John Murphy (Reid, Australian Labor Party) Share this | Link to this | Hansard source

These bills will support jobs and competitiveness and, over the first three years of carbon pricing, will provide $9.3 billion in help to safeguard jobs in high-polluting industries facing international competition. This will ensure the Australian economy remains competitive in a world that is moving to reduce carbon pollution. There will be much more support for renewable energy, including investing $10 billion in renewable energy. Low-pollution and energy-efficient technologies and improvements in energy efficiency will help households to save money on their bills and will help our efforts to cut pollution. Exhaustive federal Treasury modelling finds that the Australian economy will continue to grow strongly as we create a clean-energy economy of the future by pricing carbon.

Australia is working towards a legally binding international framework for cutting carbon pollution and tackling climate change. In the lead-up to the Durban climate change conference at the end of the year, Australia has proposed a range of actions that countries could take in the international negotiations to help build a legally binding climate change mitigation framework. These measures build on the strong action countries around the world are already taking to reduce emissions of greenhouse gases.

I now return to a suggestion by Climate Action Network Australia. Ours is a mega-diverse country, biologically speaking, but the rate of species extinction here is amongst the highest in the world. As such, Australia has a particular responsibility to make necessary reductions in greenhouse gas pollution in order to stabilise the earth's climate. The Climate Action Network is telling us that solutions to climate change are available for us today. For each unit of power produced, green-power projects employ more people than fossil fuelled power stations do. There are more economic benefits for regional communities in the industries preventing climate change than in those causing it. These solutions will not be introduced without a determination by governments and the public to make major changes to the way we produce electricity, provide transport and use the land. These bills must be supported for the future of our country and our children.

John Forrest (Mallee, National Party) Share this | Link to this | Hansard source

I am pleased to have an opportunity to put my thoughts on the Clean Energy bills on the record. The Clean Energy Bill, and the accompanying bills, being rammed through parliament by this government defy all that Australians see as fair and honest. In addition, they simply do not make sense. In my view, this debate is not necessarily about climate change itself but how to tackle and manage it. It is the way we tackle the emissions that are alleged to be the culprit that is in dispute here today in the parliament.

My position on climate change is quite clear, and always has been. I have been putting forward motions before this place from as far back as the mid-1990s indicating my concern about the impacts of climate change. In the mid-1990s I expressed concern about the impacts of climate change, particularly in regard to precipitation, especially in my electorate. I have been proposing ameliorative measures for years: scientifically based precipitation enhancement research and piping the efficient Wimmera-Mallee domestic water supplies, just to mention a couple of initiatives that I have promoted. I think it is very sad that in indicating opposition to these bills one is immediately labelled as a climate change sceptic. This is simply not the case, and I reject the proposition if it is made about the member for Mallee.

There are several positions about climate change. One is that the climate of this fragile planet has always been changing, and there is plenty of evidence of that. In some instances this climate change has been quite dramatic, even cataclysmic. The second position is that the current phase of change is caused by human activity and therefore we can have an impact on it if we change our ways, particularly our prolific consumption of energy. I believe that a realistic position is somewhere between these two propositions. Then there is debate in the scientific community about what is causing these changes. This is where the debate gets much more controversial.

Every day my office is bombarded with positions from both points of view about carbon. Thankfully, I have a masters degree in science and I therefore understand the scientific process and have the capacity to make some sense of it all. Science requires that a proposition gets put and then a line of research is undertaken to test the particular hypothesis. In this set of circumstances this can be undertaken by computer mathematical modelling, which is extremely difficult when you are dealing with the vagaries of the weather. The mathematical variables are considerably immense. In my own masters degree research I undertook mathematical modelling, using a computer, and had a lot of difficulty getting the boundary conditions which control the mathematics to give stable mathematical solutions. It therefore does not alarm me that the results from this modelling inspire such vigorous discussion, even amongst scientists. However, I come down on the position of the benefit of the doubt. I am convinced, however, that much more effort needs to be undertaken to understand what is happening precisely and whether carbon is the great bogeyman it is made out to be. In the meantime I accept the need to address the changing of our ways.

Regardless of the merit or otherwise of the arguments for carbon abatement, this issue of a new tax must be put before the electorate, in a democracy as rich as we have in Australia. This is my first response. And I am committed to the concept that it was immoral for the Prime Minister to engage in prevarication during the last election with her oft-quoted statement: 'There will be no carbon tax under a government I lead'—only then to turn around and introduce this legislation. This is of great concern to my constituents, and it is not a fine leadership example for future generations. So much so, and so oft-quoted is this, that some people in my electorate now have, as their mobile phone ringtone, that message: 'There will be no carbon tax under a government I lead'. It appals me that this kind of behaviour reflects badly on all of us in this place, that the public have got to the point where they cannot trust us to be persons of our word.

I remember when John Howard made his comment during the 1996 election about the coalition's intention of introducing a GST. He used the term 'never ever'. And how the other side taunted him over that. It is true, though, that he did change his mind, in the national interest, believing that to move to a broad based consumption tax which gave opportunity for growth income for governments was a badly needed area of reform. The difference with John Howard was that he had the courage to put it to the Australian people at an election. I remember that campaign. I remember all the hard work I had supporting such an initiative myself and explaining it to the Australian people. A mandate was sought and a mandate was achieved. This is the exact opposite to what this government has done. These bills should be deferred until that kind of process is engaged in, and the Australian people can be involved.

Australia has made great advances in emissions reduction, and there is widespread concern that this legislation will actually slow down our progress in making our environmental footprint smaller. The world has had a good default position on emissions, particularly over the past 30 years. That has seen more effective waste management, the removal of CFCs, and greater efficiency in power generation, motor vehicles and whitegoods, with compulsory energy ratings. It is working and great gains have been made.

In my own electorate we have the prospect of the largest photovoltaic solar power station in the world. I am always impressed with our farmers, for example, with their adoption of satellite technology and no-till practices that have reduced fuel and chemical use. Some have gone further and are boosting soil carbon using their engine emissions, and there are also plans by local government to utilise pyrolysis technology in waste management in my electorate to produce biofuels and biochar. The technology works, and it is short-sighted to make an assumption that all Australians are environmental vandals. What must be understood also is that Australian farmers are price-takers and unable to pass on the costs associated with the carbon tax. And I note there is no compensation proposed, so I am concerned about the position of my primary producers.

This legislation, with its associated financial and social engineering, will kill important industries and change the way every Australian lives and works. Food, power, fuel and transport will all cost more because this tax will be embedded right through our national economy. And this is deliberate. It is a market driven mechanism to change the way we behave, we are told—yet most of these bills before us today deal more with compensation. In her speech to the bills, the Prime Minister said around 40 per cent of the revenue raised by carbon pricing will go to assisting emissions-intensive trade-exposed industries. However, she also said the bulk of the money raised will be used to fund tax cuts, pension increases and higher family payments.

On one hand the government argues it needs a market driven mechanism to drive us all to change—deliberately to put up the price of electricity, in fact—but on the other hand most of this legislation is about compensation which removes that very mechanism. I submit that a new tax will make it harder for the Australian economy and the Australian people to bring about change. Reducing emissions requires investment, not a tax that is to be redistributed as a sop to the Australian populace in a bid to sell what is becoming the greatest con job in our history. Indeed, I have seen no guarantee the promised household compensation will continue beyond 2015-16, in line with the expected increases in the carbon price. And I have seen no guarantee, even from the government's own modelling, that carbon emissions will reduce with this tax. By the government's own document, emissions are actually going to increase from 578 million tonnes to 621 million tonnes by 2020. So why are we doing this? The government's ambition for wealth redistribution will in fact negate the merit of any market driven emission reduction scheme that may have looked to have been a good idea in the first instance. The Prime Minister also made reference to the judgement of history. History will, in fact, judge this carbon tax as a huge impost on our Australian economy at the very time when it is not needed and more so when we have to export our hard-earned cash to buy carbon credits from possibly some dodgy overseas seller. As an Australian, I am embarrassed that such a Heath Robinson bit of legislation, not guaranteed to have a positive outcome, could be devised and rammed through the parliament. Even the parliamentary committee that reviewed the legislation chose to ignore the immense amount of evidence and submissions faithfully written by people opposed to the timing or the very principle of the tax itself. I believe it is being pushed through the chamber by enthusiastic dreamers who are out of touch with reality and think that at the end of the day they will be judged as heroes. The contrary will be the fact. My contention is that this legislation will leave a legacy that will plunge this nation into economic lethargy for many years to come. Let us be practical in our approach to this challenging topic and not be dreamers. We need to ensure that the Australian economy can continue to grow while we tackle these challenging issues.

What happened to the innovative, practical and thoughtful place that this parliament used to be? Somebody said that if you follow this government's money trail you will find a government that cannot run a business. Higher taxes do not create jobs; in fact, the roll-on effect will be that wages will take a massive hit as unemployment rises and there is less industry capacity to pay as manufacturing in particular goes offshore.

I am also yet to learn what these thousands of green jobs that we hear so much about might entail. Earlier in this debate the Leader of the Opposition questioned government modelling that suggested the carbon tax was going to create green jobs. He told of Victorian government modelling by Deloitte and Access Economics that showed that 23,000 jobs would be lost by 2015 as a result of the carbon tax. Treasury modelling by the former New South Wales Labor government indicated that 31,000 jobs would be lost by 2030 due to the tax. Another study found that Queensland's gross state product will drop by 2.76 per cent by 2020 and other equally terrifying statistics. The opposition leader also drew parliament's attention to a United Kingdom study released in March this year that found for every renewable energy job created 3.7 existing jobs were lost. It was similar in Spain and other European countries.

It is very clear that Australia will be exporting jobs as this carbon tax hits the bottom line of our manufacturing and farming communities because our commodities and manufactured goods will become more expensive while imports will be cheaper. It is already tough with the high Australian dollar. We have seen that with companies like BlueScope Steel. We have seen the struggle that Australian primary producers endure. We have frozen peas from overseas in our supermarkets. A carbon tax on top will lead to even more hardships.

I would urge the government members in here to put this legislation off. Defer it and put it to the Australian people. How much worse this type of thing will become. If government members are right, they should have the courage and the confidence to put it to the Australian people and have a forthright discussion about it. Australians at the moment feel very frustrated that their appeals are not being heard. They are being blocked from having their say. Government members should call an election and seek a mandate, as the coalition parties did with the GST back in 1998. Put it to the Australian people; seek a mandate. If the government members are so convinced that this is right, they should put it to the people.

My conviction is that Australians do not need to be driven and bludgeoned into activity and action on this. Geothermal is gaining momentum and it will compensate for the lack of security of wind and solar. We understand that. Australians demand a very secure power system. Give the Australian people the opportunity and they will respond. They are responding. I say that this legislation should be put off until after an election. (Time expired)

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

After decades of debate, the time for talking is over. The science is in. It is now time to get this critical reform in place. Other nations are already acting. They know that, in a competitive, globalised 21st century world, the successful economies will be those that adapt early to a carbon constrained future. Labor is not prepared to ignore the threat, ignore the science and ignore the economists. We cannot say that this is someone else's problem. We all share the one planet; we are all citizens of the world. It would simply not be fair to leave it to our children and grandchildren to deal with the consequences of our inaction. If we do nothing, dangerous climate change will impact on this and future generations.

As minister for transport, I feel a particular responsibility. Here in Australia, transport accounts for around 15 per cent of total greenhouse emissions, a little lower than the global average of around 18 per cent. The vast bulk of this is from road transport and light vehicles, which are responsible for around 87 per cent of transport emissions. That is why the government is taking action to reduce greenhouse emissions from our vehicles. But we are doing this in a measured and fair way. Under the government's climate change plan, businesses that use vehicles of less than 4.5 tonnes—such as cars, utes and light commercial vehicles—will be permanently excluded from paying the carbon price when they fill up at the bowser. This means that the carbon price will have no direct impact on the fuel bills of many small and larger businesses—the couriers, taxi drivers, tradesmen, hire car companies and minibus operators. The government is also excluding the family car and ute. Families in the regions do not have a bus or a train station down the road like families in capital cities often do. Similarly, tradies cannot replace the work ute easily. So light vehicles will be permanently excluded from the carbon price. Looking at the rail and maritime sectors, the carbon price will have only a modest impact.

To offset the effect of any rises, nine out of 10 households will receive assistance. This means more than four million households will receive assistance via tax cuts for any increased prices that they may pay. Importantly, we are increasing the income tax free threshold from $6,200 to $18,000, taking a million Australians out of the tax system. This is important economic reform.

In the case of heavy vehicles, operators will have a two-year transitional period to reconfigure their fleets and renegotiate contracts with customers. From 1 July 2014 a carbon price will apply to the fuel used by trucks over 4.5 tonnes. The government has already stated that the agriculture, fishery and forestry industries will be permanently excluded. Trucks powered by CNG, LNG, LPG or biofuels will also be permanently excluded. Once in place in 2014, the carbon price will have only a marginal impact on fuel bills. In fact, it will be tiny compared with the fluctuations we see regularly at the bowser from variations in world oil prices. The Bureau of Infrastructure, Transport and Regional Economics has calculated that the extra cost of driving a B double from Sydney to Melbourne under the carbon price at today's diesel prices will be around $35, or seven cents a litre.

Let us look now at how a carbon price will affect air travel. From day one—that is, from July next year—an effective carbon price will apply to the fuel used by domestic airlines. To maintain the competitiveness of Australian carriers, it will not apply to the fuel they use when flying internationally, at least until there is a global carbon price. We are also allowing large liquid fuel users, such as airlines, to voluntarily opt in from 2013. This is because a carbon market already operates in the EU and our international carriers may want the ability to trade across markets. It is worth repeating: a market for the price on carbon already exists and Australian companies competing internationally want the ability to trade across markets. The carbon price will have only a small impact on domestic airfares, less than many of the extra fees airlines already charge. For example, it is expected to add about $2 to the cost of a seat on a flight between Sydney and Melbourne and around $1 on a flight between Sydney and Armidale. Any increase would occur against the backdrop that flying is five times more affordable today than it was two decades ago as a result of earlier Labor reforms such as the deregulation of the domestic aviation market.

Once fully implemented in 2014, the carbon price will have little impact on the cost of the daily commute. The expected rise is only one half of one per cent, significantly under the eight per cent that was added by John Howard's GST. The figures done by the New South Wales Treasury—which the New South Wales government attempted to distort—highlight the reality that the cost increase will be minimal.

We are doing much more. We are also working to reduce the sector's footprint through smart regulations and by empowering consumers. Already the government is introducing the first-ever mandatory CO2 emission standards for all new cars and light-commercial vehicles sold in Australia. We are working with local manufacturers to set the emission levels, and these will apply from 2015. This will be a big saving for motorists through better fuel efficiency. We are also requiring that all new cars in Australia will display fuel consumption labels spelling out their emissions and fuel consumption in both city and highway conditions. Coupled with our green vehicle guide, consumers will be able to make a more-informed choice about the environmental performance of the car they buy. We are investing in new technologies to better manage the flow of traffic along some of our busiest roads. By using this so-called smart motorways technology we can substantially reduce congestion and carbon emissions while making our roads safer and smoother for motorists.

And we are restoring national leadership when it comes to the growth of our major cities. After all, that is where three in four Australians live. Our recently published national urban policy, Our Cities, Our Future, supports locating new jobs and future employment precincts closer to where people live, thereby minimising the daily commute. In addition to that, we are investing, and have committed, more to urban public transport projects since our election in 2007 than was invested by every government combined from Federation right up to 2007. We have committed to major public transport projects in every mainland capital city in the land. In addition to that, we are investing in innovative projects such as the Gold Coast light-rail project.

Labor has long recognised the risk of climate change to future generations and to the nation's wellbeing. Indeed, the first official act of the Labor government was to ratify the Kyoto protocol in 2007. Personally, this was a proud moment. I campaigned long and hard for Australia to ratify the Kyoto protocol. When I was the shadow minister for environment and heritage, I introduced a private member's bill in an effort to get the then Prime Minister, John Howard, to take action. In 2006 I worked with Kim Beazley on federal Labor's policy paper Protecting Australia from the threat of climate change. This was Labor's blueprint for tackling climate change.

It is worth remembering some of the practical measures in that blueprint: a commitment to ratify the Kyoto protocol; a commitment to a 60 per cent cut in Australia's 2000 level of greenhouse emissions by 2050; ensuring Australia realises the economic benefits of sustainable industry by supporting carbon friendly technologies and emissions trading; a commitment to sustainability by increasing and extending the renewable energy target to 20 per cent by 2020; the development of commercial solar, wind and geothermal energy technologies by Australian research, including a commitment to rebuild the CSIRO; and the establishment of a national sustainability council to monitor the performance of the entire country against agreed sustainability targets.

The similarity of the Beazley blueprint and what is now contained in the bills before the House is striking. Unlike those opposite, Labor has always been committed to practical, real and fair action on climate change. After 12 years of inaction the Liberal Party of course said that they would act at some stage, and they went to the 2007 election supporting a price on carbon through an emissions trading scheme. We, however, had acted and had committed to action well before then. On 14 February 2005, while introducing my private member's bill that would ratify the Kyoto protocol, I stated that 'we must start working actively on climate change because it is an issue affecting Australia's future prosperity'. Six years ago I stood in this place and argued that we needed a planned approach to shift Australia towards a modern, clean energy economy, that the potential for innovation and therefore business investment and growth would be immense. In six years nothing has changed except the urgency of the need to act. We all know that the sooner we act the cheaper it will be; the sooner we act the quicker we can move to a clean energy economy; the sooner we act the more advantage we will gain over our international competitors.

Those opposite simply want to delay and today are moving an extraordinary position before the parliament, once again seeking to delay action on this legislation. The fact is that Australian companies and our economy will be disadvantaged if we exclude ourselves from carbon markets and the growing market in renewable energy technology. Just as science and technology have given us the tools to measure and understand environmental problems, they also help us to solve them. The potential for innovation, scientific discovery and hence business investment growth is immense. With the right policy framework the very act of addressing our challenges can unleash new commercial forces and unimagined opportunities for new jobs, new technologies and new markets. Think of the potential economic benefits and jobs for this nation. If we do not act, our businesses and the national economy will be simply left behind.

What is extraordinary is that those opposite are not just climate sceptics, they have become market sceptics in their opposition to market based mechanisms to provide solutions to the challenges of the future. The opposition puts at risk more than just our future economic prosperity. By pretending the world is not taking action, by pretending that climate change is not real, by ignoring the science, the opposition risks the future health of Australia. There is only one planet and we need to respect that planet. We must not be condemned by history as the generation that knew what the issues were but chose to do nothing about it. The time for words is over—now is the time for action and delivery. That is what the Gillard government is doing with these bills, and I commend the bills to the House.

Ken O'Dowd (Flynn, National Party) Share this | Link to this | Hansard source

On behalf of the people of Flynn I must stand here today and absolutely and completely reject the carbon tax legislation. We all know there is climate change—you just have to ask the dinosaurs about that. My electorate, as I have said before, is home to two aluminium refineries, one aluminium smelter, Australia's largest cement works, three coal-fired power stations, 11 coalmines and an emerging LNG industry. Coupled with that we have small and medium businesses that rely on this intensive industry to survive. My electorate of Flynn is ground zero as far as the carbon tax is concerned. If you go to the people in my electorate, nine out of 10 hotly oppose a carbon tax. One out of 10 is yet to make up their mind. There is only one person I know in my electorate who is in favour of a carbon tax. I ran into a miner from Rolleston a couple of months ago and he told me that no-one in the Rolleston coalmine was in favour of a carbon tax. Make no mistake, Mr Deputy Speaker, the policies of Gillard and the Brown government will cost Central Queensland—

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

The honourable member for Flynn will refer to the Prime Minister by her title.

Ken O'Dowd (Flynn, National Party) Share this | Link to this | Hansard source

The policy of the Prime Minister and the leader of the Greens will cost the Central Queensland area thousands of jobs if this carbon tax comes to fruition. For example, just jumping to Victoria for a moment, the aluminium giant Alcoa in Victoria faces closure and job losses. They put that down to high input costs, the high Australian dollar and a carbon tax. It also costs that industry $40 million. The same can be said for the aluminium smelters in my town. For instance, the Russian company Rusal, who have a 20 per cent share in Queensland Alumina, have said all sorts of nasty things about this carbon tax to the point of saying they will not invest another dollar in Australia until this matter is clarified and if it is clarified it will have to be a lot different from what is proposed with this carbon tax. I can quote you some examples, the first from the Courier Mail on 23 September:

The world's largest aluminium company, Rusal, has launched a scathing attack on the Gillard Government's carbon tax and emissions scheme, saying it puts its key Queensland project at risk.

In a submission to the Federal Government Rusal said that the clean energy legislative package—the carbon tax and Emissions Trading Scheme—was a threat to the viability of the Russian group's major investment in Australia.

The Weekend Australian on 24 September 2011 said that American aluminium giant Alcoa is warning the Victorian government, et cetera. Another article in the Australian Financial Review on 11 July 2011 said:

Rusal Australia, which owns 20 per cent of Queensland Alumina, one of the world's largest aluminium refineries, expressed concerns over the number of free permits to be allocated. Rusal Australia chairman John Hannagan said the refinery would receive free permits for 75 per cent of its emissions in the first year. 'For this year at Queensland Alumina Ltd it will cost us around $30 million,' Mr Hannagan said.

You can see that the investors are very dubious about investing in Australia and particularly in the aluminium and cement industry in my area. Six black coal mines could close prematurely and 21,000 mining related jobs could be lost as a result of a carbon tax. That is according to new data released by the industry in the last couple of days.

I do not need to remind the House that Indonesia started its coal industry in 1980. In 2006 it overtook Australia as the biggest exporter of coal. Africa is another hot spot for projects, and you may be surprised to know that there are 600 Australian based companies in Africa investigating projects in the mineral resource area. There are 225 projects already underway in Africa. In Mongolia—it was not only Genghis Khan that came out of Mongolia—there are huge deposits of high-quality black coal that are feeding into China today. That is being managed by another Australian company, Leighton, which is over there carting the coal from Mongolia to China.

It is no different in Central Queensland. Jobs are at risk. The government want us to believe that workers who lose their jobs as a result of business closures will be able to transition to new, cleaner, greener energies such as windmills, solar panels and the like. That defies logic. China has become the world's largest manufacturer of wind turbines and solar panels, and it is also a leader in the development of carbon sequestration technology. The Prime Minister and Senator Bob Brown have argued that China can do green examples and should be the inspiration for Australians and the rest of the world. It should be noted that China has taken over from the USA as the biggest emitter of carbon dioxide.

It is an act of national economic suicide to destroy our ability to generate low-cost energy. Wind and solar energy can never provide electric power at a cost to the consumer that we, as Australians, can afford and still be competitive with the rest of the world. Our large fleet of cars, trucks, trains, ships, dozers and aircraft is not going to run on sunbeams and sea breezes. Mr Deputy Speaker Slipper, just think about that for a moment. You would need a pretty long extension cord to pull that off.

What about the workers in the industries who will lose their high-paid jobs? At the moment, oil and gas industries are paying workers very well. Indeed, some workers are getting in excess of $150,000 a year. They work hard and long hours for this money, but they still get it. They also have a very good national superannuation fund that is paid for by the employers. How are they going to cop working in government transition jobs erecting wind turbines and solar panels that have been manufactured in China? How will a family used to earning $150,000 a year manage on, say, $50,000 a year? The government, those opposite, love to redistribute wealth and bring everyone down to the same common denominator.

