House debates

Thursday, 16 August 2012

Matters of Public Importance

Carbon Pricing

4:21 pm

Photo of Greg HuntGreg Hunt (Flinders, Liberal Party, Shadow Minister for Climate Action, Environment and Heritage) Share this | Hansard source

The real question is not whether the Prime Minister breached her word, breached her pledge, breached that which she took to the Australian people not just five days before but the day before the last election, but why she felt she had to make the pledge of no carbon tax under a government she leads in the first place. Today is the second anniversary of the Prime Minister's infamous pledge that there would be no carbon tax under a government she leads. But why did she feel she had to make that pledge? It is very simple: the reason is that she knew if she were honest with the Australian people they would not have given the Labor Party the votes they needed to form a government.

As it was, it was a borderline decision. If this election past had been framed in terms of the carbon tax, as was the debate, as was the context of coalition statements, advertisements and literature making it absolutely clear that a carbon tax was coming, they would have lost. So the Prime Minister deliberately, explicitly, intentionally stated that there would be no carbon tax. It was a direct clear statement made not just once five days before the election but also the day before the election with the statement 'I rule out a carbon tax'. These were two clear statements but there were two more from the Treasurer, the Deputy Prime Minister of Australia, who famously said that the idea of a carbon tax was 'hysterical' under Labor. Unfortunately, the Australian people are not laughing. But then there were 13 more statements that there would be no carbon price of any form, at any time until such a moment that there was a community consensus—as demonstrated famously through the citizens' assembly. That was what they took to the election.

Today we heard a defence that Labor did not really win the election; they had to negotiate. We heard the member for New England make it clear there was negotiation—except for the fact that the Greens had run up the white flag at 8 pm on election night when the incoming member for Melbourne said that he was going to vote for the ALP. There was no debate. There was no negotiation. There was no question. They had the vote in the bag from 8 pm on election night. So the idea that somehow there had to be, in order to win the Greens support, a surrender of a fundamental pledge of the central issue of the last fortnight of the campaign is simply historic rewriting on a grand scale. It is back to year zero because that is all we see from this government time and time again: a denial of history, a denial of the past because they are, frankly, ashamed of the past. What we see now is, again, two years later, they do not believe that they made the promise. They do not acknowledge that they had the vote in the bag. What occurred after the election was simply the fulfilment of what was always the Prime Minister's intention: to take one thing to the election and to do another thing afterwards. The negotiation with the Greens, which had already been concluded at 8 pm on election night, was merely a front. The Prime Minister expressly, deliberately, consciously pledged one thing before the election and did another thing afterwards. The Australian people will never forget and they certainly will not forgive come election time in some short period from now.

Beyond the deception is the consequence. The consequence can be described in two words: higher prices. If you really want to make it specific: higher prices for electricity. Let us go through the reality of what this carbon tax means. Let us start with the government's notion that there will be a 10 per cent price rise. Well, guess what? There has been a rise. Their 10 per cent price rise, on which they were congratulating themselves, was meant to occur over five years. It happened in one day. They seem to forget that next year the carbon tax goes up and the year after it goes from $24 to $25. Then, on their own modelling, it heads north to $37 by 2020 and thence to $350 by 2050. So the carbon tax is an electricity price escalator each year, every year, forever. That is its design. That is its intention. Indeed, to paraphrase the Prime Minister, that is the whole point of the carbon tax—to increase electricity prices.

What exactly are those price rises? We see in Queensland, where the Premier froze many of the state electricity price impacts, it is between 80 and 100 per cent of electricity price rises. In Queensland, we have price rises up to 13 per cent of which the carbon tax is 11 per cent. In Victoria, 11 per cent out of 15 per cent price rises are attributed to the carbon tax. In Western Australia, it is nine out of 12 per cent. In the Northern Territory, it is a similar figure. In the ACT, in some cases, up to 80 per cent of the price rise in electricity for this coming year is precisely because of the carbon tax. Then we see that in New South Wales the regulator approved of the fact that Integral Energy's price would include an 85 per cent lift because of the carbon tax. In Western Sydney the average component of carbon tax in electricity price rises is 80 per cent.

So when you look at your electricity bill and see the price rises this year, no matter where you are in Australia, blame the Prime Minister. The government says we have had price rises in the past. Absolutely—that is the point and that is the problem. These electricity price rises have not brought about some dramatic change in Australian consumption. What we have seen are massive price rises and then you add an escalator for each year on top of that based on a broken promise. And it congratulates itself? Honestly, somewhere between hubris and chutzpah, this government is going to have to take a look at itself in the mirror.

It is not just electricity. It is also refrigeration. The Prime Minister tried to say that there was already a refrigerant charge and there was. Let me give you some examples. It has increased slightly. HFC-134a has gone from 17c a kilogram to $30.07 a kilogram—a 175-fold increase. That means it is over $30,000 a tonne now under their budgeting. But it is a whole lot worse. PFC-5114 has gone from 17c a kilogram to $170 a kilogram or $170,000 per tonne, a more than 1,000-fold increase in the government levy. By the way, these are not our figures. These are from the government's own synthetic greenhouse gas website calculator. Probably the best-known of the gases, R404a, has gone from 17c a kilogram to $75 a kilogram with government levies, which is a 441-fold increase.

That, by the way, is a $75,000 charge per tonne of gas. These price rises flow through to butchers, they flow through to cold-store owners and they flow through to trucking operators who carry goods through refrigerated trucking. Anybody involved in refrigeration in Australia is going to have to pay the price of the Prime Minister's betrayal.

Debate interrupted.

Comments

Tibor Majlath
Posted on 8 Aug 2015 3:42 pm (Report this comment)

Mr.HUNT:

Indeed, to paraphrase the Prime Minister, that is the whole point of the carbon taxto increase electricity prices. What exactly are those price rises? We see in Queensland, where the Premier froze many of the state electricity price impacts, it is between 80 and 100 per cent of electricity price rises.

