Tuesday, 19 November 2013
Clean Energy Legislation (Carbon Tax Repeal) Bill 2013, Ozone Protection and Synthetic Greenhouse Gas (Import Levy) (Transitional Provisions) Bill 2013, Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Amendment (Carbon Tax Repeal) Bill 2013, Ozone Protection and Synthetic Greenhouse Gas (Import Levy) Amendment (Carbon Tax Repeal) Bill 2013, True-up Shortfall Levy (Excise) (Carbon Tax Repeal) Bill 2013, True-up Shortfall Levy (General) (Carbon Tax Repeal) Bill 2013, Climate Change Authority (Abolition) Bill 2013, Customs Tariff Amendment (Carbon Tax Repeal) Bill 2013, Excise Tariff Amendment (Carbon Tax Repeal) Bill 2013, Clean Energy (Income Tax Rates and Other Amendments) Bill 2013, Clean Energy Finance Corporation (Abolition) Bill 2013; Second Reading
Climate change is real. We know it on this side, it is known around the world and it is known in my community. Unfortunately, it seems that it is not known on the other side of this House in government.
We are already seeing the effects. Even if we took action now we would still be leaving a negative legacy to the next generation and to our grandchildren. We are seeing the increase in extreme weather events and we are seeing very clear statements from the scientific community that we will see an increase in extreme weather events unless we take very real and drastic action. And yet we are standing in a chamber today with a government that either does not believe in climate change or does not care what legacy we leave to the next generation.
We on this side of the House do, and having decided that action needs to be taken the next step is to decide which action. Both sides of this House over many, many years decided that a market-based mechanism—a cap-and-trade scheme if you want to call it that, or an emissions trading scheme—was the best way to go. But now there is quite a division. On the government side we see a sham of a policy: Direct Action. And let's look at what that actually is.
Through this Direct Action policy there is no cap on the amount of pollution that can be produced by the country, but there is this odd approach where the government, with taxpayers' money, pays the polluters to stop polluting. In other words, there is a department somewhere that makes decisions between this big business or that big business—who gets the money to stop polluting and who does not. In many ways it interferes in the competitive process and gives one business an advantage over another in a way that we would never expect a Liberal Party to act. Then, of course, if a business continues to pollute beyond a certain level it is fined—it pays a fine. It is a bizarre policy that we have not really seen any detail on yet. The last time we saw any detail was back in 2010, and we have seen very little since then.
The method that is accepted around the world, and in Australia by the vast majority of economists, as the best method is a market-based mechanism, sometimes called a cap-and-trade scheme, sometimes called an emissions trading scheme and sometimes called a price on carbon. But this is what it does: it sets a cap on the amount of carbon pollution that we produce in this country and reduces it over time to a level where the balance of the amount of carbon pollution that is produced by mankind and that which the earth can absorb is restored so that we have a balance in our world just as we have had over thousands and thousands of years. And then within that cap permits are sold to businesses that will continue to pollute.
Because there is a price then on pollution, businesses will do what businesses will do: they will try and find a way to reduce their costs by not polluting. So what we have then across the economy is literally thousands of small businesses and many big ones trying to find ways to reduce the cost of pollution by finding ways not to pollute. And we already see the dramatic increase in investment in renewables in this country and around the world as industry tries to find ways to reduce the cost of producing pollution.
Those that can find other alternatives will find other alternatives, and we already see local councils capping their waste disposal sites, collecting the methane and selling that methane or converting it to more useful forms. We already see that. We have already seen other areas where this has been done: for example, when councils introduced tip fees to try and reduce the amount of land pollution, if you like. We now see companies that produce tyres as waste material reusing them to make carpet. You can actually see businesses trying to find ways not only not to pay tip fees by throwing material into the ground but to resell and make a profit through their waste.
We are already starting to see that in the scientific community in this country. We see a group of scientists in Perth, for example, who are working and having quite a bit of success in converting methane into hydrogen and into a physical form of carbon rather than hydrogen and carbon dioxide. Again, an area of endeavour which would produce significant business advantages for that particular company and for many other companies as well by reducing the very cost of doing business.
Those that cannot find other alternatives under a cap-and-trade scheme continue to pay. As the cap comes down, if they cannot find alternatives the price does actually go up. But as the price of polluting goes up, the incentive to find answers also goes up. So what you find again, as the cap shrinks, is more and more effort put in by the business community to find answers to pollution. It is a really quite elegant economic solution to a quite difficult problem.
On the other side we have the Direct Action policy, which not only does not set a cap but does not really provide any incentive for businesses around the country to find the answers that we need. I know that there are members on the other side that believe that technology will out. We have heard John Howard say that quite recently—that, over time, technology will solve the problems. Well, technology will solve the problems if there is a financial incentive to do so. Technology will be developed and businesses will find the answers through technology—and technology will be developed if there is a profit to be made on it and there is an economic advantage to doing so. The Direct Action Plan does not provide that incentive, which is why it is strange that we have a Liberal government supporting it. What it does is says to a big business that is polluting: 'We will give you taxpayers' money if you stop.' Where in that is the incentive for thousands of businesses to go out and find the answer? Where is the incentive in that for Australia to use its extraordinary talent at finding new answers and to put that talent to work to build a new economy?
We talk about the wealth of Australia being in the ground. In the new world of clean technology we have a wealth of other talent. We have wind, we have sun, we have waves, we have hot rocks. We have everything we need in this country to have a thriving renewable energy market. China in the last year spent more money on renewable energy than it did on coal fired energy in terms of its investment in new assets. That is an indication of the way the world is going. To be sitting in the chamber with a government that does not care whether Australia is in the new industry or not, that is happy to see Australia freeze itself in a carbon economy, is quite bizarre.
Australia has another talent. We have a talent for ideas. We are one of the great innovative nations of the world, perhaps because of our diversity, perhaps because of our background when we became a convict settlement—who knows. But, for whatever reason, we are incredibly creative nation. We invent above and beyond our weight; we produce scientific publications well above our weight in terms of our percentage of population. It is what we do well. Put the incentive there for business to find new answers and to invest in new technology, combine that with their talent for doing just that and the talent we have in renewables through our natural environment and you have a country that can blossom and prosper in the new world in a way we did in the coal based economy.
At the time that coal was the driver of wealth we had the fossil fuels in the ground. Now, as we move away from the carbon economy to clean technology we are also the country with the right assets in the right place. We have the right climate, the right environment and the right ability to come up with new answers. A cap-and-trade scheme causes those talents to come together to build a more prosperous nation. The Direct Action Plan not only does not do much for the economy, but it does not do anything for the environment either. So I would urge the government to rethink its position on this and recognise the extraordinary opportunities for Australia through real action on climate change, not the fig leaf of direct action.
Madam Speaker, before I begin my contribution in this debate I would like to say how delighted I am to see you in the chair with your election as Speaker. We are finally returning to dignity and decorum in this House as a result of your stewardship in the chair.
I am delighted to speak on the Clean Energy Legislation (Carbon Tax Repeal) Bill 2013 because on 7 September this year a marvellous thing happened in this country: we had a change of government. It was one of the more significant changes of government since the Second World War. It is a rare event for a total and emphatic change of government to happen in the history of Australia, but on 7 September the Australian people spoke. They decided that those that were then the government—the Labor Party, led by the Rudd-Gillard-Rudd government—were no longer fit to govern and they chose the coalition led by Tony Abbott. And one of the major commitments we gave in opposition was that we were going to withdraw this destroying, economy-wide tax, the carbon tax. That was our commitment and everyone knew it. We were elected on that basis and as a result I believe there is a mandate.
Let us just have a look at why we ended up in the position we were in, this shambolic state of a carbon tax in this country—and it is shambolic, and I will address that in a moment. First of all, the then Prime Minister, Kevin Rudd, said it was the greatest moral challenge of our time to implement a carbon tax. Unlike the accusation that comes from those on the other side, I am not a climate change denier. I believe that the climate is evolving and changing and I do believe that man has had an influence on this world and leaves his footprint. It is up to us all to do our best to make sure that we repair that footprint and minimise its effect. That can be done, and you can see that all over the place. The ozone layer, for example, was being depleted until we were able to get companies to take chlorofluorocarbons out of sprays and put in hydrocarbons. As a result, the ozone layer is closing up again. You can repair the damage that is done to our world.
As I said, Kevin Rudd, the then Prime Minister, trumpeted this issue as his cause celebre. He went to Copenhagen with great fanfare, and a massive amount of bureaucrats in tow, and was going to lead the world on climate change. However, when the Chinese in particular objected to his policy in this area and it was defeated, unfortunately for the Chinese the Mandarin-speaking Prime Minister at the time, in not too good a language, described them as rodent fornicators and took a great set against them. What happened after that? It became unpalatable and Julia Gillard, the member for Lalor, then said to the Prime Minister 'dump this tax'. So leading up to the 2010 election, the Labor Party dumped this tax. So much for something that was the greatest moral challenge of our time—they dumped the tax! Leading into the election on many occasions—and dare I bring them to our attention here—there was Wayne Swan, for example, saying:
We're not introducing a carbon tax, that's an hysterically inaccurate claim being made by the Opposition—
on Meet the Press on 15 August 2010. There was Kevin Rudd saying:
The Government has decided to terminate the carbon tax to help cost-of-living pressures for families and tosmall business.
