House debates

Monday, 20 March 2023

Bills

Safeguard Mechanism (Crediting) Amendment Bill 2022; Second Reading

3:37 pm

Photo of Stephen BatesStephen Bates (Brisbane, Australian Greens) Share this | | Hansard source

The mining, transportation and burning of fossil fuels is the single-biggest contributor to the climate crisis. If we want to avoid environmental and economic disaster by staying within 1.5 degrees of global heating, we must make real cuts to emissions and transition to 100 per cent renewable energy. The number of 1.5 degrees is not just a talking point; according to the world's scientists, it's a very real planetary boundary. If we breach it, our climate system is at risk of tipping over and spiralling into chain reactions, and we will no longer be able to control the climate breakdown. No area of our lives would be untouched by this—from our food supply sending prices sky-high to our hospital services being overrun, infrastructure damage from sewage systems, flooding cities and the loss of our precious natural landscapes and wildlife.

Climate damage is not some far-off distant threat; we are already experiencing the shift, with 100-year bushfires and floods every few years. For us in the Brisbane electorate, the 2022 floods have left our community rebuilding for the last year, with some local businesses only now being able to reopen the doors again while others have been forced to close permanently.

The government seem to just expect everyday people and volunteers to clean up the mess from natural disasters and to keep pushing year in and year out to survive. They rely on individuals, families and communities to bear the brunt of extreme and unpredictable weather. Meanwhile, they are funnelling billions in taxpayer dollars into the pockets of the fossil fuel industry and making the climate crisis actively worse. Community members are taking on personal responsibility to reduce their individual emissions, like using reusable bags and paper straws and making choices about the food they consume. Meanwhile, the government allows the biggest polluters in the country to pay little to no tax and destroy our natural environment, and then sends us the bill. This is the only evidence you need to see whose side the government is truly on.

Governments only ever tinker around the edges when it comes to kicking their addiction to fossil fuels. They politely ask fossil fuel companies to reduce their emissions, but this has not worked in the past and will never work. Their business model and method of profit comes at the expense of our climate. This industry cannot regulate itself. It's the government's responsibility to phase out fossil fuels to ensure that our economy and climate are sustainable.

This bill allows fossil fuel giants to offset 100 per cent of emissions. If you just heard 100 per cent and think that seems very high, that's because it is. The Climate Council thinks so too. They stated that this is highly problematic because unlimited use of offsets will simply encourage carbon accounting to cover up pollution as usual. The design of the Safeguard Mechanism should prioritise genuine emissions reduction, because tackling harmful climate change means Australia's emissions must shrink rapidly this decade. This bill does not do that. It allows for the facilities regulated by the proposed Safeguard Mechanism to have access to unlimited offsets. So what incentive is there for the facilities to actually reduce their emissions? Analysis by the Parliamentary Library found that the cost of buying offsets to comply with the new Safeguard Mechanism proposals to the fossil fuel industry could be less than 0.1 per cent of these firms' profits. There is no incentive for them to innovate or invest in new technologies to lower emissions. They can simply buy their way out of actually doing anything.

Our climate responds to the amount of greenhouse gases being pumped into the atmosphere. It does not care about accounting tricks or good intentions. To put it bluntly, it is not possible to fully offset the billions of tons of greenhouse gas emissions that come from the burning of fossil fuels by just regrowing forests. Yes, carbon is everywhere on Earth, in the atmosphere, oceans, soils and living beings, and it is being continuously exchanged between them. This exchange is what's known as the active carbon cycle. But burning fossil fuels releases carbon that has been locked away underground for millions of years and puts tons of new carbon into the active carbon cycle. No matter how many trees we plant, this new carbon can never be locked away underground again. It goes on to remain part of the active cycle. This is why the science tells us that the phasing out of fossil fuels is the number one action needed to hold our planet from cooking and mitigate these climate disasters. But there are 117 new coal and gas projects in the investment pipeline, and both Liberal and Labor's climate and energy plans are committed to more fossil fuel projects.

The Greens want to work with the Labor government to get real tangible action on addressing climate change. We know this can be done because we've done it before. The last time Labor came to the table and worked with the Greens, we were able to get the Clean Energy Finance Corporation, a price on carbon that actually made the fossil fuel industry pay for the damage it causes to our planet, and the establishment of the Australian Renewable Energy Agency. The result: the biggest decrease in pollution we have seen and $20 billion in investment across 600 renewable projects across the country.

Real climate action is what is required to save our environment, our economy and our future. We can repair our reputation on the world stage, stop our Pacific neighbours from experiencing mass displacement, and become global leaders in renewable energy and sustainability. Real climate action is 100 per cent publicly owned renewable energy and the rollout of domestic renewable manufacturing and infrastructure. It's investing in public transport and restoring our natural environment. Real climate action is ending the $11 billion a year of public subsidies for the fossil fuel industry. This amounts to the government handing over a staggering $20,000 every minute of every day to an industry profiting off environmental demise.

Real climate action is electrification of our homes and businesses, removing our reliance on gas and ensuring energy security and reducing our power bills. Real climate action is showing the world that Australia is able to kick our reliance on fossil fuels and embrace our future as a renewable energy superpower. Real action on climate is no new coal and gas.