China has closed hundreds of inefficient coal fired power stations over the last decade, but what they have not said is that, over the last few years, for every powerhouse they have closed down they have opened up two new ones. Wind power now accounts for less than one per cent of China's energy, while solar constitutes one-hundredth of one per cent of the country's energy use. Why can't those opposite me here in the House today see that China has outsmarted us again with clever propaganda and marketing?

There is no evidence that carbon dioxide in the atmosphere controls the climate. Mr Tim Flannery has stated that there will be no change to the climate inside 1,000 years. It is false to claim that Australia lags behind the world in waging war on carbon. The Kyoto protocol is dead and Copenhagen produced nothing. Only Western Europe and New Zealand are moving on this suicidal path, but they are doing it at a much slower pace. Our current and future energy needs depend solely on coal and gas, the very things that Senator Brown's green extremists want to tax to death.

Those opposite see an opportunity to burst the balloon. Why do you want to bust something that is good? Why do you want to replace something that is not broken? It is ridiculous. Why do you want to hurt the people you profess to represent, the workers? I am here to represent workers in Central Queensland. The government's own Treasury modelling shows that the inflation impact will be 10 per cent higher in regional areas. I am in a regional area and the 10 per cent higher cost is quite evident when people start doing their modelling.

I want to go back and talk about a couple of things that those opposite have said in the debate. They said that the introduction of the carbon tax is in the national interest. How can that be, when thousands of workers will lose their jobs? Around 1,500 workers are about to lose their jobs in the Australian steel industry. They were in everyone's mind about six weeks ago, but that has fallen by the wayside now. What will happen to them? Nobody talks about that anymore, nobody cares. The government say there is going to be transitioning, retraining and repositioning. To where? That is what I would like to know. These are real people we are talking about and real jobs that were lost. They were not fakes and it is not fake jobs that they need to be relocated to. They are real job losses and that is what I am concerned about. We cannot just talk about compensation. Where is the compensation going to come from?

The government have stuffed up the live cattle exports. They had the hide to tell the graziers to go to Centrelink. Are they going to tell everyone to go to Centrelink for compensation once they lose their jobs? I do not think so, because the taxpayers of Australia will not be able to afford to pay Centrelink to pay the people who are not working.

I have six councils in the electorate of Flynn, and they are all going to have higher costs. It is the councils who pay for the lighting in the streets, the waste dumps and also water charges. To pump water around the electorate from shire to shire costs a lot of money. A lot of electricity is used to pump water. This will add drastically to the bottom line, and of course the ratepayers of the shires will have to pay for these extra costs. I wonder if that was factored into the $9.80 a week extra for our residents.

On our jobs in Queensland: in a thriving economy, a resource boom, we see the unemployment of Queenslanders going up. We are now above the national average. I think our unemployment rate is about 6.3 per cent and going up. Yesterday the jobs marketed had increased also.

We have problems everywhere we look. We cannot afford to have our jobs disappear offshore. We cannot afford to lose our Australian jobs and the people they employ—highly qualified, in a lot of cases—to overseas companies. Those Third World countries and other bigger countries such as China are looking at Australia now to take our qualified people over to their countries and work their coal mines, iron ore and steel works. I totally oppose this legislation for more reasons than one. If it goes through we will rescind it when we get into power, if we get into power, but there is the damage it is going to do in the meantime. I just hope that the Independents and the crossbenchers realise this when they come to vote on the matter.

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

This is a historic week in which we are debating a vital economic and environmental reform, the government's policy to limit carbon emissions into the atmosphere. My own association with this issue goes back to before 1989. Indeed, in 1989 the Hawke government released a statement titled 'Our country our future'. That statement included expressions of concern about and commitment to address the problem of global warming. It was one of the very first statements that was made and certainly the first by an Australian government. I was proud to have been associated with the preparation of that document. Then, in the lead-up to the 1990 federal election, I was asked by the Prime Minister to make recommendations as to the expenditure of a modest amount of money—my recollection is that it was $30 million, but in today's terms that would be a significant amount of money—and I recommended the establishment of a national greenhouse office. So my own interest in and concern with this issue date back more than 20 years.

I come to this debate now in 2011 as both an economist and the Australian Minister for Trade. The Labor Party in government have a proud tradition of not waiting for other countries to implement economic reforms before we do so ourselves in our great country, Australia. I refer to the policy to implement comprehensive health insurance for all Australians, originally in the form of Medibank and then subsequently in the form of Medicare. Medibank having been created by the Whitlam government, the coalition government between 1975 and 1983 then announced seven different health policies in seven years, and it took a Labor government to re-embrace reform in the form of Medicare.

I refer to national superannuation, which was opposed root and branch by the coalition in opposition. It was to destroy the Australian economy, if you were to believe the coalition: business could not afford it, it was a bad reform, it was a bad idea and should never be implemented. Indeed, the coalition voted strongly against a national superannuation guarantee. Today we have around $1.3 trillion in funds under management, a great savings effort on behalf of our country, as a result of those reforms. It was, again, an example of a reform that was implemented by a Labor government without waiting to see what other countries did in respect of national savings through national superannuation.

It was a Labor government that recognised the wonderful opportunities of the Asian century, going back to Gough Whitlam, who recognised formally the People's Republic of China as one of his first acts in government in 1972, and then to Bob Hawke, who foresaw in a visionary way the Asian century and set about fashioning an open, competitive economy—again, very much against the wishes of many in the community, many in the business community and many in the coalition, though I do acknowledge that the then Leader of the Opposition, John Howard, lent bipartisan support to a substantial part of that program. But it actually took Labor to do the hard work in creating an open, competitive economy through a floating of the currency, something that the coalition never did; through liberalising the financial services sector, which the coalition never did but was always going to do; and then through liberalising product markets and, in the labour market, creating enterprise bargaining as the central organising principle. This takes us to today's debate on the Clean Energy Bill 2011 and the related legislation. Today's debate is based on an argument about science. I have been following the debate through the scientific community for years. Yes, there are alternative views, and I was interested in those alternative views, but those alternative views have not succeeded in overcoming the compelling argument, based on science, for action on climate change. I have approached those issues with open eyes and an open mind. I have come to the conclusion that we cannot wait; we need to act on climate change, because it would be highly irresponsible and highly damaging to Australia's national interest not to do so.

The scientific evidence assembled and summarised by the opposition leader says a great deal—all of it adverse—about the science, because the opposition leader said in July of this year, very recently, 'See, one of the things that people have not quite twigged to is that carbon dioxide is invisible; it's weightless and it's odourless.' This was not just one of those off-the-cuff remarks that the opposition leader says he makes from time to time and should not be regarded as gospel truth, because he repeated it in the same month more than a fortnight later when he said, 'This is a draconian new police force chasing an invisible, odourless, weightless, tasteless substance.' It beggars belief that the Leader of the Opposition, who says he is a Rhodes scholar and has an economics degree from Sydney university, has committed to reducing by 140 million tonnes a substance that he describes as 'weightless'. I think this is the most ridiculous proposition that has ever been put to the Australian parliament. The coalition, led by the opposition leader, has come to the view, after this entire scientific debate, that carbon dioxide is weightless and yet the coalition is committed to reducing the incidence of this 'weightless' substance in the atmosphere by 140 million tonnes by 2020. Go figure.

The coalition's plan says that this is consistent with its target of reducing carbon emissions by five per cent on 2000 levels by 2020. This is a bipartisan target—that is, a five per cent reduction on 2000 levels by 2020. Yet, on the day that the opposition leader affirmed the five per cent bipartisan reduction target, he also described it as 'crazy'. This tells you about the true motivation of the opposition leader. He does not care about the future of this country; what he actually cares about is his own political interests.

Stuart Robert (Fadden, Liberal Party, Shadow Minister for Defence Science, Technology and Personnel) Share this | Link to this | Hansard source

Mr Deputy Speaker, I rise on a point of order. With the greatest respect, the minister cannot actually infer a motive of the Leader of the Opposition; it is against standing orders.

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

There is no point of order. But I would advise the minister to be very careful.

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

We now need to address this question: is Australia a first mover? On the various reforms that I have described, Australia was a first mover and has benefited greatly from being so. The then Prime Minister, John Howard, embraced the notion of Australia being a first mover in this area of reducing carbon emissions into the atmosphere. Indeed, he described the benefits of Australia being a first mover. Coalition speakers in this debate will say that Australia is a first mover; in fact, that is untrue. Australia is not a first mover. Around 89 countries, accounting for more than 80 per cent of global emissions and more than 90 per cent of the global economy, have pledged to reduce or limit their carbon pollution by 2020, and around 32 countries and a number of US states already have emissions trading schemes in place. Those countries include New Zealand, led by a conservative Prime Minister, and the United Kingdom, also led by a conservative Prime Minister. So much for the desire to reduce carbon emissions into the atmosphere being some extreme left conspiracy. You would hardly describe former Prime Minister Mr Howard, the Prime Minister of the United Kingdom, Mr Cameron, or the Prime Minister of New Zealand, Mr Keys, as extreme leftists. They are conservatives and they supported introducing a scheme to reduce carbon emissions—indeed, an emissions trading scheme.

China has been identified as a country that purportedly is doing nothing to reduce emissions; in fact, it is introducing an emissions trading scheme in some of its larger cities, including Beijing and Shanghai and is reported to be preparing a nationwide emissions trading scheme for 2015. It has also the world's largest renewable energy generation capacity.

The coalition contributors to this debate and in question time have asked questions of this government along the lines that reports have claimed that for every green job created three traditional jobs have been lost and would this be the case in terms of the emissions trading scheme that the government is determined to implement. What that actually betrays to the Australian people through the parliament is a belief that renewable energy should not be supported, that we should not be creating jobs through wind energy, solar energy, wave energy or geothermal energy, that we should remain totally committed to coal and LNG as energy sources well into the future and that any embrace of renewable energy will cost three jobs for every job created.

There is an important role for LNG and coal in a low-emissions future. LNG is regarded as the transition fuel to a lower emissions future, to a clean energy future, and we have loads of it. Businesses are voting with their wallets by investing in LNG in an environment where they know that a price will be put on carbon. So too with coal production; we hear that the destruction of the coal industry is nigh. Well, why is it that one of the first commercial decisions made after the announcement of the emissions trading scheme was that Peabody, a major coal producer—I think the largest in the world—made a takeover bid for Macarthur Coal amounting to $4.5 billion?

Why is there a massive pipeline of coal production and investment coming through? It is because there is a future for LNG and coal in a low emissions economy. But, of course, the emissions intensity of coal will have to be reduced.

There is a debate about the two plans. He has said that the science of climate change is 'absolute crap' and declared that carbon dioxide is weightless and odourless and tasteless and therefore completely harmless, but if we were to believe just for a moment that Mr Abbott—

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

The Leader of the Opposition.

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

sorry; the Leader of the Opposition—has any commitment to reducing emissions, then we would need to examine the government's emissions trading scheme juxtaposed against the direct action plan. The irony—though it is no great irony in my experience—is that Labor is embracing a market based solution to reducing emissions whereas the coalition is embracing a centrally planned solution. This is not the first time this has happened—I have already referred to the creation of the open competitive economy, which was a market-based approach to policy by the previous Labor government—and the direct action plan would be a very expensive way of reducing emissions by five per cent. Indeed, the cost per household would soar if the coalition were to be elected. If Mr Abbott were to carry through on his commitment to that five per cent reduction—

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

The Leader of the Opposition.

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

sorry—then the cost per household would go from $720 to $1,300, because the opposition leader has ruled out linking any scheme in Australia to the purchase of permits through low-cost solutions overseas.

In rescinding the emissions trading scheme, if the opposition leader were to become Prime Minister, he would be announcing the rescinding of the trebling of the tax-free threshold as well as an increase in taxes and a reduction in pensions. The fact is that Labor's compensation package is more than adequate for most Australians. For most Australians, the average increase in the cost of living is $9.90 per week, and the compensation is $10.10 per week. This is a very important reform, and carried with it is tax reform. It is based on science and a commitment to Australia's economic future, and as trade minister and an economist I am absolutely delighted to be able to recommend these bills to the House.

Jane Prentice (Ryan, Liberal Party) Share this | Link to this | Hansard source

The coalition opposes the Clean Energy Bill 2011 and related legislation on numerous grounds. We do not support a carbon tax, because it is a bad policy for the Australian people. It is a bad policy for the economy and, more significantly, it does not help the environment. It is premised on a lie—a deception that reeks of arrogance. The Prime Minister knew that a carbon tax was deeply unpopular with the Australian population, so she quite deliberately lied her way to the election.

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

Order! The honourable member for Ryan will withdraw.

Jane Prentice (Ryan, Liberal Party) Share this | Link to this | Hansard source

She quite deliberately deceived her way to the election.

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

Order! The honourable member for Ryan is aware that under the standing orders she is not able to make that sort of reflection on the Prime Minister. The honourable member for Ryan will withdraw.

Jane Prentice (Ryan, Liberal Party) Share this | Link to this | Hansard source

I withdraw that, Mr Deputy Speaker. But who can forget the Prime Minister's adamant statement that 'there will be no carbon tax under the government I lead', in which she was aided and abetted by the equally indignant member for Lilley? Perhaps the Prime Minister's statement can be explained away by the fact that her coalition with the Greens is so influential over this government's policy agenda that it is arguable that the Prime Minister is only the virtual leader; however, on 20 August, the day before the election, the Prime Minister categorically stated, 'I rule out a carbon tax'. There is no room for doubt in that statement, yet here we are debating legislation to introduce a carbon tax. The government can dress the legislation up as a 'price on carbon' and call it the 'Clean Energy Bill', but when it is a fee levied per tonne of carbon emitted, it is a carbon tax which will drive up the cost of almost everything that is made or transported in Australia.

This is not only yet another tax but also a bad tax. It is as simple as that. Taxes affect prices, and prices change behaviour; but this tax is different from a consumption tax such as the GST, which, I remind the House, was taken to an election and won a true mandate before being introduced by the Howard government. This tax is different because it is a tax on producers which drives up their costs. As I said before, changes in price change behaviour, but with a tax on production rather than consumption the effects are multiplied. Costs rise for producers, so they change their behaviour by reducing their costs through cutting services or laying off staff—no-one wins. Alternatively, they could shut up shop, unable to afford these increased costs, which would mean no services and no jobs—and definitely no winners—or they could pass their increased costs on to the consumer and raise prices. Consumers react to a change in costs by changing their behaviour as well. But consumers must still buy food and must still buy power, so their cost of living would increase dramatically under this tax—and by much more than any so-called compensation package would cover.

The government's own modelling shows that under this tax there will be an immediate 10 per cent increase in electricity prices and a nine percent rise in gas bills. Food costs will increase due to the electricity price rise and increased transportation costs. Be in no doubt that basic necessities for life will cost more. If families cannot save through not buying necessities, they will buy less—less entertainment, less clothing and less generally in the already struggling retail sector.

The Prime Minister says that this carbon tax, when the so-called tax reform compensation package is taken into account, will cost Australians just a couple of dollars a week, if anything. But that couple of dollars a week will be on top of the 'just a couple of dollars a week' caused by the 18 other new taxes introduced since 2007, and the 'just a couple of dollars per week' not spent by every customer on just one cup of coffee or just one magazine is a big cost to small business. Across the road from my office is a coffee shop. Talk to them about the effects of 200 or more customers buying just one less cup of coffee a week. Ask the newsagency next door how his customers buying one less magazine a week will affect his margin.

The Prime Minister only has to open any newspaper to see how hard the retail sector is being hit at the moment. The IMF has downgraded Australia's economic forecast to below budget and Treasury predictions. Yet despite the glaring evidence the Labor-Greens coalition has decided that now is the time to bring in another tax—yet another cost rise for consumers, which means yet another blow for retailers.

Back in 2008, then Prime Minister Rudd used the justification that a slowdown in consumer spending would slash jobs to hand out $900 cheques to anyone and everyone—dead or alive. Yet while the retail sector is already slowing—it is already struggling—this Labor government wants to introduce yet another deterrent to spending that will affect the bottom line of all Australians, in the form of a tax, and make them adjust their spending accordingly. It is a bad tax being introduced by a bad government. There will be less money to save for investment, making it even more difficult for Australians to save to buy their first house. The multiplier effects of a tax on production give no certainty except that costs will increase, and that uncertainty is crippling business already. Everyone, be they small business or big business, is feeling the pinch.

So far I have discussed only the immediate domestic issues and impacts. Further, the genuine fears of the market as to the uncertainties of the European and US economies have an impact on Australia as well. This carbon tax also relies heavily on the establishment of an effective international market. There is no evidence of such a system in working order at present, yet this government believes that it is indeed time to introduce this scheme. The World Bank has reported that the international market for carbon credits has collapsed and, further, has expressed doubt about the ongoing viability of a global market.

In 2005, after the Kyoto protocol was adopted, this market generated about $25 billion in the lead up to 2009. However, last year that market collapsed to just $1.5 billion dollars. Keeping in mind that the Kyoto protocol expires next year, there is little reason to believe that we will see a re-generation of this market in the near future. Significantly, the US withdrew from the Kyoto protocol back in 2001 and has indicated that it will not commit to a replacement treaty. Russia, Canada, and Japan have all also recently stated that they will not recommit to the protocol after its expiration.

This is a clear indication that much doubt surrounds whether other countries will adopt emissions trading and, if they do, it is also unclear as to what sectors will be included. Australia is the only nation introducing an economy-wide carbon tax. We need to be very cautious about legislating a default forward emissions cap for the electricity sector, in particular, and creating new property rights. Without certainty of what will happen internationally in the future, the government should be more careful about what arrangements it is putting in place that will be difficult to unravel should Australia have to align itself with an international scheme.

The absence of a global market for carbon credits is enough to cast doubt on the viability of the government's scheme before any further research into the risks such a market runs. Carbon credit fraud has been described as 'the white collar crime of the future' by Deloitte Access Economics. And The Wall Street Journal, after the systemic corruption of the European Union emissions trading system was exposed, defined the situation as 'not a functioning scheme at all but a political smokescreen to enable European politicians to claim green credentials while avoiding difficult decisions on reducing emissions'.

I think there is little doubt that this is what is happening in Australia today. If the government was truly trying to save our environment, they would be more concerned about how much this carbon tax will actually reduce emissions. The fact is that it will not reduce them at all. To reduce emissions by five percent of the year 2000 figures, we should be reducing emissions to 530 million tonnes. However, according to the government's own document, we are actually increasing emissions from 578 million tonnes currently to 621 million tonnes by 2020. So this carbon tax is literally all economic pain for no environmental gain. And, make no mistake, it will bring significant economic pain.

The Bligh government recently commissioned a report from Deloitte Access Economics regarding the carbon tax impact on my home state of Queensland. Keep in mind that this was a report commissioned by a state Labor government—a Labor state premier who is also the Labor Party's immediate past national president. In addition to what I have discussed above, this report found that Queensland's gross state product would be 2.76 per cent lower by 2020 and 4.11 per cent lower in 2050 with a carbon tax compared to without one. This is substantial and significant. It is a five per cent reduction in Queensland's gross state product under a carbon tax and will result in a predicted 21,000 jobs lost in Queensland alone. On top of this, the Queensland Treasury has estimated a loss in economic value of the state's generation companies of $640 million, which undoubtedly will be passed on to consumers.

This $640 million in Queensland pales in comparison to the $40 billion cost the National Generators Forum estimates the generation sector will incur across the country. However, as in Queensland, it is likely that nearly all of this cost will be passed on to consumers. Part of this high cost is due to the starting price of $23 per tonne being far higher than carbon prices elsewhere in the world, and it has put Australia considerably ahead of other countries. Now the Prime Minister may think that this will cause other world leaders to make a change; however, most world leaders will take into account the standard of living of their residents and the strength of their economy, not what Australia legislates. Without a carbon tax, the Productivity Commission puts Australia in 'the middle of the pack' with regard to tackling climate change. So by waiting for international action, for the sake of our economy, and particularly our manufacturers, we would by no means be dragging our feet. It is a matter of plain common sense.

Furthermore, the system requires generators to buy carbon permits well in advance, sometimes for electricity that will be covered by future contracts years in advance. This does nothing but further increase the cost of electricity in this country—a cost that will simply be passed on to consumers, further driving up prices.

The Prime Minister may believe she is leading the world with this carbon tax, but real leadership on this issue can and should start at home. The Brisbane City Council is a prime example of government leading by example and taking real action. I was proud to be a member of Campbell Newman's cabinet, which delivered record spending on green outcomes. In one term alone it planted 2.2 million trees; purchased 500 new clean buses, offsetting the whole of the council's fleet; started the CityGlider bus service; purchased new CityCats, and spent more than $100 million on new bikeways. Brisbane City Council is the largest purchaser of green power in Australia, and half of its energy supply is from renewable sources. This Labor federal government, in contrast, uses just 5.8 per cent greenhouse-friendly electricity in its buildings, according to its own Energy Use report. Furthermore, non-defence Australian government energy consumption over 2008-09 was 6,237,496 gigajoules, which equates to 1,178,440 tonnes of carbon emissions and which is in fact a 1.91 per cent increase from 2007-08 and a 9.94 per cent long-term increase over the period beginning 1999-2000. Perhaps the government should be looking to its own backyard and bureaucracy before demonising the '500 big polluters' and trying to ignore the effects its tax has as those companies pass on the tax to consumers.

This is a bad tax, plain and simple. It is not going to solve any of the environmental challenges confronting us. It is a tax on producers, who will have to absorb increased costs, so it will result in decreased services, lost jobs and higher prices; there is just no way around that. The government knows this. There would be no need to provide compensation if it had not inflicted irreparable damage in the first place. The Australian people do not want this tax. The Prime Minister has no mandate to introduce this tax and, without taking it to an election, the Prime Minister and her Labor/Greens government is treating the Australian people with arrogant contempt.

Peter Garrett (Kingsford Smith, Australian Labor Party, Minister for School Education, Early Childhood and Youth) Share this | Link to this | Hansard source

I welcome the opportunity to speak on the Clean Energy Bill 2011 and related bills in the House. I have long cared deeply about our planet and our country. In all the environmental campaigns I have been involved in or a part of, whether it was supporting the protection of our tropical and temperate rainforests, whether it was looking for better ways to protect and conserve our coastal environments, whether it was making sure that the spoiled waterways of our country were rehabilitated so that they could be productive, or whether it was looking carefully and clearly at how we might best protect those areas of Australia which have high levels of biodiversity, none is so important—nor is there any environmental issue as important—as tackling dangerous climate change.

I came into this parliament committed to represent the people of Kingsford Smith and to campaign and be part of a government that will take decisions on the issues that count, and taking action on dangerous climate change is the most important issue that we can take action on both now and for the future. I devoted a portion of my first speech in this House to this issue and made the observation that the bill for failing to deal with dangerous climate change will fall on this generation and, increasingly, on future generations unless we are resolute in taking action on climate change. I have worked in opposition as the shadow minister for climate change, environment and heritage and now in the government, with my Labor colleagues, to get Australia on the path to a low-emissions, clean energy future—the only kind of future that this country can conceivably have. It is a long and sometimes difficult path but it is a necessary path.

Noting that scientific awareness of climate change and its impact has existed for some time and that it now has become the province even of military security analysts, who identify dangerous climate change as a future risk to nations, and that there are now few who are not aware of the scale or nature of these risks, we on this side of the House and in this political party understand that the right response—the right ethical response and the right political response—is to act now. I am proud that we have seen this legislation introduced into the House by the Prime Minister and I commend the minister responsible and my colleagues on this side of House for the contributions they have made. The Gillard Labor government is delivering a comprehensive clean energy suite of bills which gets us going, provides both hope and substance that action on dangerous climate change is possible and does it in a way that is sensible and sets this country up for the future. We have made a start. That is the most important thing. It is a positive and good start, and nothing should hold this country back now—nothing, that is, except for the wilful and deliberate obstruction by the Leader of the Opposition and by the opposition in general. And I will return to that in a moment.

