House debates

Monday, 8 February 2010

Carbon Pollution Reduction Scheme Bill 2010; Carbon Pollution Reduction Scheme (Consequential Amendments) Bill 2010; Australian Climate Change Regulatory Authority Bill 2010; Carbon Pollution Reduction Scheme (Charges — Customs) Bill 2010; Carbon Pollution Reduction Scheme (Charges — Excise) Bill 2010; Carbon Pollution Reduction Scheme (Charges — General) Bill 2010; Carbon Pollution Reduction Scheme (CPRS Fuel Credits) Bill 2010; Carbon Pollution Reduction Scheme (CPRS Fuel Credits) (Consequential Amendments) Bill 2010; Excise Tariff Amendment (Carbon Pollution Reduction Scheme) Bill 2010; Customs Tariff Amendment (Carbon Pollution Reduction Scheme) Bill 2010; Carbon Pollution Reduction Scheme Amendment (Household Assistance) Bill 2010

Second Reading

Debate resumed.

4:54 pm

Photo of Chris HayesChris Hayes (Werriwa, Australian Labor Party) Share this | | Hansard source

Prior to question time, I was commenting that the government has put forward an economically credible and prudent proposal that ensures it is supporting the jobs of today while substantively putting forward a scheme that will create the low-pollution jobs of tomorrow. I spoke about my involvement with renewable energy technology businesses and also their frustration at presently trying to commercialise their technologies without a price of carbon being established on a market base and without having their technologies taken to the share market with a view to raising capital to commercialise those technologies.

Mr Deputy Speaker Kelvin Thomson, I know you are fully across this; I heard your speech earlier today. You understand what these commercial and environmental innovators, renewable energy technology developers, are going through. Each and every member of this parliament would have had either a coffee or a tea with people from these renewable energy technologies who have gone to great pains to explain their frustration in developing low-emission technologies in this country at the moment, and that frustration has been at not having a market mechanism in place.

I think that is something crucial that comes through this suite of bills before us on the Carbon Pollution Reduction Scheme, the Carbon Pollution Reduction Scheme Bill 2010 and cognate bills. As I say, the scheme is vital for commercialising these technologies, and these technologies are vital in our ability to combat climate change. It is all very well for the Leader of the Opposition to come out and say, ‘We’re going to mandate this and mandate that; we’re going to encourage people to do these various things,’ but the fact of life is that government itself—the bureaucrats—will not be out there determining what technologies go forward. What we need to do is make sure the commercial realities are that people can actually take these low-emission technologies forward to the marketplace to be able to back projects over the next 20 years. That is critical for having investment in the renewable energy sector, the sustainable energy sector and the whole gamut of low-emissions technologies that are currently subject to research and development.

Importantly, our actions on climate change will help protect and secure the economy and industries like agriculture and tourism, which account for thousands of people employed in this country. I say to the members opposite from Queensland that they will be only too well aware of the numbers involved in terms of the Barrier Reef, but agriculture accounts for a lot of people in this country. That is why our CPRS, our energy-trading mechanism, is supported by business groups like the Business Council of Australia, the Australian Industry Group and also the National Farmers Federation. They see why we are going down this path and they encourage certainty being developed in the marketplace.

I would also like to congratulate the member for Wentworth for the forthright and considered views that he put earlier today. I know that as a former Howard government environment minister he commissioned the Shergold report. I understand that through the development of policies leading to the 2007 election, when the establishment of an ETS was the current opposition’s policy, Mr Turnbull, the member for Wentworth, had a central view. I have to say that, unlike other people opposite, this fellow has stayed pretty consistent with the views that he expressed in this parliament from 2005 through to 2007. He has seen that there is a need for developing technologies and for having certainty in the business place. His considered view is similar to that of the Shergold report, which recommended the development of an ETS mechanism. Mr Turnbull, in his contribution earlier today, said:

This legislation—

referring to the CPRS—

is the only policy on offer which can credibly enable us to meet our commitment to a five per cent cut to emissions by 2020 and also has the flexibility to enable us to move to higher cuts when they are warranted. So for those reasons I support this bill. The arguments I have made for it are no different to those I have made, and stood for, for the last three years.

It probably takes a lot of guts to get up and view the circumstances and do that. But it is plain that these are the views that he has held, the views that were mutually developed in a bipartisan way in the last election and the views that led to bipartisan support of an ETS. I recall only too well when the Shergold report came down that these were the considered views of all sides of politics, before the issue of party politics got involved. What a great thing leadership politics is.

We are now prepared to put the viability of environmental controls, to put the threshold issues associated with climate change, on hold to support leadership. I guess that was not quite what the member for Higgins had in mind when she gave her first speech earlier today on wanting to make a difference. The only difference that is doing is highlighting to the Australian public that some people in this place are prepared to put into jeopardy future generations of this country to maintain a position of leadership today. That is not leadership and you would not even call it head-in-the-sand politics.

This was not just something that occurred; this was something that was very decisive. This came from a man who after the last 2007 election urged people to vote for the CPRS—just support it and get it off the table. This also comes from the fellow who is now the Leader of the Opposition and has had seven different and inconsistent positions when dealing with one of the most serious matters faced by our generation, that being climate change. He is not alone. With fairness to Mr Abbott, he is not alone in this. Bear in mind the position of Senator Nick Minchin, who obviously challenges the climate change science. Moreover, he actually summarises the view that underpins all those scientists out there and the world’s concern about climate change. He reckons it is a communist conspiracy designed to deindustrialise the Western world. They are not my words; they are his words or words pretty close to that effect. He may not have said ‘communist’, he may have said ‘leftist’, but this is the leader of the government in the Senate, that place over there, who summarised the position as being some form of communist conspiracy when we talk about climate change.

Certainly it is no surprise when the Leader of the Opposition refers to climate change as being, to use his words, ‘absolute crap’. You would wonder why you would take on a position of leadership addressing an issue as important as climate change—and there is no question that this is regarded as important to the voters out there—and yet treat with it such disdain. I suppose to some extent we have also seen those sorts of general out-there views now being supported by the chief opposition finance spokesman, Senator Barnaby Joyce. I have to say that, when he refers to things such as ceiling insulation as being that fluffy stuff in the ceiling that rats and mice urinate on, it shows how little they are concerned about taking steps to ameliorate the effects of climate change and to protect our environment.

I do not know whether Barnaby Joyce had a slip of honesty in the process, but it was very interesting when he came out and told us why the opposition would have a climate change policy if his leader thought it was absolute crap and if the leader in the Senate, Senator Minchin, thought it was a communist plot and he was clearly on the record as not having any regard for the science of climate change. He explains it with words to the effect that, to have a policy on climate change, you need to have something to pander to the views of the community. ‘Pander’ makes that sound pretty cheap, but pandering to the community is essentially what Senator Joyce rationalised as to why the opposition would not under any circumstance have a policy on climate change.

When he was pressed about how he was going to pay for the opposition’s position on it, it rolled off his tongue just like that: ‘Cut the Commonwealth Public Service and look at our aid placed overseas. We had better fix our own place up first so we can cut overseas aid projects.’ Clearly, that is an embarrassment to the opposition. He was obviously jumped on from a great height; but, as I say, he probably had a rare moment of honesty at the Press Club and decided to be open and honest with everybody and tell us his genuine views. We have the impression of Senator Minchin’s communist plot, the Leader of the Opposition’s view of it being absolute crap and Senator Joyce now having the view that you just have to have a policy if you want to pander to the electorate.

The choice is pretty clear on this. This legislation is a development of a policy which was supported by the opposition. We have embraced each and every one of their amendments. We have reduced that into the current CPRS bills. The population at large now has a very, very clear choice. It is a choice between the Rudd government’s position on climate change—one that caps emission levels through the CPRS, makes the big polluters pay, provides a mechanism to commercialise renewable technologies and provides financial compensation for families—and the opposition’s position of really wanting no change in support of their con job and in support of their leadership. This is what it is about—the protection of the Liberal leadership and nothing more and nothing less.

5:06 pm

Photo of Andrew SouthcottAndrew Southcott (Boothby, Liberal Party, Shadow Parliamentary Secretary for Regional Health Services, Health and Wellbeing) Share this | | Hansard source

This is now the third time that the House has considered legislation for the Carbon Pollution Reduction Scheme, and on each of the previous two occasions the opposition voted against the government’s CPRS, or emissions trading scheme. I would like to say at the outset that it is important that we take strong action on climate change, and an emissions trading scheme is but one possible response to taking action on climate change. So this is not a debate about whether we should take action on climate change or whether we should, as the Prime Minister often says, do nothing; it is about the best approach for the Australian economy—the most balanced approach which will enable us to achieve our environmental goals while at the same time reducing the dislocating impact on small businesses, on families and on households. Given that there is an enormous volume of science in this area—as we all know, there is currently a debate going on in the community—the prudent thing for any government is to take the scientific concerns seriously and, adopting the principles of risk management seriously, respond.

In fact, the Howard government took this approach in government. We set up in 1998 the Australian Greenhouse Office—the first country in the world to have an agency dedicated to raising awareness and coordinating practical responses to climate change. We had a number of initiatives encouraging industry to develop technologies to reduce greenhouse gas emissions. We had the Global Initiative on Forests and Climate, a very important way of getting carbon out of the atmosphere by reducing deforestation and protecting forests. While Australia only contributes about 1.4 or 1.5 per cent of global greenhouse emissions, the initiatives that we took under the Howard government saw Australia save 87 million tonnes of greenhouse gas emissions a year over the period that we were in government and going right up to 2010. That is the equivalent of taking out the emissions of the entire transport sector—all cars, all trucks, all buses. They were very significant initiatives. There was also the Asia-Pacific Partnership on Clean Development and Climate, which brought together the United States, Australia, China, Japan, the Republic of Korea and India, who together make up 50 per cent of the world’s population, world’s energy use and world’s greenhouse gas emissions. It got all of those countries working together to use technological solutions to dramatically cut greenhouse emissions.

What was obvious last year was that we were all told that there was a rush to have this in place before Copenhagen. The problem is that it has become very obvious with the Prime Minister that the emperor has no clothes. There was no need to rush to deal with this before Copenhagen. Copenhagen was a disappointment; it underdelivered. In fact, it is almost like a metaphor for the Rudd government: overpromised and underdelivered. But what we have now is a very clear choice between the government’s emissions trading scheme and the opposition’s direct action plan on climate change. There is a choice between a $114 billion tax on electricity and groceries for mums and dads and pensioners and a $10 billion direct action plan—a choice between a great big new tax and incentives for businesses to reduce their greenhouse gas emissions. Both sides—the government and the opposition—are committed to a five per cent reduction in carbon emissions, but under the opposition’s plan businesses will be given direct incentives to take direct action to reduce carbon dioxide emissions below baseline levels. The direct action plan includes incentives to clean up power stations, to have one million solar roofs over the next 10 years, to plant 20 million trees and to have a once-in-a-century increase in the carbon levels of soils.

One of the things that we have not heard anything about from the government—it has been very quiet, very secret about this—is what the impact of their Carbon Pollution Reduction Scheme will be on ordinary Australians, on working families, on mums and dads, on households. What we saw in question time today is that even the government’s own ministers—the Minister for Families, Housing, Community Services and Indigenous Affairs, for example—did not have a clue about the impact of the government’s own scheme on families. The Minister for Small Business, Independent Contractors and the Service Economy did not have a clue about the impact of this scheme on small businesses. There is a very interesting document that has been produced by the government. It is called Cameo analysis of household assistance package, and what it shows when you drill down in these tables is the impact that this will have on families and individuals. Take, for example, a family with two incomes, each $70,000, and three children. This would incorporate teachers, nurses, midwives—many different occupations—and a family like this will be $620 worse off under the Rudd government’s scheme. An individual on an income of $60,000—average weekly earnings, or thereabouts—will be $140 worse off under the government’s scheme. A two-income family, one on $98,000 and one on $42,000, with three children will be $808 worse off.

Consider the case of a single-income family where the principal breadwinner is a tradie, a steel fixer, a welder, a fitter, a plumber or a sparky and earns $120,000, with one child at primary school and one child at high school. This family will be $950 worse off under the government’s scheme. It is very obvious that the government has not been upfront about the impact of the emissions trading scheme and the Carbon Pollution Reduction Scheme. Look at the situation for individuals. For a single person, once you are earning more than $40,000 a year you are worse off under the Labor Party’s scheme. Once a single-income family with no children earns an income over $60,000 they will be worse off under the government’s scheme. A two-income family with no children, once the parents are on incomes of $42,500 each—below average weekly earnings—will be worse off under the government’s scheme.

That is why the opposition will be voting against the Carbon Pollution Reduction Scheme. It is now incumbent on the Labor Party to explain the impact that this scheme will have on working families and the impact that it will have on salary earners who are on very low incomes, well below average weekly earnings. That is why the opposition will be opposing these bills.

5:16 pm

Photo of Amanda RishworthAmanda Rishworth (Kingston, Australian Labor Party) Share this | | Hansard source

I am very pleased to rise to support the Carbon Pollution Reduction Scheme Bill 2010 and the associated bills that are before the House today. This scheme is a comprehensive and effective response to climate change. It has been developed against a backdrop of overwhelming scientific evidence, international political consensus and, until a few weeks ago, with national political consensus and, importantly, in negotiation with the previous leadership of the coalition. It is a balanced, costed and market based response to one of the greatest challenges of our times. Put simply, the CPRS caps and reduces Australia’s carbon pollution for the first time ever. It makes polluters pay for their carbon pollution and takes the money raised from the polluters and provides cash assistance to working families. The government’s approach is measured and presents a wide-ranging scheme which is designed to redirect the Australian economy towards a low-carbon future.

In the last few weeks we have seen the Leader of the Opposition bring out his alternative policy. Really, when we drill down and look at this policy I think the Australian people will see that he is more interested in cheap political gain than in any real action on climate change. The Leader of the Opposition’s so-called direct action climate change proposal is nothing more than a climate change con job which will impose a tax on the Australian people and, in his own words, allow big polluters to continue with ‘business as usual’. Last week we saw the Leader of the Opposition describe the coalition’s newest policy as a carefully costed and capped policy, when in actual fact it is uncosted, uncapped and unfair on the Australian people. In the words of the Minister for the Environment, Heritage and the Arts, the coalition’s latest response to climate change is an attempt to ‘concoct a window display without putting a price on carbon pollution’. In the same article, he appropriately described it as the ‘policy equivalent of dessert without a main course’.

What we have seen with the coalition’s policy is an absolute smokescreen when it comes to any real action on climate change. Instead of putting a cap on carbon, the Leader of the Opposition’s plan is actually designed around big polluters being encouraged to continue to emit carbon, whereas the government’s Carbon Pollution Reduction Scheme makes polluters pay for their emissions. The Leader of the Opposition’s policy is based on the idea that the government and the Australian people, not the big polluters, should foot the bill in abating emissions.

We have just heard the member for Boothby talk about being upfront. One thing we can say about the opposition’s policy is that they have not been upfront with the Australian people about where the money for their $10 billion scheme is going to come from. All we know is that the burden will fall on taxpayers. Will the money be cut from the budget, perhaps from services, as we heard in question time? The Leader of the Opposition is well renowned for the cuts he made to public hospitals. He cut close to $1 billion out of the public hospital budget. Or will the money come from new taxes? We are not sure, because the opposition have not been upfront with the Australian people about where their cost is going to come. When we talk about being upfront and clear about what our policy is—the government’s policy compared with the opposition’s—we know that whereas we have been very clear about the compensation scheme and where the money is going to come from the opposition have not.

The Leader of the Opposition’s policy was clearly developed in a cocoon, in which he is in denial about the reality of climate change. Outside this cocoon, the real world is literally heating up. The world has just come out of the hottest decade in history. While last week the government reintroduced the CPRS into the House, the Leader of the Opposition was busy holding a private audience with Lord Monckton, a person whom even conservative journalists and the likes of Senator Barnaby Joyce have publicly been trying to distance themselves from. To put him in perspective, Lord Monckton is a person who believes that climate change is the trojan horse for a centralisation of communist power after the fall of the Berlin Wall. That sounds quite extreme, but if we turn our thoughts back to late last year, the shadow Treasurer was accusing the G20 of being part of a socialist conspiracy. So I guess Lord Monckton’s views do sit quite comfortably with the Liberal Party.