3:43 pm

Photo of Josh BurnsJosh Burns (Macnamara, Australian Labor Party) Share this | | Hansard source

I listened carefully to the member for the Brisbane's contribution. There were the usual lines from the Greens about the Labor Party and telling everyone about how bad they think we are. But what the Greens aren't telling you is that we have actually been negotiating for weeks in good faith, sitting down with the crossbench and the Greens, with anyone who wants to try and get a deal done on the Safeguard Mechanism policy, to work in good faith like adults for the interests of the Australian people. That might not be in the political lines being run by the Greens at the moment, but that's fine. They're going to run their lines, they're going to play their politics on climate because that's in their DNA. What we're going to do is try to get some action on climate change.

This Safeguard Mechanism is the single biggest lever that any government has ever tried to pull in the history of our country in reducing our emissions. I would have thought that the Greens want to be a part of that and I would have thought the Greens' tone is really important when talking about progress in this place.

I'm proud, on this side of the House, to be part of a government that is trying to take the single largest leap forward in emissions reduction in our country's history. That's what the safeguard mechanism is all about, and we have tried to do it in a way that is always the challenge of those in the Labor Party—to bring together those who live in the real world—industry and businesses—while also bringing together those who want to see action on climate and want to see Australia take a leadership role in tackling our rising emissions. That's what this mechanism does. There are multiple parts to it. The first part, the baseline crediting system, is set out in this legislation.

The whole philosophy behind the safeguard mechanism scheme is to make the 215 largest emitters across our country reduce their emissions by an average of around five per cent each and every year—five per cent next year, five per cent the year after and so on. That is a big task for some of these facilities, which have never had such intense policy placed on them. We need to bring people with us, and we need to ensure that we are implementing a policy that actually reduces emissions, one that industry cannot ignore.

What's really important is that the baseline crediting system incentivises businesses for emissions reduction. If a business or a facility is able to reduce its emissions by more than the five per cent, the crediting system will allow it to sell its legitimate emissions reduction efforts. It's a way of saying to a business, 'If you go beyond the emissions reductions that are required as per the safeguard mechanism scheme, you can be incentivised for that.' It also creates a market where other businesses can purchase those credits. It's a really sensible scheme. It incentivises emissions reduction. It creates a market for businesses that require offsets, where it is harder for particular facilities to reduce emissions, and for those that are able to successfully go beyond the baseline crediting.

This scheme also works with the framework that was set up by the previous government. While that framework's baseline levels were too weak and it didn't actually bring down emissions, the fundamentals of incentivising large emitters to reduce their emissions were actually an idea that was cooked up by those opposite. In this new culture of the coalition wanting to oppose every single aspect of climate and emissions-reduction policy, they're now voting against the very thing that they helped create. Anyway, that's the world that we live in. That's the world where the coalition has decided to be. That's the world where those on the other side of the chamber are not recognising the fact that a number of seats that used to be held by their colleagues are now held by the crossbench, or by Labor—a number of seats that no-one in the history of the Labor Party ever thought that we would hold but we proudly hold. Those opposite are living in a world where they are denying the need to tackle climate change. It is, politically, a very dark place for them. They seem not to have learned that lesson, but far be it from me to stop them. Don't interrupt your opponents when they're making a mistake—I think that's the old saying.

So the first aspect is the baseline crediting system, where we're incentivising business to go beyond the five per cent emissions reductions required for each facility. Other aspects that will be part of the safeguard mechanism will be predominantly effected through regulation, but it is all important to this particular policy. There are other credits that can be accessed, and I think there are important discussions going on that will give confidence to the Australian people.

I want to take this moment to acknowledge the many conversations that I have had with peak bodies, with experts and with representatives from organisations like the Climate Council—first-class civil society organisations who are working tirelessly to make sure that this policy is everything that it needs to be. I want to thank those in the environmental and climate movement who have spent time with me, especially up here in Canberra but, even more so, in my electorate. I am so proud that in Macnamara we have people who are civic-minded and who know that we are part of the last generation that can tackle climate change in a meaningful way and that we must be a part of the solution. I have always said yes to any local group that seeks to meet with me on this matter because not only does it help me to better represent the people in my electorate but also it helps me to understand and to hear from some of the most articulate and thoughtful people who live in my electorate. I am proud to be their representative and I'm proud to be an MP in this place who will always push for more climate action and for more efforts to reduce our emissions as quickly as possible. We need to make sure that we are providing confidence to those people—and to all people, including industry—about the integrity of our offset system, and those really important discussions are happening right now that will ensure that people have confidence in this scheme.