The fact is that in Australia we are at a crucial turning point in our history. As one commentator recently observed, 'These bills represent a great triumph of the parliament, an attempt to deal with the greatest crisis facing our world today.' It is important to recognise the times that we are in. On 12 September this year we saw newspaper reports confirming that the Arctic was melting at near record levels. Ice coverage, it was reported, was at a 'new historic minimum'. A week or two earlier we had reports on likely long-term and potentially irreversible damage to coral reefs, which are particularly vulnerable to changes in sea temperature and water quality, particularly vulnerable to climate change. The fact is that this is an entire ecosystem—not a species or a number of species, but an entire ecosystem—now vulnerable to human impacts, including the impacts from dangerous climate change.

It is very important for us to realise that only a day after we read of the newspaper reports about the Arctic melting at near record levels the Prime Minister introduced this legislation into the parliament. It is important to restate that the policy of this government is based on the best available scientific knowledge which is shared by the great majority of climate scientists—by our own CSIRO; by a number of our eminent scientists, including Nobel laureates and others. It is knowledge of a rapidly-warming world, with atmospheric levels of CO2 rising from 280 parts per million in the industrial era to almost 388 parts per million now—the highest levels that we have seen for eras of time. That is why Sir David King, Chief Scientific Adviser to the former British Prime Minister, and a dozen other eminent scientists have all written to Prime Minister Gillard congratulating her on the government's actions. That is why our own Chief Scientist has similarly spoken of the need to recognise that the science behind the need to take action on tackling climate change is legitimate science.

People in the future will look back and be absolutely aghast and incredulous that the majority consensus statements of our climate scientists have been ignored or belittled by members of the opposition and the opposition leader himself. One of the great tragedies of our time is that this debate has been so distorted, so perverted and so polluted by those opposite. The fact is that the coalition's policy on climate change and the debate that it has engendered literally represents a new low point in Australian political debate. It has been reckless, it has been toxic and it has been cynical. The Leader of the Opposition and his shadow minister for climate action, the member for Flinders, bear considerable weight of responsibility for the potential path they now have this country on.

I note that, on 20 September, the member for Flinders said, 'I've designed the system I want and guarantee that it will reduce emissions as planned by 2020.' I say to the member for Flinders that he is living in a fool's world where the sort of short-term Pyrrhic victories in manipulating the public debate that he may notch up count for nothing against the significant public policy failure of the position that he has put to this parliament. The fact is that the opposition's policy will not result in the emissions cuts that have been targeted by the opposition and a number of analysts have shown that quite clearly. Its policy of $10.5 billion worth of grants over 10 years will go nowhere near dealing with the reduction in greenhouse gas emissions that we actually need.

There are two important economic principles that underpin the government's approach on this issue. Firstly, a price on carbon represents the least cost and most economically efficient way of reducing emissions. Secondly, we in this country, fortunately, are still facing an economy that will continue to grow. The situation that we face is very simple. Thomas Friedman, a well-known writer and columnist put it very clearly:

There is only one effective, sustainable way to produce "green jobs," and that is with a fixed, durable, long-term price signal that raises the price of dirty fuels and thereby creates sustained consumer demand for, and sustained private sector investment in, renewables.

That is exactly what this government wants to do. This is the logic of applying a carbon price to the largest polluting countries, this is the logic of ensuring that the Australian public—particularly those likely to be affected by any price impacts—are compensated, this is the logic of getting the architecture of a price on carbon pollution in place and it is the logic of driving the significant reforms in a clean energy economy that will ensure employment, a new threshold of research and the new energies of the future can start here in Australia when they need to. To do anything else is both economically and environmentally reckless, yet that is the position of the opposition.

I want to briefly remark on three features of this legislation. The first is the significant level of investment in clean energy itself of some $10 billion. This will be important investment to the many businesses, the many entrepreneurs and the many innovators in Australia who recognise with absolute crystal clarity that this is the way of the future. Additionally and importantly, $1 billion has been applied to biodiversity investment. There is absolutely no question that we remain utterly dependent on the provision of healthy natural resources, the environment, to sustain our way of life. That is what underpins the way of life that we experience in this country. That investment is particularly important. Finally, the independent Climate Change Authority will provide more transparency and the opportunity for the independent observation, maintenance and advice around action on climate change.

I conclude my remarks by saying that, in the period that I have taken an active interest in politics, certainly in the period since I have been in the parliament, I have never witnessed more irrational and reckless statements on an issue of such consequence as I have from both the Leader of the Opposition and members of the opposition in debating this issue of climate change. The member for Tangney said:

I do not accept the premise of anthropogenic climate change, I do not accept that we are causing significant global warming and I reject the findings of the IPCC and its local scientific affiliates.

Enormous succour has been given to those who have taken not only a sceptical view but a downright intellectually dishonest view of the science behind climate change. The Manager of Opposition Business in the House said:

I support the direct action plan of the coalition to address climate change. It is a 'no regrets' policy. What that means is that, even if you do not believe that climate change is happening, even if you do not believe the government should take action on climate change, because it is a hologram, these are still good policies …

The Leader of the Opposition said that he is far from convinced that humans are causing imminent climate catastrophe, that there is no link between emissions and temperatures, that he believes the world's warming might have stopped and that he cannot see the dangers for our children if there is a four-degree temperature rise or a one-metre sea level rise. The particular statements by those two members and also the Leader of the Opposition are reckless, scientifically inaccurate and destructive. They are intent on only one thing—that is, confusing and perverting the public debate when in fact the need, the necessity and the responsibility to act have never been greater. Ultimately, though, the actions of the Leader of the Opposition represent something else—that is, a loss of faith in the vision and the capacity of the Australian people. That is Mr Abbott's greatest deficiency in this debate. He has no faith in the Australian people to actually take up the challenge and recognise that not only our future but the future of our kids is literally dependent on our capacity to act and the new jobs, the new research and the fields of endeavour that we as a nation have the capacity to do, as our history tells us we can. All of those things—the possibilities and the promise—are reduced to nothing in the Leader of the Opposition's cynical and destructive campaign.

I believe there is cause for optimism in the face of the significant challenges climate change presents. I think we can be the best for people by facing up to those challenges and by mounting the historic effort that will be necessary to make sure that we see temperatures stabilise and our environment protected in the future. That is a commitment this government has. I commend the bills to the House as I commend the efforts and activities of all Australians, particularly young Australians, who care so much about this issue and who recognise how important it is to act. (Time expired)

George Christensen (Dawson, National Party) Share this | Link to this | Hansard source

I rise in this place, this monument to democracy, to eulogise the freedom, the voice and the self-determination the Australian people once had. The introduction of the carbon tax, the biggest, widest, ugliest and most pointless tax in the world on carbon dioxide emissions, marks the end of democracy as we know it in this country. Make no mistake, democracy died on 21 August 2010. While we see countries in the Middle East overthrowing dictatorships and establishing their own democracies, here in Australia we have a government overthrowing democracy to install a policy dictatorship—a carbon tax that the people do not want, that nobody voted for and that the Prime Minister said she would not implement. And now we are told they are going to implement it in a way they reckon can never be undone. Too bad that they are incompetent and it can be undone, but it is still policy dictatorship.

With apologies to Don McLean, the day this deal was done with the Greens was the day democracy died. Democracy died for one reason alone: so that the Prime Minister, who gained the throne by knifing her then leader, the Member for Griffith, in the back, can hold on to power for just a little bit longer. And then in February she would have given Don McLean cause to shiver: the bad news on the doorstep when the menagerie of Greens, Independents and what-not hijacked the Prime Minister's courtyard to announce the very same carbon tax that the Prime Minister had promised the Australian people would not happen under her government. She had ruled it out:

There will be no carbon tax under the government I lead.

That is what the Prime Minister assured this country just six days before the last federal election. The Labor members opposite, who were all elected on that same promise, have the gumption to belittle, to ridicule and to abuse the Australian people for feeling betrayed.

This is not just a bad policy dreamt up mid-term by a bad government; it is a policy specifically taken off the table—ruled out—in a desperate bid to steal a narrow election victory. But it could not quite steal that victory. To once again use the words of Don McLean: 'The courtroom was adjourned—no verdict was returned.' The whole country was about to be singing 'Bye Bye Democracy'. In trying to justify the grubby deal done with the Greens to hold onto power, the Prime Minister tells us that 'circumstances changed'. She would have us believe her hand was forced on the carbon tax. No, Prime Minister, no-one was forced to do the exact opposite of what they promised to do. It is very simple. The Prime Minister could have just said: 'No, I will not betray the Australian people. No, I will not undermine the democratic process. No, I will not introduce the worst tax this country has ever seen. People voted for me because I promised I would not introduce this tax, and I owe it to them to keep my word.' The Prime Minister had the choice to keep her unequivocal promise, but she chose to throw that out the window so that she would not go down in history as the Prime Minister who knifed her leader for the sake of two months in the top job.

The Prime Minister was right, back in February, when she insisted her plan should not be called a carbon tax. She was absolutely right. It should be called a prime ministerial tax because that is what it really is. It is not a price on carbon; it is the price the Australian people will be paying for the Prime Minister to keep her job. Every single person in this country will be paying a prime ministerial tax.

This unholy Labor-Greens alliance can distort the facts and cherry pick the data all they like, but no other country in the world will have an all-pervasive economy-sapping carbon tax—or a prime ministerial tax. It is going to be more pervasive than we have been led to believe. All the talk we have heard about a five per cent reduction target is nowhere to be seen in these bills. In these bills the unqualified target is 80 per cent by 2050. It is unqualified. No matter what the rest of the world is doing, 80 per cent is the target. We are being asked to commit to an 80 per cent reduction, which means that, when the carbon tax becomes an emissions trading scheme, permits will be scarcer and the price will be much higher much sooner. As we start the rapid ascent up the price ladder, this carbon tax—this prime ministerial tax—will increase the cost of freight and, from next year, the cost of electricity. Freight and/or electricity are input costs on every single good and every single service you can buy in this country. That means we will be paying the carbon tax every time we pull out the wallet, every time we write a cheque and every time we swipe a card. In regional Australia we will be paying even more, because freight increases with distance from the capital cities. The Member for New England can say, as he has done in this chamber, that these bills have nothing to do with fuel on heavy vehicles—but the entire carbon tax package does. We know that diesel will go up in two years time under this government, and he knows that diesel will go up in two years time under this government. But he can do something about it by voting against these bills.

We have also had the Member for New England in here, along with members of the Labor Party, wringing their hands and saying: 'The sky is falling; the seas are going to rise; the Arctic is going to melt; we're all going to drown.' I ask these members some questions. If the sea is going to rise like they suggest, how is this carbon tax going to stop it? How is this tax on carbon dioxide emissions going to hold back the tide? How is it going to help the reef? How is that going to stop the Arctic from melting? This tax has absolutely nothing to do with the environment. The reality is it is all about wealth distribution.

But, in the process of taxing higher incomes and supposedly compensating lower incomes, the collateral damage, I am sad to say, will be felt the most in my electorate of Dawson. The Deloitte modelling undertaken by the Queensland government showed that Queensland would be the hardest hit of all the states and that the Mackay region would be the hardest hit of all the regions in Queensland. So you cannot imagine the good people of the Mackay region, ranging from Bowen, through the Whitsundays, to Mackay and out to the hinterland coal towns, jumping up and down with glee at the prospect of the carbon tax—and they are not. I recently issued an electorate-wide survey. As of today we have had 4,423 votes returned. The results are still flowing in at a rate of 900 to 1,000 a day, so that should be up to 6,000 by the end of the week. But right now, in my survey of my electorate, out of the 4,423 votes returned a whopping total of 242 people are for the carbon tax and 4,181 are against it—a 95.43 per cent rate saying no to this government's carbon tax.

And they say no because they already pay astronomical amounts for rates and rent. They already pay exorbitant amounts for everyday items and everyday services. They pay between 20 per cent and 50 per cent more for a cup of coffee than those opposite pay in this place, whether or not they have well-paid mining jobs. And most of them, a large majority of them, do not have those well-paid mining jobs; they are ordinary people doing ordinary jobs with extraordinary high bills and living costs. And this government wants to rob them just that little bit more with this carbon tax.

The electorate of Dawson has three economic pillars: mining, sugar and small crops, and tourism. These are all export industries. They are all going to pay a carbon tax under this regime, competing on the world market against industries in other countries who will not be burdened with such a grossly unfair impediment to competitiveness. Most of the secondary industries across the electorate, such as engineering and small business, are directly or indirectly dependent on these three economic pillars.

Eighty-seven per cent of our sugar crop is sold on the world market, in competition with countries that are not subject to this bad tax. The Mackay canegrowers chairman, Paul Schembri, commented that the carbon tax would be like 'an extra lead weight in the saddle bags of the sugar industry'. When confronted with this, the Treasurer responded by saying how rosy things are in North Queensland because of the mining industry. I have news for the Treasurer: things for the sugar industry are not going to be very rosy at all. That is because sugar farmers are price-takers. They do not get to pass on the added costs of the carbon tax. According to canegrowers, the sugar industry is staring down the barrel of an $81 million slug to the industry under this carbon tax. That represents a reduction in net farm income of 3.4 per cent per annum. For many farmers, that will be the difference between food on the table and losing the family farm. I note that times are particularly tough in the sugar industry for the same reasons—a high Australian dollar and a series of natural disasters.

I also note that the tourism industry in North Queensland is in a desperate state with a high Aussie dollar and natural disasters. The Whitsundays, a world-class tourist destination that I am very proud to have in my electorate, is dependent on international tourism, especially with places like Hayman Island, Hamilton Island and the Club Med Lindeman Island. Tourism businesses in the Whitsundays are already on the edge and were rightly concerned when a Tourism and Transport Forum report predicted a carbon tax would reduce inbound international visitor revenues by around $457million while driving $266 million of domestic tourism offshore.

We are being told that everything in North Queensland is going to be rosy because of the mining industry. So let's have a look at mining. The Minerals Council of Australia estimates the minerals industry will face costs of $25billion between 2012 and 2020 under the carbon tax package. They also note that the decision to include the emissions from coal mines is unique, with these emissions exempted under the EU's emissions trading scheme. Nowhere on this planet is there an economy-wide carbon tax of such magnitude as the one this government is determined to slug Australians with. The Labor government's determination to 'lead the world' falls pretty flat in North Queensland. As one of my constituents recently said to me, we don't want a government that leads the world, we just want a government that can lead the country.

The Australian Coal Association recently commissioned economic consultants to examine the impact of the tax and they found that conservative estimates of employment forgone in 2020-21 from applying emissions pricing to current coal mines would be around 4,700 in coal mines and 14,100 throughout the entire economy. So it's not looking so rosy now, is it?

But what really irritates North Queenslanders is the contempt with which their concerns are dismissed. When the Minister for Regional Australia, Simon Crean, came to Mackay on his little tour the chairman of Tourism Whitsunday asked him what the government was going to do about the tourism industry being slugged with higher costs. The minister said, 'Tourism is in the doldrums anyway.' The fact that the minister used Regional Development Australia to set up a political forum in Mackay and throughout Australia to promote this tax was not enough. He used the opportunity to tell locals how great his tax was going to be and then wrote in the Australian that the regions love this tax. Wrong, wrong, wrong! If you really care to know what locals think of the tax, it is simple, Simon: just ask the pie man; he can tell you it is not fair.

The Senate Select Committee on the Scrutiny of New Taxes did just that. They asked the pie man during a hearing in Mackay. They interviewed Peter Grant, owner of Bushman's Breads and chairman of the Regional Policy Council for the Chamber of Commerce and Industry—and he also makes one of the best pies you will ever taste. The pie man could have told 'Simple Simon' that the carbon tax would hurt businesses. He reported that an extra 5c for a loaf of bread under the carbon tax would have to be absorbed by his business as he could not increase his prices when competing with Coles and Woolworths. He reported that many of his members were fabricators and they were concerned that some of their work would go offshore and components would be just brought in. 'Our people will just be assemblers, rather than fabricators,' he said.

In summary, the government's modelling is based on an Australia-wide economy, but the engine rooms of the economy—the regions—will be slugged the most under this proposal. The carbon tax will slug every facet of industry in the electorate of Dawson. And it will not stop there. It will slug every facet of the community and our way of life.

I have Ayr Anzac Memorial Club in my electorate. They got a letter from Energy Action predicting what electricity prices will be. It said electricity costs will be up $16,000 per year and that is directly attributable to the carbon tax. A concerned general manager of that club said that that is going to cause tremendous problems. There are 600,000 not-for-profit organisations across this country in similar positions. The tax will not work for them; the tax will not work for families; the tax will not work for the regions; the tax will not work for businesses; the tax will not work for the environment. This government should stand up and pay heed to what the Prime Minister said—there will be no carbon tax under the government she leads—and vote this tax down.

Justine Elliot (Richmond, Australian Labor Party, Parliamentary Secretary for Trade) Share this | Link to this | Hansard source

I am very pleased to be speaking on the Clean Energy Bill 2011 and related bills. These bills will give effect to our plan to move our economy to a clean energy future. They are designed to ensure Australia's economic and environmental future. The issue of climate change is of major concern in my electorate. And that is not just from the perspective of the need to act for the future of the nation and the world but also from the very local perspective of protecting the unique and special coastal areas and pristine landscapes that we have on the North Coast. Without a doubt, many people in my electorate are very concerned about taking action on climate change. It has been an issue that they have consistently raised with me over the years.

The need to act is very urgent. The fact is that the rest of the world is acting. Particularly in light of that fact, it is absolutely urgent that Australia acts. The advice from the world scientific community is very straight forward: global temperatures are rising and the cause is carbon pollution. In Australia and around the globe, 2001 to 2010 was the warmest decade on record. In Australia, each decade since the 1940s has been warmer than the last. What is now beyond any reasonable doubt is that human activities are the cause of the changes that we are witnessing in the global climate. We must all accept that Australia will be greatly affected by any rise in temperatures, both environmentally and economically.

Increased carbon pollution in the atmosphere is putting the world's environment at very serious risk. It has been estimated that average global temperatures may increase by up to 6.4 degrees Celsius above 1990 temperatures by 2100. It has been estimated that, by 2100, sea levels may rise by between 0.5 metres and 1 metre above 2000 levels and that the acidity of the world's oceans may increase significantly.

Looking at a very local incident, we had some very severe and harsh coastal erosion at a seaside town called Kingscliff in my electorate of Richmond. The erosion was very severe. Many locals put forward their concerns about climate change and their view that we need to act on climate change. When we see impacts like these on our communities and our villages, it highlights for everyone the real and immediate danger that climate change poses. We can only imagine how much worse problems like this could become if we do nothing. If we do not act, it is quite frightening to think of the extent of it.

Increased temperatures are likely to change the frequency and severity of cyclones, storms, floods and other extreme weather events. We can also expect that rainfall patterns around the world will change, making some places drier and other places wetter. Studies indicate that warming of more than two degrees Celsius will overwhelm the capacity of many of our natural ecosystems to adapt. With that level of warming, for instance, the survival of the Great Barrier Reef will be in jeopardy as higher ocean temperatures and acidity levels cause major changes to coral reefs. There are delicate ecosystems on the North Coast, such as those around Mount Warning and the Nightcap National Park, and right across the Green Cauldron. This is one of Australia's National Landscapes. They will be placed under even further stress should average temperatures rise as predicted.

Rising temperatures will not just damage our environment but will have a massive negative effect on our economic prosperity as well. And the longer we are delayed by the climate change deniers in tackling the problem the more it will cost us and the worse the impacts will be on our economy. These include the economic costs that come from floods, droughts, heatwaves and other extreme weather events. Climate change will lead to sea level rises that can damage coastal property and infrastructure. Our nation is predominantly a coastal society. About 85 percent of the population lives near the coast. It has been estimated that coastal assets valued at more than $226 billion are at risk of damage from inundation and erosion by 2100. If we look at the North Coast in my electorate and over the border into south-east Queensland, we can see how vital these coastal regions are. One of our main industries is tourism. We need to act to protect those areas, because they are the backbone of both the North Coast and south-east Queensland. We need to act to preserve the beautiful landscapes and beaches to ensure the future of tourism in those areas. We also must look at one of Australia's most important economic sectors, agriculture. It has been estimated that the effects of climate change on agricultural production in the Murray-Darling Basin could see a decline of up to 92 per cent by 2100 as a result of longer and more frequent droughts from unmitigated climate change. With the Murray-Darling Basin accounting for a large share of Australia's farm production, this could undermine our capacity to grow and produce our own food.

I am very pleased to be speaking on these bills because the Gillard government's Clean Energy Future plan will cut 160 million tonnes of pollution from our atmosphere a year by 2020. This is the equivalent of removing 45 million cars from our roads. The Clean Energy Future plan will introduce a carbon price into Australia's economy. It will put a price tag on every tonne of carbon pollution released into the atmosphere by the country's biggest polluters. The carbon pricing mechanism will apply directly to around 500 of the biggest polluters in Australia. Indeed, a price on carbon is the most effective, efficient and economic way to tackle climate change. Every dollar raised will go to support jobs and households and to invest in clean energy and climate change programs.

To help meet the costs passed through by some businesses, the Gillard government will ensure that Australian households will be compensated with tax cuts, higher family payments and increases in pensions and benefits. Looking at my electorate of Richmond, more than 51,000 people will receive household assistance through increases in their income support and family assistance payments and even more will benefit from tax cuts. In fact, nine out of 10 households will receive assistance through tax cuts, extra payments or both. On average, households will see cost increases of $9.90 a week, while the average assistance will be $10.10 a week. Overall, the estimates are that prices will rise by less than one per cent.

I will go into the detail of some of this household assistance. It means up to $338 extra per year for single pensioners and self-funded retirees; up to $510 per year for pensioner couples combined; up to $110 per child for a family that receives family tax benefit part A; up to $69 extra for a family that receives family tax benefit part B; up to $218 extra per year for single income support recipients and $390 per year for couples combined for those people on allowances; and up to $234 per year for single parents in addition to the increased family payments that they receive.

A very important part of this package is tax reform. The tax reforms being introduced as part of the package will increase the tax-free threshold from $6,000 today to $18,200 from 1 July 2012. This is a very important reform. It means that over a million Australians will no longer need to lodge a tax return. It will make a huge difference to many Australians. From day one of the carbon price, 1 July 2012, every taxpayer with income below $80,000 will receive a tax cut, with most getting at least $300 a year. These tax cuts will be permanent and they will increase. On 1 July 2015 a second round of tax cuts will apply as well. These tax reforms are a very important element of this overall package.

The government's plan includes a range of measures to support jobs in manufacturing industries as they make the transition to a clean energy future. The government's $1.2 billion Clean Technology Program will help improve energy efficiency in manufacturing and support research and development in low-pollution technologies. So we are not just supporting jobs in manufacturing; we are also investing in those very important jobs of the future, particularly in those areas of renewable energy. We know how economically important it is that we have that major investment in those very important areas.

In contrast to the Gillard government's positive Clean Energy Future plan, all we see from the Leader of the Opposition is a negative and dishonest scare campaign when it comes to the issue of climate change. We know that he has said before that he thinks climate change is 'absolute crap'. He has made that comment previously. He wants to let the 500 biggest polluters off the hook and instead slug households to pay polluters. The fact is the Leader of the Opposition cannot be trusted with either our economy or our environment. We also know that the opposition have said that they will take back the compensation from the hands of householders. Only a couple of weeks ago we had the shadow Treasurer confirming that. He said he would be taking back that compensation. Well, I would like him to come and tell those more than 50,000 people in my electorate that he is going to take away their pension increases and their increases in family payments. That is exactly what the opposition intend to do and that will have a very severe impact on many people within my electorate.

