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

I have received a letter from the honourable member for North Sydney proposing that a definite matter of public importance be submitted to the House for discussion, namely:

The adverse impact of the carbon tax on the Australian economy

I call upon those members who approve of the proposed discussion to rise in their places.

More than the number of members required by the standing orders having risen in their places—

Joe Hockey (North Sydney, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

Mr Speaker, I appreciate you staying for my speech! The Westpac-Melbourne Institute Index of Consumer Sentiment came out today and indicated an unexpected rebound in consumer confidence in the month of September. I see that as good news, but it was unexpected because business confidence is down and consumer confidence generally remains extremely flat. When you look at the actual data, it reported the major news items recalled by consumers in September as it does every three months—this is a report by an investment bank. It said that the most recalled items were economic conditions, probably owing to the solid second-quarter result; taxation, reflective of ongoing concerns about the carbon tax; international conditions, given recent financial market activity and concerns about global growth outlook; and interest rates. Of those four issues only sentiment towards interest rates was less negative than in June. Of course, consumer confidence and business confidence are fingers on the same hand; one travels with the other in many ways. If consumers are confident, they engage in retail spending, they engage in commerce. So many small businesses which are unincorporated, often family businesses, take the risks of everyday life. That in turn stimulates business investment; it stimulates business confidence. But one of the fundamental principles that cut to the core of consumer and business confidence is stability and consistency from government. If we had believed everything that has been said by this Prime Minister and the Minister for Climate Change and Energy Efficiency over the last few days, we would have thought that there really was no need for a parliamentary debate on the carbon tax because it has been going on for years, the dust has settled and all the concerns of everyday Australians have been totally allayed.

I thought I might have misheard it—but I doubt I did—when the Treasurer yesterday said something along the lines of: 'On the big reforms you have to take the Australian people with you.' We love Swannie! Why doesn't he come into this place and engage in debate? He even boasted today about the Parliamentary Budget Office—how successful that was. It was so caught up in committee in this place last night with the member for Lyne casting doubt on the bill. The Treasurer was so proud of his achievement that he boasted about it today in question time. This is a man who does not create confidence in the Australian people. I do not rush out to the shop with my credit card when I see the Treasurer on TV saying everything is all right, and I do not think I am alone; I do not think that is a lonely path. I do not think Australians are imbued with confidence when they look at this government, which has had five different policies on a carbon tax and an ETS, four different versions of a mining tax, three different policies on live exports to Indonesia, two Prime Ministers in four years and one lame duck Treasurer—no confidence.

I would have thought that the dust has settled, that we are all wasting our time engaging in the debate. I would have thought everything was before the parliament, everything was before us, and the Australian people could be confident that the full carbon tax package is here. But then I came across this comment today from the Leader of the House, who said:

Further bills to establish the Australian Renewable Energy Agency—

which is a core part of the carbon tax package—

will be introduced in the coming months …

I thought 19 bills at over 1,000 pages did the job, but, no, there is more—'Wait, we're tossing in some steak knives'! He goes on:

… and the Clean Energy Finance Corporation will be introduced in early 2012—

The Clean Energy Finance Corporation is being funded to the tune of $10 billion—more than a third of the total of the carbon tax—and it is not part of the carbon tax package, it is off budget. These guys have made an art form of taking things off budget. Most spectacularly, the $4 billion for the National Broadband Network—well in excess of $38 billion now—is not accounted for on the budget because, if it was, it would make the deficit look far worse.

The Clean Energy Finance Corporation is now off budget. I looked at the terms of the Clean Energy Finance Corporation. I thought to myself, 'Gee, this looks familiar,' and I consulted my colleague the member for Groom. I said, 'Doesn't this look like the Commercial Ready program that used to be a part of the budget and was abolished by the government in May 2008?' It was a program of $700 million over four years that the government had, with very similar terms of reference to those of the $10 billion Gillard bank that is now going to be off budget. Why is it off budget? Because it would be a $10 billion hole in the budget.

Now the government has nearly $50 billion of expenditure off budget. And the $10 billion associated with the buyout of Senator Bob Brown to get his agreement. The $10 billion Commercial Ready clean energy program—the former Minister for Finance and Deregulation said about it that there were too many programs, too many initiatives, that were already funded by the private sector: 'Why would we fund them from government money?' No wonder old Lindsay is turning and spinning in his political grave. We miss him. He was a spine stiffener over there when it came to budget activity. The spine stiffener has gone, and, most spectacularly, the program that he thought in May 2008 was a waste of taxpayers' money is now nine times bigger and is off budget.

This government does not have direct ministerial control of the money. I can understand that—gosh, with the $350 billion they have direct ministerial control over at the moment they are doing tremendous damage. Why would you give them any more money? I can understand them taking it off budget for that reason. But you know what? The lack of accountability and the lack of consistency mean the Australian people remain confused—confused about this government, its policies and its true intentions.

Why wouldn't they be confused? We recall the Treasurer saying on numerous occasions that the carbon tax package would be 'roughly budget neutral'. It is $4.134 billion short. You could almost fit that into a brown paper bag—that $4.134 billion shortfall. And this Treasurer has the audacity to come to this place on a regular basis and give us a lecture about integrity. The Treasurer—the high priest of integrity—says a rounding error, or close to budget neutrality, is $4.134 billion. The government was so concerned about a $1.8 billion hole associated with the Queensland floods that they imposed a new levy. Now they have a $4.134 billion hole and are not explaining to the Australian people how they are going to pay for it. They are not telling anyone how they are going to make up that shortfall, nor are they telling the Australian people where the $10 billion for the Clean Energy Finance Corporation is going to come from: 'Oh, that can wait till next year. That's not part of the equation now. We'll find $10 billion next year.' What is this? Is this like a scene out of a bad British comedy? It is like On the Buses over there and the guy with the moustache is the Treasurer. Was that Arthur? I miss Arthur. But he is reborn and comes from Lilley—a Queenslander!