Under the scheme, each and every facility is going to be required to reduce their emissions by five per cent. It's absolutely essential that we implement the safeguard mechanism if we are going to hit our 43 per cent emissions reduction targets. We cannot keep wasting time in this place. It must be the case that, at every single opportunity to make a difference and progress climate action and climate policy in this place, we take a step forward, and this safeguard mechanism scheme is an almighty step forward. It does deal with the total quantum of emissions that are allowed as part of the safeguard facility and, while the safeguard mechanism scheme can be tweaked in the years to come, it is really important that we get the foundations laid this year and as quickly as possible. That's because, if we are to hit our 2030 emission reduction targets, we need to make sure that we have all of the levers in place. It's not just me saying that. In the conversations that I've had with a lot of those bodies that are seeking to make progress, everyone—not those characters opposite, but all of the serious people—fundamentally agrees that having the safeguard mechanism system in place is a huge improvement on the current regime that we inherited from those opposite.

This is important reform. This is reform that will ensure that businesses and facilities are reducing their emissions. This is reform that will make one of the most important contributions to our 2030 emissions reduction target and is also going to provide certainty for businesses who operate in difficult environments. It is very difficult for some of the businesses and facilities that we're talking about to reduce emissions. We're talking about facilities that produce concrete. There is a facility that is a lithium mine. We need these sorts of minerals in order to create batteries and create the sorts of products that we need on our pathway towards net zero, but the actual mining of lithium is an extremely emissions-intensive process. Therefore, we need to do everything we can to reduce the amount of emissions as part of that, because we are going to need a lot of lithium and other critical minerals to be able to create batteries, solar panels and wind farms. We're going to need minerals to be able to create the sorts of products that we need to have a more sustainable and more renewable future. That's why we need to work with industry. It's really important that we get this right.

In the final part of my contribution, I will just reiterate where I started. It is extraordinary that, since the government came into office, the coalition have made the determination that they are not interested in climate change and emissions reduction. They suffered extraordinary losses at the last election. No-one in the last election lost to a candidate who was offering lower emissions reduction targets—no-one. The politics of this seems to be completely lost on those opposite. They've dealt themselves out of this conversation.

Opposition Members:

Opposition members interjecting

Photo of Josh BurnsJosh Burns (Macnamara, Australian Labor Party) Share this | | Hansard source

I can hear people laughing. Well, you're laughing on the other side of the chamber, and long may you laugh over there, friends. Laugh over there for as long as you want, because we on this side of the House, on the side of the treasury bench, understand that Australians' expectations have moved on from your outdated ways—or from their outdated ways, Deputy Speaker. We are here as the party of government, working collaboratively and constructively with the crossbench and even—despite what they tell you, despite some of the public ranting and raving that the Greens have been doing recently—with the Greens, because we want to get this done. We want to take the biggest step forward in emissions reduction policy in our country's history.

We need this safeguard mechanism to work. We want to make sure that this scheme is an effective one to actually reduce our emissions, to hit our emissions reduction targets and to give businesses certainty so that we can produce materials like batteries, wind farms and solar panels. Ideally, we will manufacture some of them in Australia, but that is a separate piece of work being led by the excellent minister for industry. We need to get this program in place so that we can actually hit our emissions reduction targets.

So I would urge all members of this place, including those who helped design some of the aspects of this scheme themselves, to get on board or forever be consigned to the wrong side of history on climate action. People are going to judge them at the next election: did they do one thing in opposition to help tackle climate change? Did they support one out of the many things that we put forward in this place to help tackle emissions? From the responses that I've received while making these remarks, my hopes are not too high. But we on this side of the House know that we must do our bit. We must reduce our emissions. This policy, the safeguard mechanism policy, both through this legislation and through the regulations that will be outlined by the Minister for Climate Change and Energy, is the single largest lever the government has ever tried to pull in Australia's history on emissions reduction. It is one that we must get right. It is one that we must get going in the interests of our nation.

3:58 pm

Photo of Keith PittKeith Pitt (Hinkler, National Party) Share this | | Hansard source

I really have to answer a couple of those points very briefly. The Nationals held all 15 of their seats and gained a senator, and in Queensland the Labor Party did nothing but lose seats and go backwards. So for those opposite to pretend that this is some great mandate is absolutely false. The people who drive our economy in the regions, in Queensland in particular, did not agree with the proposition.

We come to the Safeguard Mechanism (Crediting) Amendment Bill 2022. The bill intends to have 215 businesses that are impacted by the safeguard mechanism reduce their emissions over a period of 10 years. That includes 66 coalmines, 36 gas facilities, 26 iron ore mines and 49 manufacturing facilities, two of which are the last two remaining oil refineries in this country, which are already in trouble because Labor broke their promise on fuel and emissions standards in this country and they now cannot meet those standards in the future. I went to the Parliamentary Library and said, 'Okay, the federal Labor Party is going to do this to the people that we represent, particularly in the regions, particularly manufacturing, particularly resources, that drive literally hundreds of billions of dollars worth of our economy. How is it going to work?' I said to the library, 'Give me a rule of thumb. Tell me what might happen in terms of offsets and available protocols and all of these other things.' This legislation proposes a $75 carbon tax, three times the Rudd-Gillard level, and a penalty of $275 for those organisations in the list.