I would like to ask the members of the opposition here today to consider the words of the Prime Minister when she introduced the bill to the House. The Prime Minister asked the members of the opposition to consider whether they are on the right side of history. Placing a price on carbon is the right thing to do. We must, as a nation, take these actions now to ensure that we begin our journey to a clean energy future. It is a future that will ensure our economic prosperity and protect our environment and our environmental surrounds. It is very important that we do both. Indeed, these clean energy bills will do that, ensuring our economic prosperity into the future and preserving our environment for future generations. I commend the bills to the House.

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

The introduction of the Clean Energy Bill and associated bills, and the potential long-term ramifications should these bills become legislation, is deeply divisive and possibly the most damaging issue that I have ever witnessed in the public domain. In fact, the words 'deeply divisive' fail to adequately paint a true picture of the potential impact and the voter sentiment being felt in the broader community and indeed in my electorate of Solomon. As we have heard, prior to the last federal election the Prime Minister said, 'There will be no carbon tax under the government I lead.' These words remain deeply etched in the minds of most Australians, including schoolchildren. Yes, the current leader of this great nation stood before all Australians and categorically ruled out a carbon tax. Yet one year on, here we sit—in this 43rd Parliament with its new paradigm—divided and engaged in bitter debate on this issue, an issue which has the capacity to unseat a government. In my own electorate, people from all walks of life, all sectors of the community, all socioeconomic circumstances and all political persuasions tell me that this new tax is nothing more than a money grab by an inept government and that it will not do anything to help the environment. The general consensus is that this tax has nothing to do with sustainability and a longer term cleaner and greener environment. Sustainability is a question that many of my constituents have pondered and have candidly discussed with me. They have said: 'How can we talk about sustainability with the implementation of a carbon tax? It just does not make sense.' It is a tax that the voting public will be paying for, a tax that the Gillard Labor government claims is designed to apply an impost on only 500 of the country's biggest polluters. The Gillard Labor government says that it understands that there may be some disadvantages as a result of the carbon tax, so to offset the minimal cost implications—as provided by the government's modelling—a compensation package will be implemented to assist Australia's lowest paid. I suggest that this is a tax amassed in economic pain and not about environmental gain. The government's own figures indicate that this tax will immediately put the price of electricity up by 10 per cent, cause a nine per cent increase in gas bills and leave a $4.3 billion hole in the budget.

In the Northern Territory prices for most everyday items, including electricity and gas, are higher than in most other places in Australia. Coupled with its higher transport costs, higher cost of living and higher housing affordability the Northern Territory is already doing it tough. Yet the Gillard Labor government says that it understands there may be some costs passed on to consumers as a result of this tax. Despite the Prime Minister's assurances, Territorians remain unconvinced that they will not be worse off. I have had thousands and thousands of my constituents voice their concerns against the carbon tax. I am listening to them, and the message I am giving this House is that my electorate is saying no carbon tax.

The Leader of the Opposition has made this House aware that this government has a history of price rises, with a 51 per cent average increase in power prices,    a 30 per cent average increase in gas prices, a 46 per cent average increase in water prices, a 24 per cent average increase in education costs and a 20 per cent average increase in health costs. These increases are before any impact is felt from the introduction of a carbon tax. These prices will continue to increase and we know that any price increase will further deepen the already tight budgets of most Australians.

I know that in the Northern Territory we will feel the pain of every single price increase. My constituents tell me of their concerns and their financial pain. I have already indicated that in my electorate there is a strong feeling of resentment toward the Gillard Labor government for introducing the carbon tax. Small local businesses underpin most communities and this is no different within my electorate. My background is in business. I understand the economics and the sweat, tears and effort needed to maintain and grow a business. I understand the impact that rising costs have on a business. A number of business owners within my electorate tell me that they are struggling. Margins are falling while costs are rising. There is no doubt that small businesses are a good barometer for local communities in terms of how strong an economy is. When I hear local business owners say that the predicted increased costs for electricity and gas under the carbon tax will impact on them significantly, when small operators say they are not sure they will remain viable and in business or that they will have to downsize or let some staff go, I feel their hurt, I feel their anguish and I feel their anger. I echo the words of my colleagues and say to this government: now is not the time to add additional burdens on businesses, now is not the time to add additional burden on families and now is not the time to add to sovereign risk issues associated with Australia.

The basis behind the introduction of these bills is for the government to address global environmental concerns by reducing carbon emissions. A key element of the government's policy propels Australia toward reaching a five per cent reduction in greenhouse gas emissions by 2020. This is not through a mechanism of environmental sustainability but by an internationally linked scheme for the purchase of offshore permits. The Prime Minister has said this is going to be an internationally linked scheme—and so it should be. As the Deputy Leader of the Opposition has already outlined, the World Bank reported recently that the international market in carbon credits has suffered a debilitating collapse and expressed doubt about the ongoing viability of global markets.

Trading in credits commenced following the adoption of the Kyoto protocol in 2005 and $25 billion was generated over the years 2005 to 2009. However, figures for last year indicate a collapse to $1.5 billion. Why? it is due to concerns about the ongoing commitment of nations post the Kyoto expiry in 2012. Internationally, concerns are being raised about the potential for corruption and crime in respect of dealings in carbon credits. Instances of fraud, as evidenced within the European Union, are already a real concern. An estimated $57 billion of taxpayer funds, as proposed by the Gillard Labor government in its carbon tax policy, is being sent offshore to purchase and secure carbon offsets to enable the government to reach its target of an 80 per cent reduction in emissions by 2050.

Australia from a global perspective in many respects is viewed as a responsible corporate citizen in the global community. Yet as a nation this government wants to be the first to introduce an economy-wide carbon tax, or emissions trading scheme—a scheme that has the potential to disadvantage and disrupt the competitive position of Australia in terms of its export markets, a scheme that has the potential for businesses to trade offshore with countries with inferior emissions standards. Without the support of similar economy-wide carbon tax schemes across multiple countries, including big polluters such as the United States, India and China, Australia is giving away an enormous competitive advantage to overseas manufacturing. At a time when there is uncertainty in the global economy, at a time when most countries are focused on the business of their own local economic development, at a time when countries are trying to maintain if not improve the standard of living for themselves, our current Labor government seems determined to reduce our standard of living through the implementation of this carbon tax.

The government's Clean Energy Future plan has four key elements: putting a price on carbon pollution; promoting innovation and investment in renewable energy; improving energy efficiency; and creating opportunities in the land sector to cut pollution. The fact is that, according to the government's own statements, carbon emissions for Australia will continue to impact on the climate and will increase from 578 million tonnes to 621 million tonnes between 2012 and 2020. The government promised and proposed that every cent of the moneys collected by this tax would go to households. This government already has a credibility issue, and now we learn that, although it promised 100 per cent of the tax collected would go to households, it is now down to 50 per cent. You just cannot believe anything this government says. The true worth of any compensation to be paid under this carbon tax remains, to some extent, shrouded in a mist of uncertainty. Modelling across the country by a number of state governments, including the Labor government of Queensland, shows considerable economic impacts associated with the introduction of this carbon tax. The Northern Territory will, unfortunately, showcase the impact of this new tax. Why? Because of its remoteness. Not the most distant from Canberra, my electorate is one of the most remote in terms of population and demographics. Every access or exit to the electorate of Solomon is via transport. It is not just a short hop, skip, jump or drive down the road; it is thousands of kilometres from any state or major centre. Our lifelines rely on transport. Any impost on the preparation, manufacture, production, packaging, cooling, heating and transporting of goods will be impacted on by this carbon tax.

As I have already said, we in the Territory already pay extra for transport costs, and it looks like we are going to be paying more. The government will have us believe that the impact of this new tax will be minimal and, in fact, that the compensation package will provide equality for those most in need. But if you happen to be a pensioner, self-funded retiree, small business operator or one of the many other Australians struggling to make ends meet and you live in remote Australia, your government will not let you down, they will just tax you down. How on earth do the government expect the average Australian to quantify the cost of a carbon tax, when Blind Freddy can see that a carbon tax is meant to hurt? If it does not, how does it change behaviour? How does the cost of trading carbon credits address the impact of climate change in Kakadu or the Great Barrier Reef?

I would like to share with the House an example of how this tax affects a local aviation business in my electorate. Airnorth, an award-winning Territory-grown business, commenced operations in 1978 as an air charter service across the Territory. By 1993 Airnorth's expansion had continued to encompass the entire Northern Territory, from Uluru to Darwin. Airnorth is now a major aviation operator in Northern Australia with 156 scheduled departures weekly, servicing 14 destinations and carrying in excess of 250,000 passengers annually. It employs more than 180 staff in Darwin. This is a good new story for the Territory—right?—of a solid but small company providing essential services to the Top End of Australia. Unfortunately, with the looming of the carbon tax, the company is concerned, or should I say alarmed, at the impost the proposed carbon tax will have upon it.

The Executive Chairman of Airnorth, Mr Michael Bridge, shared with me some of his company's concerns and the projected impact that this tax would have on their business and growth plans. Mr Deputy Speaker, I urge you and other members of this House to listen to these figures. In 2011-12 Airnorth budgeted to use 15.5 million litres of aviation fuel. In 2012-13 they plan to use 16.5 million litres of aviation fuel. In 2013-14 it will increase to 21 million litres of aviation fuel. In 2014-15 it will increase again to an estimated 25 million litres of aviation fuel. Based solely on the usage of fuel, the direct affect that a carbon tax will have on Airnorth in the 2012-13 financial year will be an additional tax of $986,700. In 2013-14 it will be $1.3 million and in 2014-15 the company will have to pay an additional tax of $1.65 million. If this company is to remain prosperous and provide the services that are required by its consumers, it will have no choice but to pass these additional costs on to those consumers.

In addition to the issue of this significant increase in tax, Mr Bridge also highlighted to me that the Gillard Labor government had publicly stated that they are taxing Australia's 500 biggest polluters. Airnorth would not even be close to being rated as one of the 500 big polluters but, as outlined here today, they are to be taxed anyway. This is because the Gillard Labor government have applied the carbon tax to the aviation industry through the aviation fuel levy. This means no matter how big or small your aviation business is, the tax will be applied regardless. Airnorth is not the only aviation company that will be affected, as this will be applied equally to other Territory aviation companies including Hardy Aviation, Chartair and Pearl Aviation, right down to the small operators in private aircraft. They will all be paying the tax. Mr Deputy Speaker, need I say more? This tax is unjust and, as I have clearly demonstrated here today, it will hurt all Australians. This carbon tax will not be fair, as it will be significantly greater for small businesses and for people living in the remoter areas of Australia.

I have been consulting with my constituents in Solomon and they are very clear that they do not want a carbon tax. In fact, the Northern Territory Legislative Assembly passed a motion to have the implementation of any carbon tax delayed for 50 years. This action reflects the view of Territorians and they do not want a carbon tax. I wonder if Minister Snowdon, the member for Lingiari, will stand alongside me and not support the carbon tax. Will he stand up for Territorians and not support the carbon tax?

Richard Marles (Corio, Australian Labor Party, Parliamentary Secretary for Pacific Island Affairs) Share this | Link to this | Hansard source

I rise to speak in support of the Clean Energy Bill 2011 and related bills which form a scheme of legislation to put a price on carbon emissions within our economy via a market mechanism. We will do this by issuing permits to those companies who emit more than 25,000 tonnes of CO2 every year, and that equates to about the 500 largest carbon emitters in our economy. The price of these permits will, in the first year, be $23 a tonne and in years 2 and 3 will increase by about 2.5 per cent. Thereafter, the price of those permits will float and they will become tradeable.

It is predicted that this will give rise to an increase in prices within our economy which will equate to just under $10 per household. Half the money which is raised through the selling of these permits will go to low- and middle-income households to enable them to deal with the increase in prices. That will be done by tripling the tax-free threshold, by giving rise to tax cuts and by increasing benefits through the family benefits scheme. In this way 400,000 Australians will get 120 per cent of that $10 increase. That is to say that they will be better off at the end of this. At least two-thirds of Australians will have the full amount of that price increase provided to them through tax cuts and pension increases. Ninety per cent of Australians will get some form of compensation. In this way, it is important to understand that the carbon price will be funding tax cuts and pension increases for ordinary Australians. It is also important to understand that half of the money that will be raised will go to assist those industries, particularly emissions-intensive trade-exposed industries, so as to secure those jobs at those companies. That is a very important element of this scheme. While there are many companies which will have an ability to pass on costs associated with the carbon price, there will be some which are in a difficult situation within the economy, so they are being provided with assistance.

In my electorate of Corio, both Shell and Alcoa, for example, will be shielded from the carbon price to the extent of almost 95 per cent of the permits that they will be required to purchase. That is a very big win for the people of Geelong and for the economy of Geelong. I have spoken in depth with the companies within my electorate which are faced with paying the carbon price and I want to thank them for the constructive way in which they have worked with me and with the government in working through this package. I do believe that the package as it is now established minimises the effect on those businesses and I think that that is their view as well.

Economy wide, we are talking about a relatively small change to the economy—relative, for example, to the impact of the GST. This is, crudely speaking, going to see an increase of about one per cent in prices in our economy, with a corresponding package which will compensate people for that one per cent. That compares to nearly 10 per cent each way which applied to the GST.

My electorate of Corio, in my view, is very much on the front line of this debate. In what is the most carbon intensive economy in the developed world, Geelong is perhaps the most carbon intensive city within Australia. We have an aluminium smelter. We have an oil refinery. We have a car plant. We have cement works. We have other manufacturing. So any suggestion or proposition to place a price on carbon is obviously met with intense interest in the electorate of Corio. At the same time, of course, we are a seaside city. Much of that industry is located on the coast. We also have a vibrant tourism industry focused on the Great Ocean Road to the south-west of Geelong, which is a tourist attraction based on the current configuration of our coastline. So any talk about a rise in sea levels will directly affect Geelong. Indeed, being in south-east Australia, a part of the world which is predicted to see less rainfall as a result of increasing global temperatures, we are also a part of the world which is water stressed. So on both sides of the debate this is an issue which is felt very intensely within the electorate of Corio, and I think you can see that by the way in which the Geelong Advertiser has—I think very fairly—covered this issue.

I have been involved in holding many forums of businesses that would be affected by the carbon price, of people who work for those companies and indeed of groups that are very keen to see this country act to meet the challenge of climate change. What I take from that is not a sense that people want to plunge their heads into the sand but quite the opposite: a sense that people want to see this challenge met, that we meet it and we do it right and that, in placing a price on carbon, we do so in a way which gets it right. I very much believe that the package of bills which is before this parliament today does that.

The starting point in this debate is about the whole question of climate change. It amazes me that there is still a debate in this country about whether or not climate change is real, yet we very much see comments from the other side of this parliament which time and again make it clear that there are people on the other side of the parliament—indeed, a large number—who frankly believe that climate change is not real. The member for Gilmore referred to the IPCC findings, for example, as being 'very dubious scientific assumptions'. The member for Hume said:

… the argument that a reduction in carbon dioxide will somehow prevent future drought, or even increase rainfall, is entirely spurious.

And we know what the Leader of the Opposition says about this debate in his private moments—or not-so-private moments.

The science of this, in my view, is pretty simple. We are experiencing unprecedented levels of carbon dioxide in our atmosphere. Ice core samples, which are the most reliable way of seeing the levels of carbon dioxide in past times, take our time line back about 800,000 years. In that time, the levels of carbon dioxide in the atmosphere have been accurately recorded between 180 and 300 parts per million. In 1830, before the Industrial Revolution, the level was 280 parts per million. Now that figure is at 390 parts per million. That is an uncontested fact. There is not a scientist on the planet who contests that proposition. That is the first point.

The second point is this. There are a number of scientists who ask, 'If there is such a fundamental change in our atmosphere going on, what will this mean?' so many, many scientists have attempted to model the fact of the high levels of CO2 within our atmosphere. The vast preponderance of scientists who have modelled this have come up with the conclusion that it will result in a change to our climate which will see temperatures go up and, as a result, sea levels go up. That the vast preponderance of scientists have that view is also an uncontested fact. There are some scientists, a small minority, who model this in a different way, but the vast majority model it with predictions of an increase in temperature. That is the second point.

The third point is this. We are starting to see, right now, results in our climate which are consistent with the vast preponderance of those models. We have just lived through the hottest decade that has ever been recorded since records have been in place on this planet.

So we have those things: an unprecedented fact, which is uncontested; a series of modelling, the preponderance of which predicts that temperatures will rise as a result of that fact; and our now experiencing and witnessing temperatures rising. Does that mean that we are certainly going to see climate change? It does not. It might be that the small minority of people modelling this problem may be right. Is it right that we can definitely say that Hurricane Katrina or the Queensland floods were a consequence of climate change? Of course, we cannot say that about either of those particular events. Because of that, this is fertile ground for people to go out and reject the science. But, in doing so, they do not ask the fundamental question, which is this: is there a sufficient risk, right now, given the science and given this uncontested change in our atmosphere, that it will give rise to climate change and all the catastrophic consequences which are predicted to arise from that for our children and our grandchildren?

Clearly, the answer to that question is: the risk is sufficient and we should be acting as public policy makers. In truth, we have been able to answer that fundamental question with certainty for more than a decade. This is the precautionary principle. To not see that now is to wilfully plunge one's head into the sand. History will condemn those people who plunge their heads into the sand and do not deal with this issue now.

In my electorate of Corio the very large companies who will be bearing the issues of the price on carbon absolutely understand the issue here. The Shell company said, 'Shell shares the widespread concern that the emission of greenhouse gases such as CO2 from human activities is contributing to global climate change.' Alcoa said, 'Alcoa supports an economy-wide response to the challenge of climate change.' Ford said, 'At Ford, we acknowledge the science of climate change.' There is no doubt that those companies understand the risk that is at hand.

The global challenge often articulated in this issue is trying to lock in a climate change increase of two degrees or less, which involves stabilising CO2within our atmosphere at 450 parts per million, which the CSIRO said will involve halving CO2emissions by 2050. This is expected to mean very significant changes within our lifetime: two billion people exposed to water shortages and 30 per cent of plant and animal species put at risk of extinction.

What we are doing today is playing our part in meeting that global challenge. This government does understand that our emissions compared to those of the rest of the world are relatively small. There is a bigger reason now for us to move via this legislation—that is, the rest of the world is moving and we cannot afford to be left behind. Thirty-two countries have walked down the path of dealing with climate change through an emissions trading scheme or some other form of abatement policy, as have 10 US states—and California will be starting an emissions trading scheme at the beginning of next year. Most importantly, China is cutting its emissions per unit of GDP by 40 per cent to 45 per cent by 2020 on 2005 levels, ensuring that 15 per cent of its energy needs by 2020 will be through non-fossil fuels. It is increasing its forestation. It has the largest renewable electricity generation capacity in the world. Thirteen districts in China are trialling low-carbon plans, including looking at CO2 emissions trading schemes. Where China goes, the rest of the world will follow.

That is good news from the point of view of dealing with this global challenge; but, in a world where having a CO2 dependent economy is penalised—and we have an economy which is the most carbon dependent in the developed world—Australia will be particularly exposed. We cannot afford to be left behind with such an economy; to do so puts at risk future jobs and future industry. This demands that we act now. How we act is the easiest question in this debate. The most important social phenomenon which has existed over the last 200 years—the power of the market—must be harnessed in the most efficient and least costly way to deliver this change.

Putting a price on carbon will encourage new industries and new solutions. We do not say whether it is gas, whether it is solar or whether it is wind, because we are not about picking winners; if the incentives are right within the economy—and this package will ensure that they are—we know that companies will put their best and brightest to work so that they get the right solutions. We know a market mechanism is the best. Malcolm Turnbull understands that a market mechanism is the best. Greg Hunt wrote theses about a market mechanism being the best way to deal with this issue.

Walking down the path of a direct action policy is not a serious contribution to this debate. We know that this is a policy which, in the words of Ross Garnaut, 'would have some rationale if we wanted to pretend to take action against climate change but not do much'. That is exactly what we are seeing in relation to the direct action plan.

Abraham Lincoln once said:

… we cannot escape history. We of this Congress and this administration, will be remembered in spite of ourselves. No personal significance, or insignificance, can spare one or another of us. The fiery trial through which we pass, will light us down, in honor or dishonor, to the latest generation.

This debate and this vote, more than any other we have seen in this place, will be scrutinised and remembered by history. It will condemn those who vote against it. It will particularly condemn those who know in their hearts that this is the right way to go but do not vote in accordance with their beliefs.

Rowan Ramsey (Grey, Liberal Party) Share this | Link to this | Hansard source

I rise to address the Clean Energy Bill 2011 and related legislation. The government has no mandate for these bills—in fact, it has a mandate to oppose the bills. Of the 150 members in this place, 149 took the same policy to the last election—that is, not to implement a carbon tax.

Would we be having this debate if Prime Minister Gillard had said on August 16 last year, 'My government will introduce a carbon tax', instead of, 'There will be no carbon tax under a government that I lead'? If, on 20 August, she had said, 'I rule in a carbon tax', instead of, 'I rule out a carbon tax', would Australia now be facing a new tax of no less than $8.5 billion per annum on the biggest employers of the nation? If the Treasurer, Wayne Swan, had said on 15 August, 'We will move towards a carbon tax', instead of, 'Certainly, what we reject is this hysterical allegation somehow that we are moving towards a carbon tax; we certainly reject that', would Julia Gillard be here as Prime Minister of Australia? The answers are: no, no and no. No, we would not be having this debate; no, we would not be facing an $8.5 billion tax; and, no, Julia Gillard would not be the Prime Minister if she and her ministers had told the truth. They would simply not be the government of Australia.

The Prime Minister said she had no choice; the tax was the price of the deal with the Greens; the tax was part of the deal to deliver government, the cost of government. But no-one held a gun at her head—and could anyone seriously contemplate a parliament where the Greens supported the coalition? Is it really fair for the Prime Minister to blame the Greens? Surely now we are seeing the real Julia; or perhaps we are not. After all, this is the same person who as Deputy Prime Minister advised the then Prime Minister of Australia, Kevin Rudd—who, in all likelihood, will also be the next Prime Minister—to abandon the ETS. Who knows what she really thinks? Surely the ETS and migration, on which the government has gone through considerable contortions, are two of the issues on which Julia Gillard asked the Australian public to judge her. If she wants to be properly judged, she should lay the new deal—the government's completely reversed position—on the table and ask the Australian public for a mandate, because she certainly does not have a mandate for the course that she has chosen on either issue.

We are advised repeatedly that Australia is being left behind on the issue of climate change; that the rest of the world is moving on. But is it really? We could be forgiven for believing that Australia is an international pariah—the worst emitter per capita in the world—but that claim is simply not true. According to the US Department of Energy, Australia is number 11 in the world among polluters. In fact, Australia is about equivalent in this respect to similar resource rich economies and, importantly, to our direct competitors the US and Canada. There is no chance that either competitor nation will introduce an economy-wide carbon tax similar to ours anytime soon—and if the US and Canada do not do so then neither will anyone else.

The only economy in the world that has done anything significant in this space is the EU, and we should take a closer look at what the Europeans have done. While it is true that they have an ETS and have managed to cap emissions, all is not what it seems and bears closer examination. The European ETS is largely a tax on electricity, and 80 per cent of the manufacturers covered by the scheme are eligible for 100 percent compensation up to 2020. Certainly the French President is not having anything to do with a tax on his country's industries which industries in the rest of the world do not have to face. He says that a carbon tax:

… threatens our jobs, [and] it would be absurd to tax French companies while giving—

an edge—

to those in polluting countries.