Yesterday in this place the Prime Minister stood up and said the modelling on the carbon tax is settled. The Prime Minister had said before the debate that we would have the carbon tax modelling. The only problem was that the macro modelling was on $20 a tonne and the household impact was on $23 a tonne; so, in fact, it is impossible to properly analyse the impact on Australian business when the modelling is done at $20 a tonne. But thank goodness the states have done a bit of work. They have done proper assumptions about the economic modelling, and they have identified that with the government's flawed modelling there is a presumption that capital will be available to restructure Australia's energy sector and that workers will reduce wage demands and move locations in response to unemployment in ways that are not easy to achieve in reality—a rather heroic assumption from the government.

The government in its modelling also ignores the implications of current economic conditions. For example, they ignore the uncertainties posed by the risks of further global downturn from a European sovereign debt crisis. The Commonwealth's modelling presumes Australia's actions against a backdrop of significant global abatement efforts and that will allow Australia to import permits at a lower cost than domestic alternatives. It presumes leakage will not occur. The government's modelling assumes the existence of a credible international permit market.

The government says we should have a properly informed debate. The Prime Minister often reminds us that we have to refer to expert opinion. The Prime Minister said yesterday that updated modelling will be available next week, well before the parliament votes on the legislation. Well, I was ready to go today. They want us to have our one speech before they have actually delivered the economic modelling of at least $23 a tonne, which will significantly influence the debate. You would like to think so. But of course this government is not very good at delivering anything.

Modelling by the New South Wales Treasury states that in New South Wales there will be an absolute reduction of 18½ thousand jobs in the Hunter region by 2020, 7,000 fewer jobs in the Illawarra region by 2020, 1,000 fewer jobs in the Central West of New South Wales by 2020—

Mr Perrett interjecting—

and, of course, one less job in Moreton!

The Victorian government recently commissioned Deloitte Access Economics to undertake the modelling. The modelling showed that the carbon tax will reduce jobs growth by more than 24,000 and reduce the state's output by more than $2.8 billion in 2015. The modelling commissioned by the Victorian government reveals that in the electorate of Melbourne Ports the Port Philip local government area will have over 1,000 fewer jobs and $113 million less output in 2013. In the electorate of Bruce the Monash local government area will have more than 1,000 fewer jobs and $122 million less economic output.

But the Western Australians have also done their modelling, and what they reveal is that the carbon tax will increase the cost of essential services. For a typical Western Australian household there will be an increase in state government tariffs, fees and charges of at least $144 in 2012, and that will cover electricity, public transport, water and so on. But modelling performed by Western Australia's Treasury reveals that over 400,000—half—of Western Australia's households will not be sufficiently compensated by the federal government.

Queensland—one of your own—estimated the impact on the government of $250 million, rising to $360 million. These are the facts. These are the real impacts. It is this government, through its own incompetence and inconsistency, that has shown it is not fit to run the country. (Time expired)

Craig Emerson (Rankin, Australian Labor Party, Minister for Trade) Share this | Link to this | Hansard source

Being lectured by the shadow Treasurer on budget discipline is like being lectured by Lord Monckton on the science of climate change. Lord Monckton does not believe in climate change, and the shadow Treasurer does not believe in budgeting. In fact, the shadow Treasurer was exposed, along with the shadow finance minister, who is still with us—they cannot stand each other—before the last election as having to go to an accounting firm because they knew that they had a very big budget black hole. They went to an accounting firm instead of chancing their arm to have their costings done by Treasury and Finance. When the Independents insisted that those costings be done, voila: an $11 billion black hole was exposed.

But, in the period of one year since the ministry was sworn in, that $11 billion black hole has not been plugged; it has exploded to $70 billion. The $70 billion comes from none other than the shadow Treasurer, who told the shadow cabinet that they had a very big problem, whereupon the Leader of the Opposition said: 'This $70 billion is in fact just media talk. It's just the Labor Party.' But in a moment of candour on a Sunday program very recently the shadow finance minister indeed confirmed that there is a very big problem to the tune of $70 billion and the coalition has no idea how they are going to plug it. This points to the fact that the opposition leader is, as described by a former employer—that is, Mr John Hewson, who was also an opposition leader but is a professor of economics—'innumerate'. He has described the opposition leader as 'innumerate', and so he is. While we are talking about the impact of carbon pricing, this is a man who has estimated the weight of one tonne of carbon dioxide as zero. He has been asked, 'What does a tonne of carbon dioxide weigh?' and his answer was, 'Zero.' I can imagine him at school. When they asked, 'What does a tonne of lead weigh?' he would have said, 'A tonne.' When they asked, 'What does a tonne of feathers weigh?' he would have said, 'Well not so much, because feathers are lighter than lead.' So if they had asked, 'What does a tonne of carbon dioxide weigh?' he would have said, 'Nothing at all.'

I am told that the teachers realised then that young Tony had a problem with numeracy, and since they thought he was quite a good sports person they started asking him questions such as, 'Young Tony, who won the fabulous tied test of 1960-61?' whereupon he said, 'Australia,' and they said, 'No, it was a tie.' He was then asked, 'After which famous cricketer was the Victor Richardson stand named?' and young Tony said, 'Wally Grout?' They said, 'No, no, that was Victor Richardson.' The final question was, 'Okay, young Tony, how many balls in a six-ball over?' and the reply was: 'Sir, sir, I know! Is it eight?' 'No, it's six, Tony.' Then the teacher said: 'Look, you are completely innumerate. You could be the leader of the Liberal Party.' That was the recommendation and here we are—he is the leader of the Liberal Party.

This motion was put forward by the shadow Treasurer as:

The adverse impact of the carbon tax on the Australian economy.