Can you imagine what it would be like to be 49 manufacturing facilities who have legacy equipment which they either have to completely replace, or they find the alternative to offset? If we look at the options to offset, unfortunately the Parliamentary Library told me they couldn't find a data source, but my colleague and friend the Member for Flynn found one: the CSIRO's Australia's carbon sequestration potential: a stocktake and analysis ofsequestration technologies, November 2022. This is based on existing protocols, existing practices, methodologies, costs, and it is actually quite an interesting and detailed report. If we look at the potential for that—this is from the library itself—it tells us that Australia's total land mass is around 768 million hectares. Of that, the agricultural area is 426 million hectares and urban intensive areas are about 3.5. On top of all the other commitments that the federal Labor government has made, they have also made one, under the High Ambition Coalition for Nature and People, to protect 30 per cent of the world's land areas and seas to halt the loss of species et cetera. To do that from where Australia is currently positioned is going to take, I'm told, another 60 million hectares. So we have 60 million hectares to go to the proposal, and then somehow these organisations have to find offsets or equivalents to meet what you are legislating in this place. Or they have some other options—I'll get to that soon.

If we look at these options, as per the CSIRO report, we have, Labor is saying, a 43 per cent reduction of CO2 by 2030 that is legislated. There are various reports about how much that might be, but it's north of 200 million tons of CO2. As I said, 426 million hectares of ag land. This report runs through these types of protocols that currently exist. Nearly all of these that I'm about to speak about have to go into cleared or nearly cleared agricultural land. Permanent plantings of not-for-harvest woody vegetation, previously cleared ag land, two eligible methodologies. The CSIRO report talks about potential and technical outcomes, potential being as much as they think they can possibly get from this protocol and methodology; technical is what they think is realistic. 480 million tons of CO2 reduction under this methodology would require 63 million hectares of agricultural land. They say that that's probably not reasonable, and I would probably agree with that. The technical outcome will be 16 million tons of CO2 from three million hectares of land. These are all numbers that sound interesting. What is three million hectares? The entire Australian sugar industry is farmed from just over 350,000 hectares, just to get people who are listening some idea of the scope.

Commercial plantations, farm forestry, technically 42 million tons of CO2, but that would require five per cent of existing land. Human induced regeneration of native forest, including reduction in the rates of domestic livestock grazing, 60 million tons of CO2 or 32 million hectares. You can avoid land clearing—that will give you nine million tons of CO2 off 1.38 million hectares. Savannah management, which I acknowledge is not ag land, potentially six million tons off 80 million hectares. Soil carbon potentially technically 115 million tons of CO2, but they're unsure exactly how much that will require, because it is complex in the way it actually evolves and works and is paid and subsidised.

There are a range of others, whether that is blue carbon—mangroves, tidal marshes, coastal wetlands, seagrass—there's a whole heap of all sorts of epiphanies and unicorns down in the garden. But the big one is geological storage, carbon capture and storage in existing geology. The reason that I say that is because the technical potential by 2050 is 227 gigatonnes of CO2. That is an enormous amount of CO2.

The report also talks about just how strong this storage is, that it won't leak. It's proven by millions of years of experience in exhausted gas basins, for example. So, if you store in depleted hydrocarbon fields, you can store CO2 for millions of years. And this is what has happened; this where we have accumulated gas and everything else that we utilise. The member for Flynn has been a strong advocate for this, not into the Great Artesian Basin. You cannot put waste into the GAB, but there are proposals out there that I and others are aware of to inject liquid CO2 into the Great Artesian Basin's aquifers. I'm 100 per cent opposed. It will make them unpotable. The proposal of injecting liquid CO2 into the greatest water source in this country should be prohibited but currently is not.

There are a number of others, whether it's direct air capture or a whole pile of other fantasies that may or may not work, but the CSIRO has summarised the available methodologies, roughly what the cost is and how much land or other mechanisms are needed. If we add these up: permanent planning, three million hectares; farmed forestry, 21 million hectares; human induced regeneration, 32 million hectares; land clearing, one million hectares; savanna management et cetera. You only get to 133 million tonnes of CO2. You are roughly 100 million tonnes short—that is, if they utilise all of these. Can you imagine taking that much land out of production in Australia? That is the only proposal and it's on cleared or partially cleared agricultural land used for food production.

We have seen the ag sector go from strength to strength—in fact, the forecast is it puts some $90 billion into the economy. They are not only feeding Australia; they are feeding the world. But the safeguard mechanism that Labor is putting forward is saying to these organisations, 'You will pay a penalty, whether that $75 or $275, per tonne that you are over your target, year by year by year, unless you find another way.'

Some of these assets are worth billions of dollars. Why on earth would they rebuild them in the form that people on that side of this building, the government side, want at an enormous cost with no real outcome? The alternative is they can take up some of these potentials. Is that the proposition? Is that what's being proposed by those opposite, that literally tens of millions of hectares of Australian ag land gets taken up for offsets to meet your targets under the safeguard mechanism in a country that contributes just one per cent of the world's emissions? And that has dropped by some 20 per cent recently.

