Ms Anna Burke (Speaker) Share this | Link to this | Hansard source

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

The adverse effect of the carbon tax on jobs and manufacturing.

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

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

Sophie Mirabella (Indi, Liberal Party, Shadow Minister for Innovation, Industry and Science) Share this | Link to this | Hansard source

I rise on this very important issue: the adverse impacts that the carbon tax is having on jobs and manufacturing. What compounds the damage that the carbon tax has caused to Australian jobs is the fact that the government has ignored warnings. Last year in February we had the CEO of Penrice Soda say:

The carbon tax, if it is implemented the way it is intended to be, could be the death knell for a lot of Australian industry … From this year Penrice will pay $8m in carbon tax. Adelaide Brighton $80m, one of our big clients. The timing of it is excruciatingly poor.

But this government did not listen.

The government did not listen to the very basic logic. And the logic is this: if you impose a tax on Australian energy intended to increase the price of energy, to increase the price of electricity, it makes conducting business in Australia more expensive. That means running hospitals becomes more expensive. It means manufacturing operations are more expensive. And why? Let us remember why.

The purpose of this tax was not to reduce emissions. It was not for some environmental benefit because, as we know, when Australian businesses go offshore, we are exporting our emissions offshore to nations that do not have the same clean, green production processes and regulations we do. What happens is: they will make the same things we used to make but create more emissions in the process, so it is a lose-lose.

We know from the government's own modelling that the carbon tax is intended to cut production in key areas. We see that their own modelling shows that aluminium production is supposed to fall by 61.7 per cent, and that alumina production is supposed to fall by 44.1 per cent and iron and steel production by over 21 per cent.

What that is telling you is that, with the fall in production, necessarily there is a fall in jobs in those industries that are directly affected by the carbon tax, because, in the manufacturing sector, those businesses that compete with imports are put at a competitive disadvantage. It is a very simple thing to understand. When you put the cost up of making something in Australia and an import comes in that competes with an Australian-made product, that import, which obviously does not have a carbon tax imposed upon it, is even cheaper than it would have been.

Now let us take our exports, because manufacturing contributes to 29 per cent of our exports. Our exports in manufacturing are also put at a competitive disadvantage when they are competing with goods overseas that do not have the high costs of production that we have.

The government are in pure denial. They are in pure denial because there is the lack of maturity to make a very simple statement: 'We got it wrong.' The Prime Minister is not big enough to say she got it wrong in choosing the Greens over Australian workers; she got it wrong in caving in, showing poor judgment. It was not very tough then, was it? No woman of iron then, no tough cookie then, in standing up to the Greens. She could have thrown the Greens a bit of a carrot; they would have still supported her. But, no. The Prime Minister, in what will arguably—and there is a lot of competition for this—go down as her worst judgment call ever, chose the Greens and this ridiculous, job-destroying policy over Australian workers. For what? Not to reduce emissions but to desperately try to cling on to power.

Over this year alone, let's look at some of those businesses. In March, CSR announced the loss of 150 jobs at Ingleburn, with its managing director later confirming that the carbon tax had added around $500,000 to annual costs at the Ingleburn facility. In February, Amcor announced that over 300 jobs were lost across the country, many in Brisbane and also in the Prime Minister's own electorate. What did the company say at the time? It cited significant cost increases, and it included energy as one of a series of factors that had a significant impact on its ability to remain competitive. That is what it is about. The Prime Minister may think that costs in relation to a business operation is a boring topic, but it is a basic fact that, if a business cannot keep its costs under control, it will not remain competitive. It is not a charity; it must make a profit in order to employ people, and in the manufacturing sector we are seeing that this is becoming more and more difficult.

There are significant international challenges. We know that there are challenges, but why on earth, in that environment, would any government ignore the challenges and sometimes use them as a crutch to absolve themselves of their poor policy, their job destroying policy? And there is the economic sabotage of the carbon tax at a time when we can least afford it. Often you get the response from the minister or the minister's spokesman. It is interesting that, in the areas of industry policy and manufacturing policy, when things get a bit too tough, ministers are too afraid to front up to the media to pursue their argument. Instead, they send out a spokesman. One of the things they invariably rely on is the high Australian dollar. That is their crutch. It is not the carbon tax. In fact, there is the perverse Orwellian language, as if the carbon tax is great. Well, if it is so great, they should have put it at a higher rate and it would have created more jobs. But they know in their heart of hearts that that is absolutely absurd. So when they rely on the high dollar, not only are they not being totally up-front with Australian workers but they are insulting the businesses that are trying to remain competitive and continue to employ Australians.

Rob Sindel, CSR's managing director, said only the other day that it is 'just too easy for people to say it's just the Australian dollar'. CSR is a company that has experienced job losses recently. What we see is continued evidence from business and industry groups when they tell the government about the cost of making things in Australia: the barrier to investment and growth is increasing costs, and energy costs, important input costs, are an increasing barrier to that growth and investment.

Greg Evans from the Australian Chamber of Commerce and Industry said:

The lack of pricing power and inability to pass on cost increases, such as the effect of the carbon tax, has dented small business profits and its ability to employ and expand.

But, of course, the Prime Minister and the minister for industry are totally and utterly deaf to that, because to accept that would mean accepting responsibility—a very grown-up thing—which, unfortunately for this nation and the workers of this nation, this government is incapable of doing.

We have seen a record number of companies go into liquidation. We saw reports in the media on Monday about over 10½ thousand companies. The government just brushed that aside. In relation to that, insolvency practitioners have said that the carbon tax for many of those companies was the last straw. We heard that it was like pulling a leg from under a chair. What do the government do in response? They say, 'You're all pretending, because, really, the number of jobs has gone up.'

The other week the government quoted some figures from the ABS. According to media reports, the ABS briefed the government on labour force gains for February 2013 and warned them. This is according to media reports. It will be very interesting to see what happens with the update on job figures next month. They were briefed that the figures would be overstated, most likely by a factor of two. Of course, this did not stop the Treasurer and the Prime Minister boasting about all the jobs, even though it was reported that they had been briefed that the figures would be overstated. So the Labor Party should stop the spin and tell the truth, because out there—not just in the suburbs of Western Sydney but in the regional towns and centres of this country, in the manufacturing centres of our capital cities—people are seeing Australian jobs disappear. For every large listed company that has its job losses reported in the newspapers, there are dozens of small and medium-sized businesses whose job losses go unreported, but the impacts are felt just as deeply in the families that lose their livelihood. Why? Only because the government are incapable of owning up to the fact that the greatest economic sabotage inflicted on the Australian economy was the carbon tax.