Let us have a look at the impact on jobs. You would think that this would be central to the argument of the coalition. They have said virtually nothing about it but, in fact, the modelling does estimate that there will be 1.6 million extra jobs in Australia by 2020 under a carbon-pricing mechanism. That is not job losses, but 1.6 million extra jobs to build on the almost three-quarters of a million jobs that have already been created under this government during adverse economic circumstances, including the deepest global recession since the Great Depression.

We could ask: what are some of the other authorities saying about this sort of thing? The IMF, in fact, gave a glowing endorsement of the carbon-pricing mechanism when they said just last month that they:

… support the proposed introduction of a carbon price as part of a transition to a permits trading system to mitigate greenhouse gas emissions.

Of course, they are economists, and we know that the opposition leader believes that economists do not know what they are talking about. The opposition leader believes that lawyers do not know what they are talking about. He believes that scientists do not know what they are talking about. Only the opposition leader knows what he is talking about.

But the opposition leader has detractors from his own side. They are getting very, very tired of this economic Hansonism that is being espoused by the opposition leader. We know that he has a DLP background—that is, he has said, 'I worship the very water that Bob Santamaria walks on'. Bob Santamaria himself was quoted as saying that capitalism is worse than communism. These were the great interventionists of the 1950s and the 1960s, but here is Mr Abbott back as the reincarnation of Bob Santamaria.

Peter Slipper (Fisher, Liberal Party) Share this | Link to this | Hansard source

Order! The minister will refer to the Leader of the Opposition by his title under the standing orders.

Craig Emerson (Rankin, Australian Labor Party, Minister for Trade) Share this | Link to this | Hansard source

Yes, I will. The opposition leader is back as the reincarnation of Bob Santamaria.

We now have contributions to the debate by people such as the member for Mayo, who has basically had a gutful. After the appalling CEDA speech from the opposition leader, where he effectively declared himself to be Australia's first free-trading protectionist when he said that he is in favour of free trade but he is in favour of protection as well, this first free-trading protectionist got this from the member for Mayo in an opinion piece during the week:

The truth is that we can't save jobs by government protection, no matter what self-interested players promise.

Well there is a self-interested player: the opposition leader! The member for Mayo went on to say:

There is a role for government to assist industries to adapt to changing environments, but taxpayers funding a romantic attachment to a bygone era is not a position the Australian economy can afford or sustain.

…      …   …

We simply can no longer afford to be throwing good money after bad to satisfy the political posturing of a chosen few.

Who were the chosen few to whom he was referring? The Leader of the Opposition! He is self-chosen. He was chosen by Bob Santamaria and he is faithfully walking in his footsteps—but not on water!

The member for Mayo is joined in his frustration by the member for Higgins, the member for Moncrieff, the member for Kooyong, the member for Bradfield and the member for Casey, who have all had a gutful of this irresponsible economic policy-making from the Leader of the Opposition. We saw the apples legislation. We talk about impacts on jobs: the apples bill that was brought into this parliament was completely non-compliant with our obligations under the World Trade Organisation and would have led to retaliation against our exporters. Sixty per cent of the value of our agricultural produce is exported. It would have led to retaliation against them, but the opposition leader does not care. He has a palm oil bill that he is supporting which is the same thing—it would lead to retaliation and is completely non-compliant with our World Trade Organisation obligations. The opposition leader does not mind the idea of international trade just so long as it is not with foreigners.

This is where we are. This is where his thinking is. This is economic nationalism from the opposition leader. But it gets worse. We have revealed today, through documents that were obtained in New South Wales, the conspiracy involving the opposition leader's office in respect of this very issue that we are debating. The timing of the shadow Treasurer could not have been better. In fact, I wonder if the shadow Treasurer realised exactly what he was doing in putting this matter of public importance on today, because he did mention state modelling. I think he referred to Western Australian state modelling, Queensland state modelling and Victorian state modelling, but he did not refer to New South Wales state modelling. There is a reason that he did not refer to New South Wales state modelling, because these documents reveal a conspiracy. This is an email from Peter Grimshaw of the office of the Premier. He says, 'The "Tele" is very keen to do a story for tomorrow’s paper on the impact of the carbon tax in relation to public transport versus cars. If we have any figures/modelling he thinks he can get a big run on this tomorrow, with the theme being there will be an incentive for people to use cars under Gillard’s plan because rail uses electricity, buses use diesel,' et cetera. In other words, the Daily Telegraph gets in contact with the Premier's office and says, 'Look, if you can cook up some figures for us that will be great. We will put it on the front page'.

This is what happened. The Premier's office then commissioned figures, but they were warned in an email from Matthew Crocker, 'Juicy quote from the Department of Transport's brief (note there are some not so helpful quotes in the brief too, so do not ask me for a copy of the original)'. In other words, do not ask me for the original Department of Transport brief because I am going to have to tell the truth, and we really do not want to tell the truth when it comes to modelling the impact of carbon pricing on public transport.

So then in comes the Leader of the Opposition's office. The fact is that he has been running around trying to scare the daylights out of every family, every steelworker and everyone working in rural areas—everyone in Australia—saying, 'We are going to have this great big monster tax'. Of course, right on cue, in comes the opposition leader's office with talking points on carbon tax, and this is what they want the Daily Telegraph to print: the carbon tax is a catastrophe for New South Wales and will affect everyday prices and hurt jobs in New South Wales.

They tried to feed that in, but it is actually refreshing and encouraging that there are professional public servants in New South Wales who would not go along with this. We have from Roger Shu, financial analyst with Transport and Planning in the New South Wales Treasury an email where he says about the impact on transport prices in New South Wales that 'the real impact is miniscule'. There is an honest public servant, but he did not prevail. What actually happened is that on 15 July the Premier of New South Wales put out a press release asserting that it would put up fares by 3.6 per cent, and on song—because the Daily Telegraph wanted him to say this:

It’s crazy for the Federal Labor Government to impose a tax which is a disincentive for people to use public transport.