This is the definition of insanity. We have to feed ourselves; we have to feed the world. To do that we require good sources of water; we require good farming techniques. Australian farmers are recognised as the best in the world, but the concept that we will take all of this land into offsets—and let's not kid ourselves. Big companies like Telstra and others can afford to do this. They will just go and buy ag land—it's what happened under the ERF with previous governments—and they will let it go to waste. They don't need to maintain fences. They don't need to keep out ferals. They don't need to employ anyone, particularly in regional Queensland, regional Australia and the far-flung areas of our country. What that means is no-one's at school, no-one volunteers for the fire brigade, no-one's paying rates, no-one is employed, no-one has houses. This is exactly what has happened under previous proposals.

The concept that Australia will turn into somewhere which is not managed—can you imagine the chaos if those farmers are out there getting paid to simply not farm? And yet that is the proposition being put forward by those opposite in this safeguard mechanism. These companies employ tens of thousands, hundreds of thousands of Australians. The resources sector alone is accountable for over one million Australians directly and indirectly employed. They are highly competitive in a world market providing a product that the world wants. Yet we see this mad charge to 2030 to meet targets that have been set that could impact not only Australia's agricultural production but Australia's water production from the GAB, Australia's economic options, and jobs in regional Australia.

We shouldn't kid ourselves. Every single big business I know is doing the numbers right now to determine at what point in the future do they become unviable under these proposals, then whether, at that point, they close. That will get you your CO2 reductions. There's no doubt about that because there'll be none. There'll also be no jobs. There'll be no options in the future. There'll be no training of apprentices. There'll be no-one contributing to the local economy. There'll be no-one going to the hairdresser or to the bakery or going to the shopping centres because those jobs will not exist. This is the exact point we are at right now. The idea that some businesses will be able to afford to offset 200 million tonnes per year—and I've outlined that they're not even going to get to that—with enormous amounts of land. If you include the savannah management, it's 137 million hectares. It is enormous. These are huge swathes of our country. It will change the dynamic of regional Australia forever.

There has to be a better way. The better way is carbon capture and storage because it works. It works and it can do very, very large amounts of CO2 sequestration, in the right place. In fact, I know that the Barossa proposal, offshore from the Northern Territory, was looking at exactly that. Santos was looking at utilising existing lines for CO2 injection at depleted gas outputs, where the fields have been depleted and they had the option to do that. They will get paid for it, clearly. But what have we seen? We've seen the new Barossa project stopped by the Environmental Defenders Office through the Federal Court. We've seen all of those people stood down. We've seen a company like Santos, an Australian company—which I'm told has expended over $2.4 billion on this project already—now having it parked up and not moving forward. That was 600 jobs alone in the extension of the Darwin LNG program. This is significant for the Northern Territory. They're trying to do the right thing, but you have to give them the option to do it in the time frame that works for them.

The 30 years to 2050 is a very, very long way away. Think about it. How many businesses can you think of that last three decades or that last five decades? There really aren't that many because longevity in business is incredibly difficult. Yet here we see a proposal which is going to force businesses to the wall earlier than would be expected and will force them to make a decision on their viability earlier than they need to. Jobs will be lost in the regions. I've got the member for Flynn sitting next to me. I can tell you where most of them will be. They'll be in Gladstone, in the member for Flynn's electorate. They'll be around aluminium and concrete and energy.

This is the wrong proposal. It is the wrong approach. A $275 penalty for those who can't find a way—otherwise they're out buying up ag land across the country to give them offsets. We know that this will not work. It is bad for the regions. It gives a terrible outcome for communities. It's the equivalent of buying water from the Murray-Darling Basin and taking it out of the economy. Guess what? That's what the Labor Party is doing because they are tied up in their ideological views. These are not practical outcomes. They can be done and managed in a much better way. Use the technologies that come online. Give them the time to deliver what they need to. Let them design and move forward in a way that keeps their businesses profitable, keeps their employees in place and keeps the business in town, in regional Australia, in particular. The people in the cities will know the impact because they will have to pay the price and the price will go up for just about everything.

I come back to these 215 businesses, which in my view, will be just the start. The 100,000 tonne limit can be easily changed by the minister with a single stroke of a pen. I expect to see that in the future. I oppose the bill. I oppose it strongly and will continue to do that into the future.

4:13 pm

Photo of Daniel MulinoDaniel Mulino (Fraser, Australian Labor Party) Share this | | Hansard source

Taking action on climate change has been described as dealing with a problem that represents a tragedy of the commons on a global scale. It is truly a wicked policy problem. It is wicked and complicated because of the interdependency of all the different actors involved. It is a global challenge in which all of our actions affect everybody else. It's no surprise that one of the key texts on this, written by the Nobel Prize winner who was a leading developer of integrated assessment models, is a book titled Managing the Global Commons.

This is an incredibly difficult challenge that requires countries and communities around the world to take action. Not only is it complicated; it is a problem that requires a solution. It is not just complicated but necessary that we take action, because in the absence of action this planet will become far less livable. Societies and communities around the world will see their living standards collapse.