We even see the impact of the carbon tax on the auto sector. The Labor Party likes to pretend to promise the industry the earth, the moon and the stars.

Nick Champion (Wakefield, Australian Labor Party) Share this | Link to this | Hansard source

We know what you'll do with the auto sector. There won't be an auto sector.

Sophie Mirabella (Indi, Liberal Party, Shadow Minister for Innovation, Industry and Science) Share this | Link to this | Hansard source

There is a lot of delicacy and sensitivity on the other side, because at the last election they promised the industry whatever they needed to get over the line, and what did we see after the election? Not only did the Prime Minister break her promise not to introduce a carbon tax but she imposed $460 million in increased costs on Australian manufacturing.

They also broke $1.4 billion worth of their promises to the auto sector. So, the Labor Party is saying: 'We will tell you whatever you want to hear. We will promise you anything you want up until the election, and afterwards we will do the exact opposite.' So much of the discussion about the auto sector is around the components sector. We have heard the chief executive of the Federation of Automotive Products Manufacturers say:

We are going to be impacted by a carbon tax, and our competitors (overseas) won't.

And in a very challenging environment, this government is saying, 'That's too bad.'

We even see, in the case of the large companies that were awarded compensation and in the words of Graham Cray of BlueScope, that any compensation is like a bandaid over a bullet wound—because, let's face it, you can never totally compensate for the damage you have caused. At least the so-called compensation was admission of the damage the carbon tax would cause. But even these large companies need to make decisions for when the so-called compensation runs out. Companies do not make decisions for a three-year period; they look to the long term, particularly when they are looking at significant investments. But what about all those businesses that do not even get the pretense of a look-in with compensation? They are left there to accept the additional burden.

You will have the Labor Party tell you, 'But we've given all this free money to households so they can afford the increased energy costs.' But they ignore—and the reality is—that so many of the products made in Australia are being replaced by cheaper imports that are given a head start because they do not have the additional electricity and energy charges imposed upon them, because they come from countries, unlike Australia, that do not subject their manufacturers to the world's largest carbon tax.

The reality is that there is great concern about job security in this country, particularly across the manufacturing sector, where 109,000 jobs have been lost since this party came to power. They can get up here and come to the dispatch box and pretend that the reality is something else. But workers out there, and their families, know the damage that is being done, because they are losing their jobs and their friends are losing their jobs. Manufacturers have come together in a new organisation called Manufacturing Australia to ensure that their voice is heard, because they want to continue to have viable businesses and they want to continue to have a viable future. And there is every reason that we can have that viable future. The simple first step is to remove damaging government policies like the carbon tax that are intended to slug and slow down the production of our manufacturing sector.

Yvette D'Ath (Petrie, Australian Labor Party, Parliamentary Secretary for Climate Change and Energy Efficiency) Share this | Link to this | Hansard source

It is my pleasure to stand up and speak to this matter of public importance before the House this afternoon. What a surprise! Here we go again: the scare campaign. We saw it last year being rolled out by the Leader of the Opposition, Tony Abbott, commenting on price rises. In June 2011 we heard that the hit on Australians' cost of living would be 'almost unimaginable', and the Productivity Commission found that if Australia were to impose a carbon tax or an emissions trading scheme it would dramatically raise prices to consumers. We heard the Leader of the Opposition saying in August last year in parliament:

The thing about the carbon tax is that it … will clean out people's wallets and it will wipe out jobs big time.

We heard the Leader of the Opposition saying, in June 2011, on radio 4BC:

It will destroy the steel industry, the cement industry, the aluminium industry, the motor industry and it will be, over time, the death of heavy manufacturing in Australia.'

That is what we have heard time and time again from the opposition: that hundreds of thousands of jobs will be lost. The Leader of the Opposition said that 'entire towns, like Whyalla, will be wiped off the map'. And we have heard it again today from the member for Indi.

We heard it over the weekend as well. We heard the O'Farrell government carrying on about electricity prices and once again trying to shift the blame onto the carbon price. The fact is that the O'Farrell government should start being honest to householders in New South Wales and acknowledge that the biggest contributor to increases in electricity prices is rising network charges. The question is: when is the O'Farrell government going to actually start doing something about tackling network charges and taking that pressure off households in New South Wales? We are taking the pressure off, because we are providing tax cuts to 2.2 million people across New South Wales and helping nine out of 10 households with household assistance of $10.10 per week.

In the past we have also heard from Senator Barnaby Joyce about the $100 leg of lamb. Finally, last night on Q&A there was this question to Senator Joyce:

Senator Joyce, in November 2011, you said that citizens would not be happy when they were paying $100 for a roast under the carbon price. Now that the scheme has been in for some six months, this seems highly unlikely. Was your original comment intended to be hyperbole, or were you being deliberately deceptive?

Senator Joyce's answer: 'No, I tell you what, um, er, there's a whole range of things.' He went on to say: 'Okay, I agree it is not going to make it $100.' We are really glad that Senator Joyce was able to set the record straight last night—just in case we had not figured it out yet—that lamb roast is not going to go up $100.

And of course we have heard all about jobs. We heard the member for Indi talking about jobs today. We heard her saying that Australian jobs are disappearing. And I agree: Australian jobs are disappearing—but not at the hands of the federal Labor government. They are disappearing at the hands of state Liberal and LNP governments all over this country.

Campbell Newman is sacking public servants left, right and centre. I cannot do a mobile office in my electorate without someone coming up and telling me they have lost their job because of decisions of the state LNP government. If we want to talk about job losses, let us be honest with the Australian people. We have already heard the shadow Treasurer and the Leader of the Opposition saying: 'Elect me. We will make savings by cutting jobs. We will sack public servants.' That is how the opposition supports jobs in this country.

We have heard other fear campaigns. Yesterday in the Daily Telegraph we saw the headline, 'Carbon collapse'. You do not want to read past the heading because you would have read that a lot of businesses in the manufacturing sector in Australia acknowledge that the biggest pressure is the high value of the Australian dollar. You do not want to delve into the article to see what it is all about.