So they have bodgied up a figure of 3.6 per cent. You have Treasury saying that the real impact is miniscule and—this is also Treasury—saying, 'The model computed by the Department of Transport defies basic mathematics'. I know someone else who defies basic mathematics, and of course that is the Leader of the Opposition.

I think that what actually happened then is marvellous, because subsequently the New South Wales Treasury got so squeamish about this estimate of 3.6 per cent that they produced this document: New South Wales Government, the Treasury: Carbon price impact—transport, 1 September 2011. It actually quotes the Premier of New South Wales on 15 July, saying, 'The carbon tax due to take effect from 1 July 2012 will lift the cost of public transport fares by up to 3.6 per cent.' That is in that same press release.

Then they go through Treasury modelling and it says that as a result, 'This equates to an average fare price increase of 0.49 per cent'. So one-seventh of the dodgy figures that were produced by the Department of Transport were then headlined in the Daily Telegraph. Why would you believe anything that the Liberal Party ever said? They engaged in the conspiracy involving the opposition leader's office, the Premier's office in New South Wales and the Daily Telegraph to bodgie up figures so they get a front-page headline saying that fares would go up. I think the estimate was by something like $150 a year. That is 3.6 per cent, and everyone involved knew that that was untrue.

So you get the opposition leader running around here saying, 'I'm gospel truth Tony. When I write it down you can trust me, it is absolutely true.' His office knew that they were engaging in a conspiracy to deceive the people of New South Wales on the important issue of the impact of the carbon price on public transport fares. That conspiracy involved the Department of Transport, the Premier's office in New South Wales and the opposition leader's office here in Canberra.

Why would you believe the very figures that the shadow Treasurer produced? I would not believe a word that they ever said, with this exception: that they do have a $70 billion budget black hole. That is what they have said and I reckon that estimate is spot on. That is the problem: they have said that they are going to get rid of this carbon price. They are going to yank the whole thing out, they are going to increase taxes and to reduce the age pension if they get into office.

Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Energy and Resources) Share this | Link to this | Hansard source

That's rubbish!

Craig Emerson (Rankin, Australian Labor Party, Minister for Trade) Share this | Link to this | Hansard source

That is exactly what they have said. It is not rubbish, it is exactly what the opposition leader said, 'If we get into office we will rescind the carbon price and we will increase personal income tax and reduce the age pension'. There is the choice for the Australian people: a government investing in the future and making sure we care for our environment and for our economy or an economic vandal who, according to John Hewson, is completely innumerate. The only figure they have ever got right is the $70 billion black hole that remains completely unplugged.

Andrew Robb (Goldstein, Liberal Party, Chairman of the Coalition Policy Development Committee) Share this | Link to this | Hansard source

Could I just suggest that a friend needs to take the Minister for Trade aside and tell him that this sort of lightweight performance that we have just heard over the last 15 minutes does him no credit, nor the government. It was just pathetic.

Craig Emerson (Rankin, Australian Labor Party, Minister for Trade) Share this | Link to this | Hansard source

Oh, thanks for your moralising.

Andrew Robb (Goldstein, Liberal Party, Chairman of the Coalition Policy Development Committee) Share this | Link to this | Hansard source

No, it is not moralising. It is just a fact: that was pathetic, it was absolutely pathetic, Craig. There is a serious topic here about the impact of a carbon tax on a vulnerable economy, and you stand up there and give us that absolute drivel. You are a minister of the state and you ought to behave yourself a lot better than just standing there and giving us that drivel and that mock humour.

Dr Emerson interjecting—

Peter Slipper (Fisher, Liberal Party) Share this | Link to this | Hansard source

Order! The minister will remain silent and the member for Goldstein will direct his remarks through the chair.

Andrew Robb (Goldstein, Liberal Party, Chairman of the Coalition Policy Development Committee) Share this | Link to this | Hansard source

In Australia we are very blessed. We have enormous resources and energy opportunities, we have an agricultural sector which is a great strength and we have an education sector which is a great strength. All of these three are perhaps the three biggest strengths that we have had for 200 years. These strengths happen to coincide with the Asian century. We are geographically so well placed. Also, all of the things that Asia needs in this century we have as our strengths: great resources, energy and agriculture. We feed 60 million people. If we marshalled the resources, technologies and possibilities that exist in Australia, we could feed 120 million people. We have an education system which now is poised to educate so much of the region and to forge longstanding and deeply fruitful links with the Asia region. All of these things we have going for us right at this very moment.

Yet, despite that, there is a crisis of confidence in this community. It runs right throughout the community. In fact, today we saw a business confidence report released by the National Australia Bank—a survey which is used by the Reserve Bank to gauge the health of business. It shows a 10 per cent fall in confidence to a level not seen since the middle of the great financial crisis. We have seen the biggest falls in confidence in the finance sector, the manufacturing sector and the transport sector, with retail also depressed. This comes off the back of lay-offs of 10,000 identified by Merrill Lynch over the last two months, with job losses concentrated, again, in the manufacturing, consumer, government and finance sectors. It also leads to a conclusion by the chief equities analyst, Tim Rocks, who said that job losses from these sectors alone were likely to reach 100,000 over the coming quarters.

The Australian community are not stupid. They have a sense of gathering clouds—storm clouds. In fact, it explains why savings rates have gone from minus one per cent 12 months ago to 11½ per cent now, the biggest jump in savings rates in this economy on record. It represents about $70 billion that Australian households have saved—money that would normally have been spent for discretionary expenditure. It is a level of saving which has meant that the retail sector is on its knees.

But why have people been doing this? Why is business not investing? The reason falls largely at the feet of this government. Now we have a carbon tax which has become a symbol of chronic incompetence within this government. We have a situation where we have all of these blessings yet we have a government which has put this economy into a situation of great vulnerability if there is any further slide in world economic conditions.

