Wednesday, 25 May 2011
Carbon Credits (Carbon Farming Initiative) Bill 2011, Carbon Credits (Consequential Amendments) Bill 2011, Australian National Registry of Emissions Units Bill 2011; Second Reading
The coalition supports the science and agrees to and supports on a bipartisan basis the targets that Australia has set but disagrees clearly, strongly and absolutely with the primary mechanism brought forward by the government to deal with this issue. Their approach is a tax that will increase the cost of electricity by 25 per cent in the first three years, increase the cost of gas by 10 per cent, increase the cost of petrol and increase the cost of groceries. It will have an overall cost-of-living impact of $863.
On the opposition side, we have a clear alternative. That alternative involves incentives rather than taxes; incentives for people to do real things, such as to clean up waste coal mine gas, to clean up landfill gas, to clean up—potentially, if these are the lowest cost changes—some of the oldest and dirtiest power stations, which otherwise will run, according to the words of their owners, until well into the 2030s under the government's scheme. Under the government's scheme, these power producers will simply pass on the cost and consumers, small businesses and manufacturers will pay the difference while business as usual will be practised in terms of the sources of emissions. That is the difference.
On the one side, we have a practical alternative that deals with these things and in particular allows for direct action to capture carbon in our soils, in our trees and in our vegetation. It is against that background that the government has developed its carbon farming legislation in response to the coalition's direct action proposals, a set of proposals that the government originally mocked but that it now seeks to try and replicate. They are the approaches that define the differences between these two parties.
The Australian public is increasingly rejecting the idea of a carbon tax because, contrary to everything that has been said by the government, they will pick up the bill and they know it. That bill will be $863 per annum on a $30 per tonne basis. And whether it starts there or starts lower, it will be north of there before 2020 because, as the Minerals Council of Australia has said through the report prepared on its behalf, it is expected that the price will be approximately $50 to $52 per tonne. What that means is that families will have skyrocketing costs of living, with skyrocketing electricity, gas and grocery prices. And that is all unnecessary. This system will raise $114 billion on Treasury's own estimates between now and 2020. Our alternative, which is funded and costed, will start with $300 million, $500 million and $750 million over the first three years. Those are the alternatives. That is the choice available to Australians: an increased cost of living—and every member on the government side knows it—versus a system based on incentives to reduce emissions, which is a system based in large part on the successful water market model.
Having said that, let us give a fair reading to this legislation. Its objective is to help Australians reduce greenhouse emissions by contributing to the bipartisan five per cent reduction on 2000 emissions by 2020. It seeks to create incentives for farmers and landholders to undertake voluntary land sector abatement projects. These are principles that we in the coalition have set out, so the principles in this legislation are in agreement with those that we have put on the table. It seeks to give farmers some sort of incentive. Against that background, let me say this: we support the principle, but we have some significant issues with the construction and design of this and in particular that which is missing from these three bills. During the Senate process, we will be looking at a Senate committee report—which I understand is due at the end of this week—that responds to a series of issues. The Senate committee has taken significant soundings, representations and submissions across a range of areas. We will reserve our judgment but look on with interest at the recommendations in that Senate report.
In particular, firstly, we want to know what measures will be put in place for the protection of prime agricultural land; secondly, we want to know what measures will be put in place for the protection of Western Australia from what the Western Australian government outlines as the effective expropriation of crown land usage rights as an unintended consequence of the bill; thirdly, we await the completion of key regulations, which is an issue that I wish to follow in this House; fourthly, we also want the inclusion of soil carbon in a constructive way from the outset; fifthly, we want the risk of rorting—as occurred in Europe, where there were no adequate protections, and as was reported on the front page of the Australian of 19 May 2011, only last week—satisfactorily addressed; sixthly, we want the construction of an acceptable set of rules around permanence; seventhly, we want the construction of an acceptable set of rules around additionality; and eighthly, we want to examine any other amendments that the Senate Environment and Communications Legislation Committee report on the bills identifies.