We saw a further heading today, in the Daily Telegraph, 'Carbon tax is sinking tourism'. About three-quarters of the way through that article it does not state that it is a correction but restates yesterday's Daily Telegraph report and talks about the number of businesses which have closed over a certain period. It is interesting that today's article has different figures based on different time frames. Yesterday it was up until 1 March and today it has figures up to 12 months to 31 December 2012. So, when we talk about the Australian Securities and Investments Commission data showing 10,632 businesses going into voluntary administration, only six months of that crosses over with the carbon price; but they do not want to state that fact.

I am happy to talk about the figures from the article yesterday and the number of businesses which have gone into voluntary liquidation or administration over the last 12 months. For 12 months up to 1 March 2013, 10,632 businesses closed, but let us also talk about how, in that 12-month period, 186,583 new companies were registered, according to ASIC figures. If we want to quote figures, let us be honest about those figures. Let us give the Australian people all of the information which is out there about these allegations.

I am always in awe of the detailed analysis and research that the opposition put in when deciding their position on a government policy. They get up in the morning, they read the newspaper, they put out a press release and they prepare an MPI. Then they come and argue an MPI based on what they read in the paper that day or the day before. That is what we are talking about. What we see from the opposition is a bit like playing bluff in poker. We have seen the member for Indi today quoting industries and how they say it is all doom and gloom. I say to the member for Indi: I am happy to see her industry group and to raise her an industry group. In recent surveys of businesses the Australian Industry Group noted that it appears the businesses surveyed had overestimated the impact of the carbon price on electricity prices and that these estimates are not consistent with the PPI or CPI estimates. The survey found that most business estimates of electricity price increases were 2.1c to 2.3c per kilowatt hour. This is broadly consistent with Treasury modelling of projected increases in electricity prices of 10 per cent and actual jurisdictional price determinations. The Australian Industry Group highlights that recent electricity prices have mainly been driven by increases in network costs and that this will continue to be a source of upward pressure on electricity costs. I call on the opposition to start quoting those Industry Group comments as opposed to the ones they bandy around in this House all too often.

We have heard the member for Indi talking about insulting businesses. I agree: it is an insult to businesses for members of the opposition time and time again to come in here and start twisting the words of businesses on why they have shut down part or the whole of their business. We heard it again today on the Penrice closure. On 18 January 2013, Penrice announced it would cease production of soda ash, partially cited in the introduction of a carbon price. What the member for Indi did not state is that, when asked whether the soda ash plant would have closed without the carbon price in operation, Penrice's general manager of chemical operations said yes.

Andrew Southcott (Boothby, Liberal Party, Shadow Parliamentary Secretary for Primary Healthcare) Share this | Link to this | Hansard source

It didn't help. He said it had a major bearing.

Yvette D'Ath (Petrie, Australian Labor Party, Parliamentary Secretary for Climate Change and Energy Efficiency) Share this | Link to this | Hansard source

'It didn't help'—that is the contribution of the opposition. Let us be honest with the Australian people about what we are doing. I am happy to stand here and state the facts for the Australian people and the opposition. Since the start of the carbon price on 1 July 2012, 133,500 extra jobs have been created, more than 20 every hour. There have been 118,546 new companies registered, more than 20 every hour. Company share prices have grown strongly with the S&P and ASX200 index up 25 per cent. The economy grew at an annual rate of 3.1 per cent in the year to December.

Australia has retained one of the lowest unemployment rates in the developed world at 5.4 per cent. The average weekly earnings grew by 4.6 per cent in the year to December, and business investment has continued at very high levels with almost $270 billion in confirmed investment into Australia's resources industry alone in the pipeline, according to the latest Bureau of Resources and Energy Economics figures. Last week we saw a strong employment result highlighting that 926,000 jobs had been created since the Labor government came into office in November 2007 and that 71,580 jobs were created in the last month—the largest monthly growth in jobs since July 2000. So I am happy to talk about our record.

We want to talk about manufacturing. We want to talk about jobs. We know that parts of the economy are experiencing pressures from the high dollar and other structural changes. That is why we are taking action to support jobs through our $5.4 billion new car plan, supporting 250,000 jobs. Through our support for Vodafone, with which we are bringing 750 jobs back to Tasmania from India, we are actually onshoring. The Gillard government is investing $1 billion to grow jobs through our plans for Australian jobs.

If we want to talk about the clean energy future package, we can talk about the support that we are giving manufacturers through the Jobs and Competitiveness Program, the support we are giving through the Clean Technology Investment Program and the Community Energy Efficiency Program and the assistance that peak bodies are providing through the Energy Efficiency Information Grants. But let us talk about real examples: Mackay Sugar Ltd. Mackay Sugar is investing over $120 million to reduce carbon emissions across its operations by 70 per cent for every unit of production. There is Crafty Chef of Emu Plains. With the help of nearly $500,000 from carbon pricing revenue, Crafty Chef, a Western Sydney food processor, will install a new commercial blast freezer. This will reduce the carbon intensity of its operations by 54.1 per cent, reducing energy intensity by over 56 per cent and boosting turnover by 150 per cent to $50 million. We have already heard from the Minister for Climate Change and Energy Efficiency today in relation to AJ Bush & Sons. They were one of the loudest opponents to the carbon tax and they are now saying, 'You know what? It works, and it puts us at the forefront of energy efficiency and we are leading our industry.' So do not take our word for it. Go talk to these companies.

I quoted before the Leader of the Opposition saying that the cement industry will be gone. Does he extend that to asphalt and clay products? Boral Bricks in Queensland are increasing their energy efficiency by 56 per cent and saving over half a million dollars through the Clean Technology Investment Grants. Downer EDI Works have just received a grant from the Gillard government's Clean Technology Investment Program, which means that they will be able to upgrade their plant to manufacture asphalt containing up to 40 per cent of recycled material. This project will allow Downer EDI Works to cut energy costs at the site by $480,000 a year and reduce the facility's carbon emissions intensity by 33 per cent. These reductions will be achieved through cutting-edge processes and technologies that will allow asphalt to be produced at a lower temperature and therefore it will require less energy. So I welcome these industries, small and large across this country, stepping up and seeing the opportunities that come with moving to a clean energy and renewable energies future and becoming more energy efficient in their business.