While the government has based its response to climate change on the global scientific consensus, including the work done by Australian scientists from the CSIRO and the Bureau of Meteorology, the Leader of the Opposition seems to be taking his scientific advice from an eccentric English mathematician who finds himself clearly on the fringe.

Photo of Nick ChampionNick Champion (Wakefield, Australian Labor Party) Share this | | Hansard source

He is not even a mathematician.

Photo of Amanda RishworthAmanda Rishworth (Kingston, Australian Labor Party) Share this | | Hansard source

I know that the member for Wakefield will provide more information about Lord Monckton and his expertise. We have seen that Lord Monckton is on the fringe. It seems that the Leader of the Opposition is taking advice from this person and not the scientific consensus. It is unsurprising that someone who takes advice from the likes of Lord Monckton asserted some months ago that the world has actually been cooling. If he had bothered to look at the hard facts, the Leader of the Opposition would realise that 14 out of the 15 warmest years on record occurred between 1995 and 2009. With scientists telling us to expect average surface temperatures to rise between 1.1 and 6.4 degrees Celsius, it appears that the Leader of the Opposition is completely out of touch with reality. That is why he is advocating a business-as-usual approach as an answer to climate change.

It is understandable that people might be finding it difficult to keep pace with the Leader of the Opposition’s position on climate change. In fact, I have not been able to keep up with all six publicly recommended positions. First was blocking the CPRS, then passing the CPRS, then amending the CPRS and now proposing his own new taxpayer funded slush fund so that the big polluters can keep on going with business as usual. If people are feeling a little confused about where he or the coalition stands on the issue of climate change, I am certainly not surprised.

In my opinion, his real views on the issue are those expressed to the group of supporters at the function centre at the Beaufort football ground in Victoria on 30 September 2009 when he quite clearly stated that he felt that the argument for climate change was ‘absolute crap’. However, he did acknowledge that the politics of this are tough ‘for us’, as he put it, and that 80 per cent of people believe that climate change is a real and present danger.

Earlier, we heard comments about being tricky and about doing what is important for short-term political gain. I would assert that the Leader of the Opposition is being particularly tricky when it comes to the politics of climate change, looking for short-term solutions and smokescreens to try and trick the Australian people. But I believe that the Australian people will see through this. These comments really give us insight into the opposition leader’s policy response. He clearly sits in the camp of climate change fringe dwellers and sceptics, led by his mentors Senator Nick Minchin and Lord Monckton, who do not believe that the world is warming and who in fact believe it is one great big left-wing conspiracy to try and de-industrialise the world.

But, instead of standing up for what he really believes, the Leader of the Opposition has sought to pull the wool over the eyes of the Australian people, announcing his deceptive and simple direct action policy. It is deceptive because it is designed for political purposes and not for addressing the real issue of dangerous climate change. It is simple, because he knows that it will not work and he does not care. This was clearly indicated by his comment that he thinks climate change is ‘absolute crap’.

In contrast to this real con job—the direct action policy presented by the opposition—the Carbon Pollution Reduction Scheme advocated by this government is not designed for political purposes. It is designed for the national interest. It is premised on the reality that there will be a price imposed on carbon emissions and that there will be a price imposed on polluters. Because the government recognises that there will be a modest increase in the cost of living of around 1.1 per cent, this government has provided direct compensation to householders. In fact, 90 per cent of all households will receive direct cash assistance under this scheme. To put these things in perspective, 90 per cent of low-income households will receive assistance equal to around 120 per cent of the overall increase in costs that they face under the CPRS.

The coalition will impose penalties on businesses which pollute above business-as-usual levels and nobody in the opposition has been able to explain what these penalties will be and how these penalties will impact consumers. One thing that we do know is that the opposition’s plan has no option to compensate consumers for these. This highlights the great irony in the Leader of the Opposition’s proposal. The coalition direct action policy, which is designed only for political purposes, with no intention to seriously address climate change, will actually be more harmful to Australian consumers and taxpayers.

To spell this out, experts in the Department of Climate Change estimate that, rather than reducing emissions by five per cent, the policy of the Leader of the Opposition and the coalition will actually increase Australia’s emissions by 13 per cent from 2000 levels. This 13 per cent increase in our emissions will come at a cost of a $10 billion tax bill for the Australian people in a four-year period. This figure does not include the price rises that penalised businesses will be forced to pass on to their consumers. The money for the Leader of the Opposition’s slush fund has to come from somewhere, and he has refused to rule out cutting funds to schools and defence. His shadow minister for finance has also failed to rule out increased taxes.

It is ironic that the Liberal Party is running away from the market. Considering that they are accusing us of creating a state-interventionist and communist system, it is ironic that they are running for the hills to get away from a market based system such as the Carbon Pollution Reduction Scheme. But what it does is create a level playing field that encourages businesses to do what they can and to look at their options about how they might reduce carbon emissions. This is in quite stark quite contrast to the Leader of the Opposition, who has decided that if his scheme gets up then he will pick the winners—who will get the investment and who will not. Companies that will thrive under this system will not necessarily be the ones that are capable of producing low-carbon-intensive goods and services, because it will not be a market based system and it will not create incentives for companies to do their best to reduce their carbon emissions. This is a real flaw in the system.

You do not need to go back very far when thinking about governments picking winners and losers. Your mind goes back to our minister for infrastructure who regularly raised the issue of the cloud-seeding technology against departmental advice. Not only was $2 million suggested but $10 million was also suggested. And I think we can see there some of the issues that come with governments picking winners and losers. All around the world, we see that governments are not in the best position to pick winners and are bad at the command and control of whole sections of the economy. We on this side of the House realise that it is inherently problematic and that Australia’s response to climate change should not be designed around a massive slush fund which seeks to directly pay companies to run abatement schemes so that our big polluters can continue to emit carbon pollution as business as usual.

In the medium term, the outcome of the Leader of the Opposition’s scheme is that Australian goods and services will become undesirable and expensive in the global economy. We see that more and more countries, including all of Europe, Japan and New Zealand, have either introduced or are in the process of introducing an emissions trading scheme. Most governments in the developed world are in the process of realigning their economies in preparation for a low-carbon future. If we do not do that, if we do not start preparing for our economy to be realigned for a low-carbon future, we will be left behind.

If Australian industry is encouraged to conduct their businesses and pollute under the illusion that business as usual continues, there is the real danger that we will become economically disadvantaged and incapable of taking a leadership role in new technologies and businesses and, in fact, new clean, green technologies that have the opportunity to be developed and manufactured here in Australia will move offshore. The Australian economy will fail to keep pace with the rest of the world in terms of new technology. At its worst, we will face the prospect of becoming economically backwards. It is really critical for a restructure of our economy to ensure that we can take advantage of being part of the world’s low-carbon future.

The government has designed and is introducing into the House a carbon pollution reduction scheme which is capable of responding to one of the greatest challenges of our time. It will serve to both restructure the Australian economy and compensate for the effects that a low-carbon future will have on low- and middle-income households. The Carbon Pollution Reduction Scheme is a thorough, complex and wide-ranging scheme which will affect all facets of the Australian economy. It is designed around a market based and merit based system, where the government’s role is reduced to setting emission reduction targets for the national economy in line with internationally agreed targets.

The opposition leader’s scheme might be simple to explain, but that is because it is designed for political purposes. It has very little to do with avoiding dangerous climate change. The shallowness of his policy is not surprising when you consider the sad truth that it has been commissioned by a leader who is out of touch with reality and is of the opinion that climate change is ‘absolute crap’. The Australian people need to be aware that the coalition is currently being led by a person who is prepared to stake the future of the world on sceptical fringe theories and who takes advice from an eccentric English aristocrat.

The whole world wishes that responding to climate change was as simple as Mr Abbott’s ‘direct action’ plan, but the reason that nothing even vaguely similar to Mr Abbott’s plan has been taken up by the government of any advanced economy is because it will not work. It is not designed to reduce emissions and it will not allow the Australian economy to enter into a low-carbon future on the front foot. Mr Abbott’s ‘direct action’ policy, is a climate change con job which will impose a big slug on taxpayers instead of polluters.

More than ever, Australia needs a responsible and truly national scheme to tackle climate change, and a scheme which is capable of addressing the environmental imperatives of reducing our carbon emissions. We need a scheme which can accurately forecast the modest increases in the cost of living and compensates those most affected. Fundamentally, we need a market based mechanism capable of guiding Australian industry into a low-carbon future. As a result of that, I commend the Carbon Pollution Reduction Scheme legislation to the House.

5:34 pm

Photo of Wilson TuckeyWilson Tuckey (O'Connor, Liberal Party) Share this | | Hansard source

I have just listened to the member for Kingston and I could spend the next 20 minutes responding. I will give some time to addressing the comments she made. I happen to visit her electorate from time to time. I know it well—my wife was raised in Adelaide. I happen to know that the electorate of Kingston has a significant body of residents who gain their living in agricultural areas—wine and many other things. I thought she might be interested in an article published in the Perth Sunday Times on 27 December, in which the Australian Food and Grocery Council disputes her government’s estimate that the cost of a shopping trolley would only increase $68 per annum. A noted economist from ABARE called that ‘rubbish’. The Food and Grocery Council suggested a figure of $520 a year. This is the point for the member for Kingston. I quote from the council:

It seems the only way the government could have got this figure would be to base their modelling on significant reductions in Australian manufactured goods and a significant increase in supplies from cheaper priced countries such as China.

The member for Kingston has a constituency based to a great extent in South Australia, a state heavily reliant on food production and food processing. There are 300,000 Australian workers in the food industry—and the Food and Grocery Council says, ‘If you want to do what they have claimed, you better get everything from China.’ That is not a bad starting point.

The member for Kingston lectures, as everybody does—including someone from my side—that this is a market response. How can it be a market response if the government has about 10 or 15 centimetres of legislation? A market is cold turkey. If you are going to compensate everybody who turns up with a case, where is the discipline upon those people to reduce their emissions? The member for Kingston put the argument for a ‘pay to pollute’ response to the climate change legislation. She ran off all the repetition of her colleagues. Japan, she said, is going to have an ETS and then she said ‘or might do’. I think New Zealand has some form of legislation but it is not happening.

The minister got up the other day and said that there are 32 countries with an ETS. Well, the next speaker after me might name those countries. But I can tell you that they do not include Japan, they do not include India, they do not include China, they do not include Brazil and they do not include South Africa. They were the group who showed the door to our Prime Minister—who was going over to Copenhagen to run the show. They showed him the door. They made their decisions in his absence and would not give him the time of day—he and his 114 public servants—and a group of Third World countries set the agenda at Copenhagen. And what was their message? It was: ‘We will advance our economies and, if that means more CO2 in the atmosphere, it is up to you, the so-called developed countries. I love the fact that even our Prime Minister thinks we are so rich that we can donate to China, India, Brazil and all these countries, but the reality is that they took no notice of him and would have taken no more notice if this parliament had passed this legislation prior to Copenhagen.

It is said that the coalition is out of touch, but it is offering incentives not penalties. As I have been saying for decades, there are great technological opportunities for Australia and most of them exist today and we may like to take the opportunity to be involved. The member for Kingston also accused us of picking winners. What is the compensation fund that is proposed by the Rudd government but picking winners? At one stage the electrical generators were going to get $3 billion. They asked for $10 billion and suddenly they are getting $7 billion. Is that picking winners? After the election, were the ACTU and associated unions winners? Were the employers winners? They are trying to keep this economy afloat with exports, and what is happening to them? There is a strike going on during the building of the biggest industrial program in Australia because the workers involved want to keep a motel-style room empty to store their toothbrushes in while they are away for their six days off. And do not tell me that they hang their clothes in there. I get on the same planes as they do—and they wear them up there and they wear them back. I sometimes wonder if they ever take them off. So do not give me that sort of stuff.

Photo of Nick ChampionNick Champion (Wakefield, Australian Labor Party) Share this | | Hansard source

Mr Champion interjecting

Photo of Alby SchultzAlby Schultz (Hume, Liberal Party) Share this | | Hansard source

Order! I warn the member for Wakefield that, if he persists in interrupting, I will deal with him. You will have your chance to speak in the debate in a very short period of time.

Photo of Wilson TuckeyWilson Tuckey (O'Connor, Liberal Party) Share this | | Hansard source

I am very grateful to you for reminding me that there is another South Australian MP in here, representing another district with a significant agricultural component, who is voting for a tax on farmers and voting, as the Food and Energy Council says, to replace production in his own electorate with product from China—because they are not having an ETS and they will be the ones who can achieve these figures. Please remember that in Treasury modelling, they have gone as far as to say: ‘These certificates will not be that expensive. They might be expensive in Australia, but you can buy them from China.’ That is in the white paper. That is in the modelling. So, anyhow, we know we have two South Australians in here who do not give a damn about the people, jobs and productivity in their own electorates. I will make sure my relatives, who live around that country, are well aware of those points.

But let me just touch on a few of the generics associated with this legislation and the claims that it will work. Firstly, it is said that we have a situation where this legislation has been backed rock-solid by scientists. I have stayed out of that argument because I do not have the competence to say yes or no. I might add that I got very high marks in chemistry and physics when I was at school but I did not proceed to climate change technology. But what I can tell you is that, recently, the media has been full of examples of very dodgy science—like the 15,000 glaciers of the Himalayas that are all going to melt completely by 2035. Apparently that was taken out of some schoolkid’s composition. So, if you are worried about the reality, the science is still in play.

I have heard the Great Barrier Reef mentioned about a thousand times in this debate. The reality is that, if you evacuated Australia and there were no significant decisions or responses taken in other parts of the world, whatever is going to happen to the Barrier Reef will happen. It appears from some of the comments of scientists that it is doing pretty well—but we will disregard that! Then, of course, we are going to be confronted with these terrible cyclones—they are going to increase in intensity. I had the roof blown off my hotel in 1961 and nobody said that that was the result of climate change. But let me remind you what the last two highly intense ones have done. They have flooded western New South Wales and Queensland. They have broken the drought. There is a chance for the two members I have so far mentioned that some of that water will get to Adelaide. If that is a problem, write me a letter about it. It is only the big cyclones that get into that hinterland—and that has been for as long as the history of the Australian climate.

I have already mentioned the extent to which the developing countries dominated Copenhagen. There is the argument that an ETS can be a market based solution. The market is when government keeps out of it. This government is setting the pattern, selling the certificates and saying who can buy them—and that includes the hedge funds who could drive the price up as they did the price of petrol, then go broke and be bailed out by the government of the day when that goes sour on them. Again, it is distorted by selective compensation payments, which will clearly undermine any discipline to reduce emissions by parties in receipt of such payback. There is a great dispute in this place as to whether or not the compensation proposed is sufficient, and the examples where it will not be are legion. But if you get fully compensated where is the market discipline? Do you consequently not buy an air conditioner? Do you consequently tell the kids to turn the lights off, and will they take any notice of you? That is it.

When Treasury modelling was conducted there was a promise that there would be a global market in emissions trading. Where is that? Just about everybody of substance in the emissions business said no. Of course, President Obama, having lost a seat that the Democrats have only held for 40 years at about a 60 per cent margin, is saying: ‘Oops, maybe “yes we can” is “yes we can’t”.’ If America is not involved, where is the international marketplace where these things are supposed to work?

The Rudd government is convinced by its own rhetoric in this third proposal to the parliament. The cost of the initial issue of certificates to consumers and exports is admitted by the government to reach $115 billion. That has got to come out. The cost to many of these so-called nasties—the thousand worst polluters—and the fact that they probably provide about 80 per cent of Australia’s employment is not even considered. They are just the nasties for the purpose of politics. Exporters can respond to this tax by job cuts and those with a captive market like the electricity generators can respond by putting up their prices. I have said before in this House that, if you are a person of considerable wealth who puts your hand on your heart and says, ‘I’ll pay more for my electricity to save the planet,’ you are paying more for your electricity so your electricity generator can buy the certificates necessary to keep polluting. The idea is that, when all this money has gone into the government’s coffers for some apparently selective picking winners-type payback, in the delaying period after you have paid the tax and completely depleted your cash reserves you are going to rush out and do something positive to save the planet. This is unlikely and possibly impossible.