We approach these bills with a constructive heart, attitude and intent. But it is absolutely clear that at this stage there are real risks of inadvertent consequences and there are very clearly areas of great inadequacy and incompleteness. In that context I want to make a point about what we are not going to do in the House of Representatives, the people's chamber in Australia. We will not be providing a blank cheque for this legislation, having lived through the home insulation program, which we were told at the outset was predicated on the basis of, 'Trust us: we will get the detail right.' They did not get the detail right. We warned them. We set out the problems. We did it repeatedly, right throughout July, August, September, October, November and December of 2009. It is amazing how government members, no matter where they are, drop their eyes, read their papers and look rightfully ashamed at any reference to the home insulation program—at any reference to an example of failed governance on a grand scale that in and of itself should have been enough to have seen the government's commission terminated. But we go beyond that.
We go beyond the Home Insulation Program to the Green Loans Program, the school halls program. On each of these occasions the government said, 'Trust us, we will get the detail right.' What has been shown is that without adequate supervision, without adequate detail, without complete scrutiny, it is not appropriate to trust this government with issues which run the risk of perverse and unintended consequences. That has been a systemic failure.
Lest it be thought that this is a problem of the past, in this precise area the government took three policies to the election: no carbon tax, a citizens assembly and—my favourite of them all—a cash-for-clunkers program, which we recognised within five minutes would be strangled before it saw the light of day. We were told it would be fine, that they would get the details right—and, inevitably, it was strangled before the light of day. It was the one good decision that the government have made in the last year—to listen to what we said: that a program which cost $400 million for one million tonnes of emissions reduction was a clunker in and of itself.
What we see is a fundamental pattern of legislative and administrative incompetence. Against that background we hold to the principle of no blank cheque. We want to see the regulations in detail. We saw a skerrick from the parliamentary secretary today, and I thank him for that, with his release of the 'savannah burning' guidelines. But what that shows is the government is capable of producing the full range of detail and materials before this bill is addressed. It is right and proper and appropriate that we do not vote on the basis of a blank cheque.
In that context, whilst we strongly support the principle, our experience has been that giving the government a blank cheque on issues such as the Home Insulation Program, the Green Loans program and school halls program—just for example—has not been rewarded with good governance in the interests of Australia, and in particular in the interests of people who pay their taxes such as nurses, plumbers, shop assistants, teachers, police officers and firefighters, and expect value for money. Against that background we make this point: a great deal of the substantive elements in the bill exist within regulations and methodologies which are yet to be seen. The experience to date, across all of the elements of this government's legislative agenda, has been, 'Show us the detail; give us the examples'—and they do not exist at this point in time.
For that reason I will be moving, on behalf of the opposition, an amendment in the House declining to give the bill a second reading until the regulations giving effect to the provisions of the bill are laid before the House. In that context, I move:
That all words after “That” be omitted with a view to substituting the following words:
“the House decline to give the bill a second reading until the terms of the regulations giving effect to the provisions of the bill are laid before the House”.
That is an appropriate, prudential mechanism. The reason we ask for that is the government should have nothing to hide. If there is nothing to hide, if there is nothing to worry about: provide the regulations, provide us with the detail, provide us with the elements that are missing from what is otherwise merely a skeleton. A skeleton bill without the flesh is not something that this House should lightly pass. So we support the principle, but we do not accept bad legislative practice. The detail must be provided. The regulations must be provided. The facts must be provided. And, in their absence, we will not allow the government to repeat the risks and errors of the Home Insulation Program, the Green Loans program, the school halls program and any other number of disasters that are awaiting Australia, such as the unfolding issue of the NBN rollout.