I will finish with this: the member for Indi talked about significant challenges for businesses and about the international pressures. We agree that there are international pressures, and that is why we need to step up and be part of the action on climate change. If we were to see the Clean Energy Future Package ripped up after 14 September, all of these businesses would be left in the lurch. It will set this country back years in relation to our international negotiations for taking action, and all of these companies will be left behind, because they are out there taking the initiative, investing in clean energy, investing in energy efficiency, and the opposition are saying: 'Vote for us and we'll rip the whole lot up.'

Andrew Southcott (Boothby, Liberal Party, Shadow Parliamentary Secretary for Primary Healthcare) Share this | Link to this | Hansard source

The previous speaker mentioned Boral as an example of how good and how fantastic the carbon tax is, and not two months ago Boral announced that 790 of its workers would be made redundant. This is just one in a very long roll call. I want to speak about this government's record on jobs. I want to go through the roll call of major companies that have shed their workers. These are Australian icons. They are well-known major manufacturing firms. Let us just run through the list: CSR, Rosella Foods, Amcor, Penrice Soda, Boral, BlueScope Steel, Holden, Ford, Pacific Brands, Goodman Fielder, Holden again, Toyota, CSR, BlueScope Steel again, OneSteel, SPC Ardmona, Golden Circle, Ford again. Bosch, Bradken, Boral for the second time, National Foods, Austal Shipbuilder, Cadbury, Bridgestone, Caterpillar, Rio Tinto, Pacific Brands with a massive 1,850 jobs, Ford for a third time, Holden for a third time, and one very close to my heart—the closure of Mitsubishi.

This is the record of the government over the last five years on jobs. This is their record. Paul Keating once famously said of a trade union leader that he had the jobs of 100,000 workers around his neck. This government has the jobs of thousands of these workers around its neck. These are people who had a breadwinner one day and then they came home to their family having lost their job the next day. These are private sector jobs. The government is responsible for the economy. What we have seen is a terrible indictment of this government—a roll call of Australian icon business after Australian icon business and the loss of thousands of jobs.

I want to now turn to the carbon tax and—

Mr Perrett interjecting—

They are Australian workers, you dope. They are Australian workers and they are Australian jobs.

Bruce Scott (Maranoa, Deputy-Speaker) Share this | Link to this | Hansard source

Order! The member for Boothby will withdraw the reflection on the member for Moreton.

Andrew Southcott (Boothby, Liberal Party, Shadow Parliamentary Secretary for Primary Healthcare) Share this | Link to this | Hansard source

I withdraw that I called the member for Moreton a dope.

Bruce Scott (Maranoa, Deputy-Speaker) Share this | Link to this | Hansard source

No, you withdraw unreservedly.

Andrew Southcott (Boothby, Liberal Party, Shadow Parliamentary Secretary for Primary Healthcare) Share this | Link to this | Hansard source

I withdraw.

Bruce Scott (Maranoa, Deputy-Speaker) Share this | Link to this | Hansard source

You use the words again: 'I withdraw unreservedly.'

Andrew Southcott (Boothby, Liberal Party, Shadow Parliamentary Secretary for Primary Healthcare) Share this | Link to this | Hansard source

I withdraw unreservedly.

Bruce Scott (Maranoa, Deputy-Speaker) Share this | Link to this | Hansard source

The member for Boothby has the call.

Andrew Southcott (Boothby, Liberal Party, Shadow Parliamentary Secretary for Primary Healthcare) Share this | Link to this | Hansard source

Thank you very much. I now want to speak on a very important matter for Australia and particularly for South Australia, and that is the impact of the carbon tax. I have spoken about the job losses we have already seen under this government, and that is the climate in which the carbon tax was introduced. It is a tax based on a lie. We all remember that quote, when six days before the last election the current Prime Minister said, 'There will be no carbon tax under the government I lead.' It was explicit and unequivocal.

Not a single member of the current government, not a single member of the Labor party and not a single Labor candidate campaigned on the introduction of a carbon tax. The lesson from Australian political history and from politics around the world is that a party that says one thing before an election and does another thing in government pays a very high price at the ballot box.

This is a tax that will impact on every facet of our lives. It is going to increase the cost of everything and put further financial pressures on businesses within Australia. Businesses are calling the carbon tax 'the straw that broke the camel's back'. Many Australian businesses were surviving on wafer-thin profit margins before the introduction of the carbon tax. All the carbon tax has done is put their budget bottom line into the red. ASIC reports that over the past 12 months to March there were 10,632 company collapses—886 a month. The number of firms being placed into administration is now 12 per cent higher than it was during the GFC. While the carbon tax is not the sole reason for these closures, the carbon tax is adding to the financial burdens of already struggling firms, tipping them over the edge of profitability.

Greg Evans, the chief economist of ACCI, has stated, 'Rapidly escalating energy prices caused by the carbon tax and other green programs are taking their toll on many Australian businesses'. He went on to state that this is already being demonstrated in job losses, deferred investment and, in the worst cases, business closures. Businesses in industries like steel, cement, chemicals and plastics, car and car component manufacturing, food and grocery processing and aluminium and glass have been crippled by the introduction of the carbon tax. These industries are all electricity-heavy industries, and the carbon tax has caused their electricity prices to skyrocket. You only need to look at the list of businesses that have cut jobs since the carbon tax was announced and then introduced. The introduction of the carbon tax is just sending manufacturing and jobs overseas to countries that are not crippling their industries with unnecessary costs for emissions. In food and grocery industries, the cost is only compounded, increasing the cost of transport, power, refrigeration and logistics.

I turn to South Australia and the impact of the carbon tax on jobs and manufacturing there. The carbon tax is having and will continue to have a negative effect on jobs and manufacturing across the state. On 2 November 2012, Holden announced that it would cut 170 jobs at the Elizabeth plant. That came on top of two previous job cuts under this government. On 18 January 2013, Penrice Soda announced that it will cease soda ash production at their Adelaide plant in June 2013. They have been producing soda ash there for the past 70 years—in the forties, the fifties, the sixties, the seventies, eighties, the nineties and the noughties. Now, under this government, they have decided that they will cease soda production. This will cause the loss of up to 70 jobs at the plant. The jobs will now go overseas, as Penrice have decided to import soda ash from now on. They specifically cited the carbon tax as having had a major bearing on this decision.