And of course there was a classic one of Julia Gillard saying before the election:
There will be no carbon tax under the government that I lead.
And they repeated it and they repeated it ad infinitum. Then what happened? They ended up with a minority government in this place in 2010. They horse-traded with the devil in terms of the Greens and they ended up with a hung parliament. What did they do? They broke their promise to the Australian people and said they would then bring in a carbon tax, and they brought in a carbon tax with the help of the crossbenchers and the Greens.
The difference between us and them is that we are going to keep our promise, and we are going to repeal this economy wide job-destroying carbon tax. The difference between our real action and their policy is that real action actually does things on the ground and makes a difference. Just putting a tax on carbon is a revenue-raising measure. It does not stop the prolific use of carbon production. If it did, it would have to be so high that it would change the way we use our cars and the way we heat our homes. In Western Australia, for example, Western Power said quite clearly that the trigger point for them to change would be $90 a tonne. The fact that we have the highest carbon tax in the world is one thing, but it is not $90 a tonne—not yet. That is where it is heading if we allow this legislation to continue.
But a tax does not change the way people use their electricity and their energy. It does add a massive amount to their electricity bills and, as I said, it has a flow-on effect in the economy, in business and industry in terms of the way that it impacts on the cost of production—the truck that has to deliver the goods—and of course, dare I say, the coolant which I will refer to a little further on as well.
During this campaign in my electorate along came the then industry minister Simon Crean to talk to my local residents, citizens and businesses and to sell to them the glorious benefits of the carbon tax. Thank goodness I was there with a couple of like-minded people because those in the audience were aghast. There was the minister of the Crown trying to sell them the part about how good a carbon tax was going to be for them. Eventually he was soundly rejected and almost shown the door.
In my electorate the largest employer is Alcoa, and Alcoa has two large mines there and two production plants. Sixty per cent of Alcoa's world income comes from my electorate. They pointed out to the minister at the time, Simon Crean, that in 2012 Alcoa announced plans to review the viability of their Point Henry aluminium smelter in Victoria due to the carbon tax—though the large proportion of the alumina that eventually comes from bauxite comes from my electorate. They said that previously the Aluminium Council had calculated that the carbon tax would impose a cost on Australian aluminium producers of at least $60 a tonne.
Let us put this into context. Australia only has a handful of aluminium smelters and aluminium refining plants, yet China has a hundred. We were going to be put at a complete disadvantage to the Chinese, who are one of our competitors in this area, because they do not have a carbon tax. Indonesia has smelters, and they do not have a carbon tax. So we were going to be made uncompetitive with our near neighbours in terms of production of aluminium.
It is even better than that. Alcoa pointed out to the then Minister Crean that the Western Australian refineries of Alcoa had half their greenhouse gas footprint in the region. In fact in WA alone Alcoa had reduced its emissions per tonne of product by more than 20 per cent since 1990 levels without a carbon tax. So it was all about incentive, initiatives—not a tax.
I have potentially the largest gold mine in Australia in my electorate, the new Boddington gold mine. The mine manager, Tony Esplin, in April last year pointed out the crippling effects that Labor's carbon tax would have on his mining industry given that the Greens were wanting to put a tax on gold—and remember who was in bed with the Greens, the Labor Party. So you would have had the double whammy of a carbon tax and mining tax if the Greens had got their way. Thank goodness the election happened the way it did on 7 September this year.
Within my electorate also at a local level, councils were very concerned. Some of them were contemplating not leaving their streetlights on at night because of the extra cost of the generation of electricity. So there was the issue of who was going to be paying the extra costs—was it going to be the ratepayers? The Labor Party certainly did not have a plan for small businesses in the carbon tax compensation.
So the Labor Party comes into this place and opposes this bill. Unlike us when they took government in 2007 and Work Choices was the mandate that they believed they had, we walked away from Work Choices. But no, not those on the opposite side. They have not learned the lesson that they are now the opposition. They will come to grips with it eventually. It is a very depressing time to be on the other side. But the longer they sit there, eventually they will realise that opposing this is opposing the will of the people in the electorate. It is opposing the people who want to pay less for their electricity. It affects people's lifestyles in terms of the costs of doing business. In a very good article today by Nick Cater, the author of The Lucky Culture and the Rise of the Australian Ruling Class, he points out that George Wright said:
'I would say we are in the right side of history,' he continued. 'We are in the right side of science, we are in the right side of economics and on the right side of preserving for the long term our living standards.'
He goes on to say:
The important thing to note is that the party is on the wrong side of the electorate …
They have not quite got it yet; they are on the wrong side of the electorate, and obviously that means they are on the wrong side of parliament. He then goes on to say:
Having failed to make a persuasive case to put a price on carbon from government at two elections, Labor will now try to make the case from opposition and see how things go.
What a joke! They are going to try to influence this legislation from that side. Unfortunately, they do not win anymore. It is not a hung parliament. He continues:
Averting the coming climate catastrophe is, of course, a laudable ambition but Labor should surely have registered by now that tree hugging is a middle-class luxury the workers' party can ill afford.
I really want you to hear what the article says next. Maybe it is relevant because it quotes a former member. The article states:
It is heresy to talk like that these days—
that is in relation to Tasmania and the Wilderness Society that Labor fought along with the Greens and the rest of the bib-and-brace and hairy legged comrades in Tasmania. The article continues:
It is heresy to talk like that these days, but at the time, wise heads could see the insanity of it all. "A Labor government knowingly put South Tasmanian blue-collar workers—living in an area which already had unemployment rates between 20 and 24 per cent—out of work to appease bourgeois Left and middle-class trendoids in the gentrified suburbs of Sydney and Melbourne," wrote former Labor finance minister Peter Walsh.
That is the member for Brand's father-in-law. So they still have not learnt. Their elder statesmen are still trying to counsel them. We have these examples of why they might want to learn and not oppose our removal of this crippling tax in the Australian economy. We said we were going to do it before the election and we are going to do it.
I will conclude by saying that not only is my electorate determined that we do this and carry out our promise but the Business Council of Australia also is. There is an article in the Financial Review today by Jennifer Westacott. I cannot read it all so I might seek leave to table it at the end of my speech. She states amongst other things:
Australia's carbon tax is one of the highest in the world and is making our important industries less competitive every day it stays in place.
Every day it stays in place we are less competitive. I have pointed out the smelting comparisons between our near Asian neighbours and us. The article continues:
This is especially so for those industries which have to compete globally against companies that pay no carbon price or a much lower one.
In my final few moments I want to make sure the parliament understands what she says next. She wrote:
Parliament can finally put politics to one side on this critical economic issue and take the first step towards that competitive environment and policy stability by removing the carbon tax. The second step is to focus debate on ensuring direct action is workable and meets the important principles for reducing emissions while maintaining a strong economy.
What we are seeking is an approach to reducing carbon emissions that works for business and the economy as well as the environment, and which is developed in the context of a comprehensive energy policy that ensures secure and reliable energy and preserves our competitive advantages.
Now what is the matter with that? The Labor Party do not want that to happen. They want us to still pay one of the highest carbon taxes in the world and disadvantage not only our businesses and jobs but people trying to heat or air-condition their homes. They should get out of the way and let this government get on to the business it was elected to do.
Madam Speaker, this is the first opportunity I have had to address the parliament whilst you have been in the chair. Congratulations. It demonstrates that people of merit actually do get recognised occasionally, so well done.
I might not always agree with you—I probably will not; I dare say we will have our differences, but nevertheless. The member for Canning just gave an interesting oration. I am not quite sure what he was trying to tell us, apart from the fact that it is clear that he does not believe in climate change. Like many of the sceptics in the government, he has no appetite for understanding the reality of climate change or what has been put before the world community by the scientists who work in this space.
From this legislation and a variety of other legislation to be put through this place we are learning a lot about the philosophy and values that motivate this government. That is something I think many Australians are going to be very concerned about. It is very clear now that they do not care about evidence based policy and that they are the ultimate political opportunists. We all recall the way in which the former Prime Minister and a former Leader of the Opposition were advocates of a price on carbon. John Howard and Malcolm Turnbull supported an emissions-trading scheme. Of course the Prime Minister was the then Leader of the Opposition because he won by one vote a ballot in his party room about an emissions-trading scheme. So half of them but one then in opposition supported the view that we needed an emissions-trading scheme. For whatever reason, 49 per cent or thereabouts of that caucus now in government has flipped. They no longer believe in the reality of climate change.