The great promoters in this country of European action neglect to tell us that, at the same time as Europe has capped emissions, its importation of embedded emissions has risen by 30 percent. That means that the CO2 emitted for manufactured goods and raw materials consumed in Europe has occurred in other countries, mainly China, where there are no restrictions on emissions. Effectively, the Europeans have transported their emissions to nations where they will not be counted. To clarify this situation further, Australia, which is the 11th highest emitter per capita in the world, emits a full 18 percent of its total CO2 on behalf of other countries—the emissions are embedded in our exports. If we export our products to a country such as Britain, it makes their balance sheet look good and ours look bad. If these emissions were removed from Australia CO2 accounts, we would rank about No. 30 on the world's list of carbon sinners—not bad for a country which has the greatest tyranny of distance in the world.

I turn to some specific industries and the likely impacts on the communities they support—for example, my electorate of Grey. While much has been said about the cost-of-living implications of a carbon tax for Australians—and quite rightly so—my strongest concerns with the tax are to do with carbon leakage and the effects on exporting and importing businesses which are competing but which have no power within the marketplace to pass on their costs. In particular, I am concerned about the impact on two major employers in my electorate: OneSteel in Whyalla and Nyrstar in Port Pirie.

Let us look at the example of OneSteel. It is pertinent that the government has recognised that there is a serious problem in the steel industry and offered a $300 million steel transformation package over four years. One thing I often say about the carbon tax is that it is pointless unless it changes behaviour. But the government has shown with the parameters of this tax that it has no understanding of this idea. In the case of OneSteel, surely the object of the tax is to allow lower emission technologies to compete and, by making current high-emission technology more expensive, to place external costs on the business so that it switches to a process which emits less CO2. That only makes sense if there are alternative technologies; however, in the production of steel, 80 percent of the CO2 emissions are unavoidable. They come from using coke to convert iron to steel, and regardless of the cost they cannot be avoided. High taxes on steel cannot change CO2 efficiency. If we want to reduce Australia's emissions from steel, the only way of making a significant difference is to close industry down and send it offshore. That will not cut the world's emissions, but it will reduce Australia's emissions. Of course, this is less than pointless for the environment but will meet the government's aims.

The steel assistance package does nothing more than cushion the impact of the tax by compensating for the tax. However, for the reasons I have just outlined, the package will not facilitate industry's significantly altering its behaviour. There will be four years of assistance—and then what? There will be nothing but a rising carbon price: $29 a tonne by 2015 and $37 a tonne in 2020. This is a policy to get us past the next election, not a policy which will ensure that we have a steel industry in Australia or, most importantly, a policy which will reduce the amount of CO2 emitted in the world, as opposed to reducing it just in Australia.

Considering that the government assumes that $300 million will be enough compensation for the hundreds of millions of dollars that will be extracted from the steel industry and so allow OneSteel and BlueScope to keep making steel for the next four years, can we assume that, as the tax rises to 60 percent by the year 2020, the industry will need a $480 million package?

After refusing to debate the clean energy bills separately, the government is now opportunistically splitting off just one—the steel industry assistance package—presumably to try to embarrass me; it has already named me in the media. The great Muhammad Ali had an in-ring tactic called rope-a-dope. But I am not a dope, and I am not for roping. If the Greens-Labor Party bills are lethal for the steel industry then those parties are responsible for see their package is passed in full. If they cannot then they should abandon the bills. These are bills, I might add, that only 28 per cent of Australians support.

As the member for Whyalla I cannot support a bill in isolation, because it is only a stop gap. It will not achieve structural change; it will provide only a short-term benefit. Should I support just the steel assistance package, then I should be judged as the member who assisted in installing a tax which will continue to ramp up costs on the steel and lead-zinc industries until the pain is too great to bear.

Make no mistake, we are debating this tax because it was the price of a deal with the Greens. Well, in that case let them be responsible for the full effects of the tax or support the 'crumbs off the table' approach that may allow the steel industry to struggle along for a few years before being completely killed off.

That brings me to Nyrstar. Nyrstar has two plants in Australia: one in Port Pirie in my electorate and the other in Hobart in the electorate of Denison. The two plants are interdependent. In 1997, in order to comply with international anti dumping-at-sea conventions, Nyrstar's previous owners invested $70 million to stop sea-dumping of waste from the Hobart plant, instead electing to reprocess in Port Pirie. The waste has very low mineral concentrations and for all intents and purposes is nearly worthless. If the Port Pirie operation does not exist, then neither can Hobart. And there are no other practical alternatives to dealing with this waste. Now the Hobart plant is a zinc-processing plant and because it sits in the highest-intensity band of emissions it will be granted 95 per cent. In comparison, Port Pirie is a multi-metal smelter but predominately handles lead and zinc. The zinc component will attract the same 95 per cent credits under the government's tax; however, the lead part of the business will receive only 60 per cent credits. Inexplicably, the government chose to break a fully-integrated, multi-processing plant down into separate entities for taxing purposes.

The tax will cost Nyrstar in excess of $10 million in the first year, rising to $16 million per year by 2020, and more beyond that, should they still be in business. Similarly to steel production, there are virtually no means by which Nyrstar can alter the process to emit less CO2. They have no way of passing their cost increases on for they are price takers in a world market. The tax can only be described as a tax to raise money; it cannot be classed as a tax to alter behaviour—and surely that should be its purpose.

What is not widely known is that the Port Pirie plant is in need of major refurbishment. Within the next five years Nyrstar, the world's biggest zinc producer—it is a company based in Switzerland with another four smelters based around the world—must choose to reinvest in Port Pirie, or the plant will have to close. The cost of refurbishment will be in excess of $400 million. Under the laws proposed by the government, it is impossible to believe the company would choose to invest that amount of money in Australia. It simply will not happen. So, without a better compensation package it is almost certain Nyrstar will elect to remove itself from Port Pirie—and that means Hobart too. It will be a casualty of a carbon tax the Prime Minister promised us we would never have. Further than that, I recently I saw figures showing that a tonne of zinc refined in China, consumes almost double the energy used here in Australia.

I am concerned also that the Alinta power stations at Port Augusta will also be affected, even though it is unsure just what the tax will mean for them. Certainly, there is a chance that South Australia will develop an unstable electricity grid if these base-load generators are removed, and I think it highly likely that government—state or federal—will have to pay Alinta to stay on line, or subsidise gas replacements. I am concerned that we have not properly assessed the impact of the expanding renewable energy sector in the state. Courtesy of wind generation, South Australian consumers are likely to face some difficult circumstances in the medium future, but I will take an opportunity to inform the House on that issue at a later date.

In the wider sense the economic backbone of my electorate—agriculture, fishing, aquaculture, mining, and the overseas-competing tourism industry—faces the embedded costs of a carbon tax and has no ability to pass on the cost. While agriculture is directly exempt, that is only for the time being. By 2014 heavy transport will face the full cost. I wish government members would acquaint themselves with a map of Australia. A heavy transport tax is a tax on our weakness. Everything in regional Australia, which is the generator of the primary wealth of this nation, faces a freight barrier the rest of the world will never understand. Fishermen will pay more for fuel; they will pay more to refrigerate their catch. Farmers will pay more for freight, fertilizer and chemicals. Miners will pay more for fuel, electricity and transport. Tourism operators will face more for airfares and untaxed competition from overseas. None of them will get any compensation from the government; none of them can pass on the costs. All of them will pay for the government's lollies for the masses. All of them have been abandoned by this government, which has betrayed its electoral commitments and will not seek a mandate for the biggest reversal of policy this country has ever seen.

All sides of politics agree that we need to reduce our CO2 output; however, there is a better way than installing a tax that Australians were promised they would not have and, despite the government's best efforts, clearly do not want. (Time expired)

Michael Danby (Melbourne Ports, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak on the Clean Energy Bill 2011 and related bills. We have a responsibility to ensure that generations after us do not inherit the problems of today. A carbon price, in my view, is an effective method to transit our economy from a high-emitting economy to a low-emitting one.

We would like to be remembered as having left to our children a better Australia and a better economy than we inherited. We can say when we leave this place that when we were asked to act we did not falter but instead rose above the bitter, vitriolic—indeed, I would argue, conspiracy-raising—point-scoring that has been part of this debate.

Many people in this debate act in good faith. As on most issues, they vote on the future of the country in that spirit. That is why the introduction of the clean energy bills and the implementation of a carbon price is essential. The clean energy bills will ensure that the 500 largest polluters in Australia pay for emitting carbon, not ourselves. Costs that are passed on to consumers will be offset by compensation. In my own electorate of Melbourne Ports, surrounded by Port Phillip Bay, 14,500 pensioners will receive an extra $338 per year if they are single, and there will be up to $510 per year for couples combined. Two thousand, three hundred self-funded retirees will receive an extra $338 per year if they are single, and there will be up to $510 per year for couples combined. Three thousand job seekers in Melbourne Ports will get up to $218 extra per year, for singles, and $390 per year, for couples. Seven hundred single parents in Melbourne Ports will get an extra $289 per year, and 2,100 students will get up to $117 extra per year.

The government will also be providing tax cuts that will increase the tax-free threshold—this is most significant—from $6,000 to $18,000 on 1 July 2012 and to $19,400 on 1 July 2015. The tax cuts from the increase in the threshold gradually will be offset so that those with taxable incomes under $80,000 a year get a cut that counters their higher energy prices, while those earning about $80,000 will have no change in their tax bills. Overall, the carbon price will see prices rise by less than one per cent. The modelling says that there will be an increase in the number of jobs by 2013 and a further increase in 2020. Of course, with international economic circumstances we cannot necessarily predict exactly where the Australian economy will be going, but certainly the economic evidence that I have seen suggests that with the new arrangements under the clean energy legislation there will be as many jobs newly created as may be jeopardised.

Our $9.2 billion Jobs and Competitiveness Program will shield heavy industry sectors like steelmaking, aluminium production and glass and paper manufacturing from the carbon price to support jobs in Australia. The $300 million Steel Transformation Plan will provide extra assistance for steelmakers. I note it was even supported on Lateline last night by Mr Warburton, who said that, despite his opposition to this legislation, the industry associations do support the Steel Transformation Plan. On top of that, there is an $800 million Clean Technology Investment Program, which will provide grants for manufacturers to invest in energy-saving equipment and low-pollution technologies—and there is also a special $150 million program for the food-processing sector.

Those opposite would have us believe that in Australia we are increasing the cost of living by hundreds of dollars for each Australian. We are not. As I said, any costs will be offset by compensation—compensation which those opposite claim they will take away, after the legislation has passed, from pensioners, students and low-income earning Australians who will benefit from the new higher tax-free threshold. A carbon price will not apply to emissions from agriculture and from cars and light commercial vehicles or to off-road agriculture, forestry and fishery uses.

When Malcolm Turnbull rose in support of the ETS last year he said the reason he backed the ETS, and the Liberals had proposed it under John Howard, was:

… because we as Liberals believed in the superior efficiency of the free market to set a price on carbon.

It is ironic that the opposition are opposed to the free market. For all their raging about us being socialists et cetera, we are the ones who are supporting it.

We still have a bipartisan medium-term target of reducing our emissions by between five and 16 per cent on 2000 levels by 2020. So I ask: if there is bipartisan support for the level of reduction then surely those opposite ought to be willing to support initiatives to reduce our emissions? But the opposition are now opposed to being part of the process to tackle climate change. This was not always the case, and I believe many within the opposition still believe that the best course to take is a price on carbon and then a carbon emissions trading scheme.

The shadow Treasurer, the member for North Sydney, admitted in May last year in the Sydney Morning Herald that it was 'inevitable' that Australia would have a price on carbon. He said:

Inevitably we'll have a price on carbon … we'll have to.

The member for Warringah, the Leader of the Opposition, once supported a tax on carbon. We have all seen the footage of the interview the Leader of the Opposition gave to Sky News in 2009, but his words are worth remembering. In the interview, the member for Warringah said:

… if you want to put a price on carbon, why not just do it with a simple tax? … Why not ask electricity consumers to pay more? And then at the end of the year, you can take your invoices to the tax office and get a rebate. It would be burdensome—all taxes are burdensome—but it would certainly raise the price of carbon without increasing in any way the overall tax burden.

It is clear that Mr Abbott will say or do anything—will change his position on climate change over and over again, just like he has on the issue of offshore detention, or whatever it takes—to get himself into the Lodge.

The coalition, under their plan, will tax people, not polluters. The member for Warringah's 'direct action' plan would hit every Australian household with a $720-a-year charge. Business costs would rise. Living costs would rise. The Liberal plan costs families $720 a year, does not protect or create jobs and, most importantly, does not work. There is no evidence that the Liberal plan will achieve its carbon reduction goals. I am in favour of tree planting, but some people have said that an area the size of Tasmania would have to be planted to put into effect the opposition's plan. Clearly, it is beyond the realms of possibility.

The vitriol that this debate has engendered and the conspiracy theories about scientists that have been flying around have added to a climate of fear in Australia. In particular I disassociate myself from the incredible acrimony the people from the Academy of Science, our great scientists, have faced. The member for Wentworth's words are poignant, and I would appeal to those opposite to heed them. He said:

But first, let me say straight up that the question of whether or to what extent human activity is causing global warming is not a matter of ideology let alone of belief. The matter is simply one of risk management. It is, moreover, not a question of left versus right. Indeed, it was Margaret Thatcher who more than 20 years ago called for immediate action to reduce greenhouse gas emissions …

…   …   …

If Margaret Thatcher took climate change seriously—

the member for Wentworth argued—

and believed we should take action to reduce global greenhouse emissions, then taking action and supporting and accepting the science can hardly be the mark of insipient Bolshevism.

I have been very influenced by the presentations of a range of scientists who have come to this House to explain to us the impacts of global warming. The CSIRO, our scientists and indeed those of us who argue for this legislation are not part of some green conspiracy to con the Australian people into taking action on climate change. After all, carbon emissions trading was the policy of former Liberal Prime Minister John Howard. The Conservative government in the United Kingdom, led by Prime Minister David Cameron, has announced that the UK will be implementing policies to reduce greenhouse gas emissions in Britain. The conservative Prime Minister of New Zealand, John Key, is committed to continuing New Zealand's carbon emissions trading scheme. These are not Green political parties. They are responsible economic conservatives who believe that a carbon emissions trading scheme and a price on carbon are the best way to move from a high-emitting economy to a low-emitting economy. Essentially, it is the same policy that the Australian Labor Party supports.

Even China, whose economy is so rapidly expanding—and where there are many dubious pollution effects that you can quite clearly see if you visit there or that you could observe during the Beijing Olympics—has announced it will introduce carbon emissions trading schemes in six of its provinces.

This is one of the greatest economic reforms this country has seen since the Hawke-Keating years. This policy is not about short-term political point scoring or an election; it is about acting for future generations. This reform will ensure job security in steel, mining, manufacturing, farming and small business, and new jobs in renewable industries.

The Clean Energy Bill 2011 and related bills give us the capacity to unlock the full potential of the Australian people's brainpower. For entrepreneurs, philanthropists, investors and new technology these bills offer Australia a way forward into the future. After all, the effect of a market mechanism is designed to ensure that people will use all their economic creativity, which the opposition goes on about so much, as part of the natural order of capitalism to lower their carbon emissions and therefore face a lesser impact of the carbon price. In a speech in 1967, Robert Kennedy said:

If we fail to dare, if we do not try, the next generation will harvest the fruit of our indifference; a world we did not want—a world we did not choose—but a world we could have made better …

Karen Andrews (McPherson, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Clean Energy Bill 2011 and related bills. I speak on behalf of the many constituents and residents of McPherson on the southern Gold Coast who have largely been ignored by the Prime Minister and the Labor government.

I was elected by the people of McPherson to represent them in this place and I am here to voice their concerns, along with the concerns of other Australians who never expected to be in the position that we are in today, where we are debating the introduction of a carbon tax, a tax that Labor and the Prime Minister promised would never be introduced by a Gillard government.

The Australian people are now left to watch on, as the Gillard-Brown government attempts to pass one of the most controversial policy changes, while excluding and dismissing their views. The biggest issue that families on the southern Gold Coast are facing right now is the rising cost of living. Since 2007, right across Australia, electricity prices have increased by an average of 51 per cent. In the first nine months of the Gillard government, families were paying, on average, five per cent more for groceries at the supermarket and around 13 per cent more for water and wastewater services. Electricity, food and water are not the only essential items that have seen an increase in price during this period. Fuel, health, rent and mortgages have also cost local families more, stretching budgets to the limit.

What families need right now is a break from price increases, not a new tax that will potentially push them over the edge. The Gillard-Brown government's proposed carbon tax is going to flow down from the mysterious top 500 polluters and into the pockets of consumers. The affected businesses are unlikely to absorb these costs. They will be forced to increase their prices or reduce their own costs by reducing their wages bill either through job cuts or by reducing hours of work. Every time you turn on your TV or your air conditioning, or you boil the jug or go to the shops, you will be paying more. Labor talks about compensation but we all know that compensation is only paid to those who have been injured or have suffered a loss in the first place. We also know that compensation will not keep pace with increased prices in the future. The carbon price of $23 a tonne is not fixed. It will go up and is already forecast to reach over $350 a tonne in 2050.

This is the last thing the people of McPherson need. They have suffered 3½ years of price hikes under the Labor government and around 95 per cent of the local people I have spoken with since the announcement of this tax oppose its introduction. Our local tourism and construction industries are at risk under the proposed carbon tax. The Gold Coast has long been an affordable domestic holiday destination for Australians. With an increase in the ticket price of a domestic airfare, Australians will be penalised for holidaying at home, while those wishing to travel overseas will be exempted.

The Australian Tourism and Export Council believe the impact of a price on carbon is another hit to tourism businesses already facing the significant impacts of the high Australian dollar and the declining number of domestic tourists. They are concerned that thousands of small to medium-sized businesses who operate on tiny margins will close down. The local community here on the Gold Coast relies on the tourism industry's survival because, without it, thousands of jobs and associated livelihoods will disappear.

The construction industry is facing a similar fate, with costs set to increase under the proposed tax. According to a survey issued by the Master Builders Association, the Gold Coast is the toughest place to operate in Queensland. Unfortunately, under the proposed carbon tax, things will become more difficult for this industry. The Master Builders Association has said that the introduction of the carbon tax will raise the cost of new homes and renovations, worsening housing affordability and crippling confidence. Based on a carbon price of $23 a tonne, the MBA estimates that construction costs for a typical 200 square metre slab-on-ground home will increase by between $7,000 and $9,000, without adding additional increases in the cost of transport. These increases could severely impact on the construction industry as people opt out of building or renovating because they simply cannot afford it. There is already a significant number of unemployed construction workers on the southern Gold Coast and we cannot afford to have more workers put off as a result of a decline in the number of housing and commercial projects.

With our tourism and construction industries in despair, we have had to rely on a second layer of industries, including manufacturing and education, to ensure that our local economy stays afloat. As the prospect of a carbon tax is already being evaluated, the future growth of these industries is uncertain, especially in the higher education sector. I will use Bond University as an example to demonstrate my point—and I note that the Joint Select Committee on Australia's Clean Energy Future Legislation accepted Bond University's submission, unlike the numerous submissions made by others, including those from the McPherson electorate, which were dismissed as correspondence.

I recently held a carbon tax forum in my electorate of McPherson and I invited the community to come and share their views on the proposed carbon tax with me. I invited a range of panel members, including Senator Simon Birmingham, to give presentations and to answer questions in relation to the carbon tax. Jim Wilson, the general manager from Connecting Southern Gold Coast, was there as a representative of the small business community, particularly those business owners who were unable to attend the forum due to increased hours of work associated with running their businesses.

Also in attendance to address the community on the impact of the carbon tax on the higher education sector was Chris Hogan, Associate Director, Information and Planning Financial Services, at Bond University. By Australian standards, Bond University is a very small university, with about 4,500 students and around 1,200 staff members on campus. It has made preliminary evaluations on the impact of the carbon tax on its costs. It has calculated the direct and indirect cost to be $2 million.

Bond have advised me that they are expecting to see the following indirect flow-on effects from the carbon tax: rises in electricity and other utilities; additional wage costs of monitoring and reporting data; cost of acquisition of CO2 reporting software; cost of implementation of additional 'smart meters' on campus to pinpoint certain locations and their energy use; appointment of consultants to standardise data and ensure accuracy of data; additional compliance reporting to government; for travel, an estimated $3 increase in domestic flight fares, as per the media story by Virgin Blue in the Financial Review; and wage increase requests to meet the consumer price index. From Bond's own calculations, its total indirect costs are not less than $1.2 million in 2012-13, rising to $1.3 million by 2015-16. In addition to these indirect costs, Bond University calculated the direct costs of the carbon tax at $0.6 million per annum, rising to $0.8 million in 2015-16.

In order to facilitate these costs Bond University has two options: either increase revenue by raising fees or reduce costs through job cuts. Fee increases would impact on Australian students and their families in the local community and would most likely lead to students looking at alternative institutions for starting or continuing their tertiary education. We need to encourage the tertiary uptake rate on the Gold Coast. But rising costs would severely impact on future enrolments in this private institution because, currently, students are unable to access Commonwealth supported places. In addition, Bond University has international enrolments of around 30 per cent of the total student body. If Bond University were to increase its fees in order to save jobs, the international students would also possibly consider studying in other countries that are more competitively priced. Bond University said:

Regarding the potential impact on the higher education sector as a whole, given we expect Bond will be impacted and Bond is very small, it seems most likely that all of the 39 universities in the higher education total sector will also exceed the threshold of 25,000 tonnes of carbon dioxide per year unless the Government decides they are specifically exempted. We could find no such exemption in the Government's information on the proposed carbon tax.

Most other universities are considerably larger than Bond. Bond's expenditure comprises around 0.7 per cent of sector expenditure. If we were to scale up to the sector level Bond's estimated proposed carbon tax impact of $2 million per year, we would get a sector-wide impact of the proposed carbon tax in the range of $200 million to $300 million.

Of course, it is not just the education sector that will be adversely affected by the introduction of a carbon tax. I have been meeting with local manufacturers, many of whom are already facing increased pressure as a result of the high Australian dollar and reduced spending patterns. For manufacturers, the carbon tax may well be the final straw, and I am concerned that there will be an increasing number of organisations taking the difficult decision to close their operations. One of our local manufacturers, the Rock Crush Group, has over 100 years of combined experience in the engineering and manufacturing of winches and dredges, which are exported worldwide. They have been based on the Gold Coast for more than 40 years. When I asked this company how they would be affected by the introduction of the carbon tax, I was told that it would, quite simply, drive their operations offshore. They also said that here in Australia there would be no option other than to make job cuts.

The proposed carbon tax is causing a lot of anxiety within the community. Pensioners and families are struggling to make ends meet and have already had to tighten their belts beyond what is reasonable. Small business owners are also doing it tough. You can see the impact on local businesses in the number of vacant commercial and retail shops and in the higher than average unemployment levels on the Gold Coast. Our not-for-profit community organisations—in particular, local surf lifesaving clubs—are also worried that the carbon tax will close them down. There is an alternative available to the carbon tax, there is a better way. The coalition's direct action plan will cost $3.2 billion and will be funded from the $50 billion in savings that we announced prior to the election. Our plan is fully costed and capped and will not be at the expense of reduced standards of living. It is straightforward, practical and easy to understand. The direct action plan will not destroy jobs; it will protect our economic development and the environment at the same time.

Since Copenhagen many countries around the world have distanced themselves from carbon taxes and emissions trading schemes. The USA scrapped its cap-and-trade system entirely, and the only other existing example of an emissions trading system is the European ETS. However, the European system only costs roughly $1 per person per annum, while the proposed Australian system will cost $400 per person per annum. While Europe's ETS costs $500 million per year, the Labor government's carbon tax will cost Australian taxpayers $9 billion a year.

