Kevin Andrews (Menzies, Liberal Party, Shadow Minister for Families, Housing and Human Services) Share this | Link to this | Hansard source

My question is to the Prime Minister. I refer the Prime Minister to analysis that shows that in five years time electricity bills will reach up to $10,000 a year for families if a carbon tax is introduced. Why is the Prime Minister proposing a carbon tax that will increase the cost of living for struggling Australian families?

Julia Gillard (Lalor, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

I thank the member for his question. Can I perhaps ask him in return why he is determined to see continued underinvestment in electricity generation that will put upwards pressure on prices. I say to the member who asked the question that, when he looks around the nation at increasing electricity prices, whether it is in Western Australia or in other states and territories, he will find that the explanation is underinvestment in electricity generation. If he is in any doubt about that, I suggest that he get on the phone to the Premier of Western Australia, who could quickly explain the concept to him.

When we look forward and say, ‘Well, how are we going to get this investment in electricity generation?’ what we hit absolutely is the uncertainty from the electricity industry that they will not invest until they know what the economic settings are with a carbon price. We are talking, of course, about investments worth billions of dollars, and people rightly want certainty in the making of those investments. That is why it is important to work through the question of pricing carbon. Yes, it is not an easy reform. It will take work and thought. It will take the generation of consensus, which is why the government, with the opportunities of this new parliament, have been prepared to say that we will work in that way through the Multi-Party Climate Change Committee. I say again, as I said to the Leader of the Opposition earlier, if the member asking the question is seriously concerned about increasing electricity prices then there is a way of constructively joining this debate, and the way of doing that would be to acknowledge that this is a nation that needs to work through the question of pricing carbon and to join the mechanism to do that. In the absence of the preparedness to work constructively, what we see from the opposition is that they are full of complaint but have absolutely no idea about any solutions.

Tony Abbott (Warringah, Liberal Party, Leader of the Opposition) Share this | Link to this | Hansard source

Mr Speaker, I ask a supplementary question. Could the Prime Minister explain how raising taxes will somehow lower prices, and when will she stop playing politics with people’s futures and get on with governing this country?

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

I accept the first part of the question as being a supplementary, but the Leader of the Opposition should avoid stretching the supplementary nature of questions.

Julia Gillard (Lalor, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

As a man who has advocated increasing taxes, which the Leader of the Opposition did at the recent election, presumably he has had time to think through questions of increased tax, with his increased company tax inevitably hitting working families. So, when the Leader of the Opposition talks about the cost of living, he may want to remind himself and remind others that he stands for increased company tax and increased prices for working families. On the question of carbon pricing and electricity, what I would say to the Leader of the Opposition is that, if he wanted to get out an economics textbook, it might be able to teach him a little bit about something called ‘demand’ and something called ‘supply’. When you look at something called ‘demand’ and something called ‘supply’ it then tells you something about ‘price’. When we apply those rules to electricity generation—and I know it can get complicated with a graph, an X-axis and a Y-axis and all the rest of it—or when we apply that economics to electricity pricing, what we see is increasing demand and increasing uncertainty in relation to supply. We have had a decade of underinvestment. Uncertainty by the industry in pricing carbon is constricting investment. If you talk to representatives of the sector, they will say that uncertainty means that, to the extent that there are new investment dollars, they tend to go for stopgap proposals rather than the generation of the baseload power we need. We need to correct that circumstance. Providing certainty to industry is vital to correcting that circumstance. That is why the government, in a collaborative and consultative way through the Multi-Party Climate Change Committee, is working through the question of pricing carbon.

Kevin Andrews (Menzies, Liberal Party, Shadow Minister for Families, Housing and Human Services) Share this | Link to this | Hansard source

Mr Speaker, I seek leave to table the document ‘Bills may quadruple to $10,000 a year’. What are you running away from?

Leave not granted.

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

The member for Menzies will be very careful.

Anthony Albanese (Grayndler, Australian Labor Party, Leader of the House) Share this | Link to this | Hansard source

Mr Albanese interjecting

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

I am sure the Leader of the House will get over it.