Andrew Robb (Goldstein, Liberal Party, Shadow Minister for Infrastructure and COAG and Shadow Minister Assisting the Leader on Emissions Trading Design) Share this | Hansard source

For 2½ years, since the member for Griffith became leader of the Labor Party, on climate change we have been regaled in the most sanctimonious of terms, with endless references to the great moral challenge of the 21st century—the need for Australia to provide global leadership, the need for political courage, the need for resolve and good policy in this area. Our new Prime Minister basked in the glory of Bali and hinted at 25 per cent cuts in emissions by 2020. No greenhouse gas mountain was too high for our new Prime Minister. Clearly, here was a man of character, a man up to that challenge, a man who would do whatever it took to get the policy response right. Yet, when presented with a proposal to modify their emissions trading scheme, which could be twice as green at 40 per cent of the cost and save 70,000 regional jobs in the process, this Prime Minister dismissed it out of hand. We heard it today ad nauseam: total dismissal. A man who said, ‘This is the great moral challenge of the century’ has turned a deaf ear and a blind eye to any suggestions which contradict his view of the world.

Yet this is not a back-of-the-envelope proposal. The authors developed the first mandated carbon emissions scheme in Australia. In fact, it was the first carbon emissions scheme mandated in the world: the greenhouse gas abatement scheme, introduced by Premier Carr. The authors of this Frontier proposal are experts in these schemes and in the practicalities of the electricity sector. The authors used the same model and the same assumptions that the government used in the government modelling, which the member for Charlton just talked about with pride. The Frontier Economics people who authored this report used the same model and assumptions as the government models. It is comparing apples with apples. It is a 100-page study which warrants detailed examination. It is a very serious contribution, and the outcomes suggested by Frontier’s work are not incremental. They are huge improvements, and the responsible thing to do would be to consider this work thoroughly and constructively. That is what the government should be doing. It should have the courage, the responsible attitude, the wherewithal and the wit to take advice, to seek advice and to get this scheme right.

As far as the coalition is concerned, the work has been done in good faith. It is the modelling that we had asked for for months and months and months. It is the modelling recommended by the Centre for International Economics in the report we commissioned to advise us on the deficiencies in the white paper. That report, you might recall, said that the Centre for International Economics did not differ with the long-term view of the government for 2050. But that report said that the transition period, the first 20 to 30 years, is a black hole and that there could be all sorts of unintended consequences if the rest of the world did not engage. It said that there were alternative approaches, alternative emissions trading schemes and alternative modifications to an emissions trading scheme which could overcome many serious unintended consequences—that that modelling should be done, could be done and could be done quickly. That was the modelling that the government refused to undertake, the modelling that we have commissioned at our own expense with Senator Xenophon.

We on this side of the House are concerned about getting this scheme right. This is the biggest deliberate structural change in our history. In its current form it will see several key regional centres shrink over the next 20 to 30 years. That is the result of the modelling. To the member opposite, the member for Corio, your area has the biggest carbon footprint in the country. It is estimated that the Geelong region will shrink by 20 per cent over the next 20 to 30 years if you stay with your flawed scheme. This is unacceptable. Things must be done to this scheme. The government must have an ear and an eye to recommendations and to proposals which can overcome the deep flaws and the great disruption that will occur in regional Australia. Yet the member for Charlton inexplicitly dismissed that before it ever got released. How embarrassing. We saw it again today. At nine o’clock, two hours before we put it on the website, he had dismissed it. It is ignorance and it is political game playing. Minister Wong dismissed it in the most derogatory of terms, without any opportunity to study it, an hour after it was released. The Prime Minister today clearly displayed total ignorance of Frontier’s proposal—total ignorance of what is a cap-and-trade scheme. The member for Charlton did the same. They do not understand.

The Frontier proposal is a cap-and-trade scheme. The intensity target across generators, which are 50 per cent of the emissions, tracks down to zero over 20 to 30 years as is proposed in the Frontier report. When it reaches zero it is identical to the government’s CPRS system. It is a cap-and-trade scheme. The GGAS scheme in New South Wales was a baseline in credit. This is a cap-and-trade. There are fundamental differences in the schemes. The government do not understand. They have not read it, they have not studied it, they do not want to hear of any alternatives and yet, as an aside, the Rudd scheme is littered with intensity targets. All of the free permits being allocated to trade-exposed entities rely on intensity targets that have been established by the government. In fact, the way they treat fuel in this scheme is identical to the way Frontier Economics have treated the generators. But the Prime Minister is unaware of this; he is ignorant of this.

The arrogance of the government is palpable. There has not even been a pretext of consultation. The smell of politics in this is putrid. The government want to use this scheme for a political exercise. You almost feel they are willing us to vote against it. They are trying to create a scheme which we will find deeply damaging, especially to regional centres. They are egging us on to vote against this scheme for purely political purposes. It is a take it or leave it approach not only with us but with all the stakeholders. Greens and industry alike have come to us for months saying they get humoured at these meetings but never get any action on their proposals.

In its current form the government’s scheme will export jobs and emissions because of the massive tax on electricity, which will make key regional industries uncompetitive. It must be addressed. It is a design flaw in the scheme. It is a design flaw which in many respects is designed to maximise the revenue that the government will receive—tens and tens of billions of dollars over the next 10 or 20 years. They are running so hard to dismiss this proposal because it removes their capacity to generate tens of billions of dollars which they could use at their own discretion, much of it to go into consolidated revenue in the years ahead to pay off the unprecedented levels of debt that they have imposed on this economy. This approach of the government is purely politically motivated.

Rather than an abrupt 40 per cent jump in power bills, the changes proposed by Frontier would mean a small and gradual increase, giving households and businesses time to adjust. The onus now is squarely on the government to sit down and discuss this alternative approach. The work also adds much further weight to the argument that Australia should not finalise legislation until we see the outcome of developments in the United States and at Copenhagen. There is no necessity to pass this legislation now. It is a phoney deadline created by the government for purely political purposes. The government must stop playing politics with this vital area of policy, stop the take it or leave it approach and come back, sit down and discuss this with us and others to get a reasonable outcome. (Time expired)

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