The member for Throsby is leaving the parliament and she now seems to ask a few dorothy dixers about climate change. BlueScope Steel have to use coke to make steel. There is no other solution available as yet. They are just going to have to pay the tax. They might reduce their workforce. They might say: ‘We now know for certain that China and India are not going to have an ETS. Their labour force is still cheap and we will go there.’ Goodbye, BlueScope Steel. Is this a good idea? The coalition says to BlueScope Steel, ‘Look, if there is anything left in your box that could improve your efficiency and reduce your carbon consumption, come along and see us and we will participate in paying you to achieve that outcome.’ That is the difference. That is called picking winners.

Furthermore, my website has the only contribution from any member of this House that proposes practical solutions to climate change. I think there are opportunities to leverage off this debate, whether it is right or wrong.

Photo of Nick ChampionNick Champion (Wakefield, Australian Labor Party) Share this | | Hansard source

Tidal power.

Photo of Wilson TuckeyWilson Tuckey (O'Connor, Liberal Party) Share this | | Hansard source

The member for Wakefield mentions tidal power, and I thank him for that, but there is a bigger issue. It is called high voltage DC current transmission. That will be the pipeline for big ticket renewables and low emissions. It is an interesting fact that natural gas does not run down a pipeline on its own. The pipeline between the Pilbara and Perth is consuming over 200 megawatts of energy for the pumping process. That is a pretty average sized powerhouse in comparison. It is about 700,000 tonnes of emissions. If we stop taking the gas out in Perth and turning it into electricity but did that in the Pilbara, we would have more capacity in the pipeline for people who want heat, we would have the security of duplication and we could bring that electricity down on HVDC over about 1,000 kilometres into the south-west network and in the process only lose about three per cent of the power.

The Europeans are starting to wake up to this. This government says, ‘Let’s have photovoltaics all over the place in cloudy parts of Australia.’ The Europeans are going into North Africa and looking at huge gigawatt-size stations. Western Australia only has a total generating capacity of about three gigawatts. The Europeans are talking about single stations or a collection of stations of that size in North Africa, and they propose to send that power over 3,000 kilometres back into Europe. The loss of power is 10 per cent. If you used our dodgy AC system, it would be 45 per cent.

Where are the investment opportunities in this scheme to do that? If you look at the coalition proposal, you will find a $2 million commitment to further investigate an HVDC system. I see it as identical to something done by Charles Court, former Premier of Western Australia. Woodside had a find but nothing else, and Charles Court said, ‘On behalf of the people of Western Australia, I will buy more gas than they can use and I will fund the pipeline.’ Today the pipeline is overstressed and this parliament gets huge amounts of revenue from the industry that followed that initial development. His son, the then minister and former Premier, sold that pipeline to the private sector for about three times what Charlie paid for it.

What is wrong with a government statutory authority being established, after due inquiry, as our leader proposes, to undertake the original introduction of an HVDC system? I would start it on the Pilbara to Perth pipeline. I would build a line across to South Australia and I would interconnect them. As the gas comes ashore in Browse, I would build it up there too. At the end of that, with another line from South Australia to New South Wales, I would have spent about $5 billion. All the benefits of doubling the amount of power running down the wire are as good as having a renewable energy power station. If you go through the desert on the way, and you obviously do for South Australia, it then becomes practical to produce 2.4 gigawatts of wind power, because the HVDC system can accommodate the variability in the generation that comes from that. South Australia could have 2.4 gigawatts of extra power generation at a price that people could afford. (Time expired)

5:54 pm

Photo of Nick ChampionNick Champion (Wakefield, Australian Labor Party) Share this | | Hansard source

I rise to support the Carbon Pollution Reduction Scheme Bill 2010 and related bills. I begin by apologising to you, Deputy Speaker Schultz, for testing your patience earlier. It is always good to follow the member for O’Connor. We always learn something from him, something technical in this case, although he was sounding a bit like Rex Connor towards the end of his speech.

This legislation is probably the most important legislation this parliament will debate in a generation. The decisions we make will have a profound effect on the way we live now and into the future. In my contribution, I would like to refer to the scientific consensus as it now stands, the policy options that stand before us, the views of the prominent climate sceptic Lord Monckton and the nature of opposition to this legislation.

The scientific consensus as set out by the IPCC’s working group in their report, Climate change 2007: the physical science basis, says that there is no question that the climate has warmed and that it is now very likely that greenhouse gas emissions related to human activity caused most of the warming that has been observed since the mid-20th century. In the previous assessment report, in 2001, the IPCC had only considered it likely. They found that global climate change over the past 50 years is extremely unlikely to have been caused by natural variability alone. These findings are a result of sophisticated computer modelling that takes into account greenhouse gases produced through human activity and also through the effects of the sun, aerosols and land use.

The current rate of carbon dioxide in the atmosphere is approaching 380 parts per million, which is the highest rate in 650,000 years. That rate increased during the industrial era and is likely to be unprecedented in more than 10,000 years. Ice core samples show that for the past 10,000 years preceding the industrial era, atmospheric carbon dioxide has been stable at 260 to 280 parts per million and the level of 280 parts per million has been around for roughly the 750 years preceding the industrial age. Human activities have increased that rate to 380 parts per million. Nitrous oxide levels have increased by 19 per cent and methane gas levels have doubled—they are all greenhouse gases. The warming that has occurred in the second half of this century can only be explained in the computer modelling if human induced changes in greenhouse gas emissions are included in those computer models.

To put the amount of carbon that is emitted in an easily digestible form for the benefit of the House and anybody listening, human beings add 6.5 billion tonnes of carbon each year through burning fossil fuels. They add another one to two billion tonnes of carbon through erosion, land clearing and soil degradation. They are extraordinary figures when put on a global scale. Like the member for O’Connor, I have no scientific expertise. I am reliant on the scientific community for their advice. As a layman, it seems to me that if you pump 6.5 billion tonnes of carbon into the atmosphere, it might have some effect on the balance of things and some effect on our fragile planet.

We have the recent example of the hole that has been caused in the ozone layer. We know that was caused by seemingly small amounts of CFCs from our refrigerators and cooling systems, and that that had a very large impact on the world around us. It depleted ozone in the atmosphere. The world responded through the Montreal protocol, an international treaty to ban these chemicals. The sky did not fall in because of international action. The economy did not fail. No world government was enacted. What actually happened was that the use of CFCs declined and alternative chemicals for use were found by private enterprise. We changed our ways and, as a result, ozone levels in the atmosphere are likely to be restored to 1960 levels by 2050. So we had an international treaty, based on recommendations of scientists and backed by the leadership of nation states, which solved a problem through the dynamic innovation of private enterprise.

It has been done in other areas, too. Acid rain in the United States was resolved through a cap-and-trade scheme. The problem was fixed by the US government constructing a market and private industry responding to that market. The result was not economic collapse and the result was not world government. The results were that acid rain was stopped, industry fixed the problem and it was fixed at a lower cost than anybody predicted. It is interesting that there was an article by Joel Kurtzman in the September-October issue of Foreign Affairs last year called ‘The Low-Carbon diet’. Mr Kurtzman reports:

In 1979, the United Nations passed the Convention on Long-Range Transboundary Air Pollution, which marked the beginning of an international effort to reduce the emissions of sulfur and nitrogen oxides. But it was not until the US Congress passed the Clean Air Act Amendments of 1990 that the United States saw any meaningful reduction. The amendments enabled the EPA to place a national cap on emissions of sulfur and nitrogen oxides while allowing polluters to trade permits amongst themselves. Using 1980 emission levels as the baseline, the program aimed to cut emissions of sulfur dioxide in half by 2010. In 2007, three years ahead of schedule, the agency’s cap-and-trade program achieved its reduction targets. The cost to emitters, which the Congressional Budget Office had estimated would be $6 billion a year, came instead to about $1.1-$1.8 billion a year, largely because the program enabled emitters to choose their own solutions to the problem, rather than relying on a narrow range of mandated technologies and approaches.

There is some indication there that a similar scheme was used to solve a similar problem and fixed it, and it fixed it at a lower cost than anybody predicted—not at a higher cost than people predicted but at a lower cost. A similar scheme was used in the United States for the transition from leaded to unleaded petrol and, again, the result was that government gave leadership and created a market system and that market system induced private enterprise to produce a public good. Without those cap-and-trade schemes, this public policy outcome would not have occurred or it would have occurred at much greater cost.

The CPRS legislation before us today is no different in principle from the US government’s approach to acid rain. The need to act is backed by the weight of the scientific evidence that we have at this time. The government is providing leadership and direction for the public good and the national interest. A market is being created so that private enterprise will respond. This market will be based on sound principles. The first principle is that the polluter should pay for the permits to emit greenhouse gases; that the market, through the trading of these permits, will best know how to allocate the costs and risks associated with such emissions; that the market, through capital allocation, is most likely to effectively reward risk, to encourage innovation and to drive efficiency; and that the government should assist our export industries to protect our international competitiveness because, as previous members have said, those exporters cannot easily pass the prices on.

The other principle is that low- and middle-income earners should be compensated for the price effects from the creation of this new market. This is not some invention of the Australian Labor Party. Rather, it is the invention of a range of experts—a range of people from across the policy divide—who think that this is the appropriate way to go about lowering emissions. Nicholas Stern, an economist and a person of great reputation, said:

Expanding and linking the growing number of emissions trading schemes around the world is a powerful way to promote cost-effective reductions in emissions and to bring forward action in developing countries.

In addition, the Shergold report, which has been quoted many times in this debate, stated:

By placing a price on emissions, trading allows market forces to find least cost ways of reducing emissions by providing incentives for firms to reduce emissions where this would be cheapest …

That is why the Howard government was committed to introducing an emissions trading scheme. It was why the Liberals, under the responsible leadership of the member for Wentworth, backed amended CPRS legislation. You have to compliment the member for Wentworth. He did, I think, a courageous thing in this House today. He made a courageous speech, the type of speech that is not made in this House very often, and I think he is to be commended for it. It does take some courage to fly in the face of your party and it takes some courage to do it on the floor of the House of Representatives.

It is a great pity that the current opposition has ignored all reason and adopted a policy that slugs the taxpayer rather than the polluter, that is underfunded and will either result in higher taxes or cuts to services and that relies on government directive rather than a market mechanism to allocate risk, create innovation and drive efficiency. We know that, at best, this approach has profound limitations and that, at worst, it has inherent public risk associated with it—the great risk of crony capitalism. Finally, this policy will increase emissions by 13 per cent over 2000 levels. At the end of spending all this money, it will have increased emissions. Even the coalition’s own researcher, David Pearce from the Centre for International Economics, has said, according to the Australian Financial Review today:

… the apparent simplicity of the coalition plan would soon disappear if it were ever implemented, because so many technical aspects of the strategy had been left unresolved.

The cost of the scheme could also rise significantly once details such as penalties on the assignment of risk were taken into account.

At the end of the story, the article says:

The principal architect of the coalition plan, opposition climate change spokesman Greg Hunt, admitted to The Australian Financial Review that this was an aspect of the scheme that would need to be resolved.

He said that about some problems they were having with farmers. These are some extraordinary admissions about a policy that is designed to fail. It is just a political stunt—very immature, very short-sighted and very irresponsible.

One would ask: what is driving this sudden change in policy by the Liberals? What has made them shift 180 degrees? The Liberal Party have said that Copenhagen caused the change in policy, but I think that it is actually a fellow called Lord Monckton. You cannot really have a discussion about climate change without examining the credibility of the lead sceptic. I have to say that I do not have anything against Lord Monckton. He seems like he would be an interesting person to have over for a dinner party. He is eccentric and controversial. He also possesses a certain charisma and good old-fashioned English charm, politeness and good manners; but he does have a long history of form on public policy issues. He has a history of holding extreme views in public policy debates. Let us take his view on AIDS. In 1987, Christopher Monckton, a former special adviser to Margaret Thatcher, wrote an article for the American Spectator titled ‘AIDS, a British view’. In it he said:

Yet both reports fail to draw the unwelcome but undeniable conclusion from the disquieting evidence which they present. For there is only one way to stop AIDS. That is to screen the entire population regularly and to quarantine all carriers of the disease for life to halt the transmission of the disease to those who are uninfected. Every member of the population should be blood-tested every month to detect the presence of antibodies against the disease, and all those found to be infected with the virus, even if only as carriers, should be isolated compulsorily, immediately, and permanently.

He went on to say that his program of action is radical, universal, undeniably contrary to individual liberties, et cetera. It is quite an extraordinary article. He finishes the article by saying:

Although the idea of universal testing and isolation now sounds extravagant and preposterous, it will eventually happen.

We know that Lord Monckton was wrong about that. He was absolutely wrong and he admitted that he was absolutely wrong later on when he was trying to sell puzzles to the public and he had to back off. He said:

Although I did mention quarantine and compulsory testing, I also said it was incompatible with liberal democracies and placed national authorities in an immense dilemma of enacting an unthinkable infringement of basic liberties.

While quarantine may have been an option 12 years ago, it is now obviously far too late to even consider a measure like that.

He said that on 28 August 1999 and has since backed away from that. In his latest National Press Club appearance he had a whole slide based on it and he said, regarding the AIDS epidemic, ‘That is the correct policy’ in regard to quarantining. So we know that Lord Monckton swings around the place a great deal. He told a South Yarra audience about the crash of a NASA satellite. He said:

Not greatly to my surprise—indeed I predicted it—the satellite crashed on take-off because the last thing they want is real world hard data …

That is what he told a climate sceptics lunch in South Yarra. The other day at the National Press Club, someone asked him what he would do to free science from prejudice and from the state interfering in it. I transcribed this myself off APAC. He said:

The first thing we have to do is stop funding science as taxpayers, that is a mistake, there is only one customer these days, and that is the state. Ninety-nine per cent of all science is bought and paid for by the state, via the taxpayer, whether the taxpayer likes it or not. That induces a culture of dependency much the same as someone living on the dole. The scientists are all like this and therefore begin to pander to what the state wants.

What he is suggesting there is that we end all state funding for science—which is a pretty radical proposal. Like I said, Lord Monckton is a likeable sort of fellow and he is very charming and all the rest of it, but I do not think that his views are practical or desirable and I think that Australians would find them extreme. You would have to wonder what influence he is having over Australian domestic policy.

I noticed the other day that the Leader of the Opposition, the member for Warringah, met with Lord Monckton. I do wonder what they discussed in their meeting. Did the Leader of the Opposition, as a former health minister, discuss Lord Monckton’s views on AIDS and the quarantining proposal? Did they discuss communism and the green movement, as the member for Kingston talked about? Did they discuss the conspiracy of radicalised scientists? Did they discuss the ending of all government funding for scientists? Did they discuss the crash of a NASA weather satellite? I think we are entitled to know how Lord Monckton is affecting Australian domestic policy. I think it is a very important question. I do not think that people should be judged by the company they keep, but the Leader of the Opposition is a significant figure in Australian politics. He has changed his policy. He has met with this leading climate sceptic who has had a tour of the country—a very successful tour by all accounts; he had packed-out audiences—but I think we are entitled to know what Mr Abbott and Lord Monckton discussed.

We have a right to know whether this parliament is going to be used as a cipher for Lord Monckton’s views. We have a right to know if this parliament is going to be used as an incense burner to Lord Monckton’s vanity. We have got a right to know whether or not it is going to be used as a crucible to his policy fantasies. I think the Leader of the Opposition should reveal to us what subjects were discussed in his secret meeting with Lord Monckton. Whether or not he agrees with Lord Monckton’s views is irrelevant, but we should be entitled to know exactly what was on the agenda for the meeting, whether or not there are going to be any future meetings, whether or not there is going to be any future contact, whether or not there are going to be any phone calls and whether or not, under an Abbott government, Lord Monckton would be sitting over here in the ‘honoured visitors’ gallery. Perhaps he would be there—this batty English lord—giving policy advice to a future Abbott government. I think we are entitled to know all of that, and I would like to hear from the opposition about the nature of the meeting and what was discussed.

