Nola Marino (Forrest, Liberal Party) Share this | Hansard source

It has not worked. The report states that the European carbon price is in the midst of a collapse—40 per cent since June—and will continue until there was a 'crash' in the carbon price. During a time of economic instability in Europe—that is a way of putting it—a carbon crash will only add to the turmoil.

The report says that it is households in Europe that are paying for the waste and fraud. It says:

… the introduction of carbon pricing has "led to a double-digit surge in power prices across most of Europe."

The European carbon price, instead of reducing emissions, has become an exercise in paper shuffling, a Ponzi scheme that has enriched market participants at the expense of consumers—it is sounding awfully familiar—advising that the CO2 price just provides a windfall to market participants paid by electricity customers through higher bills.

Worse still, fraud is rampant through the carbon market with fraudsters, shysters and organised crime rorting the system and lining their pockets at the expense of households. This is the very scheme that the Labor government is linking Australian business, Australian industry and the Australian economy to.

As the UBS report says:

Europol estimated that VAT fraud in the carbon market has cost European tax payers 5 billion euros and it also estimated that up to 90% of all trading in 2009 could have been such carousel trading to generate the VAT-fraud profits.

This is the Rolls-Royce European scheme that this Labor government is tying Australian businesses and industries to.

We know that Australia is the only nation in the world with an economy-wide carbon tax, which is going to be linked to a chronic failure of a carbon trading scheme that is not going to make any significant impact on carbon emissions at all. You have just heard me explain what UBS thinks of this European scheme, but the Labor government refers to it the explanatory memorandum as a 'credible overseas emissions trading scheme'. The government is tying our economy to this scheme, as I keep saying. We are tying our economy to those of Portugal, Italy, Iceland, Spain and Greece—the European system, the beacons of economic management.

The government is making a major structural change to the carbon tax by removing the legislated floor price. I look back at the comments made by the Prime Minister, the Minister for Climate Change and Energy Efficiency, and others. The floor price was needed, it was vital, to 'limit market volatility'—what I just described in the EU scheme—and it was necessary to reduce the risk for business. It was necessary for 'stability in pricing' and the 'price cap provides confidence' and removed 'uncertainty'. Do we remember those words? Conversely now, after just a few weeks—just five minutes after the introduction of this tax—with the latest policy mess and linking to the European ETS and no floor price, the government unfortunately appears, very knowingly, to be increasing market volatility. What respect is there for Australian business and industry when the government, after making those statements in introducing the floor price and cap, is saying: 'We are knowingly increasing market volatility, increasing the risk for business. We know we said we needed to do this to reduce that, but now we are saying we are going to increase the risk for business and we are going to increase the market volatility.' So Australian businesses and industry are going to be subjected to sharp price spikes and plunges and reducing confidence, and we know all about the volatility of the European ETS and what UBS said about it. All the reasons the government said made it critical to support the floor price are now part of the government's carbon tax package.

We also know that through the Carbon Farming Initiative the government has excluded farmers from selling carbon credits to Europe until 2018. What is this government doing to Australian farmers yet again? We heard the previous speaker talk about the costs associated with a carbon tax for farmers who cannot pass on the tax because they are price takers. This comes on the back of the trade-exposed dairy and food processors that do not qualify for free permits like their European competitors do, the ones that now have to try to compete with both hands tied behind their backs, not just one. They have had to compete for years against subsidies, tariffs, or a combination of the two. They have had to compete against the free permits issued to European manufacturers. They have to pay the carbon tax on their production chains, they compete here in the domestic market with companies and products that do not have the world's biggest economy-wide carbon tax costs and they compete with manufacturers in Europe that get 93 per cent free permits. Our government is knowingly exposing our food manufacturers and food processors to this. The government is doing this knowing the volatility of the markets in Europe. It is just—

See this speech in context