The fact is that the world economy is facing the likelihood of a further significant slump over the coming 12 months. There is a much greater prospect of that happening than not. The job of any government is to do its best to weatherproof an economy against forces external to this country that it has no control over. The government does not have any control over what happens in the United States or in Europe, but what this government can do is weatherproof our economy, prepare our economy and gather in the acorns to get ourselves prepared, just as the households are doing. In the absence of government, they are living within their means. They are paying off their mortgage. They are paying off the plastic. They are saving money because the government is not. They are doing the opposite of what the government is doing.

Here is a government with the biggest budget deficit on record two years in a row. Here is a government that has taken a surplus and no debt and gone to nearly $200 billion in gross debt and the biggest deficits in our history. Here is a government that is borrowing as if there is no tomorrow. Here is a government that has presided over the biggest growth of government in our lives. The carbon tax is the prime example. The government has reregulated the labour market in the face of the global financial crisis. It has renationalised telecommunications. Now it is bringing in a carbon tax which is dripping with intervention and bureaucracy—hundreds of millions of dollars worth of new public servants to monitor and crawl over every company. There will be 500 companies that will have bureaucrats coming out their ears for years to come. The government gets this massive tax: $1.5 billion of the first $9 billion in the first year is the cost of abatement and the rest of it goes straight to tax for the government to churn back through the economy. The government will make the decisions and strip the balance sheets of companies so that they cannot make decisions on innovation. It will be up to the government and up to public servants. We will have the biggest line-up of lobbyists here that you have ever seen in this country because of what this government is doing.

A lot of this is now being compounded by the carbon tax, because the carbon tax shows absolutely no empathy with what is happening in the real world out there. Because of this, people know and sense that there is no direction in this economy. There is no competence. We still have all the examples that go back four years. There is no sense that anyone is in charge. You can see it on their faces on the other side ever since the last election: they are looking for a story. What does all this add up to? What is this carbon tax? What does it do apart from costing jobs, imposing further taxes on people and shifting income—redistributing it from one sector to another? What does it do? It does nothing for the environment. It does nothing for our competitive position. It will lead to the loss of jobs and industries offshore. It just confirms that this carbon tax has become a great symbol. It is the thing that is reinforcing that loss of confidence both amongst households and amongst business. There is a lot of money out there. It is not being spent, because there is this sense of unease—a great sense of anxiety; a great sense of no leadership; a great sense that nobody is in charge. We have heard the drivel from the Minister for Trade in the last 15 minutes. None of these issues was addressed. What are they doing about this vulnerability? We have a situation where this government has caused a crisis of confidence in the economy. Quite rightly, increasing numbers of Australians have written this government off. It has had too many chances, but it has proven incapable of performing its fiduciary duty when it comes to managing the economy. That is at the heart of this. The Prime Minister talks about being on the right side of history, but the only way this country will get back on track is when this government is confined to the dustbin of history.

Deborah O'Neill (Robertson, Australian Labor Party) Share this | Link to this | Hansard source

I had to have a good laugh when I was listening to the member for North Sydney and waiting for the killer argument in this debate. What was the best thing he had to offer us? New South Wales Treasury modelling. We have heard from the Minister for Trade what a load of rubbish we have been presented with. The reporting is a problem and the misuse of the information. The member for North Sydney was using the same old chestnut that his shonky state Liberal mates have been using all this year to try to deceive the people of New South Wales.

The minister has gone into this in great detail, but what we see in the chamber is a continuation of the great scare campaign. Our job is to expose that for the sham that it is. The Australian people are onto you guys. They are watching and listening because they know that you cannot continue to put mistruths in front of them. They will see through them. It is not only the member for North Sydney who is deliberately misleading us in this debate.

Peter Slipper (Fisher, Liberal Party) Share this | Link to this | Hansard source

Order! The member for Robertson will withdraw the imputation that the member for North Sydney is deliberately misleading. It is disorderly.

Deborah O'Neill (Robertson, Australian Labor Party) Share this | Link to this | Hansard source

I withdraw, Mr Deputy Speaker. I say that the member for North Sydney is trying to mislead us in this debate. He has also indicated a talent for plagiarism. I can see why the shadow Treasurer might be referred to in other contexts as 'Sloppy Joe'. If I were his teacher I would make him stay behind and write out 200 times, 'I must not mislead the people of Australia'. I hope that if he were my student he would be sitting on this side of the chamber and he might have seen the light a long time ago.

The adverse impact of the carbon tax on the Australian economy is what we are supposed to be debating today. I welcome the opportunity to engage in this debate on a matter of public importance, as the Australian economy is vitally important. It is important to the public, to me, to the people of Robertson and it is of vital importance to this government. That is why I am so proud to have taken my seat in this parliament, sitting just behind the Treasurer who delivered an economy that is the envy of the world. Celebrating the economy as a mere artefact is not enough. What we in the Labor Party celebrate in our strong economy is that through the GFC we kept ordinary Australians working. That is not what would have happened if those on the opposite side had had their chance to be in charge at that time. They parrot on about the stimulus package being a failure, but the reality is that the stimulus was wise spending in the interest of the Australian people.

We kept Australians working. We kept Australians earning. We kept money moving through our economy. We kept lots and lots of small businesses on the Central Coast and other regions like mine operating because the money kept flowing through the economy. Even though we are absolutely linked to the global economy—where everyone else went into recession—in Australia we used the facts and expert advice on how to act to prevent the pain of recession. We got on with leading, delivered a stimulus package and saved the Australian economy and lots of families from the pain that is still being suffered by many people in many nations.

Even with that strong leadership and our strong economy, we still have this carping negativity, the whingeing of those opposite who peddle a tale of permanent woe. We heard the member for Goldstein talking about storm clouds.

