Dick Honan, the owner of ethanol producer Manildra Group, has said that a cut to subsidies to his industry would lead to the closure of Manildra’s Bomaderry factory.
Last week The Australian Financial Review reported that the federal government’s “razor gang” was considering cutting ethanol subsidies, worth $108 million a year, with the majority of this going to Manildra.
A Bureau of Resources and Energy Economics report has questioned the value of the Ethanol Production Grant program, and according to The AFR’s assessment, suggested this was of “negligible economic, environmental or consumer benefit”.
The EPG program was introduced in 2002 under the John Howard Coalition government. It benefits Manildra – who make about seven tenths of the country’s ethanol – as well as the other two producers, United Petroleum and Wilmar Bioethanol.
Honan caused the BREE report “garbage”, and has said if the EPG was cut then the Bomaderry factory, which employs 300, would shut.
“It wouldn’t be viable for the renewable fuel industry in Australia if the subsidy was withdrawn,” he said, according to the Illawarra Mercury.
Gilmore Liberal MP Ann Sudmalis, whose Gilmore electorate takes in Bomaderry, said there was no evidence that cuts to the EPG were being considered.
‘‘I have talked to senior advisers and three different ministers and there is nothing before cabinet,” she said.
‘‘There is no cabinet agenda; we don’t even know who asked for the report.
‘‘It wasn’t a minister.’’
The federal government’s has displayed a firm opposition to industry assistance since being elected, refusing to meet requests for additional money to the automotive industry and food processor SPC Ardmona.