We had the former Prime Minister demonstrating very clearly how much revisionism has been going on within the Liberal Party room and the coalition. He is saying whatever he can to support his protege, his little mate, the current Prime Minister, because it appears he is no longer a believer in accepting the science. This month we heard the former Prime Minister John Howard tell a London audience that those of us who accept that climate change is real are a bunch of religious zealots, and that he will trust his instincts rather than the overwhelming evidence of 97 per cent of the world's climate scientists. What does that sound like? What does that remind you of? It reminds me very much of this quote by the Prime Minister in February 2010:
The climate change argument is absolute crap, however the politics are tough for us because 80 per cent of people believe climate change is a real and present danger.
I have news for the Prime Minister: nothing has changed and, unfortunately for him, climate change is not crap. We all know it is a reality. We on this side of the House accept the reality and we are proposing a set of policies that are aimed at bringing down our emissions. But what we are seeing from the government is nothing like an appropriate policy to address the issue of climate change and carbon emissions. There is a reason 60,000 people demonstrated in rallies around the country last weekend for stronger action on climate change. Those people believe in climate change, just as 97 per cent of published climate scientists do. Climate change is real and it is driven by man-made greenhouse gas emissions.
We do need effective action on climate change, and the best effective action is through a market-based mechanism such as an emissions trading scheme, which is the centrepiece of Labor's policy. I had one of my colleagues saying in the caucus this morning—I will not say who it was, but he got up and said, 'I'm from the left, but I really believe in markets'. In this case we all do and that is what is important. We have taken the responsible position to see that a market-based mechanism is the best way to address the issue of climate change and emissions.
Let me refer specifically to my own electorate. For those who do not know, Lingiari, the electorate that I am so honoured to represent, comprises all but 330 square kilometres of the Northern Territory. It is 1.34 million kilometres in area, and it includes the Indian Ocean territories of Christmas and Cocos Islands. It covers 5,000 kilometres of mainland coastline and a further 2,000 kilometres of coastline encompassing offshore islands. In 2011 I said in a speech in this place that the Cocos Islands in my electorate—I note that the minister responsible for the territories, the member for Mayo, is at the table—have coral atolls with an altitude of only three metres at their highest point. Sea level rise is a real threat due to global warming.
I was on the Cocos Islands a fortnight or so ago and things have changed on the Cocos Islands. They have changed dramatically; really terrific weather events have had an impact. At one point on the island, very close to the southern end of the runway, water was coming in off the ocean that was not hitting any barriers, so effectively the land is below sea level. On other parts of the island there are now real issues with erosion caused by inundation from the sea. This is real. It is not something which has been cooked up; this is real and it is happening today. I would encourage the minister to visit the Cocos Islands, and I hope he is of a mind to soon as it is a very lovely place with very wonderful people, because if there is one place in Australia that is exposed to climate change and its impacts on our community more than any other, it is the Cocos Islands.
We know, clearly, that even a small rise in sea levels will see those islands disappear. It is not an exaggeration, it is an absolute reality. The projections from the CSIRO and the Bureau of Meteorology show that if we do not reduce our carbon pollution the Northern Territory's coastline regions will experience a nearly 30-fold increase in the number of 35-plus degree days annually by 2070. I live in Alice Springs: it is getting hotter and drier; the Top End is getting warmer and wetter. We know it to be the case. The scientists are telling us it is the case. The meteorologists are telling us it is the case. The scientists are telling us why it is the case—because of climate change. And yet, for whatever reason, the sceptics on the other side of the chamber, including those who were strong advocates of a price on carbon when the Howard government was in, are now adopting the view that the best thing we can do is put our head in the sand. Well it is not the best thing they can do and it is a disservice to Australia should they do that.
In the context of my own electorate, we know that with climate change comes increased risk of health issues, particularly for poorer Australians. We will see higher minimum night-time temperatures and heatwaves, and they can impact on a range of conditions, including heart disease. Maes, De Meyer and others report on a correlation between temperature rises and violent suicide. Conditions such as hay fever and asthma are similarly exacerbated. Other factors such as humidity, the rate of change of temperature and high temperatures all night all contribute to heat stress.
Studies have suggested a correlation between climatic change and the increased risk of infectious diseases such as cholera, salmonella, giardia, diarrhoea and hepatitis A. It also threatens to increase the geographic range of dengue fever in some places. Melioidosis is known to be associated with wet weather. More storms and flooding, even if rainfall overall is reduced, could increase rates of melioidosis. This has previously been seen as a tropical disease, but it is now being reported in Central Australia in exceptionally wet seasons. Madam Speaker, even a small rise in the sea level—Mr Deputy Speaker, I beg your pardon; Madam Speaker is not here.
I did notice you arrive, and congratulations on your elevation to that lofty position. I am hoping I am not going to have many disagreements with you, but nevertheless there may be some.
We know what the impacts of climate change are. The world community knows what the impacts of climate change are. Yet the opposition, as I said, have chosen to ignore it and they are now asking the Australian community to accept a plan for climate change which they themselves cannot even explain, a policy initiative which is unexplainable. They cannot tell us how it is going to work.
Labor provided unprecedented support for renewable energy, through the Renewable Energy Target, the Clean Energy Finance Corporation and the Australian Renewable Energy Agency, among other things. Whilst we were in government, with the policies we had in place, Australia's wind capacity trebled and more than one million households had solar panels installed, up from fewer than 7,500 under the previous Howard government. Employment in the renewable energy industry more than doubled, to over 24,000 people. During the first year of the carbon price, around 150,000 jobs were created, the economy continued to grow at 2.5 per cent and inflation remained low. Pollution in the National Electricity Market decreased by seven per cent. Renewable power generation as a share of the National Electricity Market increased by 25 per cent.
Australians know what a huge challenge climate change is for our country. Summers are hotter; droughts are longer; extreme weather events are now more commonplace. Labor has said that we will support the repeal of the carbon tax, but we cannot do nothing. We have proposed a middle ground that can be reached to ensure that we act on carbon pollution. Labor is willing to work to ensure Australia is not left doing nothing. Labor's amendments will put a legal cap on carbon pollution; retain the Climate Change Authority, to ensure robust, independent analysis and advice; and stop the cuts to Australia's renewable energy research and development. As it stands, the Prime Minister's legislation scraps the cap and pays big polluters to pollute. That will amount to nothing. Faced with a choice between doing something to address pollution and doing nothing, Labor will act. Labor's amendments are a smart and sensible middle ground to ensure we act on carbon pollution and do not gamble the future.
On the other hand, the coalition's approach will—it is argued, from studies done by the Monash University Centre of Policy Studies—see pollution increase by eight to 10 per cent above 2000 levels by 2020; reduce pollution by nearly one-third less than Labor's policy would deliver; require significant additional investment of between $4 billion and $15 billion to achieve the 2020 target of at least a five per cent reduction on 2000 levels; see costs and pollution both increase over time—and even with spending increasing to around $88 billion from 2014 to 2050, pollution will still increase by about 45 per cent over this period; and subsidise the pollution of businesses who do not make changes, with these public subsidies calculated at around $50 billion to 2020.
We have a choice in this place to act responsibly in the best interests of the Australian community. The Australian community demands nothing less of us. I say to the government: think very, very carefully about where you are heading and where you are taking us, because it will not be me who suffers; it will be my children, my grandchildren and my great-grandchildren. They are the ones who will suffer as a direct consequence of the policies being advocated through these proposals from the government. (Time expired)
I rise to speak on the Clean Energy Legislation (Carbon Tax Repeal) Bill 2013 and related bills. Like a lot of Australia, my electorate of Calare has farmers of wheat, cattle and sheep. People there do various types of horticulture very well. There is cold storage. Calare also has power generation, timber growing and processing, and dairy farming. We have any number of small businesses—some 13,000, I think—including hairdressers, coffee shops, restaurants and grain processors. Every one of these enterprises, particularly the small businesses, has suffered because of the carbon tax. I just heard the member for Lingiari say that, faced with the choice of doing nothing or doing something, Labor would always do something. In this case, Labor decided to make a hard job harder, and I mean seriously harder. A hairdresser or a coffee shop with a $10,000 electricity bill, which is maybe around what it is, had to pay another $1,000 a year because Labor wanted to lead the world. It wanted to lead the world, when the world was not willing to follow. It wanted to lead the world to make its own country less competitive, both domestically against imports and overseas against competitors. We are talking not just an odd bob or two; we are talking very serious reality, at a time when Australian manufacturing and food processing is struggling like never before—partly, it is true, not just because of the carbon tax but because of everything the previous government did over the last six years to make the costs of doing business more expensive. But the most obvious, the most drastic and the most immediate and unavoidable was without doubt the carbon tax.
