Brickworks slams IMF carbon tax

Article by Adam Creighton courtesy of The Australian.

Brickworks CEO Lindsay Partridge: ‘It’s an issue that keeps us awake at night and I think a lot of the issues around climate change are a little bit overegged.’ Picture: Hollie Adams

The chief executive of ASX-listed Brickworks has blasted an International Monetary Fund call for a global carbon dioxide tax, arguing it would “destroy” the NSW-based brickmaking giant.

Lindsay Partridge, in the US to meet the company’s American employees for the first time since the pandemic, said IMF proposals for a $75-a-tonne global carbon tax, outlined by its managing director in Washington DC last week, would be “devastating”.

“It’s an issue that keeps us awake at night and I think a lot of the issues around climate change are a little bit overegged,” he said from Iowa on Tuesday.

IMF managing director Kristalina Georgieva, launching a research note last week, said a global carbon price of “around $75 a tonne by the end of the decade” would be needed to cut global emissions by 25-50 per cent and limit global warming to 1.5 to 2C.

“There has been progress, with over 60 national and subnational carbon pricing schemes around the world. But four-fifths of global emissions still remain unpriced and the global average emissions price is only $3 per tonne,” she said.

Speaking at the company’s manufacturing plant outside Des Moines, Mr Partridge also contrasted unfavourably Australian governments’ attitudes to business with those in the US, suggesting Australian businesses deserved “a gold medal just for surviving”.

“(Australian governments) are into the rule book to try and find out how they can stop you doing what you want to do, or try and delay you, whereas in America, representatives of the governor will come and see you and ask you how they can help,” he explained.

“We need to be prepared to relax the regulations so companies can function. It’s just too onerous at the moment, and very difficult for companies to invest in Australia,” he added.

Brickworks, which employs around 2000 staff globally, bought US brickmaker Glen-Gery in 2018 for $200m. It is an established high-end brick manufacturer with plants stretching from Sioux City in Iowa to the east coast.

“Americans are prepared to take risks and prepared to fail … whereas in Australia we’re very safety-conscious,” he added.
Mr Partridge said Australia’s strict international border closure, scheduled to extend until the middle of next year, and rolling lockdown regime were throttling business investment.

“It’s depressing because we’ve 800 people over here that you need to be with regularly to see how they’re going,” he said.

“We’ve got a situation in America where everything’s back to normal; they’re going to be flying around to Europe and travelling the world and Australians have to get permission from the government before you can even leave the country,” he said.

Mr Partridge said orders for bricks in the US showed Americans were moving from the east and west coasts to Texas in droves. He said a similar phenomenon was occurring in Australia where the company’s orders revealed movements from Victoria to Queensland and regional areas.

“There’s no doubt that people are going to move out of Victoria. I think they are tired of being locked up,” he added.
Brickworks’ US operations produce between 300 million and 400 million bricks a year, selling into a five billion brick domestic market, the largest in the world.

Mr Partridge said a better tax regime and gas prices about one third the level in Australia made the US a more favourable place to do business. “Australia is going to hit an energy crunch as far as gas is concerned over the coming years,” he added.

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