Craig Emerson (Rankin, Australian Labor Party, Minister for Trade) Share this | Link to this | Hansard source

That's right—talk the economy down.

Deborah O'Neill (Robertson, Australian Labor Party) Share this | Link to this | Hansard source

Exactly. What do they hope to gain from such negative speech?

Craig Emerson (Rankin, Australian Labor Party, Minister for Trade) Share this | Link to this | Hansard source

If the economy fails then the Liberals succeed.

Deborah O'Neill (Robertson, Australian Labor Party) Share this | Link to this | Hansard source

The minister speaks the truth. Putting a price on carbon is what we want to do. We want to make the polluters pay. That is our plan. Those opposite want to call it a tax and that is their problem. It is really a fine on polluters who are doing the wrong thing. They will change their ways. Those on the other side shamefully continue to misrepresent it. Let us try to get some facts on board.

Those on the other side talk about adversity, but I talk about the power of the Australian economy in a global context. We in the Labor Party deal with the facts, and the fact about international action in a global economy is that there are 89 countries accounting for over 80 per cent of global emissions and over 90 per cent of the global economy that have pledged to reduce or limit their carbon pollution by 2020. We cannot sit outside the global economy. We do have the capacity to control our economy and respond, and that is what Labor is committed to doing. Scores of countries have already started the transformation to a low-pollution economy. Thirty-two countries and a number of US states already have emissions trading schemes. We need to act. We need to deal with the economy in a global context.

In my seat of Robertson the economy is probably most experienced at the household level. Let us talk about the household economy. Those opposite would have the households in the seat of Robertson paying $1,300. It was bad enough when it was $720 per household, but now they have said they are not going to deal with this as an international problem—they do not want to have anything to do with foreigners, they will keep it all contained in Australia. The cost is now $1,300 per family in the seat of Robertson. I know that people where I live cannot afford that. In contrast, we have our position on the household economy. The reality is that nine out of 10 households are going to receive assistance from a package that we have carefully organised to support them through this massive shift in the Australian economy, this important structural reform.

The tax cuts that families will receive, the increase in family payments and the increase to pensioners, will be permanent, ongoing and linked to the CPI. That busts one of the other myths that we keep hearing from those on the opposite side. They ignore household economies. They want to cause fear and alarm. They want to tell people they are going to get one payment and they are never going to get another payment. That perception is wrong. Information of that kind going to the community is deliberately misleading. Apart from household economies, let us talk about the part of the economy that the Labor Party is always most interested in: the economy of jobs. We believe in jobs. It was the guiding principle that made us take the action that we did when the global financial crisis hit. We know that if families do not have work, children do not have opportunities and families get impacted in the most extreme ways: they can break down and they can have so many issues that arise because of the anxiety of financial hardship when people lose their jobs.

So where do we put our money? We have a great story to tell. In all of those schools that I go to in my electorate I see—and I know many of those opposite go out to their schools and see it—the celebration of an investment in education. They also know of all of the people in construction in their area who went and got jobs at those schools: the people who drove the trucks, the people who put up the steel, the people who laid pipes and the people who fixed the roofs. All of those people who live in our local economy got the benefit of our stimulus package because we believe in jobs.

Because we believe in jobs we are going to make sure that we make the transition to a clean energy future. With that, by 2020 we are talking about not just a couple of hundred jobs, not just a thousand jobs, but 1.6 million jobs spread right across the country and detailed in the analyses that the Treasurer put forward yesterday. But, wait, there's more. What other elements of the economy are we dealing with, and certainly not in an adverse way? Let us talk about small business. Those opposite like to think they are the only ones who understand anything about small business. How wrong could they be.

Small business is very widespread on the Central Coast. There are 20,000-plus small businesses in my region alone. They need to have money moving around in the economy. We made sure when we had the response to the global financial crisis that we supported families to keep on working and be able to continue to move that money through their local economy. Right now, we have small businesses that are going to benefit as we make sure that the 0.7 per cent impact in the economy is going to be balanced out in our local households by permanent and ongoing assistance.

Families, if they are smart, might make a few adjustments with products that are slightly less in terms of their carbon price loading, and they will be able to salt away some of those benefits. We also have lots of families in my area that are going to get part of the extra buffer that will help them manage this change in the economy. That money will go into local small businesses in the seat of Robertson. This is not an impost on small business; this is a careful, managed integration with small business that we know is vital to our area. On the macro scale, there is so much more to say. Investment is one of the areas that we can see clearly is happening because we are moving to a clean energy future.

In closing, I want to put on the record that we on this side have a clear contrast between those on the opposite side. On their side, polluters get paid to continue to pollute. On our side, polluters pay for their pollution. On their side, the government picks the winners. On our side, the market picks the winners. We will achieve targets; they will not achieve targets. We need to get on with the job of managing the economy, and we will not be doing anything adverse to the Australian people. (Time expired)

Mark Coulton (Parkes, National Party) Share this | Link to this | Hansard source

The topic of this afternoon's matter of public importance is the adverse impact of the carbon tax on the Australian economy. I might just touch on the contributions we have heard from the government side. We heard the rant from the Minister for Trade, the flippant 15 minutes of diatribe that was completely unrelated to the topic of the day. I might add that the trade minister actually grew up in my electorate, in a little town called Baradine. When he moved to Queensland, the IQ of both places improved, but that is by the by.

But I am looking forward to the minister coming to visit his old town, because when he does he is going to find the consequences of what happens when government dabbles in environmental matters—when government takes blind philosophy and turns it into a disaster, both ecological and financial. When the minister goes back to his old town of Baradine he will find that, instead of the 10 sawmills that were there when he left, there is now none; instead of the vibrant, living forest that sustained employment for hundreds of people, there is now a choking wilderness of cypress pine of which every couple of years another 50,000 hectares or so goes up in smoke and tortures all the wildlife within. That is what the minister will find happens when governments start to dabble in environmental policy.