In Queensland, we have price rises up to 13 per cent of which the carbon tax is 11 per cent. In Victoria, 11 per cent out of 15 per cent price rises are attributed to the carbon tax. In Western Australia, it is nine out of 12 per cent. In the Northern Territory, it is a similar figure.

In the ACT, in some cases, up to 80 per cent of the price rise in electricity for this coming year is precisely because of the carbon tax. Then we see that in New South Wales the regulator approved of the fact that Integral Energy's price would include an 85 per cent lift because of the carbon tax. In Western Sydney the average component of carbon tax in electricity price rises is 80 per cent.

Reply:

That still sounds excessive even in 2015 until one understands what is being said. Just what are these scary 70-100% values?

Queensland: Carbon tax adds 10% to the price AND is 11%/13% = 0.846 or 85% of the increase in price.
Victoria: Carbon tax adds 10% to the price AND is 11%/15% = 0.733 or 73% of the increase in price.
Western Australia: Carbon tax adds 10% to the price AND is 9%/12% = 0.75 or 75% of the increase in price.
ACT: Carbon tax adds 10% to the price AND is 80% of the increase in price.
New South Wales: Carbon tax adds 10% to the price AND is 85% of the increase in price.

Any sensible person would consider the percentage price rise or drop as a reasonable measure of any change. Why is Mr. Hunt promoting this 'percentage of a percentage of an increase'? These are two entirely different things. Yet Mr. Hunt uses the latter to 'prove' the massive impact of the 'toxic' carbon tax which on average was 10% or 2 cents/kwh more for most households at the time.

Mr.HUNT:

So when you look at your electricity bill and see the price rises this year, no matter where you are in Australia, blame the Prime Minister. The government says we have had price rises in the past.

Reply:

My oath, prices have been going up long before Labor's carbon tax! Privatisation in Victoria and South Australia haven't helped to keep prices down as promised because business does it better. The LNP's Goods and Services Tax on the total electricity bill has risen by 109% 2001-2012 which also pushed up my electricity prices. But the LNP is blind to its own regressive tax on an essential service which increases electricity bills much more than the carbon tax. The GST is a tax on a tax in this case!

Mr. Hunt:

Absolutelythat is the point and that is the problem. These electricity price rises have not brought about some dramatic change in Australian consumption.

Reply:

But electricity consumption has fallen. That is why the RET has to be abolished. Solar panel uptake and wind generation would have had an effect on coal generation of electricity. The LNP's scare campaign on a 'carbon tax' on electricity made consumers more savings conscious. The increasing price of electricity and the rising cost of network charges made consumers even more savvy and energy conscious even without a carbon tax. It is debatable whether Mr. Hunt is correct or mistaken about the effectiveness of the carbon tax. There were other factors involved and the carbon tax was not in operation long enough to decide one way or another.

Tibor Majlath
Posted on 8 Aug 2015 3:59 pm (Report this comment)

Mr. Hunt:

It is not just electricity. It is also refrigeration. The Prime Minister tried to say that there was already a refrigerant charge and there was. Let me give you some examples. It has increased slightly. HFC-134a has gone from 17c a kilogram to $30.07 a kilograma 175-fold increase. That means it is over $30,000 a tonne now under their budgeting.

Reply:

That tax increase does sound shoking. However, look at the prices being paid for this gas. The list price of R134A was already $65.72/kg before the carbon tax came in on 1 July 2012. With the introduction of the carbon tax, the price went to $181.82/kg. An increase of $116.10 which consisted of $29.90 carbon tax plus an extra charge imposed by the refrigerant industry of $86.20 [source = https://www.airah.org.au/imis15_prod/Content_Files/UsefulDoc...]

Pre tax list price of $65.72 = 36.15% of $181.82
Carbon levy of $29.90 = 16.44% of $181.82
Supply charge of $86.20 = 47.41% of $181.82


Looking at just the tax component in isolation, gives the wrong impression.

Mr. Hunt:

Probably the best-known of the gases, R404a, has gone from 17c a kilogram to $75 a kilogram with government levies, which is a 441-fold increase. That, by the way, is a $75,000 charge per tonne of gas.

Reply:

R404A was already $92.88/kg before the carbon tax came in on 1 July 2012. With the introduction of the carbon tax, the price went to $167.86/kg. An increase of $74.98 for the carbon tax. On 9 July 2012 the price lept by an extra $209.85 imposed by the refrigerant industry as a 'supply charge'. [source = https://www.airah.org.au/imis15_prod/Content_Files/UsefulDoc...]

Pre tax list price of $92.88/kg = 24.59% of $377.71/kg
Carbon levy of $74.98/kg = 19.85% of $377.71/kg
Supply charge of $209.85/kg = 55.558% of $377.71/kg


The LNP had a field day blaming the 20% carbon tax on the entire 100% price of R404A.

Tibor Majlath
Posted on 8 Aug 2015 4:12 pm (Report this comment)

Mr. Hunt:

These price rises flow through to butchers, they flow through to cold-store owners and they flow through to trucking operators who carry goods through refrigerated trucking. Anybody involved in refrigeration in Australia is going to have to pay the price of the Prime Minister's betrayal.

Reply:

I wonder how suppliers could pass on the carbon tax when there was widespread stockpiling to avoid the tax in the first place?

See, ACCC, "Report to the Minister pursuant to s 60J of the Competition and Consumer Act 2010 Information about the ACCCs operations during the December 2014 quarter relating to the carbon tax price reduction obligation."

Was the rebate for refrigerant gases with the repeal of the carbon tax not enacted because there was no carbon tax paid in the first place?