I can quote endlessly on the costs of it. I will touch on a couple. I know two people in my electorate in the town of Manildra who are canola processes. The thing that the previous Rudd-Gillard governments never understood is that a small percentage of turnover can be a huge percentage of profit. The carbon tax wasn't even based on profit; it was based on turnover, it was based on an emissions. It had no relevance to whether you were making a quid or not, and if you were not making a quid you were in serious trouble. If you are not making a quid, every job you support, your town and your whole system is in chaos. That is what they created without the knowledge or the understanding of what they were doing—except their Prime Minister could stand on the world stage and say, 'We are leaders.' Leaders of what? Not leaders of anything successful, not leaders of anything that was measurable, not leaders of anything. We all believe in dealing with pollution. I fail to see we do not call it 'pollution'; it is always 'carbon emissions', not 'pollution'. I believe totally in being sensible about pollution. I have never been, nor am I ever likely to be, called a greenie. However, I have bores on my country—
Government members interjecting—
No, I won't ever be called a greenie. But I have gone to the expense in couple of cases of replacing diesel powered generation to lift that water to solar. Because it is good for the environment? Well, yes, that is in the back of my mind, but mainly because it is more efficient. It is more expensive to put in but once you put it in it works well. That is the type of thing that we as a government will encourage. We will encourage business, farmers, manufacturers to do the right thing rather than belt them over the head and say, 'We'll send you broke if you don't do it; we'll probably send you broke anyway!'
The member for Lingiari also spoke about the choices of parliament. I think what he neglected to mention is that the Australian voter, the Australian nation has already made a choice and that choice is to get rid of the carbon tax. Not simply replace it. The previous Prime Minister said, 'Oh, we are getting rid of it.' He neglected to tell the truth, the whole truth, which is that they were not getting rid of it; they were still going to increase the cost on carbon up to some $30-odd in the very near future.
I know with some people it is a Holy Grail to talk about those things which you cannot hold, to talk about those things which they do not feel particularly affected by. It would seem I am still on the wrong side of the House, but I guess that is an accident of numbers. The people on the other side of the House seem very rarely to be actually dealing with reality in terms of productivity because of what they do. By and large they seem to be staffers of previous ministers—highly educated university students in industrial law or some such, who are then foisted on unions to tell the union what is good them. It was a government that purported to be a socialist government looking after the welfare of workers and others which foisted the carbon tax on people. And it is not just business, small business or otherwise, affected by this; it is everyday people. It is people in their homes, their families—it is everybody. When your country is not making money then it is very hard for those working in it to make money and it is very hard for them to pay their bills. I find it incredible that the member for Lingiari is still talking about, 'We'd rather do something than nothing,' simply to say that we are doing something.
It is very obvious that Australia has made a decision. It is very obvious that our government will follow through on our commitment to stand by that decision and to get rid of a tax which from day one was designed, amongst other things, to redistribute money. I always felt that one of the greatest comments that the previous Prime Minister of Great Britain once said when she said, 'Socialism works quite well until such time as you run out of other people's money to spend.' I think that is, without doubt, the basic difference between the two sides of this House—one wants to redistribute what already exists. Whereas we, on the other hand, want a much bigger pie for everybody to share in. The carbon tax is guaranteed to reduce the pie and certainly to redistribute what it produces.
I could talk about what the previous two prime ministers said they would do, didn't do and one thing and another, but I think that is pretty much consigned to history. They said they would do one thing and did another. I guess that was the story of the last six years. But when the carbon tax is gone it is quite obvious that the average household in Australia will be considerably better off and the cost of living on households will be eased.
I remember the previous government talking vigorously about how they were going to make reparations to householders for the extra costs of the carbon tax—
You were better off when you were the Attorney-General rather than the guy who is pretending to be! 'Assistance', yes, well, they certainly needed it. They talked about assistance for households—fine, I am happy to do that. When you take with one hand you certainly need to give something back with the other. They made it possible for the bigger businesses to get government money to change the way they did things.
I said at the start that there are something like 13,000 small businesses in the seat of Calare. There are hundreds of thousands of Australians but not one cent goes to the biggest employer in Australia—small business—who, without exception, unless they did not use electricity or did not use gas or did not use trains or transport, did not receive one red cent. They were hurt deliberately, although it was probably ignorance—even the shadow Attorney-General would probably agree that there was some ignorance involved here because, when it comes to businesses, there is an awful lot of ignorance on that side.
Small businesses were hurt more than anyone with absolutely no outlet to improve what they did, without any reparations for the damage done to them. We are very proud of what we do in Calare. I always say that we are that part of Australia where we do not talk about what we do, where we do not shuffle paper, do not have huge law firms like the ones I am sure the shadow Attorney-General is involved with. We are not involved in those things that actually do not produce money. In Calare we grow things; we mine things; we make things and generate power.
Regional Australia has been and is hit far worse than any other part of Australia. Why? I will give one good reason: on the coast of Australia temperatures do not vary a great deal. Inland, they certainly do. In Calare, where it can get damn cold, they vary a lot. You can be in the middle of a 40-degree heatwave in the summer and it can be minus five in the winter, so we use a lot more air conditioning. We use a lot more heating than they do in Melbourne or Sydney or Brisbane.
Therefore, it costs us one heck of a lot more to pay for the carbon tax, which was designed by a government that thought the GFC was the greatest thing since sliced bread. Why is that? I do not suppose they actually wanted the world to be in chaos but what did it do? It created an excuse to borrow billions—hundreds of millions—of dollars to use on social programs.
I can imagine being in the Labor Party cabinet. 'Hey, boys! Did you realise the world is in so much chaos that we can borrow money and spend it on all those things we always wanted to do, which we've always pretended to be responsible about, but now we don't have to be.' And by God, they were not. Then came the point: 'We've got to be the leaders in cutting world pollution or carbon emissions so let's put in one of those things that the ex-Prime Minister of Great Britain said we were going to do anyway—let's make Margaret Thatcher's words come true. Yep, we are a socialist government. It worked quite well and we've run out of money so we will bring in a carbon tax—that will bring in a bit more—and at the same time we'll be world leaders in doing nothing.' Because it has done nothing.
I guess a lot of what I have said applies to most of Australia but whether it is western New South Wales or Queensland or wherever it might be, regional Australia has borne the brunt of this. Regional Australians are the ones who fire up the power stations. We are the ones who produce things like canola. All grain processing has become as dear as hell because it does use a lot of energy. However, it is very hard to have bread or anything else without it. It is a fact of life. So we will keep doing what we do but we are going to do it with a government that is going to kick this act right out of the football field.
I rise to speak on the Clean Energy Legislation (Carbon Tax Repeal) Bill 2013 and related bills. The most fundamental duty of the government, above all others, is to act in the national interest. From the time that he knifed the member for Wentworth for the leadership of the Liberal Party some four years ago, the current Prime Minister has worked against the national interest on the vital issue of climate change. He has taken the Liberal Party and The Nationals from their position of support for the pricing of carbon.
I know members opposite do not like to remember this but their position at the 2007 election was unequivocally, clearly in support of putting a price on carbon. Not only did they take that policy to the 2007 election but also they took that policy through 2008 and 2009. The member for Fraser yesterday in his speech to the House very eloquently referred to and reminded us all of the speeches that were given so forcefully by so many members of the Liberal Party and so many members of the National Party, in which they professed their support for an emissions trading scheme for our country and for the pricing of carbon.
We know that the pricing of carbon is the most effective, least cost way of reducing carbon pollution. We also know why we need to act. Again, the government is hiding behind a smoke screen where they profess support for bringing down Australia's carbon pollution but, as have so many of my colleagues on this side of the House, I want to remind everyone here why carbon pollution needs to be reduced from Australia and worldwide. Carbon pollution is affecting Australia now and carbon pollution is going to affect Australia in worse ways in the future.
We have seen the increased frequency of natural disasters, the increased frequency of fires, floods and more intense weather events. We have seen drought and extreme weather impacting on our farmers and driving up costs. We have seen the kinds of impacts that climate change is already bringing and these impacts will only get worse. Carbon pollution is affecting the whole world. Right now, rising sea levels are threatening island nations. We were reminded at the Commonwealth Heads of Government Meeting held last week and last weekend in Sri Lanka when we heard the pleas for assistance, ignored by our Prime Minister, from island nations. We have seen natural disasters right across the world being supercharged by climate change causing death and destruction on a massive scale, often in nations that are the least able to cope with it. There is a reason that a group has been formed in the United Nations Framework Convention on Climate Change of the least developed nations of the world because they are likely to be among the countries that are worst affected and of course they are likely to be among the countries least able to afford to deal with it.
Just to remind honourable members of something that the Pentagon, not exactly a left-wing environmental organisation, have said about the threat of climate change. They have not just started saying it recently; the Pentagon have been writing about the threat posed by climate change now for many years. The Pentagon have identified climate change as one of the greatest global security challenges of the coming decades. Often the devastating impacts of climate change that we are already experiencing are only going to get worse. If we do not act, these effects of dangerous climate change are going to get worse, a lot worse, and we are going to experience an increased frequency of more intense weather events.