6:14 pm

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

I rise to oppose the Carbon Pollution Reduction Scheme Bill 2010 and cognate bills. As I said the first time I spoke on these bills, this is seriously flawed legislation that will cost Australian jobs. It will cost investment and will compromise our historic, internationally competitive marketing advantage underpinned by cheap energy. However, as a result of the coalition’s direct action plan, Australians now have a clear choice of, as the Leader of the Opposition says, ‘a big new tax on everything’ or practical direct action. One example of somebody who will be affected is David, a constituent from my electorate, a young man who is single, works as a trades assistant and, under the Labor government’s ETS, will be at least $140 worse off every year.

All sectors of the economy and every Australian family, every individual, every small, medium and large business, every contractor and industry—everyone in my regional and rural electorate—will be affected by this flawed tax policy. This legislation will raise prices for all consumer goods and services, add to the cost of living for every Australian and have a major impact, particularly on small businesses, by increasing electricity and input costs, without providing those same small businesses with any form of compensation to mitigate the 20 per cent increase in electricity costs. Some small businesses will pass on the increased cost to consumers, but the Labor government expects small businesses in the agricultural sector, which are, by majority, price takers, to simply absorb the additional costs.

The Labor government’s ETS will cost Australian jobs. As I said, there is no mention of compensation—only extra cost—for the 750,000 small businesses in Australia, and certainly there is no mention of compensation for the 13,400 small businesses in my electorate. The drycleaners, the retailers, the hairdressers and those in the service sector—particularly those who cannot pass on additional costs, like farmers and horticulturalists—will all see increased costs. We know, however, that electricity for households will be cheaper under the coalition’s direct action plan. The total cost of the coalition’s direct action plan is $3.2 billion over the first four years, while the government’s ETS will cost $40 billion over those first four years and $120 billion by 2020.

Another issue which appears to have been deliberately ignored by the government is the fact that the cost of the ETS tax will be compounded repeatedly on goods and services. Every part of the supply and value chain will add to the ETS cost. In regional and rural areas, as you know, Mr Deputy Speaker Schultz, costs are already higher than in city centres. The ETS will compound this further with additional costs for electricity, food, groceries, fuel and other essentials like heating and cooling, which are often a necessity in regional and more remote areas, particularly for pensioners and those with health and mobility problems.

The Prime Minister has guaranteed ‘absolutely’ that no pensioners would be worse off under the scheme, but does this include pensioners in regional and remote communities, like those in my electorate, who will face comparatively higher costs under the ETS on everything they use and consume? There is no assistance, again only extra costs, for self-funded retirees. All of the people in my electorate who have worked all their lives, contributed to the economy and their communities, taken responsibility for providing for their retirement and health care—and who take a huge burden from the government—will absorb and bear higher costs to live.

In contrast, the coalition’s climate action policy provides incentives for Australian families and businesses to reduce their carbon emissions and focuses on effective and direct action to improve Australia’s environment, sustainability and food security. Our policy is about investing in a future that delivers job opportunities as well as providing incentives to reduce emissions. Our direct action plan does not impose additional costs on families and households and it includes the introduction of a range of measures to encourage and support the increased uptake and use of renewable energy in homes and communities. The coalition’s strategy also commits to solar towns and solar schools, geothermal, tidal, high-voltage underground cabling, support for renewable fuels, retention of the Greenhouse Friendly program and green corridors and urban forests.

In my electorate of Forrest, there is a genuine interest in energy efficiency, renewable energy sources and options for the future. We need further innovation and investment in improved storage, transmission and delivery of energy. We have heard consistently from the member for O’Connor about HVDC transmission. Late last year, West Perth based Green Rock Energy announced that it had been granted three geothermal exploration permits within the town of Collie in my electorate, where a substantial proportion of Perth’s electricity supply is generated from power stations.

The Prime Minister, in question time, has been forced to admit that electricity prices will increase by seven per cent and 12 per cent in the first two years of the ETS. The government talks of compensation, but how long will this be offered and when will the full cost actually hit families given that, as we know, the New South Wales pricing regulator recommended a 62 per cent increase in electricity charges, one-third of which will come from the proposed emissions trading scheme?

I note that the Minister for Climate Change and Water, Senator Wong, is at this moment pre-empting a decision by this parliament, potentially wasting further taxpayer funds by seeking tenders for a carbon emissions auction system through a 123-page tender document. I look forward to the Senate estimates revealing the cost of this for taxpayers. We have heard from the Auditor-General of the waste of $17 million of taxpayers’ funds on the first, fatally flawed, costly NBN tender process. Clearly, wasting taxpayers’ money seems to be business as usual for the Rudd government. I look forward to the government telling my constituents exactly what the actual bureaucratic and massive administrative costs of the CPRS churn will be for this complex scheme. You only have to look at the schedules for household compensation to get some idea of what they will be.

I note that, under international accounting rules, emissions are counted against the country in which the goods are produced, not the country in which they are consumed. So, for Australia, as a net exporter of food, over one-third of our emissions are generated from goods produced in Australia but consumed overseas. What we have in the government’s ETS for exporters is a direct tax on production. Australian farmers and exporters will pay the cost of emissions for products consumed overseas, and that is if they are competitive in the market under the ETS.

Just imagine that you are fortunate enough to be travelling overseas—maybe you are in Brazil, Korea, Thailand or even Copenhagen—and you decide to have a meal. Of course, you are going to have some meat with your meal, and I hope that the meat is either Harvey beef, Dardanup butchers tender ridge or V&V Walsh’s Amelia Park lamb or beef. You might also have some Harvey Fresh or Challenge dairy products, and I hope you will have a Donnybrook apple-and-pear pie and some wine from the Margaret River region—all from my electorate in the south-west of WA. But that consumption will not be reflected in the carbon footprint of South America, Asia or Denmark; it will be reflected in the carbon footprint of Australia.

Locally grown and produced products will also be competing with imported produce that does not have the cost of an ETS included in the cost of production. The Sunday Times of 27 December had an article entitled ‘ETS bungle on food bill’. It noted the government’s estimate of a $68 annual increase in the weekly supermarket trolley, and the Food and Grocery Council’s chief, Kate Carnell, is quoted as saying the council believes the increase would be $520 per annum. But, from my point of view, this is the interesting quote. Kate Carnell said:

“It seems the only way the Government could have got $68 would be to base their modelling on significant reductions in Australian manufactured goods and a significant increase in supplies from cheaper priced countries, such as China.”

“The 300,000 Australian workers whose jobs are involved could have significant problems with that.”

As a farmer, I have serious problems with that. And we have the return of the melamine issue in China, and I have very serious issues with that.

The Labor government’s ETS will see major Australian supermarket chains importing even greater amounts of Chinese, Asian, South African and South American food at the expense of Australian farmers. That is something farmers in my electorate are very well aware of. The majority of them, as we know, are already price takers. How will Australian farmers, including in the south-west of Western Australia, compete with countries that maintain subsidies and do not have the added production cost of an ETS? The clear majority of farmers I know and have worked with for many years have an innate and direct respect for the environment. Often they are intergenerational farming families. They know from experience that they need to pass on their constantly evolving and improving land, water and pasture management practices. They do not stand still. Every day, they are environmental managers on their properties. They directly contribute to biosequestration through pastures, managing vegetation and tree planting. Many of them are members of land care and sustainability groups. They are constantly proactive. They very clearly and directly understand the need for the triple bottom line in their businesses: economic, social and environmental sustainability. Our businesses, our families, our farms and our communities depend on it. This is our livelihood today and the future of Australia’s food security and agricultural exports—the very exports which kept Australia out of technical recession during the global financial crisis.

I also note that a University of California study estimated that livestock contribute about three per cent of global emissions, not the estimated 18 per cent—and we see no credit for sequestration in the estimate of 18 per cent. As I have mentioned in the past, farmers and small businesses will pay more for virtually every input from day one of the government’s flawed ETS. The cost of fertiliser, fuel, chemicals, dairy and horticultural supplies—all farming supplies—will increase. The cost of production will increase. Under the proposed legislation, Australia’s approximately 150,000 farming businesses and family farms will be hit with a tax across their input costs.

There is no doubt that the ETS will reduce farm profitability. This will come as a major blow, because Australian farmers have been at the forefront of environmental management through zero- and low-till crop sowing, through water-use efficiencies, through weed control and through changes in fertiliser management. We see it on farms every day. Modelling has shown that the Rudd government’s emissions trading tax will impose costs of between $6,000 and $9,000 on the average dairy farm each year—and I believe that is a conservative estimate. My electorate is the home of approximately 170 dairy farmers in Western Australia. The majority of those farmers are price takers. They have virtually no capacity to pass on any additional cost of the Labor government’s ETS. The government must be honest with the Australian people and explain exactly how much the ETS will cost, and what costs will be added to the permit exchange process through profiteering by agents, traders and bankers. Price volatility in trading pollution permits under the ETS will not necessarily provide additional certainty to business. What it may do, however, is make it very difficult for business to have the financial capacity to invest in low-emissions technology.

The US government is now working on direct action. One example is the announcement of an agreement with dairy producers to adopt innovative anaerobic digester technology for manure-to-energy projects on American dairy farms. That is just one example. It was stated in a recent article that dairy producers and the innovation centre of the US Department of Agriculture are working together to reach a 25 per cent reduction in greenhouse gas emissions by 2020 and that anaerobic digesters routinely generate enough electricity to power 200 homes.

In my electorate recently, Griffin Coal was placed in involuntary administration, placing the jobs of over 500 workers and contractors at serious risk, as well as impacting on local and regional businesses, community service organisations, sporting organisations and, of course, our families. I know that, over many months, representatives of the company met with Minister Wong to explain how much the Labor government’s ETS would cost Western Australia’s coal fired power generators. But none of their issues—including an adjustment to the Electricity Sector Adjustment Scheme and the different characteristics of the WA energy market compared to the national energy market—have been included in the Labor government’s ETS legislation.

The company also queried what the Labor government will do for the many emissions intensive industries included under the ETS that are funded by project financing arrangements containing clauses which are triggered by significant market events, enabling financiers to exit projects completely. There is no doubt the ETS tax would be rated as a significant market event by financiers. The government has not explained how it would prevent this and has not provided economic analysis on the impact this will have on WA families and businesses. I just wonder whether the government will simply watch private investment being withdrawn from power generation as a result of the ETS tax. I have no doubt that, with the Labor government’s determination to force its emissions trading scheme through the parliament, financial institutions have been and will be factoring in a high-risk cost to finance or refinance coal fired power generators. The ETS will have further impacts on major employers in my electorate through the aluminium and mineral processing sectors and industries, not to mention the agriculture, fisheries and forestry sectors.

I will repeat what I have said each time I have spoken on the ETS. This legislation is seriously flawed and the Australian people now have a choice: this seriously flawed Labor ETS tax on everything or the coalition’s direct action. I opposed this flawed legislation.

6:31 pm

Photo of Mark DreyfusMark Dreyfus (Isaacs, Australian Labor Party) Share this | | Hansard source

Climate change is a diabolical problem, because it requires both national and international action to avoid catastrophic consequences. The Economist in December last year described it as ‘the hardest political problem the world has ever had to deal with’. The bills we are debating which establish the Carbon Pollution Reduction Scheme are an important part of our national response to the problem. The scheme is a part of our national response, not the whole of it, and will add to the armoury of measures already adopted by the Rudd government. The CPRS established by these bills is also a scheme which until December of last year was supported by both sides of Australian politics, as was so well explained by the former leader of the opposition, the member for Wentworth, in the courageous speech he gave earlier in the day.

I want to start by addressing some remarks to the climate science, because there has been a great deal of comment and criticism of the climate science which supports the need for action. None of this criticism or comment, however, has affected the central conclusion of that science, which is that our planet is in danger if mankind does not reduce our global greenhouse gas emissions. The criticisms amount to minor nitpicking but are elevated to major status by climate change deniers and supporters of inaction. Standing back from the nitpicking, it can be seen that climate change deniers and supporters of inaction do not tackle the central proposition of the science, which is that increased greenhouse gases in the atmosphere will lead to global warming and dangerous climate change. Mankind is pumping billions of tonnes of greenhouse gases into the atmosphere, which has resulted in the last decade being the warmest on record. The Intergovernmental Panel on Climate Change’s 2007 report concluded that, if left unabated, greenhouse gas increases would make the planet a further three degrees hotter by 2100—and possibly 4.5 to 5 degrees hotter. If the higher temperatures eventuate, the consequences could be catastrophic. These central conclusions are completely unaffected by the appearance in the Intergovernmental Panel on Climate Change’s report of references to non-peer-reviewed articles or by a lack of clear support in the report for some predictions of a few particular consequences of global warming. It needs to be understood that the consequences—and the created or manufactured controversy that we have had in recent weeks about the melting of Himalayan glaciers is an example—are simply a part of a very long list of dire consequences that will be caused by global warming.

The environment of our planet and the atmosphere and oceans of our planet are complex, interconnected systems. Whether Himalayan glaciers will melt by 2050 or 2080 or 2100 is beside the point. This is but one of the possible consequences of hotter global temperatures. There are many other dangerous consequences and the vast majority of those consequences are simply not in doubt as being very probable consequences of the warming of the planet. Deniers like Ian Plimer or the former Thatcher adviser Lord Monckton, who has been spreading confusion on a recent speaking tour of Australia, never produce any serious challenge to the central thesis of the climate science, which is that increased greenhouse gases in the earth’s atmosphere caused by human activity are leading to global warming and dangerous climate change.

The action which the climate science points to is to reduce the emission of global greenhouse gases. You might think that it is not necessary to go through these arguments, because both sides of Australian politics are now committed to at least a five per cent reduction from 2000 levels by 2020. I say ‘at least’ because, while the government is committed to the five per cent reduction from 2000 levels by 2020 as a minimum and has left open the possibility of increasing the reductions target to 15 and 25 per cent depending on international action, the opposition has, it seems, drawn a line at five per cent. It is of course the case that the plan produced by the opposition last week is woefully inadequate and so it is unlikely to get anywhere near even the five per cent target.

It is also clear from the plan produced by the opposition last week that the new Leader of the Opposition is prepared to pander to the deniers. For those reasons—the inadequacy of the opposition’s plan and the apparent wish of the new opposition leader not to seriously commit but rather to pander to the deniers—we need to restate the need for action and continue to restate it. Scientists say that, if we continue on the current trajectory of greenhouse gas emissions, there is a strong risk of temperatures rising by up to five degrees by the end of this century. That will mean that Australia, which is already the hottest and driest continent in the world, will become even hotter and drier. Coastal areas will be flooded, coastal infrastructure will be destroyed, water will become scarcer and agriculture will become more marginal and more difficult, particularly for irrigated agriculture, which has thousands of jobs associated with it. The Great Barrier Reef will die, and the thousands of jobs in North Queensland that depend on the tourist industry will vanish with it. Across the world, deserts will increase, icecaps will melt, coastal regions will suffer massive flooding and hundreds of millions, or even billions, of people will be homeless. There will be extraordinary levels of suffering and misery.

These are shocking possibilities, which we all hope will never come to pass. But the climate change deniers and those who argue for inaction or for less action cannot guarantee that these dreadful consequences will not occur. Because they do not guarantee our safety or that the science they are so keen to tear down is wrong, we must act. The only responsible course to take is the course which the science suggests—that is, to act now to reduce emissions. If the science turns out to be wrong, then the results of actions to reduce emissions will still benefit humanity and the planet. Our earth will be a cleaner and better place. We will have reduced energy consumption and our dependence on fossil fuels. We will have increased the sustainability of the world’s industries. But if, as I believe, the science is right and we have not acted as quickly and as extensively as we can, we will have condemned the planet to lasting environmental damage and humanity to immense misery.