We heard a contribution from the member for Robertson, and she spoke about the fear campaign in this debate. She did not mention the member for Sydney visiting the Central Coast a couple of weeks ago and scaring the pants off the good folk at a retirement village about the rising sea levels, saying that the Central Coast was going to be underwater. It was totally unsubstantiated scare campaigning. The member for Robertson also spoke about being in her electorate's classrooms. I suspect that those in her classrooms will be hearing that the government is their friend, that the government controls all and to stay away from those nasty farmers who use our water to grow crops and who have those belching cows that add methane to the environment. I can just imagine being in the classrooms in the member for Robertson's electorate, but we will move on.

The tone of this whole debate, from right back in 2008, on the emissions trading scheme and now the carbon tax has been one of fear from the government. We heard the member for Isaacs in his speech on the emissions trading scheme talking about his electorate going underwater. It is unsubstantiated. We heard from the member for Makin—I think it was in December at the time and it was 43 degrees in Adelaide—and he wanted that legislation passed by Christmas because he was worried about sunburn when he went to the beach. This policy was formulated in the middle of the worst drought in this country's history. We had the member for Wills talking about the dry river system of the Murray-Darling, somehow putting 10 years of drought down to the veracity of farmers, climate change and global warming, and saying that we needed to react. All of these untruths and overstated, emotional types of arguments have been used by the government to scare the pants off people. The job of the government is to give confidence to the people they serve. How can you give confidence to the people you serve when you are scaring the pants off them?

At the moment I am co-chair of the Australian Parliamentary Friends of Meals on Wheels. The Meals on Wheels volunteers are telling me that this winter, when they were delivering the meals, they were finding the old folk in bed—not because they were unwell but because they were conserving energy. They are frightened. It is not that they don't have the money but that they are frightened of what is to come, because they have been told that they need to show austerity and tighten their belts because of climate change.

Why are we getting this argument from the government? I will tell you why: it is because of the background of the members who have come from the union movement. The member for Robertson spoke about the small businesses in her electorate. The member for Riverina quipped that they probably used to be big businesses before this government came to power. I would like to know how many members of the government have actually run a business. How many of them have actually run an ice-cream cart or sold a dagwood dog? They have grown up on the sweat and blood of the Australian worker, sucked their way up to the size of some sort of large parasite to get to the stage where they could come into this place, but they have no idea what makes this country tick.

I saw a classic example of this. It used to be in the electorate of Parkes and it is now in the electorate of Hunter—the Kandos cement plant that has been mentioned many times in this place. It is now closed. Despite the protestations from the member for Hunter, it is now closed because of the upcoming carbon tax. Cement Australia have been coming into my office for the last four years telling me, 'If we get a carbon tax the plant at Kandos will close.' I went up there the day after that announcement was made and the members of the Australian Workers Union were there. Were they in uproar? Were they going to the media talking about this terrible government policy that had closed down a plant with a 100-year tradition and was putting over 100 people out of work? Not a squeak. Where was the champion of the Australian Workers Union, the member for Maribyrnong? Where was he when he should have been standing up for the workers of the cement industry? Put him in front of a TV camera with his head down a mine shaft, he is a champion; bring him in here and have him actually stand up for the people that he supposedly represents, not a squeak.

This is a disgrace. The country is suffering a crisis of confidence because of this government. In the electorate of New England we have one of the largest meat processing plants in Australia, Bindaree Beef, run by the McDonald family. It is the largest employer not only in Inverell but in the district. Off the top of my head, about a quarter of million cattle a year go through that plant. The increase in energy costs alone from this tax is going to cost that plant about $2.25 million. It is another impost. Members on the other side have never run a business. Margins on a plant like that are so small that an impost like that is unsustainable.

Not only will we find 600 workers in Inverell out of a job, but the cattle producers from the four states that supply that plant will no longer have a market. Where is their local member? Where is the member for New England? Doing some sort of a cosy deal with Bob Brown and Co. Where was the member for New England when it was decided to bring in the idea that agricultural transport would be hit by this legislation? Agriculture—the backbone; the one industry that kept this country out of recession a couple of years ago—is going to get hit from all sides. Every input that we use in agriculture—whether it is fuel, fertiliser, machinery—is going to be hit. They put in a scheme called the Carbon Farming Initiative. It is basically untried claptrap that will have very little effect on the environment and offer very little income to the farmer.

In closing, why are we having a carbon tax? The obvious answer is: to save the environment. When was the last time we heard anyone from the government speak about the environment and how this was going to have that effect? This is like having a high school debate—it is removed from reality. No-one is saying that this is going to improve the environment one scrap in Australia or in the world. If it is not going to have an environmental effect, why are we doing it? Are we going to subject our children and our grandchildren and future Australians to becoming a second-class nation for some grand gesture? Does the Prime Minister think that the Greens and Bob Brown will be happy with this if it gets passed? What will be the next stage? The Greens are like that cancer eating away at the side of your head: not happy until they have consumed your entire body. It is not going to stop there.

It is now time for members of the government to stand up for their electorates and show a bit of backbone. It is about time for the Independents, who sit up here behind me, to show a bit of ticker, stop looking after their political futures and look after the future of the people they represent. (Time expired)

Mike Symon (Deakin, Australian Labor Party) Share this | Link to this | Hansard source

It is a pleasure to contribute to this matter of public importance. After some of the things we have heard in this debate today it will be good to get back to a few facts. The first one that I would like to talk about is the fact of global warming. While both sides of parliament have actually made a commitment to do something about it, I really do wonder about the other side and where that commitment goes to.