We should not have to put up with the false debate that was provoked by our so-called Minister for the Environment, who wanted to pretend that people who had drawn attention to the recent intense and catastrophic bushfires in the Blue Mountains were saying that that event was definitely the result of dangerous climate change. Nobody said anything of the kind. He was, as the Liberal Party so favours as its means of argument, using straw-man argumentation, pretending that those who are opposed to you are putting forward an argument which they are not actually making. All that anyone was saying about those catastrophic fires in the Blue Mountains was that they are an example of the kind of more intense, extreme and disastrous event that we can expect if dangerous climate change is not brought into check.
If you accept the science, if you accept any science, you accept all of science. You cannot pick and choose science like items on a menu. You cannot say, 'I accept the principles of physics' and then say, 'But I think the science of chemistry is crap.' You cannot say that you accept the biological sciences that have provided the wondrous benefits of modern medicine from antibiotics to cataract surgery but that you do not accept the science evolution or the science of genetics. Science is a framework for understanding the world and it is one of the greatest single achievements of our civilisation, perhaps the greatest driver of our prosperity as a modern civilisation and we should never forget it.
We do not challenge the science of the electric light, even though we do not necessarily understand it. We do not challenge the science of the internal combustion engine when we drive our cars. There is no more reason for policymakers, ministers or anyone in Australia to be now challenging the science of climate change, as people, unfortunately, are being encouraged to do—led by our current Prime Minister. The science of climate change is clear. The consensus across the world of thousands and thousands of eminent and eminently qualified scientists is undeniable. Climate change is happening right now. It is being driven by emissions that humans are producing. If we do not act decisively to reduce those emissions, the consequence for our nation will be dire in the short term and very likely catastrophic in the longer term.
We have to act on risk assessment. We do not wait in setting government policy or on deciding a course of action for our nation for absolute certainty in every policy area. Instead, we make risk assessments. We assess the likelihood of particular future events. We assess the gravity or seriousness of those likely future events. If we are looking at a high probability of an event occurring and it is a damaging or disastrous event of great seriousness then we act. We do not wait for certainty before acting. We act on risk assessments. The national interest demands that our nation act and act decisively to respond to this threat. This is the true test of leadership and our current Prime Minister is failing it and failing it dismally.
We have a carefully crafted scheme of legislation with multiple complementary policies. It is a scheme of legislation that puts a price on carbon. It has a fixed price period for its first three years. It puts a cap on our national carbon pollution. We have in this place adopted the most effective and least-cost means of reducing carbon pollution. It is not just the Liberal Party and the National Party who used to agree with this; it is every single reputable economic organisation in the world, from the OECD to the World Bank to the International Monetary Fund to the International Energy Agency. All of them absolutely endorse putting a price on carbon as the least cost, most effective means of bringing down carbon pollution.
What is the rest of the world doing? I have heard the lines from those opposite in their script, provided to them by the Prime Minister, in which there is assertion after assertion that the rest of the world is not acting and, like so much else of what our Prime Minister has inflicted on Australia since he became the leader of the Liberal Party at the end of 2009, it is a false claim. All of our important allies and trading partners are acting and we could point to the fact that Europe has acted and not just recently either. Europe acted years and years ago in adopting an emissions trading scheme that applies across western Europe. The United Kingdom has reached a bipartisan consensus. We have a conservative government in the United Kingdom but there remains a bipartisan consensus in that country. And what a pity it is that the conservative government of this country has not reached the same position as its conservative political allies in the United Kingdom. What a pity too that it has chosen not to follow the lead given by the present conservative government of New Zealand, which, on coming to power, adopted the legislative emissions trading scheme that had been put there by the previous Labour government. There continues to this day a bipartisan agreement in New Zealand, as in the United Kingdom, on the usefulness of pricing carbon.
California, in a scheme legislated by a government led by Governor Arnold Schwarzenegger, a Republican, now has in a government led by Governor Brown, a Democratic governor, introduced from 1 January 2013 an emissions trading scheme which is remarkably similar in most of its features to the scheme that this government is trying to wreck in Australia. The scheme in California covers about 60 per cent of the economy. It covers similar sectors and, like the scheme here which has already worked since it came in on 1 July 2012 to bring down Australia's carbon pollution, the Californians are confident in their bipartisan agreement because the Republicans in California, mercifully, are different to the Tea Party Republicans that have been trying to take over the government of the United States. There in California they hope that it will work.
China, our largest trading partner, has welcomed assistance from Australia in the design of emissions trading schemes and is now this year introducing prices on carbon in seven of its provinces with the assistance, until this government came to power, of Australian experts. But shamefully, while our partners are acting around the world, while the rest of the world understands that putting a price on carbon is the right thing to do, what is the new government of this Prime Minister doing about the challenge of climate change? I wish I could say that the Abbott government wants to do nothing. That would be bad enough. But in fact that would be too generous an assessment.
Before the government gets to its plan of doing nothing with its smokescreen of a fund, which it has not explained what it is going to do with, it is going to first destroy the successful and economically responsible policies that Labor has introduced. One of the first acts of the Rudd Labor government in 2007 was to ratify the Kyoto protocol. In fear of science, in fear of an informed public—you could hardly want a better comparison—one of the first acts of this government of wreckers, was to abolish the Climate Change Commission. The CSIRO, while I think of it, is also a victim of this government's rejection of science with massive cuts that threaten to decimate scientific research at Australia's premier scientific institution.
The government are now seeking, in the bills that are before this House, to destroy the Climate Change Authority. They are seeking to abolish the Clean Energy Finance Corporation with an act of what can only be described as extraordinary ideological hypocrisy and economic thuggery. How soon will it be before they attack the renewable energy target?
What Mr Abbott is intent on doing here is taking our nation backwards. Once he has demolished the frameworks for clean energy and for long-term economic prosperity—because this is the direction the world needs to move in—that Labor has put in place, with all the upheaval and the uncertainty for business, about which this government cares not, Mr Abbott is going to get hard to work doing nothing, nothing but spending billions of taxpayers' dollars per smokescreen, billions of dollars on a policy farce hidden behind a euphemistic title, now so typical of the coalition, called 'direct action', which in fact should be called 'direct inaction'. And what is the content of that policy? We do not know because they have abandoned the policy that they published in 2010 in favour of a green paper process, and we do not know what the content of their policy is.
In spite of the opposition's continuous spin, as we just heard, and efforts to distract and divert the debate, the bill before the House today is not a debate about climate change. The real question before the House today is: what is the best response to managing the continuous change in climate? Instead of practical action, the Labor Party took the position that a new tax was the best response—in fact an economy-wide tax and the highest carbon tax in the world, not just any tax. Interestingly though, Labor chose not to tell the Australian people this at either the 2010 or the 2013 elections.
The 2010 'there will be no carbon tax' line has gone down in political history as one of the most infamous duplicities this nation has ever witnessed. There was, in quick time, a carbon tax imposed. In the 2013 election, Labor attempted to mislead Australians yet again by claiming they had terminated the carbon tax. Well, nothing could be further from the truth. The Labor Party had already lost the trust of the Australian community and at the election in 2013 actually was seen for what it was: a desperate attempt to once again hoodwink the community into forgetting their 2010 duplicity. But people were not fooled for a second time. In spite of this, a mere few weeks after the election, here in this House, Labor is again supporting its carbon tax. What rank hypocrisy? This tax needs to go. The people, the businesses, the industries in my electorate are all paying Labor's carbon tax in one form or another. It is a tax which has had a disproportionate impact in rural and regional areas on everybody from families to local councils, hospitals, schools, the countless hard-working small businesses, those in primary production, our farmers, our miners, the abattoirs and food manufacturers, those in refrigerated transport, anyone in the aluminate refinery sector, the power generators in my electorate and those producing silicon. It has added to the cost of building houses and roads. It has just been a cascading, compounding tax.
Businesses in my electorate that did not directly have to pay the carbon tax found that there was an additional cost on their businesses of hundreds of thousands of dollars due to carbon tax compounding. Labor want to not only perpetuate this tax but increase it year upon year. It is like Sarah Lee—layer upon layer. Even worse, Labor are determined to further increase the $9 billion first-year cost of their carbon tax for rural and regional areas like my electorate in the south-west of Western Australia, because their carbon tax will be applied directly to the trucking and transport industry from 1 July next year. Anyone who has even a modicum of understanding about Australia's size and distances knows that this will add a unilateral additional cost right across the nation but even more so in rural and regional areas. Labor's carbon tax has to go, and that is what the electors of Forrest voted for.
Alinta Energy has confirmed that the cost to energy providers will be reduced once Labor's carbon tax goes, but the Labor Party is opposed to making electricity cheaper for families, individuals, businesses and industries. The tax should go not only because of the direct cost for families, businesses, industries and the whole Australian economy but also because Labor's own modelling shows that domestic emissions continue to rise under the carbon tax. So not only is the carbon estimated to accrue $16 billion over two years; it is ineffective in its purpose of reducing emissions. In fact, it is just another costly, useless Labor tax—one that makes Australian businesses and industry less competitive.