We need to keep squarely in mind Lord Stern’s warning from 2006 that there is a cost now in reducing emissions to prevent climate change but that this cost is far, far less now than if we delay and allow emissions of greenhouse gases to continue. The cost of reducing emissions will be greater the longer we fail to act, because steeper cuts are harder to achieve. We will need to make steeper cuts in emissions the longer we wait. As well, the cost of adaptation to climate change will be greater in the future because the climate changes that we must adapt to will by that stage have become more severe.

A number of speakers in this debate have commented on the result of the Copenhagen conference in December, which was of course a disappointment to the world, because the high expectations that had been raised for a binding global agreement were not met. But the failure of international negotiators to reach a proper deal to limit greenhouse gas emissions does not alter the science. The failure is a failure of politics. It is a failure of international relations. It is not a failure of the science. The poor outcome of Copenhagen will not affect the processes which are now occurring. The fragile and thin atmosphere of our planet will continue to be damaged by greenhouse gas emissions until levels are reduced. We are all very well aware that there are already in the atmosphere, and will be for some hundreds of years, elevated levels of greenhouse gases, which already ensures that there will be a rise in the order of two degrees in global temperatures. It is for that reason that some level of dangerous climate change and global warming is already locked in. Our task as legislators, and the task of governments around the world, is to make sure that climate change and global warming are kept in check to the maximum extent possible. That is the task to which this legislation is directed.

Many of those opposite who have spoken so far in this debate seem to be happy that Copenhagen did not produce better outcomes. They should be dismayed, as I am dismayed, and work to a better outcome in Cancun in Mexico this year, because one thing that is clear is that concerted global action is necessary. Copenhagen did not meet expectations but it should not be seen as a justification for inaction. It should be seen as a spur to renew effort for a global deal. Instead of playing the political charade that effective action to reduce emissions can be achieved without cost and without substantial change in some industries, we need to ask: what is the most effective action we can take nationally and globally to reduce emissions? It is not enough to commit to emissions cuts. It is not enough to promise future government spending, which is what the opposition relies on. It is not enough to rely on good intentions, particularly when what is needed is a change in corporate investment decisions. What is needed is a mechanism which creates incentives to cut emissions.

There is a broad consensus that emissions trading schemes are the most effective and lowest cost mechanism to cut greenhouse gas emissions. The report prepared for the former government by the former head of the Prime Minister and Cabinet, Peter Shergold, reached that conclusion. The Garnaut review prepared for the current government reached that conclusion. The report prepared by Lord Stern for the government of the United Kingdom reached that conclusion, and the current Leader of the Opposition reached that conclusion until he perceived that some temporary political advantage was to be gained by pretending otherwise.

The international community has reached that conclusion. More than 30 countries around the world already have an emissions trading scheme, including the European Community, the United Kingdom, France and Germany. Other countries are developing these schemes, including the United States, Japan and Korea. The international direction is towards agreement and consensus for emissions trading schemes, and Australia needs to be moving in the same direction.

The CPRS is the best means of doing this because it will provide a price signal to industry, to companies making long-term investment decisions. The market will set that price. One of the ironies about the current debate is that the Liberal Party and the National Party are opting for heavy government regulation, for the command and control approach, and are, it seems, against a market based solution. The carbon price will provide the incentive to move to lower emissions and at the lowest cost. This was Peter Shergold’s direct conclusion in advising the former government. The opposition’s solution will simply channel billions in subsidies to businesses selected by them. Very possibly, the subsidies will support an investment the businesses would have made anyway. It is a solution which means higher taxes for fewer cuts in emissions, and the Liberal and National parties should not be pretending otherwise.

Much of the commentary since the release of the opposition’s inadequate plan last week has wrongly suggested that direct government spending, which the opposition relies on, is somehow an alternative to an emissions trading scheme. It is not, because we need to do both. We need a range of government spending, a range of government programs and government action, supported by an emissions trading scheme—and one could add to that a renewable energy target. The Rudd government has already acted in a range of ways. The government has acted by signing the Kyoto protocol, acted by taking part in the world efforts at Bali and Copenhagen and is now working hard on a better outcome in Mexico later this year.

The government has acted by embarking already on what the opposition choose to call direct action—by committing more than $15 billion in the last budget to a range of measures which are directed at lowering emissions. Those measures include action to improve energy efficiency in homes, shops, offices and workplaces; measures to deploy existing clean energy and low-emissions technologies; support for the creation of new clean energy and low-emissions technologies and products and opportunities for individual action by households. Direct climate change related measures in the 2009-10 budget included the Clean Energy Initiative, which incorporates programs for low-emissions coal, solar and other renewable energy technologies, the Australian Carbon Trust and the National Strategy on Energy Efficiency.

A simple example of what the opposition would like to call direct action on climate change is the Home Insulation Program, an important part of the economic stimulus measures introduced by the government last year, which the opposition voted against. There is over $2 billion to be spent on insulating hundreds of thousands of Australian homes. Not only will this cut power bills and improve home comfort for Australian working families; it will also reduce emissions by cutting energy use. The emissions cuts produced by the Home Insulation Program have been estimated as the equivalent of taking a million cars off the road. That is the kind of direct action, to use the opposition’s term, that the Rudd government has well and truly embarked on and has been acting on since coming to office.

I will finish by saying that there are great national benefits to be gained by adopting the CPRS. It will, together with other government programs, move Australia to a low-carbon economy, an economy with far lower emissions, which is the direction the rest of the world is turning towards. I will give just a couple of examples. China has become a very large emitter of greenhouse gases, although not, of course, on a per capita basis—Australia takes the prize for very, very high emissions on a per capita basis. But China has also reached the largest installed renewable energy capacity in the world and aims to increase the share of non-fossil fuel energy in China to 15 per cent by 2020. The United Kingdom has adopted the UK Low Carbon Transition Plan, which is focusing on increasing energy efficiency, developing a smart grid, decarbonising transport and a range of other measures.

There are global opportunities for low-carbon technologies. Adopting a low-carbon policy in Australia, which the CPRS is part of, will create demand for low-carbon technologies, which will create jobs, create business opportunities and stimulate investment. Reducing greenhouse gas emissions will create growth opportunities for businesses. We are all aware of the advantage that comes from being an early leader with new technology. I want to see Australia be an early leader in developing low-carbon futures, not just for this country but for the rest of the world. The renewable energy target and the CPRS are part of the solution which will move Australia to a low-carbon future. They are measures which will prompt emissions reductions. I am confident that very substantial reductions in emissions of greenhouse gases in Australia can be achieved. They can be achieved without producing substantial changes in Australian lifestyles. Many of the reduction opportunities that are presented are in fact profitable for business. (Time expired)

6:51 pm

Photo of Judi MoylanJudi Moylan (Pearce, Liberal Party) Share this | | Hansard source

Environmental policy is one of those areas where I do not believe government can act unilaterally—that is, just making decisions without bringing the Australian public with them. The challenge of climate change cannot be solved without direct action and participation policy for the community. It was for this reason that in 2008 I held a community forum called ‘Our Patch, Our Planet’ in the electorate of Pearce so as to encourage some of the community to come and debate issues around the future of our environmental policies. The community had one message which was loud and clear. Where there was a policy to reduce carbon pollution, they wanted to be part of it. They wanted recognition for their contribution and, more importantly, they wanted leadership, guidance and incentives from the federal government so that their efforts were effective, so that what they did actually counted. Instead, they got a poorly constructed, incoherent emissions trading scheme with a great emphasis on strutting the world stage and little explanation as to how the scheme would work domestically and what it would mean for individuals and business, large and small.

I suspect the reason the ETS has not been explained to the public is that the government still fails to fully understand its own scheme. Dr Alex Robson, a visiting fellow from the Crawford School of Economics and Government at the Australian National University, recently presented a paper titled ‘What does the government CPRS modelling tell us?’ analysing and commenting on the government’s paper ‘Australia’s low pollution future’. The paper set out some of the key assumptions in the modelling the government did in 2008 in preparation for the introduction of the Carbon Pollution Reduction Scheme Bill and cognate bills that we are debating today. Dr Robson gave an insightful paper. In particular, at the outset he made three very important points. First, the government has not modelled key aspects of its actual climate change policies. Second, the government has provided no information on some of the key economic effects of its planned emissions reduction policies, including possible effects of unemployment, interest rates and inflation. Third, and finally, the government’s own modelling results show that the present value of the cost of emissions reductions could easily exceed Australia’s entire current gross domestic product.

This analysis gives us some clue perhaps as to why the government has been unable to articulate a coherent argument in favour of its policy, except a mantra that we had to go to Copenhagen with a settled position and legislation passed through this parliament no matter what the cost. How can the government expect the public to have faith in this ETS when it has failed to produce modelling on the key economic effects of measures outlined in this bill? A survey in my electorate has shown that the public are very keen to see us do something about reducing our carbon footprint. But, in order to instil public confidence, the government has to lay everything out very clearly so that people can understand what they are being asked to sign up to. I do not think this has happened. It is very sad really to have bungled so comprehensively this important policy matter. It really is an indictment of the current government and, importantly, it seriously sets back the plans to reduce Australia’s carbon emissions.

I have spoken often on these and related bills over the past several years and accept the science, notwithstanding some of the more fantastic claims from sceptics and some mistakes in ICCP reports that are now being corrected and addressed. It is concerning that impetus for global action has stalled and that the public feels sceptical about aspects of the science. But this in no way absolves us as responsible members of this parliament from acting in a way that cuts through some of those more fantastic claims and to ensure that we risk manage for the future.

Although Australia is one of the largest emitters per head of population, the fact is that Australia’s contribution to CO2 emissions is around 1.4 per cent. Without a significant commitment by other developed and developing countries, we cannot unilaterally take action on our own continent that will resolve the looming problems on the planet. While we should make a contribution to reducing the output of CO2, it is very hard to see the point of the government’s unseemly haste to push this particular legislation that we are debating today through this parliament for a second time when it has failed to coherently articulate the policy to the Australian people. My experience is that people are reasonable. As I said, a survey of my electorate shows that people want something to be done, but they are very wary of what is being offered at the present time by the government.

There have been fantastic claims, as I said, on both sides of this debate. Surely, in the interests of public confidence in the policy direction, the government does owe it to the nation to fully model all aspects of the policy in terms of its impact on the community and to improve its articulation of the policy in the public domain domestically. Meanwhile, the Leader of the Opposition, the member for Warringah, and the shadow minister, the member for Flinders, have proposed a direct action policy that does make a good start to doing more than churn large sums of money made from permits into compensation papers. It is a policy that reflects the community’s concerns and provides the vital framework in which people can make a direct contribution to reducing greenhouse emissions. This is a policy that recognises community engagement as a priority rather than as a favour to the community. The direct action proposed by the coalition has the capability of achieving the five per cent target at a lower cost to the community. It provides direct incentives to reduce CO2 emissions without the immediate flow-on effect of Labor’s legislation.

Most importantly, the coalition policy provides incentives for individuals as well as families, businesses and industries to take direct action to reduce carbon emissions. The coalition will introduce a $2.5 billion emissions reduction fund to support carbon reduction and the fund will direct CO2 emissions reduction activities through to 2020 by providing incentives to businesses to reach the target of reduced carbon emissions by five per cent by 2020, the same as the government’s target, without the cost burden and the complexity. As I said, it is enormously important that governments recognise the need to clearly articulate the policy, explain it to the community, be upfront about its impact and bring the public along with them on this important journey to reduce carbon and to improve our quality of life globally.

The fund that the coalition is setting up will provide a reduction in CO2 emissions and practical environmental benefits, while protecting the community from massive increases in costs and possible job losses. Again, the impact on jobs has not been adequately modelled. The coalition’s emission reduction fund will use the existing national greenhouse gas and energy reporting scheme, which was introduced into this House by the Howard government, to determine proposed emission reductions beyond the base levels which have already been established for individual firms. Businesses that reduce emissions below their individual baseline will be able to offer the CO2 abatement for sale to the government. This means that there is a direct financial incentive for businesses to take direct action to reduce their carbon footprint. This is an efficient market based policy. There is no doubt that the market has an important role to play. In the future we may find that there is a place for an even greater market role, but the effectiveness of the large-scale market approach is limited until such a time as the community comes on board with it and accepts it.

The coalition’s proposed fund will support a range of other measures to abate carbon, including replenishment of soil and farmland; the replacement of old, inefficient power stations; a $40 million investment in the development of clean energy hubs to drive clean energy research and development for the future; and the planting of 20 million trees by 2020, with a commitment to a green army to assist with the delivery of this program. Importantly, the coalition’s policy direction includes a strong emphasis on a new solar sunrise for Australia, one of our greatest natural resources—and we do not make the most of it. We see countries like Germany developing whole industries around solar, and they do not have the natural advantages that we have in this country. The new solar sunrise for Australia includes a million additional solar roofs by 2020 through an additional $1,000 rebate for either solar panels or solar hot water systems and has a $100 million solar towns and schools initiative so that whole communities can contribute. There will be $50 million invested in a geothermal and tidal towns initiative. The program will commit to a study of high-voltage underground cabling to support renewable energy delivery.

Labor has chosen, by contrast, to rely on its high-taxing, complicated merry-go-round of money and a direct action policy that frankly is a shambles. That, again, is a great shame. The integrity of the direct action policies put into place by the government is in question, yet they have a lot of merit and should be done. Those programs have the capability to reduce CO2 emissions. Rather than engaging the community, this government has further alienated people through dismal management and chaotic delivery of its direct action programs. The three key government initiatives designed to engage the community—the solar credits scheme, the insulation rebate scheme and the Green Loans scheme—are all now lying in tatters. After a series of scandals, these programs have wasted millions of dollars of taxpayers’ money and have resulted in mass community disillusionment and scepticism. Sadly, what it has meant is that they have not achieved their potential, which is not good for any of us. First we had the chopping and changing of the solar panel rebate, leaving industry and consumers confused and many out of pocket. Next came the very serious allegations of the rorting of the insulation rebate scheme, now subject to inquiry. We now know that the management of this program was so negligent that many houses across Australia are at risk of electrical fires due to improper installation and quite probably are not saving as much energy, because of the shoddy way in which some of that work was carried out.

But the epitome of mismanagement comes from the Green Loans Program that was expected to run until 2012 but now looks like running out of money by April. The minister says this is testament to the program’s success, but the thousands of Australians who invested $4,000 in training and accreditation to become a green loans assessor who now find themselves without work might say otherwise. The government capped the number of assessments but not the number of assessors and now faces the prospect of a class action from disgruntled assessors who claim to have been misled about their training and job prospects. Again, it is just not good for the environment and it is not good for any of us. It does not help us to take the important steps to reduce our carbon footprint. While there is a glut of assessors, the Green Loans process has been further hampered by the inefficient processing of applications for assessments and loans. I have been contacted by a number of constituents with serious concerns as to the administration of the program, which has hampered their efforts to reduce household carbon emissions. These cases, of course, I have referred to the minister, and I would hope that they will be sorted so that this program can do what it was intended to do, which in intent is noble.

The capacity to reduce our carbon footprint in the future will rely undoubtedly on every individual playing a part. We have all contributed to the problem of environmental degradation and we all need to play a part to change the way we live our lives and the way we do business. Many Australian businesses and individuals have been taking steps for some time to reduce carbon emissions, but ongoing meaningful change cannot take place unless there is full community engagement and everyone is equipped to play their part. There is so much more we could do with regard to new vehicle emissions, urban planning, public transport, house design and even in the area—just the single step—of the way we consume packaging could have a very significant impact on the environment and on our greenhouse gas emissions.

These are other areas where direct action could really benefit the community in reducing our reliance on traditional forms of energy, reducing the cost of living and improving our environment overall. I am at a loss to know why we do not have the sort of leadership we should have in some of these areas which we do not seem to have done much about at all—they have been barely touched on.

Igniting the community consciousness and engaging individuals through reputable programs and transparent modelling is an essential element for any Australian environmental policy. It is not enough for government to establish a huge bureaucracy, and to expect the public’s support for a scheme that not even the government seems to understand, especially when some households stand to lose $950 from their budgets each year under this scheme. It really is important that if government wants the cooperation of the people that it comes clean, that it explains the policy, that it outlines the implications of that policy and does everything to ask the public to come on that journey as well.

