Monday, 16 November 2009
Carbon Pollution Reduction Scheme (Consequential Amendments) Bill 2009 [No. 2]
Consideration in Detail
I certainly agree that agriculture should be exempt from the Carbon Pollution Reduction Scheme. Agriculture should be exempt in its entirety, not just crops that are grown for food. Indeed, let me pose a very practical problem: when my brother plants his crops, he generally does not know whether the end crop is going to be used for food, for animal feed or for some other purpose. So the division that the member for New England seeks to create in this regard would, I think, be very difficult to deliver in practice. But his proposal and his objective to exempt agriculture from the CPRS are meritorious.
The government announced just yesterday that they were proposing to exempt agriculture, although few details have been provided. However, it is important to make the point that the honourable member for O’Connor has just made—that that does not mean that farmers will not pay significant costs associated with the ETS. They will still have to pay higher costs for their electricity, their fertiliser, their chemicals, their machinery. Virtually all of their inputs will be more expensive. There is no emissions trading scheme planned anywhere in the world that includes agriculture. No-one is proposing to include agriculture. Therefore, if these taxes were imposed on agriculture, it would further disadvantage Australian farmers.
We have a lot of cheap food flooding into Australia at present. None of the farmers who are supplying that food to Australia are paying any emissions trading taxes, nor will they. There is no likelihood of such costs being imposed in China, India and South-East Asian and other countries that are increasingly exporting food to Australia. So the flood of foreign food into Australia is going to grow under Labor’s CPRS. In addition, there will be jobs lost in the Australian food processing sector, because the government is not proposing to exempt the food processing sector, apparently, under its latest concessions. So there will be more jobs lost in food processing, there will be more foreign food coming into Australia and Australian farmers will find it increasingly difficult to compete with farmers around the world who do not have to pay these higher taxes.
In addition to that, the government has made no firm commitment to allow farmers to claim credits for the carbon sequestration and carbon abatement activities that they undertake. Again, Australian farmers are the only ones in the world who effectively cannot get credits for the carbon sequestration activities that they undertake. The US bill proposes to give farmers credits for the abatement work that they do and, of course, the countries in Asia can claim credits under the Kyoto rules. Because Australia signed the Kyoto accord, Australian farmers cannot get credits for the carbon abatement activities that they undertake. If a Chinese farmer does the same thing he gets a credit, and an Australian industry can buy that credit, but an Australian farmer cannot get a credit for doing it. This is the nonsense of Labor’s CPRS and the serious way it is going to affect agriculture. So agriculture needs to be exempted from the impact of the CPRS costs, but farmers also need to be able to be rewarded and encouraged to play the role that they can meaningfully adopt in reducing Australia’s CO2 emissions. Farmers can do a great deal to reduce emissions.
You may be interested to know, Mr Deputy Speaker, that farm emissions have already fallen by 40 per cent over the Kyoto reporting period. A lot of that is because of the reductions in the size of our herds and flocks, but also farmers have borne almost the entire burden associated with tree-clearing laws for which they have received no compensation and no credits. The reality is that the farm sector is already undertaking a very significant role in this regard, and that needs to be recognised.
The final point I would like to make is slightly critical of the member for New England because he has some form on this issue. He is the man who brought a private member’s bill into this House that proposed reductions of 80 per cent, and there was nothing in that bill about leaving out agriculture. He had an opportunity at that time, when he was putting in his own bill, to do some constructive things as far as that is concerned and he did not. In fact, agriculture makes up 16 per cent or thereabouts of emissions, we are told, so if he takes reductions of 80 per cent, and farmers are allowed to keep their 16, in practice there will be nothing left for anybody else at all. I think he is adopting two standards. (Extension of time granted) The member for New England is proposing an amendment which improves the bill, but I do not think it goes as far as it ought to in relation to agriculture. He has also been somewhat inconsistent because his own private member’s bill would simply devastate agriculture, and not just agriculture but every other industry in his and other electorates—unless, of course, he is volunteering to put a nuclear power plant in his electorate. I do not think he is, because the press release he put out at the time said he was not keen on nuclear power stations. But unless he is going to find some way to generate electricity in significant quantities and if he is going to have an 80 per cent reduction in CO2 emissions, he has some sums there that simply do not add up. The member for New England is right to seek to exempt agriculture. In fact, I think it should be all of agriculture; not just food, but the food-processing sector as well. But all of that will not fit within the constraints of his private member’s bill, which presumably may have lapsed now but, nonetheless, was sponsored with enthusiasm by him about a year or so ago.
There has been some progress on the issue and a recognition by the government at long last that Australia’s CPRS should not be the only emissions trading scheme in the world which proposed to include agriculture. Why the government took so long to get to this position remains to be seen. They know that their legislation is defective in a whole score of areas. They know it has got drafting errors and yet they have not fixed them. They are asking the House of Representatives to vote for bills that they know are technically defective. They also know that they are proposing a scheme that no-one else in the world will ever follow. In fact, the Prime Minister has just come back from a meeting in Singapore with world leaders who all agreed to ditch the Copenhagen treaty. They are not going to have any treaty anymore; they are just going to have a political statement coming out of Copenhagen. So it is absolutely clear that no country in the world is going to go to Copenhagen with a legislated CPRS, and no country in the world is expected to. They are just expected to have targets. And we agreed on those targets ages ago.
So the PM has everything he needs, when he goes off to Copenhagen on this trip, in relation to targets to meet the obligations that the United Nations is seeking from countries. What he ought to be doing is withdrawing this bill altogether, fixing the problems and starting to draft something that looks like what is going to happen in the rest of the world, so that Australian industry and farmers will not be disadvantaged but can participate in a genuine global response to climate change issues, so that Australians can take advantage of trading in carbon credits that might be available through various mechanisms and so that Australian farmers are not the only ones in the world who effectively will be unable to claim credits for the carbon sequestration and carbon abatement activities that they undertake.
What an extraordinary agreement Kyoto was. It actually prevents Australia from undertaking activities that are good for the environment. It prevents us from getting credits for carbon abatement activities, yet the Americans, who have not signed Kyoto, can do that and they are doing it now. They have a voluntary carbon trading scheme in the United States so US farmers can get the benefits of the good things they are doing. An Australian farmer can do exactly the same thing and get no credits whatsoever—only the taxes, only all the bad news out of Labor’s CPRS and none of the good news. With those comments, let me say that I think the member for New England’s amendments are defective and a bit confused but they are an improvement and, for that reason, are worthy of some degree of support.
Message from the Governor-General recommending appropriation announced.