We know that Australia contributes less than one per cent of global CO2emissions. We also know that China is the largest emitter—I read recently that it could be around 23 per cent—followed by the US, India and Russia. We know that the top 10 emitters produce two-thirds of the world's emissions, and this number is expected to rise. As these economies grow rapidly, and they are, their total emissions will continue to rise at a faster rate than the rest of the world—which means their emissions will continue to dwarf those of the rest of the world, including Australia's. Most importantly, I ask: in practical terms, which of the major emitters are going to have reduced their total emissions by 2050? The answer, I suspect, is very few. While some countries may try to hide behind lower emissions intensity, this simply ignores the fact that growth in their economies will result in growth in emissions.
Big emitters will become bigger emitters, despite the misleading rhetoric we heard recently from the Greens and Labor, who try to pretend otherwise. That is the practicality. You have to be a realist. This means that, no matter what the outcome of this debate in this Parliament of Australia, global emissions will rise, which reinforces the need for Australia to have what we are suggesting: a practical response that does not damage our economy or our competitive advantage. We know that Australia is one of the only countries to meet its Kyoto targets. Business and industry have worked hard to reduce their emissions and will continue to do so. Indeed, under our coalition government, we will retain the five per cent reduction target from 2000 levels by 2020. We are committed to reducing our emissions but, given the time wasted by Labor and its flawed carbon tax policy, the challenge is certainly significant. However, Australia will be one of very few nations that actually achieve a reduction.
Global emissions are predicted to rise, predominantly due to increases in the emissions of the top10 emitters. This is why I believe that adaptation needs to be a much greater part in the debate and should have equal consideration with climate change mitigation—a practical approach, as we are suggesting. The failure of the Copenhagen round of climate debates was the greatest example of global failure on the climate issue, but why? It is because the bigger emitters refused to make cuts to their total emissions. There is no sign that this is any different now.
The coalition government is determined in its commitment to reducing Australia's greenhouse gas emissions. The government is also committed to funding and supporting an area that I think is extremely important, and that is adaptation. This is evidenced by the election commitment from the minister to continue the work of the climate change adaptation research centre at Griffith University. I congratulate the minister for this decision. I look forward to greater engagement with the natural resource management system in what could well be a nationally co-ordinated program, and it works down to the local level through direct action. These are things that actually happen and work on the ground. This is not talk, not paper shuffling but things that work on the ground. I also believe that a more practical adaptation mechanism will be a nationally co-ordinated approach to managing some of the issues we see with feral pests and weeds. I am talking about practical actions on the ground that you can see that actually work. We need to future-proof our ecosystems to ensure they not only survive but thrive in what will be a changing environment.
The south-west of Western Australia has its own vulnerable ecosystems. The jarrah forests of the northern and eastern parts of the south-west have seen some stress because of the drying climate. We have had much better rainfall this year, but water stress is still apparent and it is noticeable around the Darling Scarp at Collie. Our iconic karri forests are also vulnerable. Karri trees are, as we know, highly water dependent so they will require monitoring and potential action. The remaining Tuart forests on the coastal plain of the south-west are also at risk. So we need to better understand our environment and, of course, protect it into the future through adaptation. This presents us with great opportunities. Ecosystems, as we know, are alive and changing, and the planet can adapt. We can make use of this adaptive mechanism to drive good outcomes. For example, warmer water pushing south down the WA coast via the Leeuwin Current brings with it coral spawn that could represent the beginnings of new coral reefs. Right now there is not much structure off the south-west coast for the spawn to lodge and grow on. However, a trial by the WA state government has seen concrete frames deposited on the ocean floor from the substructure that the coral requires to grow. That is going to provide the framework for that growth. That type of action and practical action should be the basis of Australia's climate change adaptation response and the WA government is to be commended for its foresight. This is a project that could be expanded exponentially. Let us look for practical outcomes for the changes. Such projects should be happening, to future-proof Australia and leave a real legacy for future generations—not the cost of a carbon tax, practical applications that work. This is a worthy task for government: the practical actions that we are focusing on, real things that work on the ground where you can see what is happening and making a difference.
The carbon tax did nothing to achieve any of that. The carbon tax would not, as we know by the government's own reckoning, have reduced Australia's carbon emissions. In fact, it increased. Labor's own modelling showed that our emissions would have risen under the carbon tax—no practical action that I am talking about on the ground. Australia's emissions would have risen, and global emissions would continue to grow. So our response to climate change has to be adaptive and I have confidence that this government will make sure that that is exactly what we do: adaptive processes, practical outcomes that actually work on the ground. We will see harnessing of new technology. The world does not stand still. There is a challenge out there and there is a lot that we can do. We need to continue to invest in adaptation so that we ensure that our descendants have the same benefits that we do through living in the way that we live.
I have great concerns for every single day that Labor hangs on to this flawed carbon tax. Every day is another cost for the people, for the businesses, for the industries in my electorate—and for no benefit. So the additional cost that we see in rural and regional areas, the exponential cost, has been compounding and cascading, and my electorate in the south-west of Western Australia has felt this particularly badly. I have talked to so many. We provide some of the manufacturing, the only secondary value-adding to resources in my electorate. We have seen the increasing costs.
We have looked right across the primary sector. For instance, one thing that has been overlooked in this debate often is the impact on the dairy industry, one that I know a lot about. In this country about 11 billion litres of milk are produced on an annual basis, and all of that milk has to be refrigerated on farm before it is collected and transported to the manufacturers. So the dairy farmers in Australia have all had to absorb this cost of the carbon tax added to their daily business. It was not just that, because every other input basically involved an additional electricity cost. So there was the cost for farmers in the primary sector in the dairy industry. Then you move on to the actual manufacturers of the product, one that uses electricity significantly to produce some of the best and the highest quality products in the world, some of the best dairy products in the world, and yet they have had to bear this additional carbon tax. I talk to small businesses frequently on the cost of doing business has increased, and often they operate in a market where they have been unable to pass on those costs. So these same small businesses have had to constantly try to reduce their costs, and often it is a mum and dad type business, who have to do the work themselves. They have no way of passing any of these costs on. So it is more costs and more work for them.
I am fully supportive of removing this carbon tax. It has not achieved the objectives that it was supposed to have had. I support the practical actions that we will be taking on the ground to bring about a genuine change.
I am delighted to rise today to speak on this legislation. No serious member of parliament elected to this parliament in the 21st century can come here without having a position on climate change. How we deal with climate change and how we deal with the carbon pollution that causes it will be something by which our successors will judge us in 30 or 50 or 100 years time.
I think we will be judged on how we responded to three key questions. Firstly, did we act? We know that 97 per cent of published climate scientists agree that climate change is real and is driven by man-made greenhouse gas emissions. Did we act, or did we leave it for our kids and our grandkids to clean up our mess? Secondly, we need to ask ourselves was our action effective. When an overwhelming majority of economists suggest that the best way to take action is to limit pollution and then allow business to choose the most cost-effective way to reduce emissions, what did we do? The third question we need to ask ourselves is, did we do our share? When the world took action on climate change, did Australia play its part or did we sit on the sidelines?
The legislation introduced by this government is reckless. Against all sensible advice, it removes a cap on pollution. It seeks to abolish the Climate Change Authority, an independent body providing government with the best advice on tackling climate change. Against evidence showing that the carbon price is working, it seeks to replace it with a slush fund for polluters that sheets home the costs to taxpayers.
Going back to our key questions, why did we act? Carbon pollution is having a big impact on Australia. Summers are getting hotter and there are more extreme weather events. It is beginning to affect our agriculture, our oceans and our environment. There is a cost to our environment and to our economy that will grow over time. Australia has just had its warmest 12 months on record, and that was not a one-off. The hottest 10 years ever recorded have all been recorded in the past 15 years. Labor's position on climate change is clear: tackling climate change has been part of our policy platform since 1988. As the party of fairness, we believe it is only fair that we take action now to clean up our mess, that we do not leave it for our kids and grandkids to clean up. Taking action on climate change is about intergenerational equity, doing what we can to make sure that those who come after us inherit a planet in better shape than the one we inherited.
So we ask ourselves about how we acted. Was our action effective? We have believed for the past decade that a market based mechanism is the most effective way to reduce pollution. In fact, New South Wales, under state Labor, introduced the world's first carbon market in 2003. An emissions trading scheme imposes an economy-wide cap on carbon pollution and lets business work out the cheapest and most effective way to operate within that cap. A recent survey showed that 86 per cent of economists back an emissions trading scheme as the cheapest and most effective way to tackle carbon pollution, and this month the OECD released a report confirming that countries could achieve higher levels of emission reductions at a much lower cost if they relied on this type of scheme.