The tendency, though, to ignore the real cost of doing business in Australia—and, in fact, globally—and not factoring in clean-up costs means that I think we are all living in a fool’s paradise. To think that we can keep digging material out of the ground, we can keep manufacturing and doing all of the other things that we do without factoring in the real cost of what we are doing means we are just kidding ourselves. We need to really think about that quite a bit. Also, the convention that our economic wellbeing must continue to rest on industrial and commercial practices that have historically led to environmental degradation must be urgently rethought and reviewed. There are new ways of doing things. We do have very innovative people and we can change for the good of the whole of the nation and, indeed, for the global good.

But if we are to meet the considerable challenge of climate change the action ultimately has to come from individual efforts on a global scale, and it will demand a financial investment—there are no two ways about it—as well as one of human ingenuity and human effort. We are all in this together and the time has passed, really, to debate the core elements of the science but to move forward with a carbon reduction scheme that all Australians can feel confident in, can embrace and can participate in so that we make a genuine effort to reduce our carbon footprint.

7:11 pm

Photo of Darren CheesemanDarren Cheeseman (Corangamite, Australian Labor Party) Share this | | Hansard source

I rise to speak on the Carbon Pollution Reduction Scheme Bill 2010 and related bills. In doing so, I highlight the importance of these particular measures in my own seat of Corangamite. They are also very significant nationally and globally.

I would like to start by formally putting on the record my thanks to Minister Penny Wong for her tireless efforts in calibrating these bills to meet the needs of working families and their employers. The minister has put together what I believe to be a fantastic package that will enable us to counteract the worst aspects of climate change through these particular measures. Of course, it has been an epic and incredibly difficult task that the minister has undertaken. I believe she has done it in a first-class way.

I want to add some clear and unequivocal statements to those I made before Christmas. These statements will be judged in our electorates and in my electorate of Corangamite—it is important that we all recognise this. Not that long ago the current opposition leader described climate change as crap. I actually believe in the science; I believe action on climate change is a necessity in my electorate of Corangamite. I believe the Leader of the Opposition is an embarrassment to this parliament. He starts with the argument that climate change, in his view, is crap. Then he goes on to present a policy that I believe does not deliver in any way whatsoever any emissions reductions. He then puts those costs onto Australian families through taxation and our normal government arrangements for raising revenue.

As I said earlier, I believe climate change is real. I believe the science is real. I believe people and industry have contributed very substantially to climate change. I believe Australia, as a country, has, proportionally, one of the highest carbon footprints anywhere in the world. And, as a consequence, I believe we have a moral responsibility to lead the debate on carbon pollution reduction and take the necessary steps to achieve that. We have a responsibility to help rectify the damage that we have all done. We have a responsibility to our future generations. We have a responsibility to take the necessary steps to reduce our carbon pollution. We have a responsibility to other nations on this planet. We have a responsibility to lead, and that is what I believe these bills will do. I believe that advanced countries like Australia have a moral responsibility to lead on climate change.

Corangamite, my own seat, faces some very substantial risks. Corangamite has hundreds of kilometres bordering the ocean. We have the Great Ocean Road. The Great Ocean Road links coastal community to coastal community, and was built by 3,000 servicemen who had returned from the First World War. Modelling shows that sea level rise driven by climate change will see the Great Ocean Road breached in place after place. Other parts of my seat, such as the Bellarine Peninsula, Queenscliff, Ocean Grove and Point Lonsdale, also face very significant inundation challenges if we do not meet the challenges of climate change.

In addition to that, we also have some very significant environmental places within my seat, such as the Otway Ranges, the lakes district in western Victoria and our magnificent volcanic plains. These assets now are at far greater risk due to fire, and over the last 10 years we have seen a large number of those lakes drying because of drought. And we do know that climate change will lead to further periods of dryness and drought. Our flora and fauna and our people are also at further risk due to climate change.

In Corangamite we have a very substantial farming community. The farming communities now face very significant challenges because of climate change and drought. Less rain is posing enormous challenges to our farmers and our farming communities. The CPRS will allow farmers to generate additional income. It will enable farmers to take meaningful steps in producing an income that will be good for our environment and good for their families. I think this is very significant and good news for our farmers. Unfortunately, the Liberal Party wants to take away from farmers this opportunity to derive additional income for their families. The Wentworth Group of Concerned Scientists reported that the Leader of the Opposition’s con job would cost farmers. Farmers in my electorate do not need any more costs imposed on them. They need ways in which they can generate sustainable income and make a difference. The Labor government’s CPRS will deliver new income streams for farmers.

The minister and the whole Rudd government are aware of the need to protect jobs in dealing with climate change. Farming jobs, the jobs of Alcoa workers, the jobs of Shell workers and the jobs of the cement industry workers in my electorate are all very important. The Rudd government’s CPRS is carefully calibrated to protect their jobs so that they can continue to participate in a low carbon economy with a lower carbon footprint.

We also need to make sure that we have a vibrant tourism industry, particularly of course in my seat of Corangamite. Climate change is one of the biggest risks to the tourism industry in my region. It is the primary reason why we have to act. The consequences of Black Saturday are only just becoming clearer for the tourism industry, particularly as areas like the Otway national park become more threatened by wildfire events because of climate change.

If we compare that to Abbott’s con job, the government has got the balance right. We have recognised in this legislation that there are trade-exposed industries. We have recognised the need for industry transition. And we are providing the industry assistance that is required and the time which is required for them to be able to participate. These bills balance the overriding need to act on climate change with the need to put in place the mechanisms that will allow our industries to adjust to a lower carbon footprint. Unlike the Liberal Party’s con job, we have thorough policy that will help to lead us through the challenge of climate change. My region, the greater Geelong region, is showing leadership on climate change. We are providing certainty through the mechanisms in this bill. A world carbon market is inevitable and it will be created. We are readying our country with some well-calibrated legislation—legislation that will future-proof us. This bill has clear aims and clear targets—unlike the opposition leader’s con job. The government’s commitment on targets is an unconditional commitment to reduce our carbon pollution by five per cent by 2020.

This is the most important legislation that this parliament will have to deal with. This is about how we turn around the terrible legacy that unfettered carbon pollution has left us—a legacy that now threatens to engulf island nations within our Asia-Pacific region through sea level rise; that threatens to decimate biodiversity; that is threatening human life, creating fire, storm and flooding events of unprecedented ferocity and scale; and that will leave future generations the question of why we have not acted in this place.

On the other side of the chamber, of course, we only see a policy con job. Their policy is nothing short of a joke. Their policy will not cut emissions. Their policy will cost Australian families. I urge those members on the other side that get the need to act on climate change to support these bills. Stand up for what you know is right. These are defining bills. These will be the bills that future generations judge our generation on. These will be bills that future parliaments will judge this parliament on.

As I have said before, I am very proud of the efforts that Minister Wong and this government have gone to to get the balance right. We are now a world away from the shameful Howard years. We cannot let policy con jobs continue to set our climate change debate. This is Australia saying we are up for the challenge. This is Australia saying we will act. This is Australia saying we are leaders on climate change policy. For those reasons, I commend these bills to the House.

7:24 pm

Photo of Don RandallDon Randall (Canning, Liberal Party, Shadow Parliamentary Secretary for Roads and Transport) Share this | | Hansard source

This is now the third time that I have spoken on the Carbon Pollution Reduction Scheme legislation, and I welcome the opportunity—in the debate on the Carbon Pollution Reduction Scheme Bill 2010 and cognate bills—once again to call the Labor government scheme what it really is: a great, huge new tax. As I have mentioned in my previous speeches, an effective and responsible approach to tackling climate change is needed, and that is exactly what the coalition has proposed. We will support and encourage direct action, unlike the great big new tax put forward three times by the Prime Minister, which will cost jobs, drive up inflation, inhibit business growth and investment and hit household budgets.

The government’s motives are purely political; we know that. Australia accounts for only 1.4 per cent of the world’s CO2 emissions and is one of only a handful of countries meeting their Kyoto targets. Just to put this in perspective, both the government’s plan and the coalition’s plan will cut emissions by five per cent. For $40 billion, though, the government will reduce Australia’s contribution to global emissions from 1.4 per cent to 1.3309 per cent, cutting our contribution by only 0.07 per cent, not a wise investment when you consider that the coalition can achieve the same result for a fraction of the price—in fact, less than 10 per cent of the price, at $3.2 billion.

Mr Rudd wanted to lock Australia into this reckless scheme before Copenhagen. Australia should breathe a sigh of relief and look at how that turned out. If Mr Rudd had had his way, households would be feeling the pain of an ETS when there is clearly no global consensus and most likely never will be. It is true that per capita Australia is one of the higher emitters, but it should not be surprising; we have a strong manufacturing and industrial sector, we are a strong economy and of course we can expect to have higher emissions than, say, Third World countries such as Burma.

This plan is the equivalent of raising the GST by almost three per cent, creating an enormous government slush fund. It will have the same history as the petrol parity pricing scheme, which was introduced in 1977 because of an apparent oil shortage and which aimed to ensure further exploration and ensure supplies. But, in reality, such schemes do not create a culture of investment but a huge government money pit, massive revenues that are administered by a huge government bureaucracy. Governments never give all the money back; they skim and use it for their own purposes. In the case of parity pricing, they now treat that as revenue.

Labor’s ETS would hurt exactly those people Mr Rudd centred his election strategy on during the 2007 election campaign, the working families. In fact, you do not hear him talking about working families much these days because he has put so many out of work. They have every right to feel betrayed by the Prime Minister, who vigorously pursues his plan to drive up the cost of living. There is no finite figure on Labor’s action. There are no answers as to how much costs really could go up on everyday items like bread and milk. We at least know that electricity would soar by almost 20 per cent, a horrifying reality for ordinary Australians who are already burdened by a 15 per cent price hike this year and are facing the prospect of more.

Evidence shows that a working couple earning $140,000 with two or three dependent kids would be $620 worse off under the ETS. These figures get worse. Single-income families bringing in $120,000 would be $950 worse off every year. Labor said they would give the money back. Compensation which the government cannot exactly explain or calculate will be of no comfort to the 120,000 workers in regional Australia who will lose their jobs. There are no answers to the most basic questions. The Minister for Ageing cannot detail the impact on a pensioner’s costs of living, and the small business minister laughed off a genuine question about electricity costs for dairy farmers.

Not even those opposite trying to sell the scheme to the Australian public understand it. Mr Rudd continues to say, ‘Well, it’s very complex.’ Every time he gets bogged down on a figure or an explanation, he says, ‘Oh, but it’s complex.’ He is basically saying, ‘Well, you wouldn’t understand; I understand because I’m quite intelligent, but you wouldn’t understand because it is so complex.’ There are no answers to the most basic questions, as I said. The feeling in the electorate is one of frustration. People want to do their bit for the environment, but they do not want to get slugged with a massive tax that will have little impact on the environment and will ship their jobs and emissions overseas.

Let us put it into perspective. Labor’s plan allows polluters to pay to pollute. This tax that they want to put on industry will not reduce carbon in the atmosphere by one tonne. They will say, ‘Well, the incentive is that, if we charge them all this extra money, they’ll stop their emissions.’ These are the people, as we continually hear, that keep the lights on, and they are not going to stop keeping the lights on; they are just going to pass the costs on. So, at the end of the day, this supposedly so complex program that the Prime Minister wants to introduce is not complex at all; it is just going to make the polluters pay to pollute.

While the rest of the world changes its tune, our own Prime Minister pursues his massive tax. The Canadian Prime Minister is on the record as saying that developing technology is the answer, not setting targets. United States President Barack Obama has backed away from a cap-and-trade scheme and is considering direct action similar to that which the coalition is planning. Perhaps when President Obama comes to Australia next month he might persuade Prime Minister Rudd to his way of thinking during his visit—though I doubt it. The world’s biggest emitters—the United States, China, Japan, India and Russia—do not have emissions trading schemes.

As Christian Kerr reported in the Australian this week, New Zealand is the only country outside of the EU to adopt what is essentially a carbon tax, plunging New Zealanders, whose emissions reductions will make no difference on a global scale, into debt as fuel prices rise by at least 3.5c a litre and electricity costs soar. I think it is a conservative estimate by the New Zealand government that the average household will only be $165 a year worse off compared to the figures I have just told you about with ours. Interestingly, that was brought in by the previous Labour government in New Zealand and has not been enacted to this date by the current government. They have backed away from it as well. Why wouldn’t they? The rest of the world is not doing it. The biggest emitters are not doing it. They do not even want to commit to it. They saw what happened in Copenhagen: the Chinese stared down the rest of the world on a whole range of issues and our Prime Minister was left outside in the cold trying to look useful.

The best place to start on this issue is at home. Our policy is one of practical and cost-effective measures that will reduce emissions by the same five per cent by 2020 proposed by the government but, as I have already outlined, at a fraction of the price. Obviously this is a no-brainer. Why would any government choose a massive tax and cost to jobs when the same outcomes can be achieved more cheaply and efficiently? One can only surmise that the $120 billion slush fund is too much to turn down for a government that loves to squander money. The coalition aims to look after the Australian environment first, and in doing so will focus on its natural resources: soil and sun.

I recently met with Justin Byatt, a family poultry farmer from my electorate, about a company called Agriboost. Agriboost is an organisation newly established to investigate the alternative uses of chicken manure, which has focused on power generation to date. But Agriboost plans to move forward and develop other opportunities. It intends to form partnerships with the soil amendment industry and to apply new technologies, including biochar to broiler waste, to improve soil quality and fertility. Farming is the backbone of the Australian industry so there is no better place to start than encouraging farmers to use soil carbon measures. This is real, direct action by industry.

Australia’s hot, dry climate makes it an ideal candidate for solar power. With less than one per cent of power currently coming from solar energy we can—and should—do better. We will invest in solar panels for one million Australian roofs by 2020. I repeat: one million roofs around Australia could have solar panels on them. Local residents will welcome the $1,000 rebate for either solar panels or solar hot water systems. As I drive around my electorate it is abundantly clear that most houses have a TV aerial or a satellite dish on them. There is plenty of room on these roofs for solar panels, which will reduce the energy used and feed power back into the grid. Can you imagine, during a hot time in summer in Perth, when we have brownouts and blackouts because of the huge draw on the power stations through air conditioners going during the 43-degree days which we have had recently, that this would not happen if we had most of the roofs on the houses and on the industrial estates of Western Australia feeding a massive amount of electricity back into the grid on these hot days? It is only sensible, but too sensible for the government to take on board. It is probably too simple. Simple inventions are generally the best. Sliced bread was simple but it was one of the best things that we have come across.

Further, the green army will plant an astonishing 20 million trees by 2020 to re-establish urban forests and green corridors and to support large-scale renewable energy generation and emerging technologies. The coalition is serious about making a real difference, not symbolic gestures. We have to encourage business and families to make a change, rather than taxing them for doing it. We are into incentives; they are into taxing them. Our reward based approach could be as simple as planting more trees, or more elaborate technology advances for bigger businesses.

I read with interest an article in the Australian Financial Review last November about the Mountaineer coal plant in West Virginia and its massive experiment in clean coal. It aims to be the first to capture the fugitive emissions of a fully operational coal plant. The Mountaineer plant generates enough electricity to power a small city but in turn emits eight million tonnes of C02 emissions a year. Its sequestering of carbon underground is an expensive pilot on a massive scale. Projects like this support local jobs and result in real advances, not massive taxes. In Australia we have the Maitland plant working on clean coal technology. This is just another example of real action on our own shores, considering Australia gets about 80 per cent of its energy from coal.

Direct action is a responsible and proactive approach to keeping local jobs and the local economy strong, and it is supported by industry. Canning is home to Alcoa, BHP and Newmont, who make up the largest individual employers in my electorate. With BHP’s Worsley Alumina having a capacity of four million tonnes annually, it is BHP’s biggest carbon emitter in Australia, and a reckless scheme would cost many local jobs. There has been a $3.5 billion investment in the Boddington goldmine, which I attended last week when it was officially opened by the Premier. It will be the largest goldmine in Australia and will be bigger than the Kalgoorlie Super Pit. It will support around 1,000 local jobs and produce about a million ounces of gold a year. Mr Rudd wants to risk these jobs with this scheme of his—this penalty on industry.