On 16 January 2013, Boral announced the loss of 790 jobs across its Australian operations. This will impact on local operations in South Australia. Peter Macks, the principal at a local Adelaide based insolvency firm, Macks Advisory, has stated publicly that the carbon tax has been quite debilitating for many hotel operators who have been struggling for a long time. You only need to look at the Belair Hotel, a hotel in my electorate. I raised this issue in this chamber late last year. The hotel's off peak power rate increased by 45 per cent. The bill clearly listed 'carbon adjustment' as the main reason for the increase. The effect of this, according to the hotel manager, was either jobs or prices. The first post carbon tax electricity bill—a monthly bill—of the Lakes Resort Hotel in South Australia cost them an extra $3500 a month due to the carbon adjustment alone. These costs will have an impact either on price or on jobs.

The carbon tax is a bad tax. It was introduced dishonestly. It has crippled industry. The single biggest thing that this parliament could do to help with the cost of living, to help jobs and to help the economy would be to abolish the job-destroying carbon tax. That would restore the confidence of and give support to the manufacturing industry in Australia. It would support the creation of local jobs. The coalition, in government, will abolish the carbon tax.

Nick Champion (Wakefield, Australian Labor Party) Share this | Link to this | Hansard source

The other day I was looking at Twitter. There was a very interesting tweet from an individual quoting the Economist from 1848. What the Economist said in 1848 was 'Suffering and evil are nature’s admonitions; they cannot be got rid of'. That is what the Economist magazine said about the introduction of the sewer. You can be sure that whenever there is some form of progress in human affairs there will be some conservative out there saying: 'The sky's going to fall. You can't fix these problems. It's all too hard. It'll all cost too much. It's the end of the world as we know it.' Haven't we just heard that from the previous speaker? He got up there with a long list of jobs. He was all grim. He talked about armageddon and all the rest of it. He talked about Mitsubishi, which closed in 2008, in discussing the carbon price.

There is a fair bit of disingenuous conduct going on over there among the opposition on these matters. That is because they cannot win the substantive argument that is going on not just in Australia but around the world. That argument is, on one hand, jobs, growth and investment and, on the other hand, austerity, recession and the downward spiral of disinvestment. That is the choice that Australia has and that indeed is the choice that is having to be made around the world. This country during the GFC made the right choice. That is why we have an unemployment rate of 5.4 per cent. That is why we have seen growth in our economy. That is why we have seen business investment in our economy. That is why around the world Australia is regarded as something of a lone survivor of the GFC period. Look at the nations that have embraced the austerity policies of the opposition. The United Kingdom had a jobless rate of 7.8 per cent the last time the figures came out. That country has zero growth.

As their economy fails to grow, their ability to service their debts lessens. That is what is happening in the United Kingdom.

If you look at Europe, where they have embraced austerity, you will see 50 per cent youth unemployment rates in places like Spain and Greece. The choice that the world has had—it has been no different since the depression—is about how you tackle these periods that occur periodically in capitalism. There was the global financial crisis and, before that, the Great Depression. The right way to embrace it is through Keynesian economics—that is, to support growth and economic confidence and to use the benefits of economic growth to service debt. The wrong way to go about it is to try to cut your way out of trouble—to try to cut government expenditure—because cutting government expenditure destroys growth in your economy, and, as you destroy growth, your capacity to service any debt goes downwards.

The approach of the opposition was best espoused by Hoover's Secretary of the Treasury, Andrew Mellon. What he said was, 'Liquidate labour, liquidate stocks, liquidate farmers, liquidate real estate; purge all the rottenness out of the system.' That was the approach of conservatives in the 1930s and that is the approach of conservatives now. They have not learnt a single thing along the way from these great crises in capitalism.

It is a critical point that you are always better growing your economy to service your debt. You heard the Leader of the Opposition in question time today referring to the nation's credit card. Of course, it is completely misleading to the public to talk about household budgets and credits cards. A nation's economy is not a household budget, and it isn't a credit card. If you are going to use those sorts of analogies, a much better analogy is to say, 'It's like a young person taking out a loan to go to university, to get higher skills to get a higher income to produce more to be able to service that debt.' That would be a much better analogy to make than the one that is made constantly by those in opposition, which is based on the idea that there is some sort of fixed amount of money and some sort of fixed debt and your capacity to service it is best served by cut, cut, cut. I tell you: it is not. The proof is in the pudding. Go to the United Kingdom. Look at what they have tried over there. They have tried exactly what you are going to do, and it has been a dismal failure.

There is another debate going on around the world, and that is about how best to deal with climate change. You have two choices here. You can deal with it through a market mechanism, which this nation has done. Electricity emissions have dropped by 8.6 per cent since the carbon price was introduced, jobs have been created—I will go through the figures later on—and investment has continued and the ASX risen. The market mechanism is sending a price signal to people—to companies and consumers alike—and that puts the onus on the polluter.

The other alternative is to have big-government plans. In this case the opposition wants to have a big-government subsidy to polluters. In effect they are saying: 'We're not going to leave it to investors, markets and businesses to deal with this problem. We're going to leave it is politicians and bureaucrats.' Common sense would tell you that a price signal and markets are a much better way of dealing with this issue and a much better way of sorting out climate change; and around the world we are now starting to see price signals being put into place. In China, in California and in other places around the world, this is the way the world will deal with climate change.

Having gone through all of this debate and legislation, and having had the parliament's attention on it, the opposition intends to tear up the government's reforms—to unscramble the egg and to cause massive dislocation to the economy of this country and the business community of this country by tearing it all up. They are going to cut pensions. They are going to put their hands into the pocket of every low-income earner in the country and put them back into the tax system—one million people going into the tax system. But for what? Look at the facts. Do not listen to me; listen to Stephen Koukoulas from the Climate Spectator, who said that since the carbon price has been put in the Australian Stock Exchange has gone up 25 per cent—that is, by $296 billion. It paid out $30 billion in dividends. House prices have gone up 2.8 per cent since the carbon price came in, and that adds about $110 billion to household wealth. So the gains overall are about $410 billion in the eight months, which is about $50,000 per household. That does not sound like disaster to me. It does not sound as if the world is going to cave in. As I said before, in electricity emissions there has been 7.6 million fewer tonnes of carbon—an 8.6 per cent drop.