If Australia does not change its ways we will be left behind and the rest of the world will keep going. If we do not become a low-carbon-emitting and efficient economy then the 21st century will be the century that Australia missed out on. Whilst other countries in the world—89 of them representing more than 80 per cent of global emissions and 90 per cent of the global economy—have pledged to reduce or limit their carbon emissions pollution by 2020, in Australia we are still arguing about it. Really, the time for that has passed. Just about the entire world is moving to reduce its carbon intensity by adopting new technologies and efficiencies. That is great to see because it does take action from everyone, but if we do not act then why should anyone else? If that was applied to many of the things that had happened in the world in its recent history, nothing would have changed so action is essential. Australia has to be here and now, not waiting for everyone else to deal with it.

It is estimated that the low-carbon goods and services sector that is already worth about $4.8 trillion today and employs around 28 million people worldwide is going to grow at four per cent a year. That growth will continue to accelerate as more countries introduce schemes to reduce their output of carbon emissions or greenhouse gases. The opposition has made all sorts of claims about the impact of the carbon price but the fact is the government will support our industries to become more efficient and help create new jobs in new industries. Treasury modelling, for instance, shows that with the carbon price jobs will continue to grow. In fact 1.6 million more jobs will be created by 2020, a huge figure when you think about it.

The Clean Energy Future package will tackle Australia's carbon emissions by charging the 500 largest polluters a price for the carbon emissions that they emit, which, up till now, is something they have done for free. The rest of us have to put up with the pollution that is put into our atmosphere, so user pays is not a bad principle for this type of thing. A price on carbon will create an incentive to reduce the emission of carbon and the revenue generated from the scheme will help industries adopt new technologies and will compensate consumers. In taking this step to introduce a price on carbon, it must be understood that industry needs support to adapt to a low-carbon future because it is a big change.

Recognising the importance of manufacturing and heavy industries that compete on international markets, use large amounts of energy and generate significant levels of carbon pollution is something that is accommodated in the Clean Energy Future package. Part of that package is the Jobs and Competitiveness Program to provide assistance to emissions-intensive trade-exposed industries. Over the first three years of the carbon price, the government will devote $9.2 billion of that revenue to assist those industries. There will be two categories of assistance under the Jobs and Competitiveness Program. The most emissions-intensive trade-exposed activities will initially be eligible for free permits representing 94.5 per cent of industry average carbon emission costs. Manufacturing activities like aluminium smelting, steel manufacturing, flat glass making, zinc smelting and most pulp and paper manufacturing will be covered.

The steel sector has the $300 million Steel Transformation Plan which provides additional assistance to help the industry transition to a clean energy future. Activities which have lower levels of carbon pollution such as some plastics and chemical manufacturing, tissue paper manufacturing and ethanol production will be eligible for free permits to cover 66 per cent of the industry average carbon costs. Liquefied natural gas projects will also receive a supplementary allocation to ensure an effective assistance rate of 50 per cent. The Jobs and Competitiveness Program will provide support for activities that generate more than 80 per cent of emissions within the manufacturing sector.

There is also the $1.2 billion Clean Technology Program to support industries to become more competitive in a clean energy future. That includes $200 million to support jobs in food processing and metal forging industries and $800 million to provide grants to manufacturers to support investments in energy efficient capital equipment and low-pollution technologies, processes and products. That is a particularly important point because if manufacturers are still using old plant that was designed, made and has been used for many years, in many instances that plant was not really thought out properly when it came to energy efficiency. Did it do the job? Yes. Did it produce what was needed? Yes. Is it the most efficient in energy use? That was not a consideration maybe a few decades ago but is most definitely a consideration these days.

There is also an additional $200 million over five years for grants to support business investment in research and development in the areas of renewable energy, low-pollution technology and energy efficiency. That is also particularly important because it takes a lot of investment in R&D to come up with the ideas that we will use in the future. Australia cannot rely on the rest of the world to do all our R&D for us. It is allowing our best and brightest to go overseas when those ideas could be well catered for, at least the embryonic ideas, here and then brought to fruition here. That is another great advantage of the Clean Energy Future package.

To help small business, the government will extend the small business instant asset write-off threshold to $6,500. If you think $6,500 is not that much, when you look at it across 2013-14, in one year that is worth more than $1 billion to small businesses, which is a significant amount. By boosting cash flow, it will help small businesses grow and invest in assets many of which, as I said, may be more energy efficient than what they currently are. In some ways you could compare it to buying a new car versus an old Holden you might have sitting around that is 30 years old. There is quite a difference in what you can get out of an engine in power and fuel usage but, again, that many years ago that was not really the top priority. For many years now cars have become more efficient with each model as technology has improved. That is just one example of where technology, through research and development, can create more efficiency and therefore less cost.

The government will also establish a $40 million program to provide information to small businesses and community organisations on practical measures they can take to reduce energy costs. That is also very important because a lot of the time that energy is used and, because the bill comes later, it is not always realised what is being used now. Many households can tell you about that when they receive their quarterly electricity, gas or even water bills because the instant use in an hour does not seem to add up. No-one sits back when they leave their lights on and says: 'Well, in three months time I'm going to get the bill. It's going to be this much because I haven't turned off my lights.' But if you do not turn them off every night, or every day as the case may be, at the end of the quarter you are in for a nasty shock. It also applies to businesses. Not knowing what you are using and not knowing the best way to use what you have got can cost you. So having a package to provide information to save money is a win-win for everyone.

The Energy Security Fund will be established as part of the Clean Energy Future package. That fund is about shutting down old generation assets. In Victoria, where I come from, most of the baseload power is generated by brown coal power stations. Some, like Hazelwood, date right back to the 1960s. They were built at a time when pollution and efficiency were not taken into account. What was taken into account was the massive amounts of very cheap brown coal upon which these power stations in the Latrobe Valley literally sit. Whilst they have been of great service to Victoria over the years, many of them should have been shut down a long time ago. After the State Electricity Commission was privatised, private entities bought these generators. (Time expired)

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

Order! There being no further speakers, the discussion is now concluded.