While it is necessary for us to take action, it is also an opportunity for us when we take action. It is an opportunity in the sense that we will be improving our environment, investing in new technologies and investing in our long-term quality of life. That is why there is a transformation going on around the world. That is why countries all around the world are embracing abatement, adopting standards and taking action together. There is a revolution going on that is technological, social and regulatory, and we have stood on the sidelines of this revolution for too long. For a decade, we have used trite, mealy-mouthed statements like, 'We're going to adopt the Australian way'—meaningless statements which really described inaction rather than anything which reflected true Australian values. We used trite comments like 'the adoption of technology rather than taxes', when in fact we've wasted a decade with no real, meaningful regulatory change.

What we see from those opposite during this debate is a claim that they now recognise that action needs to be taken, belatedly, but what they say is that whatever particular solution we put forward is all too hard or won't work. Whether we put forward legislated net zero, 43 per cent or a strengthened safeguard mechanism, those opposite are simply left saying that it won't work or it's all too hard. They've gone from saying we don't need to take action to saying we can't take action. The last speaker just gave us a litany of reasons why it's all going to be so hard. It's a ridiculous approach to a problem where the solutions are out there and where people in government, civil society and corporations are fighting for solutions every day but where we need to strengthen our regulatory arrangements to make it easier for them. Those opposite have gone from being ostriches to being defeatists, and both approaches are inappropriate given the challenges that we face.

I want to just lay out a couple of general principles, because these are absolutely critical when it comes to dealing with this problem and laying out the right regulatory response. The first principle is that, when we are undergoing a technological, social and economic challenge and transformation as big as this, it's always better to start early—to start as early as possible. The later you leave this, the harder it is going to be. Second, if we're going to get the best outcomes, it's going to be by leveraging investment through certainty in regulatory arrangements, leveraging investment in research and development and leveraging investment in capital. Third, integrity in regulatory arrangements is absolutely critical. Fourth, abatement should occur broadly across the economy. As a general principle, it is going to be less costly the broader abatement is and the more sectors it touches on. It will be more costly if you focus more narrowly. Fifth, abatement, where possible, should be at least cost.

This government's first major approaches in this area, at the beginning of this term, were to legislate net zero and to legislate 43 per cent by 2030. That goes right to the heart of a couple of those principles that I laid out just then—first, that you need to start early. We came to government after 10 years of complete inaction when it came to setting targets, so the first thing we did was to set a target. We didn't really want to start where we were. If somebody were giving us directions to get to net zero, they probably would have said, 'I wouldn't start where you are.' But we are where we are, and the best thing we can do is to start as early as possible. The second thing is leveraging private-sector and public-sector investment with certainty, and that's exactly what we did by legislating net zero and 43 per cent. So we, right from the start, have been approaching this problem with those core principles in mind.

Now we go to the safeguard mechanism, which is going to see abatement from 215 of our largest polluters—just under 30 per cent of total emissions—setting up an arrangement where they will abate their emissions by roughly 4.9 per cent per year until 2030. That is absolutely critical in terms of reflecting those other principles I laid out—that abatement should be broad. We don't want all the abatement on just one part of the economy. We can't achieve 43 per cent if we achieve abatement just through energy production or just through transport or just through one sector. It's going to be better for our economy, for our society, for our standards of living, if we achieve abatement broadly across the economy. It's entirely appropriate that the safeguard mechanism is going to be strengthened so as to bring in these over 200 large emitters. Under the previous government, there had been a safeguard mechanism of sorts but it didn't bite. It may as well not have been there for most of the firms within it. It didn't offer the breadth of abatement that our strengthened scheme will.

The other key thing is that abatement should be least-cost where possible, and that's where offsets are so important. The previous speaker gave some examples of where he thinks certain types of offsets may be difficult in practice, but is he seriously arguing that we shouldn't have offsets or is he arguing that somehow every other country is moving towards net zero but it's going to be oh-so-hard for us: 'We're only one per cent, we're different, let's not bother.' It really is a crazy argument, particularly given where our society have said they want governments to take them. But abatement at least-cost is going to require offsets, and that's why it's such a critically important part of this scheme that offsets be set up in a rigorous way. I'll deal with the offsets regime and how it's been supported by a rigorous report later on in my contribution.

Those opposite, as I said, have shifted their rhetoric from, 'It's not really necessary,' to, 'It's all too hard.' But their rhetoric doesn't reflect that of any major segment in our society or any major set of stakeholders, whether it be business, civil society, the scientific community or, frankly, the electorate more broadly. Let's look at what the Business Council of Australia said:

But without policy certainty and policy realism, we run the risk of another five to 10 years of delay and inaction.

When they say 'another 10 years of inaction', I know very clearly which 10 years of inaction they're referring to—the 10 years we're just coming out of. They're saying that, if we don't take realistic action that strengthens our regulatory arrangements, we are at risk of repeating the disastrous 10 years we're just coming out of:

We support the reform Safeguard Mechanism's objectives to achieve a net zero emissions economy which delivers new industries, new exports, new jobs, new opportunities and better living standards.

The Business Council of Australia backs in all the objectives this strengthened arrangement sets out.

What about the Australian Industry Group:

We want this mechanism to work as it's important to industrial investment and emissions reduction.

Again, clearly alluding to the fact that, unless we set up stronger regulatory arrangements, we are not going to have the certainty necessary for investment, and, secondly, that if we're going to have least-cost abatement we are going to have to abate broadly across the economy and have to do so in a way where offsets are possible.