Look at the facts that the parliamentary secretary read out before. There have been 133,000 extra jobs—more than 20 extra jobs every hour since carbon pricing started. There have been 118,000 new companies—20 every hour. Company share prices have grown strongly, as I said before, and growth has been at the rate of 3.1 per cent. There has been low unemployment—5.4 per cent: the envy of the world. There were 71,000 jobs created in February alone.

This is an economy that is operating exactly as it has always operated. It has taken the carbon price in its stride. We know that the Henny Pennys from the opposition want to go out there and talk everything down. We heard the member for Boothby talk about Holdens. Those on the opposite side of the chamber come in here with all this doom and gloom and concern, but the very same people criticised Holden workers getting a pay rise. The very same people were crying crocodile tears over job losses.

Those on the opposite side of the chamber do not talk about the Holden Cruze coming off the line. They do not talk about the new model Commodore. They do not talk about the exports to the United States of police cars and performance cars. They do not talk about the two new models that we have locked in, maintaining production at Holden until 2022. The most important thing a government can do is co-invest to ensure a billion dollars worth of investment down there at Holden at Elizabeth.

The member for Boothby comes in here. But they do not have an automotive policy—and the policies they do have terrify those in the automotive industry. For him to come into this chamber and talk about jobs is just ridiculous. The choice around the world is growth and jobs and investment versus austerity and recession. That is the choice that we face, and the opposition insist on embracing austerity and recession. It is a fool's errand, and the people of Australia will find that out.

Alan Tudge (Aston, Liberal Party) Share this | Link to this | Hansard source

We have just had five minutes from the member for Wakefield as to how fantastic the carbon tax is and the impacts it is having. He says house prices are up, job numbers are up, new companies are being created and cars are running off the line because of the carbon tax at $23 per tonne. If the carbon tax is so fantastic for house prices, so fantastic for jobs and for new company creation, why not make it $50 per tonne, or $100 per tonne, or $200 per tonne? On the Labor Party's warped logic, that would mean that house prices would be even higher, there would be even more jobs, there would be even more companies created and the share price would be even higher, according to the member for Wakefield. But, of course, it is absolute nonsense. The carbon price has no such impact. The carbon price is a dampener on all of those activities, and every economist in the nation will tell you.

I would like to give the member for Wakefield and those opposite, first of all, some cold, sober and tragic facts. Let me just go through what happened last week. On 12 March 2013, the last wholly Australian-owned cannery, Cowra's Windsor Farm Foods factory, was placed into voluntary administration, with 70 jobs lost. The day before that, on 11 March, CSR's Viridian put off 150 jobs. The week before that, on 1 March, the iconic soup manufacturer, Rosella, shut down, with the loss of 70 jobs. The week before that, Amcor announced that over 300 jobs will be lost. The week before that, Penrice Soda announced that it will cease soda ash production and cited the carbon tax as having a big bearing on its decision. A couple of weeks before that Boral announced that 790 jobs will be lost. The week before that BlueScope Steel announced the loss of 170 jobs. That just brings me back to mid-January. I could continue to go through this exhaustive list, going week by week by week, all the way back to find jobs lost after jobs lost after jobs lost in our manufacturers.

I ask the Labor government members, in all seriousness: how many jobs need to be lost before they realise that the manufacturing sector is struggling? And why is it struggling? In part it is because the Aussie dollar is high. But a big part is also because the government's policies are making it so much harder for Australian manufacturers. We know that they have re-regulated the labour market, which makes it tougher. We know that they have added 20,000 new regulations and only removed 200. But the worst aspect of it all is the introduction of the world's largest carbon tax. This diminishes the key competitive advantage of our manufacturers, which is cheap energy. Do not just believe me or the coalition in making these statements, but listen to the businesses themselves as to why they are laying off workers or why they are closing down their businesses. Many will cite that the carbon tax has been a direct contributor to it.

Or you can read yesterday's ASIC report, which also blamed the carbon tax for contributing to so many businesses closing across Australia. That report found that there were 10,632 company collapses over the last 12 months. That is 12 per cent higher than during the global financial crisis. The member for Wakefield tells us how fantastic everything is, and yet we have had company collapses 12 per cent higher than during the peak of the global financial crisis. This report says that, while the high Aussie dollar is seen as the main factor behind manufacturing closures, experts say the carbon tax is adding to increasing cost burdens for many firms struggling to stay afloat.

You also could listen to what the ACCI chief, Mr Greg Evans, says in relation to the carbon tax:

In energy reliant industries—

such as manufacturers—

it is already showing up in job losses, deferred investment and in the worst cases, business closures.

That is the reality. The member for Wakefield and those opposite can say for as long as they like how fantastic this carbon tax is, how it is leading to growth and to companies starting up and how it is leading to additional jobs and all sorts of other great things. But the reality is in fact the opposite. The reality is that we have had more companies close than at the peak of the GFC, and almost every week we are having manufacturers laying off workers. The reason this is occurring is very simple. The carbon tax is damaging to our manufacturers because it makes them less competitive versus their fierce competitors from overseas, because the carbon tax applies to the production here in Australia but does not apply to manufactured goods produced overseas and imported into Australia. In that regard it acts like a reverse tariff. Nearly all manufacturers these days compete against Chinese, Indian or Vietnamese imports. All this does is make the cost burden high for our manufacturers compared to those manufacturers of imports. It is a remarkably simple concept.

The Labor Party do not understand these basic business concepts because they do not have any business people on their benches. They are all union leaders, and it is terrific that they are all union bosses and they are all union members now. But they do not have any people who have had experience in business or in basic economics to understand that if you make our businesses more expensive and you do not put the same costs on our competitor businesses then our businesses will be worse off and will therefore be at a competitive disadvantage. The member for Wakefield talked about the car industry. PricewaterhouseCoopers examined the impact of the carbon tax on the car industry and it said that there would be a $400 per car cost associated with the carbon tax. That applies to every car manufactured in Australia, but it does not apply to the cars coming in from Japan or from China or from South Korea or from the UK or from Germany. So what does that do to our car manufacturers? It adds $400 to our cars but not to those imported ones.