Importantly, the carbon price is working. The previous parliament saw those opposite launch one of the most mendacious scare campaigns in recent political history. Carbon pricing, it was claimed, would destroy entire industries, like steel manufacturing and coalmining; it would wipe out whole towns, like Whyalla; and it would result in unimaginable increases to the cost of living, like the $100 Sunday roast. Of course, none of that happened. During the first year of the carbon price around 150,000 jobs were created, the economy continued to grow at 2½ per cent and inflation remained low. Pollution in the national electricity market decreased by seven per cent. Renewable power generation as a share of the national electricity market increased by 25 per cent. One million homes around Australia now have solar panels, compared with 7,000 when we came to office. South Australia draws almost 30 per cent of its energy from wind. The inflationary impact was modest at best and less than expected, which meant that the assistance households received through tax cuts or transfer payments went even further. So after the success of the carbon pricing, why would we take the reckless action of repealing it?
The government's alternative is troubling, to say the least. Labor supports getting rid of the fixed price carbon tax, but only when the government comes up with a real solution to cut carbon pollution. Yet the government is led by a Prime Minister who does not believe in climate change and has no serious policy to deal with it. The government's legislation removes the cap on pollution and allows the big polluters open slather. They are not allowed to dump their rubbish in the street, they are not allowed to pour their chemicals into our rivers but this government wants to leave them open slather in our air. This will cost households an average $1,200 a year, while failing to cut pollution.
The Minister for Communications called the government's policy for what it is. He called it:
… an environmental fig leaf to cover a determination to do nothing.
Last week, former Treasury secretary Ken Henry called the government's policy a 'bizarre' strategy, which involved the government paying big polluters in a scheme that costs more and is less effective. That is, they will replace the price on pollution paid by polluters with a slush fund for polluters that will cost Australians around $1,200 a household. Instead of charging polluters to pollute they are handing over cash, with no guarantee that we will meet pollution targets. We know, too, that most Australians simply do not believe the assurances that electricity prices and gas prices will go down.
While this House debates the carbon price, and the Prime Minister continues to equivocate on the science, countries in our own neighbourhood are dealing with the reality of climate change. As the Kiribati foreign secretary told the World Bank in September:
There are still some who believe that climate change is a distant threat but for us it is a present threat. It’s happening now and our people are being affected now.
As a last resort the Kiribati government has already developed a relocation policy, which is aimed at helping its entire population to migrate should the worst impacts eventuate.
Against that harsh reality, the world is acting on climate change. Ninety-nine countries worldwide, including Australia, covering 80 per cent of global emissions and 90 per cent of the global economy, have made formal pledges to the United Nations to reduce carbon pollution. Around one billion people live in a country, a region or a city with a carbon price, and this will grow to around three billion people by 2016—almost half of the global population.
Those opposite like to say that Australia, with only 1½ per cent of global emissions can afford to do nothing. What impact will our activity have, they argue? Well, you can ask the exact opposite question: the Australian population is less than half a per cent of the global population and yet we are one of the highest emitters per capita, and we are among the top 20 highest emitters in total—how can we afford to do nothing with that record? What credibility do they think Australia will have internationally if we do not commit to taking strong action?
Under Labor Australia made significant contributions to global action on climate change. The first act of the Labor government in 2007 was to ratify the Kyoto protocol, and we subsequently committed Australia to a second commitment period under the protocol. In government we played an active role at the United Nations Framework Convention on Climate Change at the Conference of Parties meetings. Unlike this government, we actually sent the relevant minister or the relevant parliamentary secretary to these meetings. Momentum is building right now in Poland, with the global climate agreement scheduled to be agreed in Paris in late 2015. But Australia is not appropriately represented; neither the Minister for Foreign Affairs nor the Minister for the Environment, nor either of their parliamentary secretaries even bothered to turn up.
And just last week, we know that with the Prime Minister, at the Commonwealth Heads of Government Meeting in Colombo, we became one of only two countries out of 53 to oppose action on climate change and to oppose comments in the communique from the Commonwealth Heads of Government Meeting, opposing not just words in the communique and not just a vague commitment to action but also opposing the establishment and use of the Green Climate Fund. It is curious that they support Direct Action here but they do not support direct action around the world.
The world's major international economic institutions have lined up firmly in favour of carbon pricing. China, Australia's biggest trading partner, is heading down the same path. This year China started seven pilot emissions trading schemes in regions covering more than 200 million people, with the aim of a national trading scheme in place by the end of the decade. The OECD says consistent carbon pricing must be the cornerstone of government actions to tackle climate change, and the OECD position was supported by both the International Monetary Fund and the World Bank. If Australia wants to be a constructive member of the world community, we need to take effective action on climate change.
As I have been saying, the Labor opposition want to tackle climate change in the most effective way possible and the most cost effective way possible. That is why we support getting rid of a fixed price carbon tax, but only when the government comes up with a real solution to cut carbon pollution. Labor's amendments to introduce an emissions trading scheme on 1 July 2014 will abolish the carbon tax, but they will retain the Climate Change Authority to ensure robust, independent analysis and advice and they will stop the cuts to Australia's renewable energy research and development. We will keep a commitment to put a cap on pollution. That means that Labor will tackle climate change in the most cost effective and efficient way possible.
Our amendments will replace the fixed carbon price with a system that puts a legal cap on carbon pollution and lets businesses get on and work out the cheapest and most efficient way to operate within that cap. Our amendments are a smart and sensible middle ground ensuring we act on carbon pollution and do not gamble our future. The government's alternative does nothing to reduce pollution and yet costs Australians more. It costs Australian households $1,200 a year. They are not getting rid of the carbon tax, they are replacing it with a tax on families. They are replacing a tax on businesses with a tax on families.
I urge this House to support the opposition amendments. If members agree that climate change is happening, if they agree that it is caused by carbon pollution, then we need to place a legal limit on that pollution in the same way that we regulate many types of pollution. If members agree that a price on carbon pollution should be paid by polluters and not by Australian families, then we need an emissions trading scheme. And if members want Australia to play a constructive role on the world stage, to do our bit, then we need to take serious action on climate change.
I am cognisant of the time as we will be adjourning this debate soon, but in the time allowed for me I want to speak on the Clean Energy Legislation (Carbon Tax Repeal) Bill 2013 and related bills. Our government was elected with a mandate to scrap the carbon tax, and we are a government that will follow through on what we say. Our mandate is evident in this very room I stand in today, the national parliament. If you look around this chamber, you can see that our numbers run beyond the halfway limit and over onto the other side. In contrast, the numbers on the other of the House from the Australian Labor Party, outside their front bench, are flat out getting past the first aisle.
Our centrepiece at the last election could not have been mistaken: it was, simply, to repeal the carbon tax. So why is it that we have speaker after speaker come into this House and blatantly move against the will of the Australian people? I know there are those out there who hold the same position and are supporting a carbon tax. But what are the foundations of democracy if we do not go to an election and allow the people of Australia to have their choice, to have their say, to let their voice be heard? In trying to draw a conclusion, when the Australian public have spoken so overwhelmingly for propulsion of this carbon tax, one only needs to look at the model for how the Australian Labor Party listen to their people. It was not too long ago that a vote for the leader of the Australian Labor Party was given to their membership. There were two worthy candidates: Albanese and Shorten. I know, Mr Deputy Speaker, I should be referring to their names properly, but those were the names they ran under as candidates. The votes were 18,000 to one candidate and 12,000 to the other candidate, and here is a party that elects the bloke that got 12,000. That is clear evidence that the voice of the majority is not heard, that the voice of the Australian majority is of no consequence. However, on this side of the House we advocate that we are the voice of the silent majority. And in this case, on the repulsion of the carbon tax, the voice of the silent majority is overwhelming, it is deafening.
Why do we feel so strongly about ditching the carbon tax? There are economic reasons and there are environmental reasons, which I would like to indulge in speaking about. We feel strongly about the reduction of the costs associated with carbon tax, which has hit businesses and households hard. At a time when we were coming out of the GFC, when we should have been putting in measures to stimulate our economy, we spent as a parliament billions and billions and billions of dollars trying to stimulate our country while hamstringing businesses, ball and shackle, to extra costs, to extra burdens in their business, to extra compliance. No-one in this nation escaped the extra costs that were passed on, whether they were pensioners, households, small business, anyone who had electricity. No-one escaped the additional costs of this toxic tax. And evidence suggests that the carbon tax is not in fact reducing our emissions. The government's own modelling suggests that emissions have risen and will continue to do so under this tax. For those in history who will go back and read Hansard, to make that statement clearer, government used the resources of Treasury and departments through the Public Service to model the future reduction of carbon as a key performance indicator to measure the success of this carbon tax.
One of the ironies is that with that tax coming in the amount of carbon in the atmosphere was not going to reduce, it was actually going to go up. The modelling does not show the savings—and our previous speaker made some points that there had been some reductions. They are correct, there had been some reductions under the carbon tax, but our question is: is it the most effective way for carbon to be reduced in our atmosphere? And on that same modelling the carbon tax per tonne was set to go through the roof—$56 per tonne. $56 into the future was what our carbon tonnage cost was going to be under that same modelling.