I expect that local governments and schools will take up the coalition’s million roofs initiative. The City of Mandurah in my electorate has already installed a 2.1 kilowatt solar photovoltaic system on the roof of the Falcon e-library that generates around 3,720 kilowatts of electricity and saves approximately four tonnes of greenhouse gas emissions every year. Similar projects will be embraced throughout Canning. It is all part of the direct action needed at the grassroots level to make a difference. Imagine what a million roofs and solar cities would do. That is what I really call direct action.

Scare campaigns about climate change have been well fronted, but there is a growing shift, and despite this the Prime Minister remains adamant about locking Australia into a plan that could be based on suspect data. There is no doubt in the world that since Copenhagen there has been a shift on this whole issue not only internationally but also in Australia. We have seen that even in the latest Nielsen poll today. At a local level, I have people coming to me, emailing me and writing to me when they did not come to me before, saying, ‘Don’t allow us to get sucked into this; don’t allow us to have this as a millstone around our necks forever.’

So what is really causing global warming? Is it really carbon emissions or is it something else? In his book The Real Global Warming Disaster, Christopher Booker contends that, rather than the apocalyptic scenarios promised by Al Gore, the real disaster of global warming will be the strangulation of the world economy by measures imposed by governments around the world based on false information. Eminent academics offer some persuasive arguments about the science and truth behind global warming. Even the head of the UN’s Intergovernmental Panel on Climate Change is under fire now. We know that Rajendra Pachauri’s credibility is under attack after the IPCC inaccurately claimed that the Himalayan glaciers would melt by 2035 if nothing were done about climate change. He was outed.

I have spoken with prominent scientists and recently met with climate change experts Joanne Nova and David Evans, who maintain that the climate change alarm is founded on information that is fundamentally flawed. In the last 100 years the climate has warmed only about 0.7 degrees. In fact, in the last decade the climate, some say, has cooled. In periods throughout history there have been warm spells—none warmer than the medieval period. Long-term weather forecasts are impossibly inaccurate; as experts say, a forecast for 30 or 40 years in the future is not a forecast.

No-one can deny that global carbon emissions have risen with industrial growth since the First World War. Carbon is reportedly at higher levels than at any time in the last 650,000 years. But, if you accept the fact that the planet has not warmed dramatically during a time when carbon emissions have peaked, the conclusion is that our emissions may not be responsible for the warming of the planet. Dr David Evans says that the shift in views came in 1999 and by 2007:

… the evidence was pretty conclusive that carbon played only a minor role and was not the main cause of the recent global warming. As Lord Keynes famously said, “When the facts change, I change my mind. What do you do, sir?”

In the last 20 years, the world has spent $50 billion on global warming research and has not found hard evidence that carbon emissions cause global warming. Joanne Nova puts it simply:

Everything hinges on this one question. If carbon dioxide is not a significant cause, then carbon sequestration, cap-and-trade, emissions trading, and the Kyoto agreement are a waste of time and money.

…            …            …

Hoping for a good outcome while acting on something for all of the wrong reasons is called policy-by-accident.

I am by no means an expert, but the reality is that there is conjecture about what really causes the planet to continue to warm. Despite this, the Prime Minister remains gung-ho about locking Australia into a scheme which will have no impact on global emissions, will cost Australians dearly in jobs and income and will send the pollution offshore.

Can you imagine if something like Alcoa in my electorate were to be penalised as this system would do to them? They would quite easily go to somewhere like Indonesia, which does not have the same rigorous checks and balances on emissions. First of all, we would export our jobs. Secondly, we would export our incomes through the aluminium produced and the taxes that the workers would be paying as they earned. Worse than that, we would export the pollution, because the Indonesians, as I said, do not have the same rigour in their environmental assessments. As a result, this exporting of pollution into a country which does not have to comply, because countries like Indonesia are called ‘developing countries’ and do not have the same obligations, is quite irresponsible for Australia to do.

The former head of the National Climate Change Centre, William Kininmonth, said last year that the basis of the Rudd scheme is:

… an unsustainable hypothesis that dangerous global warming will be an outcome of continued burning of fossil fuels …

Yes, we need to look after the environment and explore alternative energies. But the point is that we may not have all the answers about climate change, and should that not be enough to take the direct action that avoids economic suicide for Australia? The choice is clear and the public is starting to realise this. It is not so complex, Prime Minister Rudd. The public now are starting to understand that we have a solution of direct action. We do things by recharging our soils. We are going to have a program of planting more trees. We will have a million solar roofs around Australia putting electricity back in. The Labor Party just wants to give us a great big tax and not reduce one tonne of carbon in our atmosphere.

7:43 pm

Photo of Joel FitzgibbonJoel Fitzgibbon (Hunter, Australian Labor Party) Share this | | Hansard source

I say at the outset that I have no intention tonight of making a contribution arguing the science of climate change. I am not going to get into whether or not the globe is warming or, indeed, whether humans are making a contribution to that warming. As far as Parliament House is concerned, that debate has been had. It has come to some conclusions. No major party in this place believes now that action is not required on climate change—not the Labor Party, not the Liberal Party and certainly not the Greens.

So there is no doubt that government action now is inevitable. But let us go back one step. Major parties in this place agree that there is a problem and action is required. The next question is this: is this action a priority for an Australian government or are there bigger and greater priorities for the government of the day at this point in time? We know that the Leader of the Opposition believes it is a priority because he now has a plan to spend some $3 billion of taxpayers’ money on his so-called direct action method. We know the government certainly has a plan. We know the government places a high priority on the need to act on climate change, and it is that plan we are debating for a third time this evening and no doubt will be debating for a little while yet.

So we know the pollies have come to a conclusion. The question then is: are the pollies right? I think it is fair to say, based on the polls, that the politicians are reflecting a broader community view. All the opinion polls tell us that the majority of Australians want their government to act on climate change. Even my electorate of Hunter is an electorate in which I believe the majority of people want the government to act on climate change. It is well known in this place that my electorate is one very relevant to this debate this evening, an electorate in which the coalmining, power generation and aluminium-smelting sectors are very, very prominent. If this debate had been taking place five years ago, I am not sure I would have been able to stand here claiming that a majority of people in my electorate supported government action on climate change, but there has been a big shift in my electorate in recent years. I will share a few anecdotes.

A few years ago a coalmining company was proposing a new coalmine, the Anvil Hill mine, in part of my electorate. At the site where the Anvil Hill mine was proposed, we had a protest action that people described as a picket line—not quite the correct description but it will do. Standing on the picket line on a regular basis were Hunter coalminers, people then currently employed in the coalmining industry, protesting against this mine and its potential environmental effects.

I remember once being asked by one of our major newspapers whether I could organise a photograph of a third generation mining family, a family in which grandfather, father and son had been involved in the mining industry. That newspaper wanted to run this picture as a way of portraying what might be the threats to coalminers in electorates like mine. I could not find one, because coalminers I talked to did not really feel comfortable about associating themselves with an all-out attack on the idea of addressing climate change. They wanted to go with the majority. They understood—the third generation person was the guy I was turning talking to—that times had changed and it was past time that governments started doing something about the environment generally but climate change in particular and all its threats.

The coalmining union in my electorate was well ahead of the Labor Party on this issue, long before the party advocated the emissions trading scheme or at least some carbon constraint, notwithstanding the potential impact on coalmining, because the coalmining union believed that there was no future for coalmining in the long term if the industry did not act to become more sustainable.

So there are big changes in electorates like mine, partly of course driven by demographic change. Younger people tend to be more conscious of environmental concerns than older Australians are. As those younger people continue to wash into the system, attitudes change. So, for all these good reasons, government has decided to act.

I said I did not want to argue the science, because there is a general consensus in this place in any case that the risks are too great not to act. There are plenty of scientists who will tell us that global warming is not real and certainly man’s contribution is not a factor. But I am a great believer in the precautionary principle: if in doubt, act. Australians spend about $3 billion on household insurance every year, mainly to cover them for unlikely but catastrophic events like fire. I do not know what the percentages are, but I suspect that in the broader scheme of things very few houses in Australia burn down each year. But Australians decide to spend that $3 billion or so each year in aggregate because they know it is a small price to pay given the enormous impact a fire could have on them, their family and their family’s future.

What are the risks in the broader sense when we talk about climate change? They are drought, heatwaves, storms, cyclones and rising sea levels, to name a few. Under some scenarios, the consequences could extend right to competition amongst people for water, food and other resources. For some island states, including those in the South Pacific, we know the threat is potentially existential.

It is clear that the parliament and the Australian people have come to the conclusion that the risks are too great to sit back and do nothing. So what do we do? In just under four weeks time, I will have been in this place for some 14 years, as is the case with my comrade from the opposition sitting at the table, the member for Dunkley. My staff advise me that this is my 417th speech in this place. Few debates over that long period of time and during my many contributions in this place have been more important than the debate we are having this evening. But, in addition to that, never in those 14 years have I seen such political opportunism from an opposition. That might be a big statement, but I have seen political opportunism in this place, on a regular basis, from those flying all sorts of colours. I saw it in the mid-1990s, when the then Labor opposition opposed the GST. In hindsight, I think that was a questionable decision. Labor saw a political opportunity and exploited it. There were some differences, of course. The biggest difference of all was that the majority of Labor MPs held strong convictions. Many of them, if not the majority of them, did not accept that the GST could be introduced without having an adverse impact on their largely working-class constituencies. I concede that the GST, a broad based consumption tax, had become a necessary and inevitable thing for Australia, but strong convictions and beliefs were held.

By contrast, this is highly doubtful on the other side of politics. We certainly know that, in the recent leadership ballot, the overwhelming majority of MPs voted for a candidate who was dedicated to taking action on climate change. They were committed not to ‘direct action’, as the now Leader of the Opposition calls it, but to some form of carbon constraint or, more likely, some form of market based mechanism. We know that the majority of those on the opposition benches who have spoken today are not speaking genuinely but are on the path to political opportunism.

We also know that there is a difference because the opposition, having negotiated with the government, last year agreed to support the CPRS, agreed to support the government’s approach to addressing climate change. To his great credit, the member for Wentworth was in here today standing by his commitment to the government, standing by the deal he struck with the government, standing here arguing for an ETS and making it clear to the parliament that he will stand by that deal all the way to crossing the floor in this place. All credit goes to him for doing so. And then we had the member for Warringah. Of course, Tony Abbott knows a political opportunity when he sees one. On many occasions he has demonstrated a willingness to exploit an opportunity when it comes along, and he is certainly grabbing the opportunity with both hands in this case.

But there is another big difference between what Labor did on the GST back in the mid-1990s and what the opposition are doing today. The risks involved here are much different. The risk of a GST not going through did have some medium- to long-term effects. As I said, there was an inevitable shift to a broad based consumption tax as the wholesale tax base narrowed and our services sector grew. But the risk in this case extends to all those things I mentioned earlier, including the existential threat for small island communities, and creates enormous uncertainty for Australian businesses. At least Labor was consistent with the GST, which is something we certainly have not seen from the opposition benches on the question of the CPRS.

We know that the Libs support carbon constraint. There can be no doubt about that. The Liberal Party have a history of support for the free market and for market responses, and I acknowledge that. Certainly in recent decades that has been the position of the Liberal Party. It has not always been the case. If you go back a bit further, they were very strongly under the influence of the National Party. But in the last two or three decades the Liberal Party have been pretty committed to the market and to market responses and to allowing the market to deal with these issues. So it defies belief that the Liberal Party, having acknowledged that there is a need to act on climate change, now believe that this direct action fiasco is the right path, as opposed to a market based mechanism. I do not believe that for a minute. John Howard believed in a market based mechanism. We know that the member for Flinders believes in a market based mechanism. He said so in a thesis he wrote as a university student. Peter Shergold, who did John Howard’s work for him, believed in a market based mechanism. And so do I—I want to make that clear.

So what is this market mechanism? This is where this debate is confusing for the Australian public. They are still wondering what this is all about. The opposition’s decision to belatedly run interference on the CPRS is making the government’s task of communicating that message and explaining the CPRS to the Australian people all the more difficult. For all its complexities, the scheme is really pretty simple. It is complex when you get down to the detail, but at the end of the day it is all pretty simple. The CPRS—or an ETS—is all about putting a cap on the amount of pollution that businesses can emit. In this case, we are talking about 1,000 businesses out of many millions of businesses in this country—for example, power stations, aluminium smelters and fuel refiners. If they cannot stay within that cap, they pay a penalty or have to buy additional emissions permits. That is the basic thrust of the thing. Simplifying it over the longer term as we emerge—that is the system.

Business can do three things. It can absorb the costs into its profit margin, or its bottom line; it can find ways to reduce its emissions; or of course it can pass the cost of that burden onto the consumer. We all welcome the fact that, in a competitive economy, passing it on is not that easy. Certainly absorbing it into the bottom line is not a good option for business. This is about the other option, and that is helping business to reduce its emissions. The extent to which business will pass on the costs we think will be between one and 1.5 per cent in inflationary terms, and of course the government will compensate consumers for that change. The tables are there for all to see on the government’s website. Any family, any individual, can go into those cameos and work out exactly how they will be affected by the CPRS and the extent to which they will be compensated.

We are also helping business in the transition. Energy intensive trade exposed industries will get massive amounts of assistance to help them through the transitionary period. Indeed, all the revenue the government raises under the CPRS goes back to compensation—compensating people, compensating families, compensating businesses through the transition period. The opposition mischievously describes the ETS as a tax. It is not a tax; it is a charge on heavy polluters and it is an incentive for them to drive their emissions down, and of course the revenue from that charge will be used to compensate businesses and families, as I suggested. The government’s CPRS package extends well beyond an ETS. We are heavily investing in the renewables sector and other low-emissions technologies. We are investing heavily on the demand side, helping Australian households reduce their energy consumption, reducing demand on that side of the equation.

When it is all said and done, for all its complexities in the detail, it is a pretty simple proposition. It is the most efficient way of dealing with the challenges we collectively face. It is time the opposition put its political opportunism aside and worked with the government on these issues. The government has demonstrated in the past a preparedness to talk and to negotiate. That is why we are dealing with CPRS mark two. I have no doubt that, to get these very important matters through the parliament, the government is prepared to talk further. But it is absolutely apparent that Tony Abbott, having gone completely in the other direction with his so-called direct action plan, has no intention of indulging in any more talk. The member for Warringah, the Leader of the Opposition, has no intention of further negotiating on the CPRS, because the Leader of the Opposition has one thing in mind and one thing only, and that is the 2010 election. I can say to the opposition leader that, just as Labor lost some credibility on the GST debate, he will lose environmental credibility and economic credibility and he will pay a heavy price in the medium to long term for his political opportunism.

8:03 pm

Photo of Bruce BillsonBruce Billson (Dunkley, Liberal Party, Shadow Minister for Small Business, Deregulation, Competition Policy and Sustainable Cities) Share this | | Hansard source

The member for Hunter is someone with whom I have a friendship and for whom I feel some fondness, and I felt uneasy as he struggled to come to terms with what is actually before the parliament today. He followed the tradition of all the Labor speakers on this Carbon Pollution Reduction Scheme Bill and distinctly avoided what is actually in the bill. We did not hear any defence of the policy approach. We did not hear any explanation of the policy settings within the bill and the way they have been calibrated or how in fact this bill may actually achieve the goal that it states it aims to achieve. You do not hear any of that. You do not hear any of those Labor members come into this parliament to debate their so-called Carbon Pollution Reduction Scheme Bill and actually discuss the bill. What you get instead is a rich ensemble of platitudes and distractions and false debates, where they describe what the opposition is trying to achieve in a most inaccurate and disparaging way and then seek to have a go at it, without actually turning their mind to the bill before the parliament.