The Prime Minister talks about sending price signals, but what price signal does this send, when you add $400 to the cost of an Australian made car but that does not apply to an imported car? The price signal it sends is, 'Go and buy the imported car,' and that consequently leads to fewer jobs.

In my own electorate I have 1,000 manufacturers, employing about 10,000 people. It is a huge proportion of my electorate. Nearly all of them are competing with overseas players, and many of them have told me that they are struggling because of the high energy costs. Those high energy costs, particularly in the last 12 months, have been driven almost entirely by the carbon tax. This year is just the start of the carbon tax. It is $23 per tonne and it is causing a 10 to 20 per cent increase on electricity prices for businesses. But that is just the start. In two years time it will be $29 per tonne. By 2050 it will be $350 per tonne, according to the government's own figures. You can look up the government's own figures and they say it will be $350 per tonne by 2050.

If this carbon tax stays in place and it goes up to $350 per tonne, I would predict that that will be the end of manufacturing in my electorate and almost all manufacturing across Australia. I cannot see how manufacturing in this country could survive if the carbon tax went up fifteenfold to $350. That is what is at stake here in this debate, and that is what is at stake in this election coming up. We have two competing visions in relation to our manufacturing sector. From our side, we would scrap the carbon tax. Make no bones about that—it would be gone, and we would provide other incentives to boost manufacturing in this country. On the other side of the ledger, the Labor Party are promising to continue with the carbon tax and continue with the upward trajectory of that tax—starting at $23 this year, going to $29 in two years time and going all the way up to $350 in 2050. That is exactly what the government has forecast and exactly what the government actually desires. This carbon tax needs to go, for the benefit of our manufacturers and the benefit of Australian jobs. (Time expired)

Stephen Jones (Throsby, Australian Labor Party) Share this | Link to this | Hansard source

Since 1 July last year, 133,500 extra jobs have been created. That is almost 20 each hour. There have been 118,546 new companies registered. That is more than 20 every hour. Company share prices have grown strongly, with the S&P/ASX 200 index up 25 per cent. The economy grew at an annual rate of 3.1 per cent, and Australia has retained one of the lowest unemployment rates in the developed world, at 5.4 per cent. I understand that this is devastating news for those opposite, who hate good economic news. But it is good news for the people in my electorate and it is good news for Australia.

I listened with great interest to the member for Aston's contribution to this debate, because the debate has at its centre the policy to reduce carbon emissions. I should say that, if you are going to have a policy to reduce carbon emissions, it is not a bad starting point to actually believe that carbon emissions are having an impact on climate change. Many on that side of the House do not seem to believe that. I actually respect and listen very carefully to the member for Aston's contributions because I learn a lot from him. I particularly learned a lot from him when I read the article that he wrote in the Australian on 27 February 2007. Members sitting alongside the member for Aston might want to listen to what he had to say before he came to this place. He had this to say:

In determining the appropriate climate change responses, what is needed is not grandstanding … but hard, rational analysis to determine how we can reduce global greenhouse gas emissions with the least possible cost.

…   …   …

Governments are poor at making such hard-headed assessments to determine what gives the best return for a dollar invested: political considerations and emotional arguments inevitably cloud judgments. The decisions should be left to the market.

I could not agree more. I see the member for Wentworth has entered the chamber. If the member for Wentworth and the member for Aston had more authority and more say over the economic and environmental policies of the coalition they would not be in the confused and irrational mess they are in today.

What we have in this debate is a clear choice between a market based solution and the solution once decried by the member for Aston and the member for Wentworth—the policy of planting trees and picking winners. It is the plant-and-pick policy, aiming to plant more trees than the entire surface area of Tasmania, at last count. Is it any wonder that the serious end of town, when it comes to business, are running away from this policy at a great rate of knots? They know that it will not work. But it will cost business more and it will cost Australian consumers more.

As the head of the AiG, Mr Inness Wilcox, has noted:

The scheme has shaped forward and contracted prices for electricity, gas and other business inputs.

Businesses have factored it in; they are getting on with the business. I have to say the policy is working. As the member for Wakefield said in his thoughtful contribution, the policy is working, because carbon emissions from electricity generation have dropped 8.6 per cent since July last year. The policy is clearly working at the lowest cost of abatement.

If you are going to come into parliament this afternoon and say that manufacturing is a matter of public importance, it would not be a bad idea if you had a manufacturing policy yourself. If you are going to say that manufacturing in this country is a matter of public importance it would be a damn good idea if you had a policy yourself—then we could have a proper debate.

I searched for a policy on the member for Indi's website. Do you think I could find one? No, I could not. There was not a policy. It was a policy-free zone. There was a bunch of ideas and some dot points including: toughening up our anti-dumping laws—we have done that; better targeting funding for commercialisation—we have done that; and redrafting the current legislation in relation to research and development tax incentives—we are doing that. I love this one: consider a national inquiry into manufacturing with wide stakeholder involvement. This is devastating stuff.

If you are going to say that manufacturing is a matter of public importance, do your policy homework. Come in to this chamber and have a policy in hand. We have a well-thought-out policy, one that has been arrived at after wide stakeholder consultation and one that will work. It includes putting Australian workers first in the labour market. What we are saying to employers is: you cannot be job snobs. I do not have a problem with employers using the 457 skilled migration program to fill genuine shortfalls in the skilled workforce. I do not have a problem with that. I come from an electorate which took workers from all around the world in the sixties, seventies and eighties to fill workforce shortages. I do not have a problem with that program, but what we do say quite clearly is that, if there are skilled Australian workers who can fill those vacancies, they should be at the front of the queue.

We are establishing a $1 billion program to establish industry and innovation precincts around the country because we know we have put an enormous amount of money into research, development and scientific research in this country through our universities and other fine research institutions around the country. The challenge for us is to ensure that we can connect that great research, those great innovations that are occurring at universities like my own university, the University of Wollongong, where I graduated from. It is a very important part of the local economy in my region. We need to join that research up to ensure that we have a well-informed, well-resourced national innovation strategy and to also join it up with small and medium-sized businesses in our regions.