In particular, let me make this point: there are, at this stage, deep deficiencies. So a bill which has great potential is not yet ready. We want the detail. And if the government have nothing to hide, why would they deny the House the ability to examine the regulations? Let me repeat that: if the government have nothing to hide, if they are fully confident with their methodologies, if they are fully confident with the regulations, if they believe it is ready to go—show us the detail. If you have nothing to hide, show us the detail. Because, I say to the government, the last time you did not provide that detail, we saw the Green Loans debacle, we saw the Green Start debacle, we saw the Home Insulation Program debacle. Form fits this government as being legislatively and administratively incompetent.
So that is where we stand. The coalition support biosequestration. We believe strongly in the process. As the CSIRO set out in their recent report, the potential is there, on a conservative estimate from a conservative scientific agency, for 20 per cent of our emissions to be offset over 40 years using trees; revegetation, through mallee and mulga; soil carbon; and other forms of reducing emissions—landscape and agricultural management. That is a view which is more prospective than our own estimates, but it is the view set down in writing by the CSIRO, by Dr Michael Battaglia, no less than the head of the Sustainable Agriculture Flagship of the CSIRO. His position, and the CSIRO's position, is that the very methods we have outlined as being of considerable and fundamental importance to the direct action plan offer up to 20 per cent reductions in Australia's emissions for a period of 40 years—significant, fundamental and important. Against that background, this legislation also needs to be viewed within the broader context. We want the regulations and we want to see how the legislation links in with the proposed carbon tax. Let me remind the House that this legislation is fundamentally linked to the carbon tax and that this government went to the election with a pledge from the Prime Minister. On Monday, 16 August 2010, at the beginning of the last week of the election campaign, the Prime Minister of Australia took her policies to the people of Australia to seek a mandate upon which to govern and said on Channel 10: 'There will be no carbon tax under the government I lead.' I just repeat that: 'There will be no carbon tax under the government I lead.'
Then, on the day before the election, on election eve, on the front page of the Australian on 20 August 2010 the Prime Minister said: 'I rule out a carbon tax.' Lest there be any doubt as to what that categorical statement could possibly have meant, the government's express, clear and absolute policy was that there would be no carbon price of any form until the citizens assembly had produced a deep and lasting consensus. So the government has then tried to say, 'I was only kidding about the carbon tax; I actually meant an emissions trading scheme.' The fine print was provided by the government and that was in their climate change policy which was a citizens assembly of 150 people randomly selected from the phone book and they would need to show that there was a deep and lasting consensus. As things stand, there is no deep and lasting consensus around the government's carbon tax or around the general notion of providing an increase in prices of electricity, gas, petrol, groceries, Australian-made cars and houses, for example.
Let me deal with the way in which there is a conflict between the two approaches as evidenced by this legislation. The nature of the carbon tax is intended to increase prices. Contrary to what the government is leading Australians to believe, its goal is to increase the price of electricity. Its structure, its purpose, its intent is to drive up electricity prices in the hope that people would use less of an essential service. This fundamental idea is flawed at its very heart because, as the Independent Pricing and Regulatory Tribunal of New South Wales has set out over the last five years, we have had over a 50 per cent rise in electricity prices in New South Wales but barely any change in the demand per capita. We see that electricity is one of the most fundamentally inelastic goods available to consumers and householders in Australia. It is a very similar experience in the United States and Europe.
Electricity is an essential service; therefore, driving up the price simply forces people to substitute it for other goods in their life. For a pensioner it could be the once-a-month restaurant meal that they forgo. For a self-funded retiree it could be the gifts to grandchildren that they forgo. For a family it could be the swimming lessons for their kids that they forgo. For a small business owner it could be the expansion of the small business which they forgo. Let it be made absolutely clear that the economic history of Australia, the United States and Europe is that electricity is a largely inelastic good. In human terms that means it is an essential service and what that means in practice is that driving up the price of electricity is just a tax, because people pay more but they barely change their consumption at all. I am not alleging perfect inelasticity in economic terms. I am saying that the real world history of the last 30 years—
Mr Perrett interjecting—
I will come to that, matey.