Energy tax attack

BELL Bay Aluminium general manager Ray Mostogl has backed a push by federal government backbenchers to scrap Renewable Energy Target payments contributed by the industry.

A group of 25 Coalition MPs have lobbied Environment Minister Greg Hunt and Industry Minister Ian McFarlane to allow aluminium producers to be fully exempt from the RET scheme.

Among those who wrote to the ministers were Bass MHR Andrew Nikolic and Lyons MHR Eric Hutchinson.

The RET is paid by electricity users and designed to ensure 20 per cent of Australia's electricity comes from renewable sources by 2020.

Mr Mostogl said while the Bell Bay smelter received a partial exemption from the target, it was still forced to pay about $8 million a year in RET costs.

The smelter uses about 25 per cent of Tasmania's electricity.

Mr Mostogl said the payments were placing strain on the business and undermining its long-term viability.

He said the company had already responded to plummeting commodity prices, a high Australian dollar and freight costs by slashing 20 per cent of its workforce over the past two years and had reduced costs by about $250 million.

``We're at a point where we're running very lean,'' Mr Mostogl said.  ``There are no other significant opportunities to reduce our costs.''

Mr Mostogl said the annual payments equated to the wages of about 100 employees.

``If we had to try and find that saving just in our employee base, that's nearly 100 people,'' Mr Mostogl said.

``We just wouldn't have the ability to run our business with 100 less people.''

Mr Nikolic said the RET was adding unnecessary pressure to aluminium smelter production costs.

``The RET is reducing the international competitiveness of Australian smelters at a time when smelter viability is finely balanced,'' Mr Nikolic said.

``One [interstate] smelter has already closed and another will close this year.''

However, Greens leader Christine Milne said exempting the biggest polluting industries from the RET would completely undermine the scheme.

``The point of the Renewable Energy Target is to see the whole economy move away from this unsustainable and unhealthy use of polluting fossil fuels,'' Ms Milne said.

``Aluminium companies are already heavily subsidised and have been profiting off the backs of the community for years. How much harder will the Abbott government let them lean?''

Premier Will Hodgman yesterday joined calls to exempt the Bell Bay smelter from the scheme, which was met with criticism from Tasmanian Greens Climate Change spokeswoman Cassy O'Connor.

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