The Labor government's target to reduce emissions by 80 per cent by 2050 will force the coal industry to cease its operations entirely. Additionally, an estimated $57 billion of Australian taxpayers' funds will be sent offshore to buy carbon offsets to enable Australia to reach this target. Australian taxpayers work hard to contribute to the economy, and what we have here is the potential for our wealth to be transferred away from the Australian people who built it.

I am concerned about reports that indicate that 100 arrests have occurred throughout Europe for the extensive defrauding of the European Union ETS. I am aware of reports that indicate around 90 per cent of the trades in the European Union's ETS were fraudulent, resulting in a loss to European taxpayers of $6.6 billion. Deloitte Australia has even warned that carbon-credit fraud is the white-collar crime of the future.

I would like to conclude today by reminding the Labor government that, when the Howard government introduced the goods and service tax, the people were given the option to decide on the GST. It was a replacement tax—it replaced the wholesale sales tax—and was 15 years in the making. The proposed carbon tax will not replace an existing tax. The carbon tax is a cascading and compounding tax that will affect everyone. I have listened to the community and I will be supporting their views by voting no to the carbon tax.

Tony Crook (O'Connor, National Party) Share this | Link to this | Hansard source

My position on the carbon tax, or these clean energy bills 2011, has always been the same. As such, I do not intend to take up too much of the chamber's time today. I would, however, like to take this opportunity to reiterate my position on this carbon tax. I did not support a carbon tax at the election; I do not support a carbon tax now. I have consistently said that I do not, and would not, support a carbon tax in this parliament. My views on a carbon tax have always been the same, which is more than I can say for most members of this House. I have consistently said that the carbon tax is bad for my electorate of O'Connor, bad for my state of Western Australia, bad for regional Australia and bad for industry. A carbon tax is bad for my electorate of O'Connor because it will burden the families of O'Connor who rely for their employment on local industries that will be heavily affected by the carbon tax.

It is bad for the small businesses in O'Connor such as the Widgiemooltha Roadhouse. Small businesses such as these will be hit by an effective carbon price on fuel without any viable alternatives. It is bad for the people in O'Connor who rely on goods to be transported over great distances to reach their supermarkets, stores and homes. A carbon tax is bad for Western Australia, which is home to most of the mining industry. Western Australia will be hit hard by the carbon tax and is already under siege from the unfair distribution of GST and the impending mining tax. The carbon tax is bad for the unique WA electricity market and WA energy generators such as Griffin Energy, who are set to share $0 of the $5.5 billion compensation that will be allocated to the national market.

I have consistently said that the carbon tax is bad for industries, which do not need another tax and will be disadvantaged when they compete in the international market. It is bad for industries that rely on transport fuels for onsite power generation.

I have consistently said that the carbon tax is bad for regional and rural Australia. Regional Australians have no choice but to rely on goods which have been transported over great distances. Rural and regional small businesses have no choice but to rely on diesel fuel for onsite power generation.

I have consistently opposed this tax, and I will be consistent when I vote against this tax in this parliament. Although I firmly and consistently oppose the carbon tax, constituents and industry representatives have pleaded with me to do what I can to make this tax less damaging. Although I will vote against this carbon tax, in whatever form, it is my duty to represent my electorate and the many industry members that have been ignored by this government.

One of the most consistent and specific complaints from industry is about the Clean Energy (Fuel Tax Legislation Amendment) Bill 2011, a bill that will apply an effective carbon price on transport fuels used for onsite fuel generation—a carbon price that will hit small businesses. Members of the House will recall the government's repetitive promise that this carbon tax is 'a tax on big polluters'. However, as we all now know, this is another broken promise to the Australian people—the government's amendments impose an effective carbon price on every business that uses transport fuels. This is an effective carbon tax on big business, small business,

developing businesses and established businesses. Every business in a non-exempted industry that requires onsite fuel use will be whacked with this carbon tax—including, of course, businesses that are not part of the top 500 polluters and businesses that are not 'big polluters' by any definition. The Minerals Council of Australia's public submission on the carbon-pricing framework demonstrates that the carbon price on fuel will apply to tens of thousands of small businesses, covering the manufacturing, construction, retail, wholesale and tourism sectors. These operations are by no means big polluters and should not be shouldering the brunt of the carbon price. One of the sectors hit hardest by these amendments are junior miners and mineral exploration operators. This is particularly important for regional mining and mineral exploration operations. These operations rely on diesel fuel to operate, and for many of these operators there is simply no other option. In many country towns and remote locations where junior miners operate, there is no alternative. This is not about changing behaviour; this is just another hit to small business.

Changes must be made to these bills which will hold the government to its promise to only tax big polluters. As such, I intend to move amendments that will introduce a threshold of fuel consumption before a company pays the effective carbon price. The threshold is based on the government's 25,000 tonnes of carbon dioxide equivalent threshold as referred to in the government's Clean Energy Bill. These small polluting operators should not be part of a carbon tax regime that is being spruiked as a tax on the big polluters. My amendments to the Clean Energy (Fuel Tax Legislation Amendment) Bill 2011 will exempt the small polluters from the carbon tax, a provision that would already exist in the legislation if the government had held true to its promise that only the big polluters would pay. These changes are necessary to ensure that this is a tax on big polluters only. I look forward to moving these amendments later this evening.

Even if these amendments are adopted, I will be representing my electorate and state by opposing this carbon tax. This reform is part of the government's triple assault on regional Australia: a carbon tax, a mining tax and the unfair distribution of GST returns. These are major concerns for regional WA, and I will continue to take a stand on these issues.

Warren Snowdon (Lingiari, Australian Labor Party, Minister for Defence Science and Personnel) Share this | Link to this | Hansard source

It is a great pleasure for me to participate in this debate. I acknowledge the contribution of the member for O'Connor. I cannot say that I agree with him; nevertheless, I welcome his contribution. I want to talk briefly about my own electorate. I will not be canvassing the idiocy of the Leader of the Opposition's position in any great detail. It is there for all to see. The blandishments that he has placed around his arguments about whether he is climate change sceptic one day or believing in climate change the next do not disguise what he really thinks, which is that he does not support the science.

My electorate is unique. It has a large area, covering 1.34 million square kilometres, and a small population. It covers some pretty interesting country, including 5,000 kilometres of mainland coastline and a further 2,000 kilometres of coastline encompassing the offshore islands. Eighty per cent of the land of that coastline is Aboriginal land. Lingiari's population is young and we have an enormous bounty of sunshine, clean air and open space that we are exploiting for the purpose of developing alternative energy futures.

Because of our good fortune it is easy to ignore—as those opposite choose to do—that as a nation our emissions per person are the highest in the world. If our emissions were saddlebags, we would each have to carry around top weights of Phar Lap proportions in any contest. The scientific evidence makes it clear that climate change is real. The planet is warming and it is now time to act.

Let me give you one example from my own electorate, the Cocos Islands, that shows that this is important. These are coral atolls with an altitude of only three metres at its highest point. Even a small rise in sea level would see the islands disappear. This is not alarmist talk; it is reality. Yet it does not seem to be something that is accepted by the opposition. This is science. Projections from the CSIRO and the Bureau of Meteorology show that if we do not reduce our carbon pollution the Northern Territory's coastline regions will experience a near 30-fold increase in the number of 35-plus degree days annually by 2070.

I welcome Labor's Clean Energy Future plan. It accepts the part that carbon plays in our everyday lives and incorporates its costs in our investment decisions to protect our infrastructure, our economy, our environment and, indeed, our way of life. It lays the groundwork that will be appreciated for generations to come. It is one of those systemic changes that comes around every now and then. If we have the courage to seize the opportunity and to deliberately make changes to legislation to give us something significant in terms of the structure of our economy, as this bill does, then generations to come will thank us—with no thanks to the opposition.

In the electorate of Lingiari the Clean Energy Future plan is already making significant inroads; it is real and it is happening. My home town of Alice Springs is on the international map in terms of solar power energy penetration into the community. Three years ago my colleague Peter Garrett launched the Solar Cities project in Alice Springs. Much has been done. I do not have time to go through all the details but I will mention four solar power projects that are a great source of pride to those of in Central Australia: the solar panels at the Crowne Plaza Hotel, the solar panels at Alice Springs Airport, the use of solar power in the $16 million aquatic centre in Alice Springs and the recently opened solar farm south of the town, which consists of the largest tracking solar array in Australia and creates enough energy to power 288 homes in Alice Springs. These are significant changes. I should also mention the 400 households in Alice Springs that have been assessed and then changed to improve their energy efficiency.

Environmentally, the potential for climate change to alter the ecology of our arid regions, our tidal coastline areas and our iconic national parks is a challenge that this legislation acts to meet. The economic development of our remote regions has been a constant challenge. The legislation in front of us, which we will pass in the next 24 hours, will provide opportunities for clean energy initiatives based in our remote regions, in line with Labor's renewed focus on this important policy area.

In Lingiari a substantial proportion of the electors—around 40 per cent—are Aboriginal people who live in many remote communities. Lingiari is therefore home to many Aboriginal organisations that have an interest in or are participating in economic, ecosystem service or capacity-building opportunities—including research and development—afforded by climate change mitigation and adaption strategies. The unique and varied Indigenous land and knowledge assets across Australia can deliver many benefits to carbon projects across the country.

The North Australian Indigenous Land and Sea Management organisation, NAILSMA, is a bioregional forum for Indigenous land and sea managers across Northern Australia. It works hard to support practical land and sea management using strategic approaches to care for country, with an emphasis on practical management by traditional owners across the whole of Australia's north. You need only look at NAILSMA's website to be astonished by the full range of activities which it undertakes.

Also in the Top End of the Northern Territory is the groundbreaking West Arnhem Land Fire Abatement (WALFA) management project, which has now been underway for a few years. This is a very significant and important partnership between Aboriginal traditional owners and representative organisations, Darwin Liquefied Natural Gas and the Northern Territory government, which has been implementing strategic fire management across 28,000 square kilometres of western Arnhem Land. This project offsets some of the greenhouse gas emissions from the ConocoPhillips liquefied natural gas project at Wickham Point in Darwin Harbour by adopting effective fire management practices. Set in what is known as the Stone Country to the west of the Kakadu escarpment, the topography, environment and Aboriginal values of this country are absolutely unique. While the project aims to offset greenhouse gas emissions, it is also enabling the traditional owners to reconnect with country and undertake cultural and natural resource management in this region of unique biodiversity.

Traditional owners' land management organisations—Warddeken, Jawoyn, Djelk, Adjumarllarl and Mimal rangers—are working closely with non-Indigenous partners, such as Bushfires NT and the Tropical Savannas CRC. Using controlled dry-season burn-offs to reduce the size and extent of unmanaged wildfires, the project measures the greenhouse gas offsets. It is a very important initiative. While the West Arnhem fire management project is a fee-for-service arrangement in which traditional owners are paid for fire management, it points to a creative, cleaner energy future. It is to be applauded. The process and accounting practices used to abate greenhouse emissions position this project to take advantage of carbon trading when it comes on stream.

The WALFA project has led the way in demonstrating potential alliances between corporate Australia, government, Aboriginal and non-Aboriginal scientists and land managers. Initiatives such as the WALFA project provide for collaboration between governments at all levels to develop direct relationships with Aboriginal people who are landowners for their participation in climate change initiatives generally and carbon projects in particular.

As recently as last week my colleague the Minister for Sustainability, Environment, Water, Population and Communities, Tony Burke—in announcing the collaboration between government, Aboriginal owners and the not-for-profit conservation sector to preserve the Fish River estate—pointed to the potential of this unique bioregion for local traditional owner participation in collaborative clean energy initiatives. The stewardship of the Indigenous Land Corporation, working with the Nature Conservancy and the Pew Environment Group, will enable Aboriginal traditional owners to manage their land in an ecologically sustainable and economically responsible manner in their interests and in the interests of all Australians. I acknowledge the value of the work done and the contributions made by the ILC, the Nature Conservancy and the Pew Group in showing the way forward to a future that our children and grandchildren deserve and require. And, of course, in Central Australia there is also a great deal of activity. The return of land to its traditional owners, in areas such as the Simpson Desert and the Finke Gorge, is providing similar opportunity for such collaboration, including the potential for carbon sequestration and other farming initiatives.

Aboriginal ownership and interests in land can correlate neatly with the interests of all parties involved in the progressive development of a clean energy future. Labor's necessary and productive reform recognises the right of traditional owners to be central to the trade in carbon associated with reforms. In this respect I acknowledge the work of the National Indigenous Climate Change Steering Committee and its chair, Rowan Foley. The NICC Steering Committee aims 'to bridge the divide between Indigenous Australia and mainstream Australia through providing a mechanism for the purchase of carbon credits with identified social, environmental and cultural benefits'. Labor's clean energy policy will have such social benefits. Its transformative economic impact will be important in our remote regions while also providing a necessary environmental investment.

Indigenous Australians manage approximately 20 per cent of the Australian land mass. Through the Indigenous Carbon Farming Fund, Aboriginal and Torres Strait Islanders will receive $22 million in assistance over five years to participate in the Carbon Fund Initiative. I welcome the establishment of the National Indigenous Climate Change Steering Committee and the dialogue they have established with community and government in identifying Aboriginal and Torres Strait Islanders and organisations in carbon initiatives.

For many years Aboriginal and Torres Strait Islander communities have been at the forefront of renewable energy generation systems. For instance, in Lingiari there is the work done by the Bushlight program and the many activities of the Centre for Appropriate Technology, known throughout the NT by the acronym CAT. Organisations such as CAT will welcome the Remote Indigenous Energy Program, which will help Aboriginal and Torres Strait Islander communities access clean, affordable and reliable 24-hour power supplies. Over four years the $40 million program will assist 55 remote communities with solar panels and wind turbines and will include training in power system maintenance and information to support households and communities to manage their energy.

Madam Deputy Speaker, I am also a minister under the Health portfolio. There are a number of important health impacts from climate change. Dr Peter Tait, an Alice Springs resident, has written of the negative health effects of global warming derived climate change. He quotes from Turner, Muscatello, Zheng and others, who have written about the effects of heatwaves, particularly involving high night-time minimum temperatures, on a range of conditions such as heart disease. Maes, De Meyer and others report on a correlation between temperature and violent suicide, while an article by Craig Anderson casts light on the relationship between prolonged hot weather and domestic violence. Conditions such as hay fever and asthma are similarly exacerbated. Other factors—such as humidity, the rate of change of temperature, the length of time the temperature is raised, the absolute daytime temperature and high temperatures at night—all contribute to heat stress. The effects of heat are more pronounced in outdoor workers, who make up a significant proportion of the mining, construction and pastoral industries in Lingiari and elsewhere across Northern Australia. Rates of diarrhoeal disease, more common in hot conditions, are already high in the Northern Territory. It is harder to maintain fluid intake in infants in hot weather, increasing the risk of dehydration, which tragically can lead to death in the very young and the elderly. Melioidosis is known to be associated with wet weather. More storms and flooding, even if rainfall overall is reduced, could increase rates of melioidosis in those at risk. Melioidosis has already been reported in Central Australia during exceptionally wet periods. This has previously been seen as a tropical disease. I look forward to working with corporate and Aboriginal interests as Australia moves to a cleaner, environmentally responsible and economically progressive future.

The Labor Party has always been a party of reform. We show responsibility and leadership when it is required, and now is such a time. Acting now to move to a clean energy future will avoid long-term costs. I welcome the challenge and I totally support the legislation.

As I said at the outset of my contribution, I am bemused by the attitude of the Leader of the Opposition. He spent a year travelling around the country spreading his scare campaign, making claims based on wild speculation and downright untruths. He needs to be held to account for the untruths he has perpetrated on the Australian community. The Leader of the Opposition has confirmed that he will strip back the $15 billion in household assistance we have promised over four years under this legislation, unwinding our tax cuts and ripping up the pension increase we are delivering to every single pensioner across the country. Mr Abbott believes these people do not need a helping hand and he will take that assistance from them, slugging them with a higher tax bill to pay for his plan. His side of the debate has only half-hearted responses and shows an inability to confront the reality of climate change. The exaggerations from the other side of this chamber have been startling. The fact is that the average price impact of the carbon pricing in this legislation would be only 0.7 per cent— (Time expired)

Barry Haase (Durack, Liberal Party) Share this | Link to this | Hansard source

In light of the comments from the previous speaker, the member for Lingiari, I would remind him and the remainder of the House that the most abysmal mistruths uttered in this place have been from the Prime Minister in relation to the fact that there would not be a carbon tax under a government she leads. Today I rise to speak on the Clean Energy Bill 2011 and related bills. These bills, I might add, have been rushed through parliament by a Labor led, Green endorsed government, a government which quite obviously has no sense of moral obligation to the people of Australia. So rushed and cloaked in secrecy is the detail of the worst tax hit Australians will suffer in their lives that the government only released updated modelling on the impact of a carbon tax just minutes before the commencement of the joint select committee inquiry into the government's carbon tax bills.

The Australian public have been misled time and time again by the leader of this government. I am afraid the position of Prime Minister in Australia has been tarnished. Irreparable damage has been done and future Prime Ministers of Australia will bear a tainted reputation based on the legacy of the current leadership. The Prime Minister of Australia once commanded respect from children and adults alike, similar to the old-fashioned policeman. I am sorry to say that that respect is long gone and with it goes another Australian tradition, that of respect for authority. It seems to me that, with the Greens in bed with the government, a lot of Australian traditions are being thrown out the door, all for the sake of vocal minorities and to the detriment of the majority.

We heard from the Prime Minister that there would be no carbon tax under the government she leads. Then in contrast we heard from the same Prime Minister the following:

The best way is to make polluters pay by putting a price on carbon. So that is the policy of the government I lead. And that is the plan which is before the House now. … Today we move from words to deeds. This parliament is going to get this done. There will be a price on carbon from 1 July 2012.

Where is the real Julia? Who is the real Julia? Australians deserve to know which Julia we are dealing with and when. This carbon tax is toxic and this government is toxic. As reported in the Adelaide Advertiser on 11 July this year:

People remain sceptical about the Government's ability to administer such a complicated plan which involves a myriad of reforms and assistance programs.

The Government does not have a good track record of administering such programs—just witness the Building the Education Revolution and the home-insulation program.

It goes on:

Many of them will feel that this scheme will be little more than a huge washing machine where money swirls around and around … The Government's figures on how much the scheme will cost and how the compensation package will leave households better off appear to be a little rubbery …

These, colleagues, are the sentiments of constituents right across Australia, not just in Adelaide, not just in the cities. This is what an entire nation is saying. In the past month I have attended many events in my electorate of Durack. At the Mingenew field day I was accosted by rusted-on Labor voters. I have been in this game a long time, and at no other time during my political career have I been accosted by such rusted-on Labor voters wanting to shake my hand, begging me to change the government, begging me to stop the tax. It is my duty to all constituents in Durack, those that voted for me and those that did not—although those that did not at the last election may do so at the next—to pass on to the House the messages I received. I must pass these messages to the Prime Minister via the House because the Prime Minister will not reply to my correspondence. On 8 July 2011, I sent a letter to the Prime Minister requesting her to visit Durack to explain the carbon tax. I even gave her a list of 25 towns to choose from. As yet I have had no reply. It is hard to fathom how the powerhouse of the nation, Durack, is not deemed to be worth a scratch on the soles of the shiny leather shoes of Ms Gillard. It is further evidence of a government not listening to the people. The message to the Prime Minister, from the people of Durack, is this: this country has gone to rack and ruin. Have an election. Madam Deputy Speaker, that is the message in general context; it is not verbatim. I would have suffered your admonishment had I delivered it verbatim.

I digress. I stand here today to address the Clean Energy Bill 2011 and in particular the dire effects it will have on Australian industry. An example of an industry most disastrously affected is the Australian lime industry. Together the Australian lime industry production accounts for 75 per cent of the 2.1 million tonnes of the Australian demand for lime each year. The industry operates 18 facilities across all states and the Northern Territory, largely in regional areas. Lime is a versatile product that is extensively used in a range of applications. It is used in the resources industry for extracting metal ores and for producing soda ash. It is used in agriculture as a soil conditioner. It is used in the construction industry, of course, in cement;. It is used for environmental applications to stabilise hazardous landfill and neutralise acidic wastewater. It is used2 to filter waste air streams and to purify drinking water. Lime production includes technically sophisticated high-temperature processing in kilns from selected sources of limestone. Australian lime production brings world-class technology and service industry support and offers employment in a wide range of specialised skills for operators, engineers, scientists, management and all business disciplines. The industry is working towards greater sustainability practices which share its regional industry synergies with local community issues such as the management of waste oil and other materials that the lime industry utilises as alternative fuels and raw materials.

As an industry that is emissions intensive and trade exposed, it is important that clean energy future legislation gives certainty by including transparent guidance and accountability. Available resources of limestone and energy in Australia lead to the manufacturing of lime being suited to the economy. Loss of lime manufacturing to offshore production would result in carbon leakage and an increase in global greenhouse gas.

We know that the USA, Canada and Japan have postponed their carbon pricing schemes. We also know that China and India's emissions will continue to grow significantly, despite their greenhouse gas efficiency improving, due to the Kyoto protocol Annex I countries contributing technology and funds to carbon efficiency projects. We also know that a starting price of $23 per tonne of greenhouse gases is 50 per cent above the world trading price of $15 a tonne. It is a fact that the 2020 environmental benefit objective will not be met by pricing carbon.

Treasury modelling shows that the clean energy future addresses only 38 per cent of Australia's target of a five per cent reduction in greenhouse gases by 2020, leaving 62 per cent to be sourced from purchasing international permits. Madam Deputy Speaker Bird, I will repeat that: it is a fact that the 2020 environmental benefit objective will not be met by pricing carbon. Treasury modelling shows that the clean energy future addresses only 38 per cent of Australia's target of a five per cent reduction in greenhouse gases by 2020, leaving 62 per cent to be sourced from purchasing international permits. That equates in 2010 dollar terms to a cost of $57 billion in 2050 and a staggering cumulative figure of $650 billion by 2050. Billions upon billions of Australian taxpayers' dollars will be going into the pockets of overseas carbon credit traders. Billions upon billions of our dollars are going to schemes with all the potential to be as reliable as the Nigerian tax schemes. The plan is riddled with loopholes and is open to rorting to an extent never before seen in Australia. Norway, hardly a Third World country, has been found to be implicated in a rorted $5 billion European scheme. This carbon tax strategy will lead to the same thing happening in Australia, only more frequently.

These bills are complex and Australians are being duped. The average constituent does not understand the carbon tax, but they do understand the consequences—no worldwide reduction in emissions and a whole lot of pain for every man, woman and child in Australia. The Centre for International Economics, in July 2011, revealed that the European Union emissions trading scheme, in its first six years, collected $4.9 billion. Treasury modelling of the Australian clean energy future scheme reveals that, in the first six years, it will raise $71 billion. This scheme will be the most costly carbon scheme in the world.

The clean energy future policy should not apply to process emissions. As such, it should not apply to the production of lime. That clean energy future will cover greenhouse gas emissions from process sources in the production of lime. Sixty per cent of greenhouse gas emissions in lime production are created in the cracking of the raw materials. These emissions do not have any relevance to energy consumption or energy efficiency. Applying a price to these emissions can only be described as a tax which cannot be abated by a price on carbon emissions.

