Ed Husic (Chifley, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Climate Change and Energy Efficiency. Will the minister outline the benefits of a market mechanism for pricing carbon over other mechanisms? Why is consistent policymaking important for business certainty, and are there any threats to that certainty?

Greg Combet (Charlton, Australian Labor Party, Minister for Climate Change and Energy Efficiency) Share this | Link to this | Hansard source

I thank the member for Chifley and would like to congratulate him on his first speech, which he delivered earlier today. I extend to him, certainly, my warm welcome. We were colleagues in our former working lives and I am very pleased that he is a colleague in the parliament with us now.

The issue of climate change presents very serious public policy questions, and they are not going to be answered by the sort of opportunistic rubbish we have been hearing again from the opposition in question time. A carbon price is a significant and necessary economic reform. It is a reform that will create an incentive to cut pollution; it is a reform that will drive investment in low-emissions technologies and clean energy and create new jobs; and it is a reform that will ensure our long-term economic competitiveness. A market mechanism is the most efficient and cost-effective way of establishing a carbon price, and that is a very widely held view.

It was a point that was made again yesterday by former Prime Minister John Howard in the Press Club—that is, that a market mechanism is the most efficient way of reducing carbon pollution and introducing a price on carbon into our economy. Of course, Mr Howard made the point that he continued to support an emissions trading scheme as the best policy response to climate change. We also know that that is the advice the former Prime Minister gave to the shadow Treasurer during the time of the leadership upheaval in the Liberal Party towards the end of last year.

In contrast, the so-called direct action policy now championed by the opposition, using taxpayers’ funds to try to pick winners, is more akin to a Soviet style command—

Mrs Bronwyn Bishop (Mackellar, Liberal Party, Shadow Minister for Seniors) Share this | Link to this | Hansard source

Mr Speaker, I rise on a point of order again referring to House of Representatives Practice, at page 553. Under the old rules of answers being relevant, it was held that irrelevancies such as contrasting government and opposition policies should be directed by the Speaker to be out of order. Surely under the new paradigm, for want of a better word, the word ‘directly’ must have some meaning and must pertain to the answer being given. The answer, I put to you, Mr Speaker, is out of order.

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

The question, which I said was in order, described ‘threats’. The minister will be directly relevant to the question. The minister has the call.

Greg Combet (Charlton, Australian Labor Party, Minister for Climate Change and Energy Efficiency) Share this | Link to this | Hansard source

I was being relevant to the question in that I was asked about market mechanisms and, of course, this is something that under the opposition leader has been abandoned as a policy position. In fact, the opposition is losing its way on economic policy.

Earlier in question time, reference was made to Mr Grant King, the head of Origin Energy, and to some comments he made several months ago—in April this year—remarking upon the potentiality for a threefold increase in electricity prices by the end of this decade. It was represented, I think by the member for Menzies, that that threefold increase was somehow related to the introduction of a carbon price. Over the ensuing six months there has been considerable opportunity to discuss with Mr King exactly the intent of his comments. Far from reflecting upon the impact of a market mechanism for a carbon price, he was making the point that the transmission network costs were going to increase and that in the absence of a carbon price we would face increases of that nature. Mr King knows well, as the head of Origin Energy, how important it is to have a carbon price mechanism in our economy. The type of policy opportunism that we hear from the opposition, the inconsistency in policy positions, generates further uncertainty for the business community.

The House could consider for a moment the circumstances for the business community should the opposition adopt an economically responsible and coherent position. It would be in the national interest for there to be a community of view about the appropriateness and necessity for a market mechanism, a carbon price to be introduced into the economy. (Time expired)