They might think that the bill itself is not worth debating in here. That might be one reason they do not address it. They might also think that, because the bill has not changed despite the whole context within which this debate is being carried out having changed, there is no need to actually describe the aspects of the bill gain. Or they might be honest with themselves and ask, given that the international context has shifted and the debate is alive and well, what is the most appropriate response, and recognise that many of the propositions contained within the Rudd government’s great big tax on anything and everything—and we hear the Labor Party describe it as the CPRS bill—really do not address new insights and new realities. It could be any one of those three things.

What we can conclude is one single, undeniable thing: the Labor Party will not defend its own bill. It describes the subject of the bill as complex, almost like, ‘Don’t worry about it; it is like the workings of an MRI; if you’ve got a bad knee go in and have one, no need to trouble yourselves with how it operates—it will all be right; leave it to the experts.’ They say that makes it a simple proposition. I am not sure the Australian public believe that. I am not sure pious language from the Labor Party about how complex the whole thing is is a justification for not defending what the government is doing and explaining its actions. I do not think that will ring true with most members of the Australian public. I think the Australian public want to know what is in the Rudd government’s great big tax on everything, this ETS bill known as the Carbon Pollution Reduction Scheme Bill. I think they want to know because they have learned through the debates over recent months that these are important issues at stake.

I think the Australian public clearly understands that both sides of the parliament recognise that there is a need to take responsible action on climate change. I do not even think that there is a debate there any longer, despite the efforts of the Labor Party to resuscitate some lines of that kind. There is no lack of will or desire from the coalition to take action on climate change. The debate is about what sensible action is, what the wise action to take is, given the sentiment that spans this parliament of a willingness and a desire to take action on climate change.

The Rudd Labor government and its Labor members do not even turn their minds to this legislation. Within the legislation it talks about applying a charge. This is where ‘the great big tax on everything’ is an accurate description. It is not as the member for Hunter tried to describe before, where he actually stumbled into an explanation of the opposition’s alternative strategy. No, it is not an idea where you penalise those who drop the ball and go backwards in their emissions performance; that is the opposition’s idea. The proposition embodied in these bills is that you penalise everybody. Everybody is penalised, even the most energy-efficient abatement-sensitive activity, business or production process in our country. That will all be penalised. And those who are not so flash will be penalised as well. It is not only those who have dropped the ball, as the member for Hunter in his contribution would have you believe; everyone cops it through this CPRS. Everyone cops it and generates an enormous amount of revenue for the Rudd Labor government to share with those that it feels are its friends or that it feels obliged to help.

It is noteworthy that even in this House the Minister for Finance and Deregulation, Mr Tanner, comes in and tries to just bat away suggestions that this great big tax on everything actually amounts to an enormous impost on the Australian economy of $114 billion over the next nine years—that is right: $114 billion, 114 thousands of millions of dollars, over the next nine years—and then says the opposition’s impact would be greater. He bats away the concern that the opposition has highlighted of a $114 billion revenue-raising tax on everything and what that will do to the Australian economy, Australian households and Australian small businesses by saying: ‘No, don’t trouble yourselves. Remember, this is complex. That is a very big number, but this is complex and you need only be concerned with the net cost to the government.’ And he describes a lower figure.

What is missed, though, is that the cost to the Australian nation, the Australian economy and the Australian community is undoubtedly $114 billion. That is undoubtedly the cost. Some of that will be given back, not on the basis of where it has been raised, because those newborn nouveau free marketeers across the chamber in the Labor Party have reconnected with concepts of market after saying that it was a horrible thing—according to the Prime Minister, some months ago. Now they have reconnected with the market. Of course, where those costs land does not accurately reflect where the money goes back. So people can be paying a great cost, a great share of that $114 billion, under Kevin Rudd’s great big new tax, and they will not be getting commensurate compensation.

We have heard in debates in this chamber today and last week how, so complex is this scheme, Rudd government ministers cannot even describe the impact on very credible, realistic and not very mysterious family types. That is deferred to the table, a broad-brush table which apparently is not enough for the Rudd ministers to give direct answers.

Today we talked about another bearer of this great cost, that being the small business community, and why they are completely excluded from the compensation arrangements that seek to soften the harm and hardship caused by $114 billion of new taxes on the nation and on businesses over the next nine years. It is interesting that the Minister for Small Business, Independent Contractors and the Service Economy, Dr Emerson, on the many, many occasions that this great big tax on everything has been debated in this parliament, has not once chosen to defend it. Even today, when I asked him a question about the real-life impact on a drycleaner at Queanbeyan, he could not turn his mind to that. Instead, as is his wont, he had a go at everybody—a little bit of theatre but no answers, which is a very awkward way of confessing to the fact that there is no compensation for small businesses. They are not a part of this $114 billion revenue-raising exercise over the next nine years. They are not a part of a portion of that coming back to those paying most of the burden.

This is a scheme that punishes everybody regardless of their level of emissions performance. If you are doing better than many, you are punished less. If you are a major emitter, you are punished substantially. If you are a small business, you are punished, and there is no relief for that financial pain through the compensation system. And, when asked today to explain that, the small-business minister again failed to address the design of the scheme and why small businesses have been excluded from compensation.

It is not as if that question would have been a great surprise. I have repeatedly highlighted the failure of the small-business minister to stand up for the constituency he is supposed to represent. I have repeatedly highlighted how small businesses are extremely worried and concerned about the impact of the Rudd Labor government’s great big tax on everything, the ETS, and why they have been excluded from compensation. I have repeatedly highlighted how, even on the government’s modelling, where it seeks to identify the electricity cost increase, the electricity cost increase is seven per cent in the first year, accumulating on top of that a further 12 per cent. That is 19.84 per cent, let us say 20 per cent, in the first two years. That is the electricity cost. A small business or a family will know what that electricity cost increase means. It means increased pressure on the costs of living and increased pressure on the costs of doing business.

What is not in those figures is the increase in energy costs embedded in all of the inputs of the supply chain for what households consume and what businesses produce and provide, as we saw today with the dry-cleaning business—very significant electricity costs and a $3,000 penalty for doing business under the Rudd Labor government’s great big tax on everything. What of the energy costs embedded in their processes, in the machinery they use and in the energy they consume? We know the energy sector is an enormous consumer of electricity in this country. Those costs will run all the way through and accumulate at each stage of production. It is not just about the direct impact on the cost of electricity. Electricity is embedded in everything that goes into production, systems and services. There will be increases in input and supply chain costs for small businesses and in the cost of consumption for households. Householders will look at a 20 per cent increase in their energy costs and be terrified—and rightly so—as those cost pressures just keep mounting under the Rudd Labor government. They will be worried about 20 per cent on top of escalating energy costs. I have described how energy is an enormous cost input for the water sector and how already-spiralling water costs will increase. These are the necessities of life. Families will soon know that energy is embedded in everything that goes on in this country at one stage or another and that, unlike the GST, which is taken out of business inputs and applied only to the last point of sale or transfer, costs will rise at each stage of the production process.

The Rudd Labor government are trying to force this great big tax on everything on the Australian public again and again, despite people’s cautions, worries and concerns about its impact. The Rudd Labor government cannot hear. They just keep forcing this down people’s throats, while people are telling them that prices are going to escalate at every stage of consumption and every stage of their business processes and inputs, leading to a far greater price penalty at the end of the day.

This is why leading organisations like the Australian Retailers Association have again cautioned the Rudd Labor government and challenged it to say what their great big tax on everything will really mean for the costs of goods in retail outlets. That is why COSBOA have pleaded with, not just asked, the government to turn its mind to the impact on the small business community. They have highlighted the exclusion of small businesses from the compensation arrangements and that there is a need to have a look at the punishing impact of this great big tax on everything on all in the business community and in the general community. It is difficult to accept that some households will get compensation and large businesses will get support from the Rudd Labor government to ease the pain of its great big tax on everything but that there is no mention being made of support for small business.

That was highlighted again today when the minister for small business, Dr Emerson, again could not bring himself to address the specific issue of why he and his government will allow small business to cop this great big tax on everything if it is allowed through without any compensation. That is why the Australian Chamber of Commerce and Industry said:

CPRS deal: Small business left exposed.

They have conducted some really credible research. Castalia Strategic Advisors have identified the costs of the Carbon Pollution Reduction Scheme on Australia’s small and medium sized businesses. Has the Rudd Labor government done anything to turn its mind to this input and analysis? Of course not. All it can do is come back into this place and try to jam through the very same flawed and friendless great big tax on everything, the CPRS proposition that got rejected previously by the parliament.

Why do they do this? Why do they insult the intelligence of the Australian public, the clear message of concern from the Australian community and the outrage of those in the small business community by simply stumping up the same old thing? They do it because this is a government that learns nothing. It is a government that will not learn from its experiences and will not recognise its mistakes. It is a government that uses objective analysis so selectively that, rather than look dispassionately at a problem and what strategies might be implemented, they decide what they want to do and then shop around for some kind of information to back it up. That is not evidence based policy; that is policy in search of some evidence to back it up. Again, this is what we are seeing in this chamber today.

I am surprised that the Rudd Labor government is not aware of the work that was carried out by the City of Greater Bendigo about the price penalty that is already being paid by non-city electricity users because of higher electricity transmission charges outside our capital cities. Small businesses and families living in non-city areas are already paying more for their electricity through higher network charges. The figures range from 20 per cent to as much as 43 per cent more, depending on what state you live in. They are going to get another slug in the neck from this great big tax on everything. We have not seen any comprehensive modelling about how the energy price increases will work their way through the different activities, production and cost structures of businesses in the economy. We are told what the direct electricity costs will be but we have not seen how the costs will wash through every stage of production and every step of the business chain. Those living outside our capital cities are already paying a premium for their electricity and they are going to be paying again.

So what does a drycleaner in a regional centre do when faced with no compensation because the Rudd Labor government does not care—small business can just cop it—and already facing price penalties because of higher transmission charges embedded in their electricity costs? They cannot pick up their business and move it to a capital city. Drycleaners need to be close to their customers. Those businesses will have an additional cost burden that will compromise their capacity to employ, undermine their viability and invariably mean higher costs to consumers. The very cost-of-living pressures that are already troubling the vast majority of households in Australia are almost being placed on steroids by the Rudd Labor government through this great big tax on everything.

So that is what this bill is about. I thought someone needed to talk about the specifics of the bill, because the Rudd Labor government members will not defend it. They are just going to use platitudes and talk in broad concepts about what they are trying to do. They will say: ‘Isn’t this a great idea? It’s all too complex to explain to you, but it’s a simple proposition at the end of the day; just go with what Kevin Rudd wants you to do.’ The opposition does not believe that that is a sensible way forward and has mapped out a far more direct, affordable and appropriate strategy. It is a strategy that reflects the fact that the global situation does matter and that that situation has changed, that there is a need to respond to those circumstances but to take practical and positive action on climate change.

As I said at the beginning, there is no lack of will or want on the part of the coalition to take action. It is about what is wise action to take in the current environment. The coalition’s plan for direct action on climate change—and I am pleased that my friend and colleague the member for Flinders is here; he is a significant author of this body of work—actually will achieve the reductions in emissions for Australia that the Rudd government’s great big tax on everything says it will achieve, but without the pain. The government model will cause pain that is not properly costed and modelled, that will run through every activity in this country. It is pain that starts with the cost of electricity. Wherever electricity is used in anything that goes on in our nation, that cost penalty will be there and will be built upon by further activity and further steps that add to the production process, to consumption and to the cost for households and consumers. The Rudd Labor government would be well served to have a good think about this. It has an exit strategy. That exit strategy is to concede that it has got it wrong and that the coalition’s plan is more directly targeted and deserves support, not ridicule.(Time expired)

8:23 pm

Photo of Julie OwensJulie Owens (Parramatta, Australian Labor Party) Share this | | Hansard source

I rise to speak on the Carbon Pollution Reduction Scheme Bill 2010 and related bills. Climate change is perhaps a more important issue than any we have faced in many decades. Human activity is damaging our climate and the world needs to minimise the impact on future generations and our world. Listening to the member for Dunkley, I am reminded once again of how difficult this issue is, because it is not a cost-free issue. If we do not act, there will be significant costs to future generations; if we do act, there will be costs now. In the political environment, where we face the people every three years, it is very easy to take an easy road and not act now. That is not something the government are prepared to do. We will meet our obligations to future generations.

Given that there has been so much muddying of the waters lately, building a climate of fear and confusion around this issue, I thought that it would be worthwhile to go back to the basics, to the things that most of us—perhaps excluding members of the opposition—agree on. Firstly, climate change is real. That is a view backed by longstanding science which has been extensively peer reviewed. The consensus view among scientists and governments around the world is that the evidence on warming is unequivocal, that average surface temperatures have risen by 0.74 degrees Centigrade in the last 100 years. Thirteen of the 14 warmest years on record occurred between 1995 and 2008. The projected global average warming to 2100 is around 1.1 to 6.4 degrees Centigrade, and the projection for sea level rises is up to 0.8 of a metre. More recent reports suggest that it may be higher.

It is true that there are a small number of scientists who dispute the science. Around the world, a number of people without a scientific background have been swayed by that, including, it seems, many on the opposition benches. To some extent, I can understand it. The issue is scary; it really is. The impact that we have already had and the damage that we will do without action is scary. It is difficult to believe, and there are days when I would rather not believe it either. I have talked to scientists, too, who want the science to be disproved, who look almost with great longing at alternative opinions and hope for them to be true. Nobody in their right mind wants climate change to be true, but look at the sheer number of scientists who support the science of climate change. The evidence is overwhelming and we are obliged to believe it, no matter how hard that may be.

The world is warming. Human activity is contributing to that warming. Unless we act, increasing temperatures will have catastrophic consequences for our environment, our way of life and our standard of living. True, there are best-case and worst-case scenarios, but there is general consensus that even if we manage to hold temperature increases to two degrees, a target set at Copenhagen, it is most likely that there will still be serious changes to the climate that will impact significantly on our children. The world needs to act and the world has agreed to act. In fact, many years ago it agreed to act. As difficult as the change has been and will be, we are part of that world and must play our part, not as a follower that waits for the rest of the world to tell us what to do. That is not what we do here. It is not what we have done historically on the major issues that have faced the world. We should act as a country looking after its own interests by participating at the forefront of the design of new methods for combating climate change, making sure that as the world moves forward we have our economic systems in place and sufficient investment to ensure that we have a strong future in a new, cleaner age.

We need to act sooner rather than later. Actually, I suspect we needed to act a few years ago. I think the electorate understands that absolutely. We need to act because the costs of inaction are greater than the costs of action. Some of the impacts we are potentially facing without action are quite catastrophic for our nation. By 2070, up to 40 per cent more drought months are projected in eastern Australia and up to 80 per cent more in south-western Australia. Exports of key commodities could fall by up to 63 per cent in the next 20 years and by up to 79 per cent by 2050. Up to 247,000 residential buildings, worth around $63 billion, are at risk from sea inundation by 2100. Climate change related coral bleaching on the Great Barrier Reef may cost $37.7 billion in lost economic value and the loss of 60,000 jobs. Irrigated agricultural production in the Murray-Darling Basin will drop by over 90 per cent by 2100, and there are 90,000 people employed in agriculture in the basin. The Stern review found that if we do not act the overall cost will be equivalent to losing between five and 20 per cent of global GDP each year. They are all significant costs of inaction—something that the opposition seems to fail to grasp. If these figures are alarming, that is because the consequences of not taking serious action on this are alarming. We should be frightened of inaction on this. We should be afraid of the economic costs of failing to act and we should be ashamed of the lost years.

While the costs of inaction are high, in environmental damage, in social costs and for our economic future, there are of course also costs associated with action. Unfortunately, in a catastrophe of this size there is no cost-free solution. But all serious reports indicate that the cost of delay is high. Treasury modelling shows that economies that defer action face long-term costs around 15 per cent higher than those that take action now. To put this into a global context, the International Energy Agency predicts—

Photo of Peter SlipperPeter Slipper (Fisher, Liberal Party) Share this | | Hansard source

Order! The debate is interrupted in accordance with standing order 34. The debate is adjourned and the resumption of the debate will be made an order of the day for the next sitting. The honourable member for Parramatta will have leave to continue speaking when the debate is resumed.