The assistance program fails to give adequate support to the lime industry as allocated permits are only applied to a portion of the process for lime manufacturing and cover only 94.5 per cent of that portion of the process for the first year, declining a further 1.3 per cent each year thereafter. The clean energy future is described in three stages to be implemented over seven years. In the first three, comprehensive reviews by the Productivity Commission will influence the clean energy future directions and conditions. This places emissions intensive and trade exposed industries, with no more than five years of assistance certainty, with even less certainty in the scope of the overall scheme. The lime industry is capital intensive. It has long associations with its location and technology. Three- to five-year horizons of short-term planning are insufficient for business investment certainty. The clean energy future legislation, in draft and without regulations nine months before the program starts, has seriously jeopardised 2012 budgets for the industry and gives no time for systems to be implemented to manage the complexity and impact of the change. Lime manufacturing is imperative to the Australian resource future, which is of course Australia's economic future. The cost of emissions trading to the production of lime will cause a significant increase to the price of the volumes utilised in the manufacture of internationally traded products and will affect the viability of downstream industries. Australian lime production could be replaced with imported product, effectively shutting production and curbing growth of a viable Australian manufacturing sector—effectively putting one more nail in the coffin of our grandchildren's future.

Labor governments do not hesitate to trash our grandchildren's future. They appear to have a policy of 'squander the future today and to hell with tomorrow'. Capital investment in lime processing will go overseas. The best we can hope for is increasing greenhouse emissions due to the transportation of lime to overseas kilns and an enormous increase in the cost of every cement content product. Members opposite would do well to contemplate the cement content of civil projects and building construction in their own electorates and the consequent reaction of their constituents to this unnecessary Labor government inflicted price hike. They say that every cloud has a silver lining. It is hard to find in this case, but at least Labor members who lose their seats at the next election will know why.

The question is not whether there is such a thing as climate change. The question is: will Australia ever recover from the tax on weather? Will the lime industry of Australia be another statistical lemon in this Labor government's basket of rotten fruit? I absolutely oppose these bills.

Brendan O'Connor (Gorton, Australian Labor Party, Minister for Home Affairs) Share this | Link to this | Hansard source

I rise to support the Clean Energy Bill 2011 and related legislation before the House. This House has been discussing these issues for some time, and some would say for decades. It is true to say that leaders of major political parties have held the view, primarily, that we do need a market based approach to dealing with carbon. Former Prime Minister John Howard had that view. Former leaders of the opposition Brendan Nelson and Malcolm Turnbull had that view. Prime Minister Gillard has that view and former Prime Minister Rudd had that view. Indeed, Tony Abbott had that view when it suited him, and when it suited him not to have that view he opposed the market based approach to pricing carbon.

That is a dreadful shame for this country because this is fundamental reform that is required. This is the reform that governments should be embarking upon. Fundamental reform is always made easier where there is a responsible opposition taking a bipartisan approach. Of course, checking and challenging assertions made by governments is entirely proper, but to turn against the facts, to turn away from the science and to turn away from what is in the interests of this nation is not something, in my view, that a responsible Leader of the Opposition would do. It is unfortunate that to that extent we are not one on the view that carbon pricing is absolutely critical for this country.

This policy package is based on good science, good economics and good administration, and I would say it is good for the nation. I want to say a few words about each of those things. The good science tells us that we human beings—of which we Australians are a part—have a problem. We Australians are part of the cause and we are part of the solution.

On the good economics: this package of bills implements a tax which reflects fundamental, basic, widely accepted economic principles. Let us start at the start of that economics. If you let people do a bad thing like polluting and you let them do it for free, they do it too much. You have to price the bad in this world. That is the elementary idea of externalities. But the carbon tax is not to be a permanent feature of the Australian fiscal landscape. This is a temporary tax designed to take us to a full market for carbon emissions. That unleashes a slew of powerful market forces: market forces economising on carbon and market forces innovating.

To put it in terms that might be familiar to some in this place and possibly comfortable to the opposition, this is about tax avoidance, a subject I would have thought dear to some of their hearts. This is about a tax which governments want to be avoided. We want the big polluters, who have been having a free lunch at the expense of the rest for too long, to be engaged with the idea of avoiding this tax by economising and innovating. This is not an impost for the sake of placing an impost on large polluters; this is about changing the dynamics of our economy and ensuring that fundamental restructuring takes place.

The economics underlying this tax is very simple indeed. If you let the market rip and do not price pollution, you get too much of it. You get way too much of it. If you price pollution in the right way and then let the market rip, market forces are ignited to produce less pollution. That is the fundamental essence of a market based approach, and that is why economists across the country—indeed, around the world—would argue that the most efficient means to deal with carbon emissions is a market based approach. And I would argue that that is indeed what the government is doing with the legislation that is before the House.

Of course, if you attack pollution in the wrong way, the way in which I would argue that the opposition is proposing—this week, at least—big polluters are better off and householders are much worse off. If you price pollution in a better way, householders on average are no worse off. If you price pollution in the best way, our way, the way that is being proposed by the government, householders are overcompensated.

The government have recognised that it is important that we get these fundamentals right. But, as I said, of all the leaders of major parties in the last decade, Tony Abbott is the only leader to argue against the science and to argue against the economics of a market based approach. That, of course, is fundamentally a concern for this country because in the end we will be judged, in years to come, about where we stood on a fundamental reform for our economy and for dealing with environmental challenges like carbon emissions. I believe that this government, like Labor governments before it, is on the right side of history. Indeed, we were on the right side of history when we enacted the compulsory superannuation legislation, opposed by those opposite. We were on the right side of history when we supported the principle of universal health coverage and introduced Medibank and then Medicare; the opposition opposed providing health services to citizens of this country. They appear on this occasion to again be on the wrong side of history, as they oppose the most efficient means to reduce carbon in our economy.

I guess it is not entirely surprising that a coalition opposition would oppose superannuation and health in public policy; they are not enamoured with supporting working people and they certainly have not been ones to believe in a public health system for ordinary punters in this country. But the one area I am completely confounded by is their opposition to a market based approach, because the one brand, the one element, the one essence, of the Liberal Party is that that they are supposed to believe the market is the best mechanism to deal with fundamental reform.

It seems to me that, in order to be opportunistic and to put politics ahead of policy, the opposition—and Tony Abbott in particular—has chosen to turn Liberal Party philosophy on its head, to turn its back on a market based approach, to turn its back on the wisdom and counsel of economists and scientists, to support funding polluters at the expense of householders and to have the most inefficient means to bring about reform in this area. That is a shame.

I support the legislation and call upon this House to pass the legislation as soon as possible.

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

I oppose the Clean Energy Bill 2011 and related legislation introducing a carbon tax, because it is not the right plan for Australia. It is not the right plan for Australian households and it is not the right plan for Australian businesses. In the absence of agreed international action, we are placing enormous pressure on the Australian economy, for little gain. Without agreed, consistent and measurable international action, this legislation takes Australia out on a limb.

To oppose this legislation is not to oppose the science of climate change; that is just the Labor Party spin. I do not and have never denied the science in support of recognition of climate change. I am not a scientist nor am I an expert on climate change but I must make my decisions based on the best interests of the community. As a legislator I aim to make decisions based on the best available evidence and advice. I believe, on the evidence available, that our climate is changing. I believe, on the evidence available, that human behaviour does contribute to climate change. I believe, on the evidence available, that reducing carbon dioxide emissions will slow down the pace at which the climate is changing. I have held these views consistently for more than 10 years now on the public record.

The coalition is committed to the same carbon reduction goals as the government is. We are committed to reducing Australia's greenhouse gas emissions by five per cent below 2000 levels by the end of 2020. Where we differ from the government is in the mechanism for achieving those goals. As a Liberal, I believe that markets are the best pricing mechanisms for commodities. I was a strong supporter of an emissions trading scheme up to the disaster at Copenhagen in December 2009. At that conference, despite the predictions of the government, there was no binding global agreement for climate change action; and, with no global scheme in place, it no longer made sense for Australia to unilaterally commit to an emissions trading scheme. There is no global market for carbon trading. There is not transparent liquid or accountable market for carbon dioxide trading. In this light, I do not believe that a new tax which will increase the price of everyday goods in Australia is the right solution for our country.

There is a better way. The coalition's direct action plan tackles the challenge of human generated carbon dioxide emissions at its source. It provides incentives for emitters to do the right thing and to find less carbon-intensive ways of doing business. I note at this point that a large part of the government's own package is in fact direct action, so it rankles somewhat when they suggest that direct action will not work while they are literally committing more than $10 billion to direct action. Our solution does not impose additional costs on households, because we have identified the savings to pay for our capped plan. Our solution does not penalise Australian industries or drive investment and jobs overseas.

The government's plan is a very expensive tax churn. New taxes over the forward estimates rake in $27.3 billion. All of this money and more is spent with the budget bottom line worse off by $4.1 billion over the current estimates. The Treasurer has not explained how this carbon hole in the budget will be financed, but it is a safe bet that he will put it on the national credit card and increase the deficit.

The hole of course is already getting bigger. Where carbon tax costs are not borne by the federal government, other governments will have to pay; and it is of course the same taxpayers, whether they are federal taxpayers or state taxpayers. For example, New South Wales has now announced it will be looking to offset the expected cost to their budget to the introduction of the carbon tax, which will be around $900 million or more over the forward estimates. This will be done by increasing mining royalties paid by companies subject to the proposed rent minerals resource rent tax. This will capitalise on the Commonwealth's commitment to reimburse companies for the state royalty liabilities. That is before the federal government, in addition to its original commitment of over $31 billion, pours another $10 billion of debt into the clean energy finance corporation, dubbed the 'Gillard bank'.

The government's carbon tax scheme creates a structural hole in the budget. Revenues beyond the forward estimates are highly uncertain and volatile as they rely on an international price for carbon. There is no way of predicting what that will be or whether it will occur. However, the costs of compensation will rise steadily through time. That will compound the structural fragility stemming from the mining tax. The coalition's direct action policy will be just as effective in achieving Australia's carbon reduction goals, and it will do so at a much lower cost. Its cost is known—$3.2 billion over the forward estimates—and it is fully funded through budget savings, not more taxes on more debt. There is no structural hole because there is no tax churn with escalating compensation funded by uncertain and volatile revenues. The coalition policy provides business and the community with the financial certainty and stability that they need with the added assurance that the government budget will remain in the black.

The modelling of the impacts on the macroeconomy was originally based on a carbon price of $20 per tonne, not the starting price of $23 per tonne. Revised modelling, which most members have not been able to comment on because it was released well after this debate occurred, has now been released by the government using the correct starting price. The big surprise in the modelling is that there is no change in the key economic forecasts. Apparently, a 15 percent increase in the starting carbon price will have no effect on the economy. I find that very hard to believe, but there is an even stranger finding. The government wants us to believe that introducing a carbon tax will have no impact on jobs. There is a statement in the modelling that reads:

Employment continues to grow strongly, with national employment increasing by 1.6 million jobs by 2020, with or without carbon pricing.

Apparently, all the workers in those trade exposed and carbon intensive industries will magically and immediately find new, green jobs. Obviously the final modelling is still not complete. It does not include the Clean Energy Finance Corporation because the government is yet to finalise consultation with key stakeholders about how the corporation will operate. So the effect of the debt-financed $10 billion Gillard carbon bank is left out of the modelling. The modelling does not include policies that provide investment and innovation grants, such as the $3.2 billion Australian Renewable Energy Agency or the $1.2 billion clean energy technology program or the $300 million Steel Transformation Plan. The Carbon Farming Future Fund and the Biodiversity Fund are also not modelled.

These programs are omitted from the modelling because their 'investment and behaviour is difficult to predict'. That is just great! These are expensive programs and the government does not know whether they will achieve their objectives, but they are ploughing ahead regardless and spending taxpayers' money, which is typical of Labor. The modelling also does not include the planned closure of 2,000 megawatts of electricity generation capacity at the most emissions intensive power plants. The modelling still assumes that other countries will also act to mitigate climate change. This is in marked contrast to the real situation. For example, the United States, as well as many other countries, is moving away from economy-wide schemes. Overall there remain significant holes in the modelling of the carbon tax package and significant doubt about the veracity of the findings. The coalition is not convinced, and, more importantly, the Australian people are not convinced.

The imposition of a carbon price will not occur without economic costs. The modelling concedes that GDP and real average incomes will grow less with a carbon tax. There will be significant impacts on the mix of industries. Mining will be smaller with big hits on coal, gas and nonferrous ore. Manufacturing of aluminium, alumina and iron and steel will also be significantly impacted. The new modelling confirms that consumer prices will rise by 0.7 percent in 2012-13 and that there will be a second increase of 0.2 percent the following year until 2015-16. The new modelling also confirms that electricity prices will rise by 10 percent in the first year of the tax. But that is not the end of the story. There will be a further increase in electricity costs of eight percent by 2022 with another 35 percent out to 2050. So the carbon tax will lift electricity prices by at least a cumulative 50 percent. This will occur on top of the already inflated impact of renewable energy costs on electricity prices. The Productivity Commission in June 2011 estimated that Australians were paying a subsidy equivalent of up to $694 a tonne for existing emission reduction policies. In the case of large-scale renewable energy initiatives, the implicit abatement subsidies are up to $111 a tonne. This is an enormous amount of money that is already being spent, and it flows through to electricity bills.

The coalition does not believe that it makes any sense to introduce a carbon tax which will add to the burden of household budgets, which are already under some pressure. Headline inflation was up 3.6 percent over the past year, which is the highest rate in 2½ years. Interest rates have increased on seven occasions over the past two years. The government has increased or introduced 19 taxes—for example, the flood levy commenced on 1 July this year, and the mining tax and the carbon tax are both scheduled to hit from 1 July next year. Consumer confidence is weak: growth in retail spending is soft, dwelling construction approvals are comparatively low, house prices are down—established house prices have fallen in three out of the last four quarters—demand for credit is weak, household borrowing for housing is rising at the slowest pace in a generation and the household savings ratio is close to generational highs as Australians cocoon, concerned about the uncertain outlook.

The government has taken a very inconsistent approach and had a range of different views on emissions trading schemes, despite their rhetoric. This was never more obvious than when the Prime Minister and the Treasurer emphatically stated before the last election that there would be no carbon tax; the Treasurer stated that it was a fanciful suggestion. This reflects their inconsistent policy across a range of areas—the mining tax, live cattle exports, budget surpluses and so on. It is no wonder that ACCI business conditions in the June quarter were down to levels not seen since the survey began in 1998. Every business in the Australian supply chain will be affected by the carbon tax. The more manufactured a product is, the larger the energy component will be and the larger the impact of the carbon tax will be on the end price of the product. Some industries will receive partial compensation. This is a short term fix. Businesses across a range of sectors must now be reconsidering future investment.

The Treasurer has claimed that a feature of the compensation measures accompanying the carbon tax will be an increase in the tax-free threshold from $6,000 to $18,200. This claim is an exaggeration, as is so much else from the Treasurer. The tax changes will be accompanied by a phasing-down of the low-income tax offset. The effective tax-free threshold this financial year is in fact $16,000 when the income of the LITO is taken into account. Another issue is that the legislative design of the tax makes carbon units a form of personal property. Any future action to repeal the legislation may well amount to forced acquisition of the units. The government of the day may be liable to compensate the holder for the value of the units. This is an attempt by the government to put in place a poison pill should there be any attempt by this parliament to repeal the legislation. I warn the government that this is a bad idea. If the government thinks that it can continue to defy public opinion for all time in relation to this matter then the Labor Party will suffer a generational fall in its support base.

Both the Treasurer and the Prime Minister, together with the whole Labor Party, are responsible for this tax. They refused to announce a carbon tax before the election; they denied it was in place. Now they refuse to seek a mandate for a carbon tax at the next election. And they are making it more difficult to repeal the legislation, which, as I said, defies the will of the Australian people.

The coalition will not be deterred. We remain committed to rescinding the tax when we are returned to government. The curse of the modern Labor Party is that it chooses to govern for Balmain rather than Bankstown. Given that this tax will leave Australians worse off without making any discernable difference to climate change, the tax is the most compelling evidence of a party and a government that has lost its way.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

I rise to support the Clean Energy Bill 2011 and related bills. The Labor government accepts the consensus among climate scientists that climate change is real. Climate change has been called the greatest moral challenge of our time. It is also the greatest economic challenge of our time, and it will affect society. It will affect society's most vulnerable. We need to take action now, before it is too late. Indeed, some would argue that we have missed the tipping point, before which action should be taken. As Tim Costello has said:

The poorest countries are already in those parts of the world most exposed to climate change. In these countries, the poorest are driven to live in vulnerable circumstances. Tenure is fragile. These families get the crumbling river banks or steep hillsides, unproductive land or flood plains, so the impact of wild weather is worst in the poorest communities.

The government understands this. Labor members understand this and that human actions have contributed to the causes and consequences of this climate change and the changes in our environment. We must do something, not just now but into the future; not just for people in Australia but for people around the world.

To have an argument that, somehow, families in my electorate will be paying and will be worse off because of this, and that therefore we should not do it, defies logic and does not look at the impact that we are having on those most vulnerable in our communities throughout the globe. As a government we understand that climate change is the greatest economic challenge of our time. That is why we are introducing a sensible raft of legislation. I support the introduction of this legislation in the House.

The science is in. All major parties accept the science of global warming and that human activity is contributing to climate change. As Professor Ian Chubb, the Chief Scientist for Australia, said during the recent hearings of the Joint Select Committee on Australia’s Clean Energy Future Legislation:

The latest information I have seen shows that the CO2 levels are high and that the rate of accumulation is accelerating. The scientists who study this would argue that it is getting to the point where something has to be done quickly in order to cap them at least and start to have them decrease over a sensible period of time. You could easily argue that it is urgent and that something needs to be done because of the high level presently and the accelerating accumulation presently. We do need to do something.

The level of debate around these bills has been hysterical. I accept that individuals have different points of view. I accept that we can have rational debates. I can reflect and agree to disagree with individuals. But people like Frank Johnstone, who sent me a death threat in bold capital red letters today, are beyond the pale. That does not add to this debate; it does not help the debate. When he sent the emails the other day, which my 12-year-old opened, it just was not on. Let's have a sensible debate. We can have differing opinions but let's have a debate based on fact and not hysteria. Let's look at the science and the information in front of us. Everybody has agreed—both sides of the chamber—on a target. We are just coming at it from different angles.

I really would request that the community out there should try and have respect for those points of view. I will respect their points of view. I might not agree with it. I might be doing something that they do not like today, but I reflect the majority of my constituency, who have emailed me saying, 'Stay firm, pass the legislation. We believe something needs to be done now.'

During the course of the inquiry into the clean energy bills we did explore many of the issues and many of the concerns that individuals had. And we received a lot of correspondence from individuals. I want to thank those individuals for taking the time to send us that information. We did not ignore it. We read it and we analysed it. A lot of the information has gone to the issue of the legitimacy of the legislation. The report quotes the Prime Minister Julia Gillard earlier this year when she said, on Q&A:

Now, I did say during the last election campaign—I promised—that there would be no carbon tax. That's true and I've walked away from that commitment and I'm not going to try and pretend anything else. I also said to the Australian people in the last election campaign that we needed to act on climate change. We needed to price carbon and I wanted to see an emissions trading scheme. Then we had the election and the 17 days that were, and we formed this minority government. Now, if I'd been leading a majority government I would have been getting on with an emissions trading scheme. It's what I promised the Australian people. As it is, in this minority parliament, the only way I can act on climate change by pricing carbon is to work with others. And so I had a really stark choice. Do I act or not act? Well, I've chosen to act and we will have a fixed price, like a carbon tax, for a period and then get to exactly what I promised the Australian people, an emissions trading scheme.

Interestingly enough, back in October 2005, the then opposition leader, as the minister for health, also said on another program, in answer to Laurie Oakes:

Well, Laurie, when I made that statement in the election campaign, I had not the slightest inkling that there would ever be any intention to change this. But obviously when circumstances change, governments do change their opinions, and that is actually the responsible course of action.

Things change. The need arises to make changes, and the government has done that. At the end of the day we are introducing an emissions trading scheme, and that is what we have promised the community we would do for a long time. The argument that somehow this has been forced upon us in a great rush is absolutely hysterical. I was shown a leaflet from the then Leader of the Opposition, Andrew Peacock, back in the 1990 election in which he promised action on climate change and was looking at a 20 per cent reduction in emissions levels. This is not a new debate. It is not something that has just been forced upon us, it is not something that has come out of the 'Labor-Greens alliance', as we hear from the doomsayers out there; it is something that is real and needs action.

I have taken an active interest in the science of climate change and am in absolutely no doubt that our planet is warming. In May this year, the Climate Commission released a report called The Critical Decade, which provided the strongest evidence of these facts. It showed: global temperatures are rising faster than ever before, with the last decade being the hottest on record; in the last 50 years, the number of hot days in Australia has more than doubled; sea levels have risen by 20 centimetres globally since the 1800s, impacting many coastal communities, and another 20-centimetre rise by 2050, which the scientists warn is likely on current climate change projections, would more than double the risk of coastal flooding; the Great Barrier Reef has suffered from nine major bleaching events in the past 31 years, where it previously had experienced none; and it is now beyond reasonable doubt that excess carbon dioxide in the atmosphere, caused mainly through the burning of fossil fuels, is triggering the changes we are currently seeing in the climate. In the report, the scientists warn that a rise of more than two degrees Celsius in global temperatures will result in dangerous climate change, with more intense weather events like droughts, floods and cyclones. The CSIRO, the Bureau of Meteorology and academies of science from around the world have all advised that the world is warming and high levels of carbon pollution risk environmental and economic damage. In Australia and across the globe, 2001 to 2010 was the warmest decade on record. Each decade in Australia since the 1940s has been warmer than the last.

Australia faces significant environmental and economic costs in a warmer, more unstable climate. Climate scientists advise that extreme weather events, such as droughts, heatwaves and bushfires, are likely to become more frequent and severe. These threaten our homes, businesses and communities, industries such as agriculture—indeed, our way of life. For example, the recent report Climate change risks to Australia's coast found that as many as 247,000 existing residential buildings, with a replacement value of up to $63 billion, are potentially at risk from a 1.1 metre sea level rise. I do not know why people somehow feel that these reports are inadequate, inconclusive or controversial. Yes, these reports are based on modelling. We can only model and predict what will happen into the future.

When there was concern about the depletion of the ozone layer the same debate raged: 'Why should we do something about the depletion of the ozone layer? Why should Australia do anything?' Australia's approach to climate change needs to be similar to that taken with the phase-out of chlorofluorocarbons, CFCs. CFCs were phased out by 1995. Australia was one of the first countries to ratify the Montreal protocol and continues to be a leader in the phase-out of ozone-depleting substances. But at the time there was a huge argument: no woman in Australia would be able to style her hair ever again because she would not be able to use hairspray; no industry would be able to go on because we could not use CFCs. CFCs are still being used, and we need to do more to reduce them. But, at the time, the sky was going to fall in. We were going to be shut down or turned off if we did something about them.

When we removed lead from petrol because there was a demonstrated causal link between lead in petrol and brain damage in children, the world again said, 'We must do something.' Again the sky was going to fall in—no car was ever going to run again; unleaded petrol would mean the end of the automotive industry in Australia. But we acted. We did something. We changed.

In my opinion, the evidence for climate change is overwhelming and conclusive. Taking into account the fact that we in Australia have contributed above and beyond our fair share to global warming, it is incumbent on us to act as a responsible international citizen and contribute to a solution. Scientists agree that the worst effects of climate change can be largely avoided if we reduce carbon pollution to an acceptable level. Australia has an opportunity to move to a clean energy future and cut pollution before that task becomes more difficult and costly. Indeed, ClimateWorks Australia, which I am on the board of, has put out some interesting modelling and predictions. It warns:

… each year of delay would mean more opportunities are lost or become harder and more expensive to catch up. ClimateWorks' previous research has found that delaying action on climate change to 2015 would increase the cost for business and households by $5.5 billion to reach Australia's 5 per cent reduction target in 2020.