The coalition's decision to vote against changes it had previously proposed and the reported Greens positioning once again make Australia look incapable of reaching agreement on how to utilise assets and build economic success. The unholy alliance that might be occurring—the trainwreck that might be occurring right in front of our eyes—between those who don't believe and those who want perfection over any realistic solution might again put us back in a situation where, despite the result at the last election, we might be faced with another 10 years of inaction. That would be a disaster for our environment, for our economy and for our society.

What about Amanda McKenzie, the Climate Council CEO:

The Federal Government's reform of the Safeguard Mechanism is a critical opportunity to deliver the right policy settings to help future-proof industries, protect Australian manufacturing, and reduce harmful carbon pollution.

Again, we need to strengthen the safeguard mechanism from the form it took under the previous government, where it wasn't biting. It wasn't leading to abatement. It wasn't doing what it was supposed to. It wasn't spreading abatement more broadly across the economy because it wasn't leading to change across a wide range of stakeholders.

This takes me to carbon offsets and carbon credit units. It is important to recognise that the task of abatement will not be equal across all of those 215 firms. So we recognise that it is critical that there be mechanisms whereby offsets can be purchased where it's not possible for firms to achieve abatement on site within a certain period of time. That is absolutely standard, rigorous, best-practice regulatory policy.

I want to take us for a moment to the Chubb report, released in December 2022, which has made very clear when it comes to the integrity standards of offsets that are being proposed that they stack up. Firstly, I want to talk about the fact that the method for determining the integrity of offsets has six elements: there must be additionality; there must be measurable and verifiable removal of emissions; it has to be an eligible carbon abatement; it has to be evidence based; any material emissions that are a direct consequence of carrying out the project should be deducted from the project's net abatement; and any estimates should be conservative. So it's a very strong framework that we're talking about. And what we find is that the human induced regeneration, the HIR, method is found to be sound. It meets the OIS, the offsets integrity standards, that I just described and is a rigorous way of achieving offsets. This is absolutely critical.

Secondly, when it comes to accounting for carbon sequestration in the human induced regeneration method, the Chubb report says:

The current model-based estimation of carbon sequestration using FullCAM is a suitable basis for estimating aggregate carbon storage in native vegetation, when applied appropriately at the project level.

I do think it's important to stress that the offsets mechanism that is being proposed is rigorous. It will lead to real abatement. But it is also critical to acknowledge that it is necessary because not all of the firms in this scheme are going to have the same potential to produce abatement in the next two, three, five or whatever number of years. This is exactly the kind of scheme that the economy needs. It's going to spread abatement, but it's also going to move towards a system where abatement is more least-cost.

This is an absolutely critical and overdue reform. What we are facing is one of the great regulatory and environmental challenges the world has seen in modern times, certainly in the times of modern human civilisation. It is a diabolical problem, because it's affected by all countries and there are all sorts of regulatory challenges, including coordination challenges and free-rider challenges. That's why it's so critical not only that governments regulate abatement within economies but also that governments of goodwill negotiate with each other internationally and take coordinated action globally.

What this government has done since taking office less than 10 months ago is that we have set upon the task immediately of putting in place an overarching architecture. We have put in place a net zero commitment in legislation. We have put in place a 43 per cent target in legislation. That will provide certainty. That will provide the earliest possible start. This is going to be built on by the safeguard mechanism, which is going to provide abatement that is spread more broadly across the economy and abatement that is least-cost. This is the action that our society and our economy need.

4:29 pm

Photo of Colin BoyceColin Boyce (Flynn, Liberal National Party) Share this | | Hansard source

I rise to make a contribution on the Safeguard Mechanism (Crediting) Amendment Bill 2022. I would like to make a comment on the previous member's contribution, and that is that all of the speakers from the other side that I've heard do not qualify or quantify the effects or the results of what they're proposing with this legislation. And the results will be enormous. They will be huge. None of them understand where they're going with it.

Basically the safety net mechanism is a tax—that's what it is—a carbon tax. If the Labor Party is good at one thing, it's imposing tax on our businesses, on our industries, on the Australian people. They're proposing to implement a 10 per cent increase on the transport industry through fuel excise increases and registration increases. There have been proposals on a superannuation tax on single-entity self-managed funds. There's also a franking credit tax. They are very good at imposing taxes. In respect of the safety net mechanism, in my electorate of Flynn there are 18 businesses that will be directly affected, those businesses emitting over 100,000 tonnes of carbon. In my neighbouring electorate of Capricornia there are 28 businesses, so of all of the businesses approximately 30 per cent are in Central Queensland. They are all related to heavy industry: to the coal industry, to the power generation sector, to the alumina sector, to the gas sector, to everything that generates income for the economy of Australia, and the ramifications are huge.

The ramifications of this tax have not been quantified by those opposite, and they don't know how to do so because they don't know where they're going with it. I have spoken to many of the proponents that are involved—not all of them—and one thread in the conversations that I had with them is common: where are we going to get the carbon offsets from, and how much are they going to cost us? There is a $75 cap on the price of carbon, and there is a $275 impost if they can't meet those carbon offsets of five per cent every year from now to 2030. The reality is they don't really know where they are going. They don't know how much it's going to cost them. They don't know how much in carbon offsets is available.