There is a national and international consensus from industry leaders that the carbon tax experiment has failed for a number of reasons, no more so than Labor's mismanagement of its own policy. I just want to pick up on that word 'mismanagement'. One does not have to look far beyond any portfolio that the previous government presided over, whether it be the NBN with their continual blow-outs—and I think there was a back-of-the-envelope calculation where the cost for the NBN was supposed to start in around $5 billion and now is pushing $90 billion. There is the way that the budget was managed, which was an absolute disgrace. It will take us many years to try to bring some type of integrity back to the budget. Just put it into perspective when it comes to mismanagement of portfolios, for the current debt that we have at $300 billion, if we were to go back into history and find Australia's largest surplus, given that the Australian economy is very cyclical and has its ups and its downs, as a government, to pay down that $300 billion of debt we would have to emulate that surplus for 18 consecutive years.
The previous speaker also spoke on this bill about making the tough decisions so that we did not leave a legacy for our children. She spoke about making the hard decisions now so that we did not burden our children. I tell you that they had no problem with leaving all of our children enormous debt. It is so hypocritical to come to this House and talk about looking after a future generation with reference to the environment when all the opposition has done is shackled my daughter, my nieces and my nephews with debt and deficit. The Australian government is abolishing the carbon tax to reduce the cost for businesses and households. The carbon tax has been a hit of nearly $9 billion a year on the economy.
The previous speaker said that our direct action policy would cost $1,200 more. We need not go back too far to look at the budget figures. This was a government that could not hit the side of a barn with a forecast, so how the jingoes do you think that they can rattle up a $1,200 estimate as to our cost on the direct action plan? They could not hit the side of a barn with a forecast so for any number that they bring into this chamber and try to advocate down to the $100, these blokes were predominantly out by about by $20 billion on every single budget! The only common denominator was that it was a downward trend. So do not profess to come into this chamber and advocate that you are the authority on estimating a $1,200 cost to our budget.
We will not leave the problem to our future generations. The government will make the tough decisions, as we will with the NBN, and we will fix that as well. We are already fixing our border security problems. There has been a drastic decrease in arrivals in boats, because we are committed to fixing our nation. The removal of the carbon tax in 2014-15 will leave the average cost of living for households around $550 lower than they would otherwise have been according to Treasury's modelling. Now I have just spoken about the previous government's capacity to forecast. You need to look at our historical track record when it comes to delivering from an economic perspective. If we say that it is going to deliver $550, take that to the bank.
It is estimated that retail electricity should come down around nine per cent and be seven per cent lower on gas prices. Most of the gas and energy companies line item the carbon tax as a component on your electricity bill. We will require every energy body to regulate and make sure that that production happens. It is there because of the carbon tax. We will repeal the carbon tax and the cost will come down. As a result, household average electricity bills would be around $200 lower and household average gas bills would be around $70 lower.
Before the election in my electorate, we sent out a survey to every member asking them what their major issues were. We communicated with our electorates and we asked them if they had a magic wand what things would they want us as a government to fix. Two overwhelming issues were our common denominator: reduce the cost of living—cost-of-living pressures in my electorate of Wright in Queensland were biting, and pensioners, businesses, mums and dads and families were doing it tough. The second one was to remove the carbon tax. The second issue outside the cost of living—and the two issues are related—was to remove the carbon tax.
I would not say that my electorate is different from most electorates in the nation. I am on the public record saying that my electorate of Wright would be a bellwether seat for the opinion of the nation. There is a wide cross-section of families. The horticultural area has people that supply vegetables to feed the eastern seaboard of Australia, and that has enormous export potential as well. In the campaign throughout my electorate, the issue of skyrocketing household bills was raised with me time and time again. Mums and dads approached me to express their struggles in living from pay cheque to pay cheque. That is not the way we run a country, to have people struggling. Winston Churchill once said with reference to a struggling nation:
You cannot tax a country into prosperity.
Trying to tax the nation into prosperity, he said:
… is like a man standing in a bucket and trying to lift himself up by the handle.
But what we saw from the previous government was constant tax, tax and tax. The people I represent in my electorate—and I am the voice for the silent majority of them—clearly said to me, 'Get rid of the carbon tax and ease our cost-of-living pressures.'
Australia is a wealthy country. Our standards of living are high and our remuneration rates are some of the highest in the world, yet in my electorate families and elderly citizens are fighting to make ends meet because of this toxic tax. We in this parliament have been elected to repeal the carbon tax. I will not rest until we do so.
There is indisputable evidence that proves that the carbon tax has directly increased the cost of inputs for business. As I said earlier, no-one has been able to escape the cost of this toxic tax. These increased costs reduce Australia's competitiveness with other countries without a carbon tax. Because these costs are inevitably passed on through the economy the carbon tax essentially weakens Australia's entire economy.
In my area I have producers who sell food and vegetables in the international market. They have an extra carbon tax on top of their cost of operations. When they compete to sell their product in the global market they are at an unfair advantage. They are clearly disadvantaged because of the shackles that we put around their business. How is that fair? We all believe in free trade but, by crikey, is this true free trade? We put free trade agreements in place with nations so that we can become more competitive and grow our slice of the pie as a nation. There are two ways we are going to turn the ship around: one is to increase our slice of the pie, increase our sales, and the other one is to cut some of our expenditure and, by crikey, there is a lot of expenditure we can cut. There is a lot of waste and fat that was introduced by the mismanagement of the last government that we will have to work hard to tidy up.
The Australian Industry Group surveyed 485 businesses. They released the results of that survey this year. Manufacturing businesses reported that their total energy input costs increased by an average of 14.5 per cent as a direct result of the carbon tax. How is it that 70 per cent of businesses get it wrong and the previous government got it right? Some 70 per cent of the businesses surveyed indicated that their cost of production has gone up. Something is wrong. Are we listening? (Time expired)
I thank the member for Wright for that interesting contribution. I particularly liked the bucket analogy. I am still trying to work it out. It was an interesting analogy.
I want to say first of all how inspiring it has been to listen to the speeches of my colleagues on this carbon tax repeal legislation. This is an issue on which Labor are united. We believe that climate change is a real and significant threat and one that demands a strong response. Labor are united in support of a market based solution as the most effective and efficient way to tackle climate change. It has been inspiring to hear the passion shown by my colleagues—the passion they have because they obviously want to ensure that Australia does not take a backward step here, that we do the right thing for future generations and that we do the right thing for the planet.
We have known for some time that our sea levels are rising as a result of human induced global warming and the advice from climate scientists is clear on this. Most recently the fifth report of the Intergovernmental Panel on Climate Change released this year told us that warming of the climate system is unequivocal and the sea level has risen. We know too that extreme weather events are increasing in intensity and frequency as a result of climate change. In Australia we do not need to be reminded about the devastation that extreme weather events can cause. It is something we all know and it is something we all fear. It is something, therefore, that we should be united in tackling.
Those opposite agree on the need to reduce carbon pollution. What we disagree on is how we should go about that. Labor will support the repeal of the fixed carbon price in order to replace it with an emissions-trading scheme. What we will not support is the removal of the fixed price on carbon if it is not going to be replaced by a carbon-pricing scheme that puts a cap on carbon pollution, that guarantees a reduction in carbon pollution.
I want to talk a bit today about the significance of the moment we are in right now. We are at a fork in the road. If we choose one course, we have an opportunity to position ourselves to make the most of the carbon constrained global economy that is coming over the horizon as a matter of certainty. We have the opportunity to ease the challenges that our children and grandchildren are certain to face. We have the opportunity to join our trading partners and our allies as they demonstrate to the world that limiting carbon pollution can be done and must be done. This is not about being a global leader anymore. That moment has gone. The global leaders have been operating in carbon constrained economies for years. This is about not being left behind.
Then there is the other course that we can take, which offers us a future that is not so bright. Along this road our children and grandchildren will face insurmountable problems and the costs, both financial and human, associated with tackling those problems. Along this road we will lag behind the rest of the world—lag behind our trading partners, our allies and our neighbours who took action when they first saw the opportunity and the need to do so. Along this road our future economic prosperity is at risk.
Yesterday I was talking to one of my staff members about the position that Labor has taken and the crossroads that we are at at the moment. I was saying to her that it is a bit like being in the late 1970s and being on our way out to get a VHS player. We had ordered it and worked out how we were going to pay for it and it was almost ours, but at the last minute we switched and decided to get a Beta, which we went on to regret for years to come. My staff member, who is a lot younger than me, said that a similar situation occurred in 2001 when people decided to ditch their brand-new Apple iPods for Sony MiniDisc players.
While these analogies might not be perfect, the message is clear. Moving away from a price on carbon is making the wrong choice. It is making a choice that Labor believes and that I believe Australia will live to regret.