The Nationals in the Senate voted in support of the disallowance of the carbon sink tax regulations so as to render the legislation unworkable. The Nationals also supported expunging the effects of the upfront deduction via the Associated Tax Law Amendment Bill.

After extensive negotiations by The Nationals over a long period of time, no progress has been made in any substantial form to mitigate the loss of prime agricultural land to government-inspired carbon sink forests that produce nothing for their regional community. They are a static low-maintenance, low-labour asset with a next-to-nil income stream to their local community.

With the increase in carbon sink forests comes a reduction in the land that sustains the economy of local regional towns. This leads ultimately to the demise of the economic base of the regional town leaving behind those who possibly never owned farming land in any form but are stranded with a house in a town that no longer has a reason to exist. What is particularly galling is this is not because of global economics but because of domestic tax policy.

A four-year upfront tax deduction for the planting of a carbon sink forest will obviously mean a reduction of tax paid by the organisation that claims the deduction and in a deficit budget that will be picked up by the increase in the tax burden to others.

A tax deduction creates market differentiation so that people on one side of a fence get an upfront tax deduction for capital expenditure that people on the other side of the fence on exactly the same land cannot get unless they too change from producing food for Australian tables to producing forests that will sit there in perpetuity and feed no one. Australia cannot keep removing prime agricultural land without flow-on effects to food inflation. If you reduce the area that produces the food you reduce the quantity of food which pushes up prices in the supermarket and increases our reliance on imported food and those with the mechanisms of creating those imported food supply chains to the retail level.

Your local greengrocer may struggle being part of those supply chains. Australia is moving to a tenuous position where we are relying on others to feed us. In a country of 21.5 million people the size of Western Europe we are importing more and more of our food.

If carbon credits are going to be a real economy issue then why are we sponsoring them with a substantial tax break? Let the market decide on carbon sinks on terms that are equitable with the production of fruit, vegetables and meat.