We need to have an Australian industry participation policy to ensure that, when we have large government investments in new infrastructure or when the private sector is investing, as it is with billions of dollars in new resource projects around the country—despite the doom and gloom that has been spouted by those opposite—Australian businesses, Australian fabricators and Australian manufacturers get a chop at getting some of those contracts they have the capacity to win to ensure that they are able to thrive with this great mining boom going on.

I have to say it is already working. I can tell the story of Maintech, an engineering company from my own electorate which, once upon a time, not two years ago, had over 90 per cent of its work from BlueScope but saw the writing on the wall and decided that it had to diversify. It is now winning large contracts including a $100 million contract with Anglo American Australia, a large mining project in Queensland, which is going to employ over 100 people in my electorate.

There are numerous other elements to our policy I could talk about. I could talk about how small and medium-sized enterprises, which have great innovations or great ideas, can convert those great innovations or ideas into a business opportunity. We are doing that through our jobs program and by ensuring that they have access to venture capital.

The one thing that matters more than anything else in my electorate is ensuring that BlueScope is able to see its way through this difficult period it has encountered due to the high Australian dollar having a bigger impact than anything else. The $300 million steel transformation plan, which was voted against by each and every one of those coalition members on the other side of the chamber, is ensuring that not only are the doors of BlueScope being kept open but they are turning the corner. In the latest announcement to the Australian Stock Exchange, BlueScope said it expects to turn a profit in the very near future.

As the member for Wakefield said, you have two options: you can bury your head in a bucket of sand—or pick and plant—which is their policy, or you can try and show some leadership. That is the policy that is adopted by this side of the House. (Time expired)

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

Manufacturing in Australia is on a knife edge. There is no denying that. The government's carbon tax is proving to be job destroying and confidence crushing. Over the last five years since 2008, 109,000 jobs have been lost in manufacturing. The Gillard government proved its negligence of and contempt for the manufacturing sector when it dumped the manufacturing portfolio in December 2011, before realising its mistake and reinstating it.

The Australian manufacturing industry once enjoyed a huge competitive advantage. It had access to cheap and abundant energy and access to cheap water. Now the industry has to cope with a $23-per-tonne carbon tax, which will increase on 1 July each year rising to $350 per tonne by the year 2050. That is something for the industry to look forward to indeed.

Some industries receive bailout money while others are ignored. There is no formula with this government on who gets it and who does not. It is just handed out on a whim. There is no science behind it they wants industry to survive. As we all know, the high Australian dollar has made market conditions difficult for our manufacturers.

But the implementation of a carbon tax has significantly added to the pressures, and the government says, to the contrary, 'It's going to be okay; everyone's going to thrive.' As the people on this side say, if it is such a good thing, why not double it? Why not triple it?

The 20 per cent by 2020 renewable energy target has also added to the problems of the manufacturing industry, and it affects their bottom line. The 20 per cent renewable energy target cannot be achieved by 2020—and, if it is, it is going to be too expensive, which will add another burden to our manufacturing arm.

Repeated budget deficits are placing pressure on interest rates and the availability of capital, as the government is competing in the money market with our private enterprise. This means that many Aussie businesses and manufacturers are surviving on paper-thin margins. How much longer can they take to get back into profit? As the member on the other side has just said, they hope to come into profit soon. How soon is 'soon'?

Industries affected by the government's destructive policies include steel—BlueScope, OneSteel. When they put up their hands and asked for help they were told by this government: 'Get used to the new world.' What does that mean?

Vehicles and car-component manufacturers are also under the pump. Toyota and Ford not only have to compete against each other in Australia but have to compete with other plants run by Toyota, Ford and Holden in other parts of the world. They rely on 50 per cent local consumption of their vehicles and 50 per cent for the overseas market. If one of those markets falls, the car industry is in deep trouble. The carbon tax will cost the car industry about $500 million a year, but the government says, 'Well, we will refund them $500 million a year.'

Cement companies that are based in my town of Gladstone are under the pump as well. They have to compete with the Chinese clinker, which can be imported cheaper than they can produce them in Gladstone. Chemical companies like Orica, which again are situated in Gladstone, are facing competition from overseas. Our food and food processors certainly have to compete.

The cost of aluminium production is about $2,300 a tonne. The current price for aluminium is about $2,000 a tonne. Glass, and the rag trade—textiles—are also disappearing. You cannot buy locally made stubbies, shorts or uniforms—they now all come to us from overseas. They are all under the pump. The government have perfected the art of chasing our industries offshore. They are doing a very good job at that—that is about the only good job they are doing.

The carbon tax is a total contradiction: whilst our emissions will go down, globally they will increase. Our cement industry in Gladstone is the most efficient plant in the world—and yet, if we were to lose that plant to some overseas country, you would find that Australia's best practice, as with a lot of industries in Australia, would be lost to other countries that can produce a similar product but for a much lower price.

The carbon tax has elevated costs in the transport, power, logistics and refrigeration industries. A friend of mine who has a hotel in Yeppoon told me at a luncheon that his electricity prices have risen from $12,000 a month to $19,000 a month—and that spells a loss of jobs for that industry. The power bill of the cement industry in Gladstone has risen by $1 million a year. That puts that industry under a lot of pressure.

The Gillard government has failed to reward those companies who have had voluntary programs to reduce their emissions. The aluminium industry has reduced its emissions by 26 per cent since 1990. Cement companies have reduced their emissions by 20 per cent since 1990 and reduced their carbon intensity by 24 per cent per tonne. Meatworks, and all sorts of other industries, have reduced their emissions—not because of the carbon tax but on their own initiative and their own pride in their workplace. And now those particular industries are being punished by this reckless government.

Senator Penny Wong, on 21 and 22 June 2012, could not define what a 'green job' was; she could not give an example of one. And they say these green jobs are going to replace the tens of thousands of manufacturing jobs that have been lost. They just don't get it—no-one can tell me what a green job is and how they are going to replace the manufacturing jobs. They cannot. The government has conceded that the carbon tax has brutalised the Australian manufacturing sector. The coalition knows what needs to be done: we need to scrap the tax and give our manufacturers a fighting chance.

Steve Georganas (Hindmarsh, Australian Labor Party) Share this | Link to this | Hansard source

Order! The discussion has concluded.