOVERNMENT, industry and a think tank will appear before the House of Representatives Standing Committee on Infrastructure, Transport and Cities at a videoconference public hearing on Tuesday, September 14, 2021, to examine how to improve procurement practices for government-funded infrastructure.

Committee Chair John Alexander OAM MP said, "Given the Australian Government’s $110 billion commitment to the infrastructure pipeline as part of Australia’s Economic Recovery Plan, it is crucial that government ensures taxpayer money is used effectively.

"The diversity of witness groups at this, and upcoming hearings, reflects that for infrastructure procurement reform to be effective, it must be a collaboration between government, industry and key stakeholders,"Mr Alexander said.

The Australian National Audit Office, Department of Defence and New South Wales state-owned corporation Sydney Water will help illustrate challenges faced, and lessons on what has not worked and what is working well.

Consult Australia and the Australian Industry Group Limited (Ai Group) will provide a valuable industry perspective on challenges and opportunities in infrastructure procurement. The Grattan Institute think tank will share its findings on the effects of mega-projects and recommendations for government action.

"Sydney Water and the Centre for Defence Industry Capability have taken some innovative approaches to project delivery, technology and supporting industry development. The committee looks forward to hearing about their experiences and potential for wider application in the infrastructure sector," Mr Alexander said.

The terms of reference and submissions received are available on the committee’s website.

Public hearing details

Date: Tuesday, 14 September 2021
Time: 9.15am to 3.30pm
Location: Videoconference

A program for the hearing is available on the committee’s website.

Due to health and safety concerns relating to the COVID-19 pandemic, this hearing is not currently scheduled to be open for public attendance. Interested members of the public will be able to view proceedings via the live webcast at aph.gov.au/live.

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THE Financial Services Council (FSC) has welcomed the Federal Government’s recent decision to provide temporary and targeted relief to financial advisers, by reducing the cost recovery levies charged by ASIC.

FSC CEO Sally Loane said, “We are pleased the government has recognised the cost pressures on the financial advice sector. The temporary relief will give the 19,000 advisers in the sector hope the government understands the challenges facing the financial advice industry and will take further action to reduce the costs of regulatory burden on advisers.

“The FSC’s Green Paper Affordable and Accessible Advice noted advice licensees are facing significant regulatory costs that are resulting in advisers leaving the industry. Financial advice has been subject to a 'Gordian knot' of prescriptive and overlapping compliance, which has significantly added to their cost of doing business and made advice more expensive for Australians,” Ms Loane said. "Advisers need the opportunity to spend more time with their clients, particularly as we try to recover from the pandemic

“The FSC also welcomes the government’s announcement that it will review ASIC’s Industry Funding Model while this relief is in place to ensure that it remains fit for purpose.”

As the industry collaborates on ways the cost of financial advice can be reduced, the announcement gives hope of more substantive deregulation following the Government’s Review of the Quality of Financial Advice post 2022. Reforms to reduce the cost of advice have been proposed in the FSC’s Green Paper and soon to be released White Paper on Financial Advice.

www.fsc.org.au

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AUSTRALIA'S professional accounting bodies are grateful for the temporary ASIC fee relief for financial advisers announced recently by the Federal Government. However, they cannot understand why other parts of the accounting profession, which have also been hit by steep fee increases, have been ignored.

CPA Australia, Chartered Accountants Australia and New Zealand and the Institute of Public Accountants are urging the Feeral Government to extend this relief to all financial services participants, not just financial advisers.

This would provide widespread regulatory certainty while the profession awaits the review of the ASIC Industry Funding Model.

ASIC fees for financial advisers have increased by more than 230 percent over the past three years. Most financial advisers are sole traders or small businesses and cannot afford these rising costs. The total number of financial advisers now sits at just over 19,000, a loss of more than 2000 since November 2020.

Restoring ASIC fees to their 2018-19 level for the next two years comes as welcome relief for financial advisers. This decision will directly improve business viability and adviser retention rates. These are issues which also severely impact other financial services participants.

Registered company auditors, for example, have seen their registration fee more than quadruple in a short period of time. For 2020-21, the individual levy for a registered company auditor will rise to $1,127 from $208 in 2018-19. This comes at a time when auditor numbers are declining.

Insolvency practitioners are charged ASIC industry fees at a flat rate of $2,500 per year and then per 'notifiable event'. This structure makes it hard to precisely quantify ASIC fee increases. The professional accounting bodies are nonetheless aware that insolvency practitioners are finding rising fees debilitating and difficult to budget for.

The most recent announcements recognise the debilitating impact that ASIC industry fees are having on the profession and acknowledges the government’s role in controlling fee increases.

But the accounting professional bodies said it did not make sense to discriminate between participants by granting relief to some while ignoring others.

"We look forward to the review of the ASIC industry fee model in 2022 and will actively participate in the consultation process," read a statment from the professional bodies. "It will be important for this review to examine the impact of ASIC industry fees on all participants."

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