Laura Smyth (La Trobe, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Prime Minister. Prime Minister, how will a price on carbon help to create a clean energy economy, and what would be the impact of rolling back a legislated carbon price?

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

I thank the member for La Trobe for her question. She, as all members of the government and other people of goodwill in this place are, is interested in the future of this country and making sure that we have a clean energy economy for the future.

Opposition Members:

Opposition members interjecting—

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

I expect the opposition to interject because, of course, they are a party of the past. Let me explain in detail our mechanism for pricing carbon. The first proposition is an incredibly simple one. At the moment carbon pollution can be released into the atmosphere for free. There is no disincentive for doing that. We will put a price on carbon, a price on every unit of carbon pollution. It will be paid for by businesses and as a result, because our business community is smart and adaptable and innovative, they will work out ways of pursuing their business and generating less carbon pollution. They will work out ways of making sure they pay less of a price when carbon is priced. Then they will enter into contracts, they will make investments on the basis of understanding the rules and understanding that carbon will be priced. And as they go about making those transitions, innovating, making the new investments of the future, we will work with those businesses in transition to a clean economy.

Having priced carbon and seen that innovation, yes, there will be pricing impacts; that is absolutely right. That is the whole point: to make goods that are generated with more carbon pollution relatively more expensive than goods that are generated with less carbon pollution. But because we are a Labor government this will be done in a fair way. We will assist households as we transition with this new carbon price. What that means is that people will walk into a shop with money in their pocket, the government having provided them with assistance. They will see the price signals on the shelves in front of them—things with less pollution, less expensive; things with more pollution, more expensive—and they too will adapt and change. They will choose the lower pollution products, which is exactly what we want them to do. Between the business investment and innovation, between households who have been assisted in a fair way by a Labor government responding to price signals, we will see a transition to a cleaner economy, to a clean energy economy, to a low-pollution economy.

What does that mean? Put very simply, it means jobs. It means that our economy will keep pace with a transition that is happening around the world. Our economy will keep pace and we will have the jobs of the future. What is the alternative? The alternative is to keep emitting carbon pollution. It is to see Australia left behind the tide of history with a high-pollution economy. It is exporting jobs to the rest of the world—jobs that Australian kids could have to build a future on. It is leaving households to deal with escalating electricity prices, which are going up because of a lack of investment certainty, and without household assistance in their pockets. And, of course, if we follow the Leader of the Opposition’s plan, it is also about ripping $30 billion off taxpayers. The efficient way to transform our economy is to price carbon and that is what we will do.