We need to act.

The other argument is that we are acting alone, that we are racing ahead. Last month an article in the Age by Adam Morton said:

As Australia's major political parties squabbled last week over whether an MP should be granted leave from a vote on carbon price laws to witness the birth of his child, arguably more serious statements about the future of carbon policy were being made overseas.

In China, the world's largest emitter of carbon dioxide and a country often painted as indifferent to climate change policy, the State Council announced individual targets for provinces and cities that would require them to cut the amount of energy used to run their economies.

Other countries are acting ahead of us. We are lagging behind and actually missing the research and business opportunities in renewable energies.

This legislation goes not just to the price on carbon but to action to ensure individuals are not impacted, are not made worse off, and there will be a huge household package with it. But it is also around direct government investment in clean energy. The federal government is investing billions in low-emissions technology and providing support for Australian households to become more energy efficient. The new $10 billion commercially oriented Clean Energy Finance Corporation will invest in renewable energy, low pollution and energy efficient technologies. The new Australian Renewable Energy Agency will administer $3.2 billion in government support for research and development, demonstration and commercialisation of renewable energy. The renewable energy target, combined with other elements of the government's plan, including the carbon price, will drive $20 billion of investment in large-scale renewable energy by 2020, in today's dollars. We know that we can reduce carbon pollution to ensure our children and grandchildren have a future, but our economy also has a future. Listening to some of the contributions to the debate from those on the other side has been quite fascinating. They have been talking a lot about what is going to happen. It is constant negativity and it has completely overtaken the coalition. They are constantly talking the economy down and using every opportunity to scaremonger workers in Australia. It is time we looked at the facts. We have created nearly 750,000 jobs since we came to office and we have one of the lowest unemployment rates in the developed world. When it comes to a price on carbon, we are providing a $9.2 billion jobs package to support workers in emissions-intensive trade-exposed industries. As the Treasury modelling shows, jobs will grow strongly under a carbon price, with national employment expected to increase by 1.6 million jobs by 2020 and by a further 4.4 million by 2050.

Those opposite sticking their heads in the sand are refusing to open their minds to the investment and employment opportunities a carbon price will provide. Some members, like the member for Menzies, in this debate have even said that the notion of a green job is mythical, and the member for Groom said last week that all new green jobs will go overseas. This directly contradicts the coalition's own direct action plan, which says at page 17, 'The coalition recognises the potential for clean energy to underpin future employment growth in key regional areas.' Not only is it in contradiction to their own policies; it is in contradiction to the evidence already out there and to evidence we heard during the clean energy bills inquiry, such as that the Macarthur wind farm in Victoria will create 900 jobs during construction, the Woodland wind farm in New South Wales will create 150 jobs during construction and a solar farm in New South Wales will create another 50 jobs—just to mention a few.

These projects and many like them will provide billions of dollars in new investment and thousands of new jobs, as well as help us to transition to a low-carbon future. The race is on for clean energy jobs and investment in the future. We want our economy to be in a position to take advantage of that. In my own electorate I see this at the CSIRO plant at Clayton, where there are many jobs in this industry. At Monash University and the Monash Sustainability Institute individuals are taking action because they see the need for change. We as a government see the need for change. I have held two forums on climate change. One was organised by a group called Lighter Footprints and had 300 people at the hall. All of them accepted the need for change—actually most of them were fairly angry that we were not going far enough. I held another one in my electorate with Alan Pears from RMIT and Dr Brett Parris from Monash University, and I want to thank them. They gave a great presentation that was accepted by everybody in the room. It is time to act and stop putting our heads in the sand. (Time expired)

Tony Smith (Casey, Liberal Party, Deputy Chairman , Coalition Policy Development Committee) Share this | Link to this | Hansard source

We are here to debate 19 bills of betrayal that represent the triumph of political vice over policy virtue, bills of betrayal that sacrifice the prosperity of the Australian people at the altar of the Prime Minister's personal survival in her job. Everyone in this House knows that this government is in extremis. Everyone in this House is asking the same question, particularly those opposite, in relation to the Prime Minister's standing in the opinion polls: how low can things go? You would think that in such a circumstance the Prime Minister would observe the basic lesson of politics: when you are in a hole, stop digging. But, no, there she is, shovel in hand, burrowing ever deeper.

The political fortunes of the Prime Minister are a matter for her; that is her business. Of much greater concern is the fact that this misbegotten tax will bury the economic fortunes of Australian families and small business. Every Australian household will be whacked by this tax 100 times a day. They will be whacked every time they turn on a light, they will be whacked every time their kids turn on the Xbox and they will be whacked every time they go to the pub or to the footy. Earlier this year, radio MTR in Melbourne indulged in a bit of satire that would have been hilarious if it were not so tragic. They adapted to the carbon tax debate a famous song by Sting. Their adapted words were:

Every breath you take

Every cent you make

With every promise they break

There'll be no escape

She'll be taxing you

Every single day

More and more you pay

Carbon tax

You obey

It's the Labor way

She'll be taxing you

For satire to be successful it must be anchored in truth. Truer words than those have never been spoken. Of course, the Prime Minister has promised up hill and down dale that the compensation scheme will leave nine out of 10 Australian families better off. Really! Does anyone really believe that a government that could not deliver a simple home insulation program can insulate Australian families from the impacts of a carbon tax that will reach into the wallets of Australian families every minute of every day of every month of every year once these bills are passed?

My kids are not present in the gallery and you will pleased to know, Madam Acting Deputy Speaker, that at their young age they do not yet read Hansard so I can let you in on a secret: there is no Santa Claus. I worry that some on the other side of this House still believe that old St Nick exists so I feel compelled to inform the idealists opposite that there is no magic solution to render their scheme painless. That is because their carbon tax is intended to modify behaviour through premeditated economic pain. You do not need to take our word for it on this side of the House. The Prime Minister said as much in February when she declared that the very point of pricing carbon was to have that effect.

This tax will drive up the price of energy. It is intended to. Electricity bills paid by Australian families and businesses will spike by at least 10 per cent. Gas prices will climb by nine per cent, and that is just in the first year alone. But it is not just household budgets that will take a hit. You do not need to be a Nobel prize winning economist to figure out that the basic impact of the carbon tax on businesses throughout Australia will be significant. If you raise business operating costs, you kill jobs. If you raise business operating costs, you hinder the ability of Australian firms to compete overseas. It will mean that businesses will hire fewer and lay off more, and in some instances those increased prices will be enough to push companies over the edge. Some shops will close and some factories will go belly up.

Throughout Australia this tax will trigger a giant sucking sound as jobs are siphoned offshore to places where foreign governments are smart enough not to engage in stand-alone economic masochism. This Prime Minister obviously thinks that she is the political equivalent of Star Trek's Captain Kirk. She thinks she is boldly going where no government has gone before but, as we know, there is a fine line between boldness and complete recklessness. The Prime Minister is acting like the proverbial fool—rushing in where angels and every other advanced national economy fear to tread. In the United States the Obama administration could not pass the Waxman-Markey emissions trading scheme bill even when the Democrats controlled both houses of congress. But wait. In answer to a question in question time the minister for climate change seized upon California as a shining example for emissions trading. I know fiscal know-how is not exactly this government's strong suit, but someone needs to let the minister know that America's so-called golden state is not so golden after all. California has an unemployment rate of 12 per cent and a state budget deficit of US$26 billion. Is that really an example the minister is seeking to emulate?

And then of course there is China, so often heralded by the minister as an inspiring model of carbon correctness. Yet documents obtained by the Institute of Public Affairs show that the government's claims about China's higher carbon tax levels are bogus. In reality China's carbon price is about three-quarters of what the government intends to impose on Australia against the public's will. You do not need to take my word for it; you do not even need to take the word of a member of this side of the House for it. During this past April former Keating government minister Gary Johns penned a piece for the Australian entitled 'Dodgy figures, wrong questions plague debate'. In his article Johns wrote:

The Chinese must think Gillard a fool. Vivid Economics—

which did the study on which the government's claims were based—

has been colourful with its analysis. They wildly overstate China's and wildly understate Australia's implicit carbon price.

For every older coal fired plant shut down in China over the past three years two new ones have been built and as a result Chinese coal consumption has increased 17 per cent per year over the same period. After all, who does the Prime Minister think is buying our coal and what does she think they are doing with it? The misleading and deceptive campaign waged by this government gives new meaning to that famous quip by Mark Twain:

There are three kinds of lies: lies, damned lies and statistics.

But this habit of playing fast and loose with the truth is not limited to dodgy data about China's carbon price. We all recall how the Prime Minister heavied the member for Griffith into postponing his emissions trading scheme after the shambolic Copenhagen climate conference collapsed in disarray; we all recall how the Prime Minister then moved seamlessly from procrastination to prevarication, from overt delay to outright deception; and we all recall how this Prime Minister gazed into the television cameras during last year's federal election campaign and vowed to the Australian public: 'There will be no carbon tax under the government I lead.' But when the Prime Minister needed to seal the deal for political support with the Greens she threw her 'no carbon tax' promise overboard and her personal credibility went over the side as well. And then there is last year's palace coup. Only weeks before presiding over the political defenestration of the member for Griffith, this Prime Minister assured us that there was more chance of her becoming full-forward for the Western Bulldogs than challenging for the Labor leadership and prime ministership.

Mr Deputy Speaker, it is a supreme irony, isn't it, that the Prime Minister probably does have a greater chance of becoming full-forward for the Western Bulldogs than of remaining Prime Minister till the next election. With the legislation currently before this House we have a discredited Prime Minister leading a discredited government to impose a discredited carbon tax on a disinclined Australian people. If the Prime Minister told the parliament the sun was shining, members would be forgiven for ringing the Bureau of Meteorology for a second opinion. The late great Ronald Reagan once said that his guiding principle when negotiating with the Soviets was to trust but verify. In this case, a slight adaptation of that adage is required because this Prime Minister's history is so full of backflips, U-turns, broken promises and shattered political promises, the track record is so full of cheat and retreat, that the only healthy attitude one can take is to distrust and check again and again. That is why I cast such a jaundiced eye on the Prime Minister's promises of a clean, green renewable energy future funded by the revenue of her carbon tax, which she promised would never occur under the government she led.

In his speech on this bill the Leader of the Opposition noted the United Kingdom study released in March this year which found the cost of every job created in the renewable energy sector was that 3.7 existing jobs were lost, and he went on to make that point in great detail. The true believers on the other side of this debate are afflicted by a curious mix of economic ignorance and Messianic zeal. They are peddling pixie dust policies of wishful thinking and utopian dreaming, and for the Australia public it is a toxic combination. The only thing in which this Prime Minister clearly and truly believes is her own personal aggrandisement. This Prime Minister is willing to do any deal, bend in any direction, assume any political position in order to eke out her political survival. This legislation is pure political calculation designed to purchase Greens support, upon which her government depends. In the final equation the carbon tax is just, for this Prime Minister, the cost of doing business with Senator Bob Brown.

This is an exercise in cynicism and should be contrasted with the coalition's common-sense direct action program. Our direct action plan will lower Australians' carbon emissions by the same five per cent that the government claims, without blowing a gaping hole in the bottom line of Australian businesses and household budgets of Australian families. The Leader of the Opposition articulated this in his speech when the debate on these bills began, when he said:

There is a much better way to reduce emissions and the better way to reduce emissions is to work with the grain of the Australian people … to further encourage the intelligent, sensible things that Australians and Australian enterprises are doing now to reduce emissions.

The Prime Minister tried to claim in the debate on these bills that history would vindicate her. She asked members to think of being on the right side of history. I am in no mood to be lectured by a 'Julia-come-lately' on economic reform. During the 1980s and 1990s the Prime Minister was, of course, a rising star in Labor's political firmament. As president of the Australian Union of Students and later as leading light of the Socialist Left faction she certainly had the power of Labor's pulpit. Yet I do not recall her voicing support at the time for the Hawke-Keating free market reforms that received bipartisan support from the coalition. And given her past socialist leanings, I would be astonished to discover that all along she has been a closet devotee of Milton Friedman.

The Prime Minister's audacious claim to history rings hollow and rings hollow to all who heard it because her own political history is so hollow. At the last election nearly 84 per cent of voters cast their ballots for parties that were opposed to a carbon tax. This Prime Minister has no mandate to impose this carbon tax. If the Prime Minister truly believed that a carbon tax is the way to go, the Prime Minister would do what John Howard did with the goods and services tax: show the courage of her convictions and seek the assent and the permission of the Australian people at the ballot box. The fact that this Prime Minister has not, and will not, really reveals her devious nature on this important policy before the parliament today. The Australian people were made a promise before the last election by this Prime Minister. This Prime Minister deliberately broke that promise.

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

Order! The honourable member will withdraw the accusation of deliberately misleading.

Tony Smith (Casey, Liberal Party, Deputy Chairman , Coalition Policy Development Committee) Share this | Link to this | Hansard source

Withdraw 'deliberately misleading'?

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

Yes, you cannot say it was deliberate.

Tony Smith (Casey, Liberal Party, Deputy Chairman , Coalition Policy Development Committee) Share this | Link to this | Hansard source

I withdraw, Deputy Speaker, in deference to you.

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

The honourable member's time has expired.

Bill Shorten (Maribyrnong, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

This debate on the Clean Energy Bill 2011 and related legislation is a debate about hanging on to the status quo or energetically reaching out to shape the change which is happening in our society and our economy. The debate between the government and the opposition is a debate between new versus old; between progressive hope versus conservative instinct; between whether we should be optimistic about what is ahead of us or whether we should have a fear of the future. Indeed, it has been far too often about scientific facts combating political fiction. Make no mistake, we in Australia cannot afford to surrender to those who preach the false promise that Australia does not need to change.

Let us for a moment consider what our nation would have looked and felt like today had the superannuation savings vision of former Prime Minister Keating and Bill Kelty not been realised 2½ decades ago; had Medibank, which has become Medicare, not been delivered in the 1970s; had the Snowy Mountains scheme not been rolled out under Sir William Hudson after the war; had, in fact, construction of the Harbour Bridge not been started in the 1920s.

Australians have not always found change easy. Francis Greenway, the famous colonial architect, suggested the harbour bridge to Governor Macquarie in 1815 and we finished it in the 1930s. I would suggest that we have in fact been debating climate change and what to do in response to it since the 1980s. Former Prime Minister Thatcher spoke about it. Former Prime Minister Hawke spoke about it. Former Prime Minister Howard spoke about it and indeed proposed an emissions trading scheme much in detail like the one which is being submitted today. The concept of putting a price on carbon pollution is not a new concept. Let us not wait 110 years to get this done. We in this country are better than that at coping with change.

When it comes to the complex issue of climate change and our government's measured response being debated today in the parliament, I would submit that we are simply taking out insurance. As the Australian newspaper's editor-at-large Paul Kelly put it in his paper's publication last month, if I may paraphrase him, the best pro-science approach is the insurance principle. Because there is a climate change risk, everyone can see that the prudent path is to take out mitigating policy insurance. Yet the Leader of the Opposition would have Australians take out no insurance when it comes to climate change, irresponsibly ignore the risk and somehow walk on through the raindrops as though we could never get wet from the consequences of a warming planet.

We are witness to a steady climatic warming due specifically to anthropogenic factors determined and recognised and so advised by a panel of internationally recognised, appointed and accountable scientific experts. Yet the Leader of the Opposition stubbornly says that these scientists are wrong. He says the economists are wrong. He says the signs in the skies are not significant and the change in the weather does not need this action. He says that the extreme flooding and drought and the turbulent climatic conditions, which can in time disable whole economies, are not significant enough to act upon now. To borrow from Winston Churchill: there is a gathering storm. The conservative parties, like their intellectual inspiration, the Luddite movement, believe that they can simply wish change away. By closing their eyes and stopping their ears to informed discourse they have somehow convinced themselves that they can abolish the future, put away the laws of cause and consequence, and lazily consign this great uncertain globalised world to harder changes later—and that this course of action is a good thing to do.

I do not believe that all of those in the opposition believe this. I know that the member for Wentworth and the remnants of those small 'l' liberal supporters of what was once the great Liberal Party know that climate change needs this action. Indeed, if the member for Warringah had not replaced the member for Wentworth we might well have had these debates concluded some time ago. Change is coming. However it is fudged or spun, however people try to dodge around it, however we twist the numbers or slime the science, change is coming that challenges the world as we know it. So we must adapt. Our method, and it is a good one, is a tax-to-trading model coupled with generous assistance—this legislative priority before the House. Our carbon price policy is based on this three-point proposition: one, we all want to reduce pollution for a clean energy future; two, business needs certainty and the big polluters should be charged a price for their carbon pollution; and, three, families need a fair go, through generous assistance and tax cuts. That is why this package introduced to the House targets the largest polluters while nine out of 10 Australian households are compensated, and it is how we will cut $160 million tonnes of carbon pollution from our atmosphere by 2020. In the same way we will support our coal and steel industries.

The Australian economic story since European settlement was initially that of convicts, then it was of gold, of farming our way through the late 19th and early 20th centuries, of moving into heavier industries and manufacturing from the Second World War right up to the 1980s, and then of a growing, prosperous services economy from then until today. The next step in our economic narrative is a thoughtful, moderate evolution into a lower pollution economy with good jobs, clean technologies and a sustainable future. We will still be an agricultural producer, a manufacturer and a services provider, but we will not be a rapidly expanding carbon producer in the way in which we are today. I believe that a Labor government's role should always be to deliver economic change but also to assist workforces and families with the inevitable reskilling and new training that allows a transformation to occur without leaving people behind, without leaving people on an economic scrap heap.

Yet, in the face of this confident grasp for progress, the 12 months just past has been a bruising political time. Perhaps the most bruised of all has been the Australian people's faith in politics itself. I put to the House in this debate that nothing has done more bruising than the opposition's economic belligerence. In the final quarter of this year and as we move into 2012 to properly prepare for the challenge ahead, Australia needs to have a full-bodied economic conversation that is more assertive, optimistic and open-minded about the facts than the war of words since the last federal election has proven to be. This Spring and beyond there are considerable issues to consider and weigh up, from the mining tax and job creation to the National Disability Insurance Scheme and lifting superannuation.

A big test of whether we can have a sensible dialogue focused on the national interest is of course the proposed legislation before us right now, the clean energy future bills. So far, in 2011, the national discourse has been too often narrowed, sold short and bottomed out because of the number of political vested interests that have attempted to hijack the debate and drown out the voices of Australians who reasonably expect the government to navigate a path to the future. Australians today perhaps are cynical about politics, but that would be a natural response to the depressing conduct of relentless negativity and cynicism of the opposition. As our Chief Scientist said three weeks ago, things have now 'reached a new low'. A visiting German climate scientist reportedly said, upon being heckled during a visit to Melbourne University, 'Take a look at Australia, and you will find that the climate debate is the most toxic on the planet.' On Four Corners last month, the Leader of the Opposition failed to acknowledge the question, 'But surely it is unbecoming of an alternative leader of the country to stand on a stage next to someone who says that CSIRO scientists are engaged in a conspiracy?' I entirely agree with Prime Minister Gillard's passionate belief that what we are witnessing is a repugnant trend in our national politics.

It is profoundly incumbent upon all of those elected to this place to lead. And it is incumbent upon us in the labour movement to resist at all costs the sort of unhealthy, cynical developments that we see emerging on the extreme Right overseas. I refer to the United States, where eminent writer Thomas Friedman has observed that the Republican Party is progressively being taken over by some who are entirely obsessed with only one issue: tax. I believe that the Friedman insight prompts us to think carefully about the path some extreme conservatives are now taking us on here in Australia by concentrating almost entirely on boat people, climate change scepticism and the relentless cynical negativity about, and neglect of, virtually every other economic and social policy issue.

That was brought into stark relief last week by the cynical approach of the opposition to the tax forum. The Leader of the Opposition today is neglecting a broader economic policy debate, a gentler, sensible conversation about Australia's future, because he believes that he can shout his way into office about a carbon price that taxes polluters. We are witness in this place to irrational arguments and cynical daily bullyboy fearmongering—politics at its most depressing. This underestimation of the wisdom of Australians needs to end, not just for the sake of the government but indeed for the sake of this country and where it needs to go.

I would submit that the biggest threat to confidence in the Australian economy is not putting a price on carbon but a federal opposition who have no confidence in the Australian people and who constantly underestimate the capacity of Australians to change. The Gillard government understands that you cannot put up a proposition that Australia can be frozen in the moment. The coalition would have Australian people believe that now is not a good time to change and that tomorrow will not be a good time to change—it will never be a good time to change! This nation cannot progress on the foolish policy prescription that Australians do not have to adjust, amend and do things differently.

This nation needs great leadership, and change is never easy. The Gillard government understands that. We understand what business well knows: the economy is in transition and we cannot stand still. Australians understand that the world outside Australia is a tough place but that inaction and complacency does this nation and our children and grandchildren no favours. We know that business appreciates the value of certainty and that the world is moving to improve energy efficiency and to lower carbon pollution. We understand that we need to lower the carbon output, reduce the growth in carbon output, in this country, and the big polluters should assist in that process. None of us ordinary citizens tip our garbage in the street and expect someone else to pay for the privilege of cleaning up our mess.

We believe that families and consumers should get a fair go and we also believe that climate change is real. We also know that, whoever is in charge, that government will sooner or later have to put a price on carbon. It is the cheapest and most effective way to cut pollution. Imagine two future worlds. In one, Australia continues to lag behind Germany in solar technology, as we do today. In another, we are world leaders in applying solar technology domestically and also in exporting it to the world. Why shouldn't we aim to be the best in the world? Why shouldn't we aim to capture the blue-sky potential of industries that will clearly be massive in the future?

China and India are urbanising now. In 20 years—and over the next 20 years—they will be converting en masse to clean energy. China is already the largest clean energy investor in the world. Why do we want to miss the curve, miss the wave, of change? Let us get ahead of the curve.

The tragedy of this debate is that underneath all the bluster of the opposition at least half the Liberal Party know—and I would submit that the opposition leader understands this—that one thing is sure: those opposite would also put a price on carbon. The only questions are when and how much it would cost you. Brendan Nelson supported a price on carbon. Malcolm Turnbull supported a price on carbon and still does. John Howard supported a price on carbon. Even Tony Abbott, periodically, as his mood has changed, has supported a price on carbon, but unfortunately he is hiding now.

Underneath all the feigned, hostile outrage, the opposition understand that they will have to introduce it, but they just do not want to admit to it now. It will happen. Even if they manage to scramble into power with their timid cynicism, it will have to happen. But what is the benefit, if you know you have to change, of delaying the change? It only comes at a higher price. They instead would have you believe that when they come to power nothing will change, that you can be frozen in the moment and this nation will need to change little.

We understand that whoever is in charge of this nation has an obligation not to betray the leadership entrusted to us by people. Real leadership does not always involve telling people what they want to hear. Real leadership means dealing with issues. We in the Labor Party do not rely on scaring people to obtain power, yet those opposite rely on threat to give them purpose. We rely on hope to give purpose; those opposite rely on conservatism to give them purpose. We believe in innovation. We do not accept the proposition that industries in Australia—agriculture, mining, manufacturing and the service industry—and the nation at large lack the capacity to change. Those opposite rely on fear; we rely on optimism. Those opposite rely on hostility; we rely on hope. Those opposite think the future is something to hide and run from; we believe the future is not something to be frightened of. Instead of talking down the economy and small business, we understand that the world will not stand still. We understand forces are at work and we will meet the challenge. (Time expired)

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

I would commend to the minister the provisions of standing order 64.

Debate adjourned.