The member for Hinkler has rightly pointed out that they're looking at agriculture, to buy up agricultural land all over Australia, millions of hectares of productive agricultural land, to look for carbon offsets. There are other proposals—carbon sequestration, for example—and there is a proposal that I'm sure many are not aware of, and that is that Glencore, the largest coalminer in Australia, inject liquefied CO2 hypercritical fluid into the water aquifers of the Great Artesian Basin. They have a trial site at Moonie, near me in Darra, in the western Darling Downs. According to their papers, the test project they're proposing will cause 266,368 tonnes of carbon dioxide. They are proposing to inject 330,000 tonnes of carbon dioxide into the Great Artesian Basin test site, for a net yield of 57,000 tonnes. They also say in their technical water report that any injection site that they have and a zone around it will effectively render that water source useless. They say in their technical water report:

Future users should not be allowed to take groundwater supply from the zone impacted by the plume (Precipice Sandstone aquifer). This should include a zone around the impacted area from which water might be extracted by a well installed outside of the immediate residual impact zone.

They also say in their report that the waste is likely to result in the deterioration of the environmental values of the receding groundwater, so they are admitting that they cannot meet the environmental standards. What they are proposing in Queensland is to change the EP regulations to allow them to do this.

The problem I have with that is that, if those environmental regulations are changed—and I am talking about section 41(2C) of the regulations—that would open the gate for anybody and everybody to do the same thing. There are 215 companies that emit over 100,000 tonnes of carbon, and it is difficult to identify where these carbon offsets are going to come from and how much they are going to cost these companies if they can't meet those regulations imposed by this safety net mechanism. They will possibly look to carbon sequestration technology, and if those EP regulations are changed it will have an enormous effect on the greatest water source on the planet. The Great Artesian Basin is unique. It is one of a kind; there is only one of them. It's the same as the Great Barrier Reef. It is the outback's Great Barrier Reef. It is estimated to carry 65,000 cubic kilometres of fresh water. It covers 22 per cent of the area of Australia over four states. It covers 71 per cent of the area of Queensland, and it is the lifeblood of agricultural Australia. I am vehemently against anybody putting liquefied hypercritical fluid into the waters of the Great Artesian Basin. If I can borrow from Macbeth, 'They shall hack the flesh from my bones before I give up on this issue.' It's not happening on my watch.

There are other issues in respect of this safety net mechanism, and that's the hypocrisy that surrounds the whole thing. Why is the renewable energy industry not included in this safety net mechanism? Everybody thinks that as we move to the future and achieve 43 per cent carbon emissions, we're going to rely on wind farms, solar farms and alternative energy sources for our power. They are under some delusional idea that none of these industries create carbon. Well, they do. There's concrete, there's steel, there are plastics; there are all sorts of things. The member for Brisbane, in his contribution, wants to turn away from all of these fossil fuels. How on earth are you going to feed the world if you don't have gas to make fertiliser? If you do not have the hydrocarbons, petroleum and oil industries, how do you create plastic? The steel and cement industries, which give us our homes, buildings and roads, are all reliant on the fossil fuel industry. One thing about the Greens' arguments in all of these debates is that they have no alternative whatsoever as to how they're going to solve these problems, if indeed we were to do that.

One other thing that I would like to touch on is a synthetic gas that the renewables and energy sectors use, called SF6 sulphur hexafluoride, and it has been identified as being 23,900 times more potent than CO2 in the atmosphere. In Europe, in 2017, it was estimated that the leakage of SF6 was equivalent to the burning of 100 million tons of coal. SF6 is used by the electrical industry as an inert gas in switching gear in electric vehicles, wind turbines and all of these things. So I have a question for Mr Bowen in respect of reaching 43 per cent carbon emissions and the fact that he wants to install 40 wind turbines every month between now and 2030, 22,000 solar panels every day between now and 2030, and 28,000 kilometres of high voltage powerlines between now and 2030 to achieve their 43 per cent emissions target. How much of this SF6 sulphur hexafluoride is going to be used, and how much of it will leak into the atmosphere? One kilo of sulphur hexafluoride is equivalent to 23,900 kilos of carbon dioxide. Australia produces somewhere in the vicinity of one per cent of world carbon emissions, so what are we actually achieving by implementing this policy? That's where I'm going with this; it doesn't make sense to me. If carbon dioxide is such a terrible gas, why is it that, in a recent meeting with Glencore, CTSCo and the Clean Energy Council, Glencore said to me that their biggest client for compressed carbon dioxide is Coca-Cola? We're putting it into soft drink. We're putting it into beer. What is so dangerous about carbon dioxide?

One of the other issues is that before the election the Labor Party promised that no coalmine would be impacted by these policies. Obviously, that's not correct. I would say to the coalminers and the resource-sector workers in my electorate of Flynn: be mindful of the Labor Party. They do not support your industries, and they're after your jobs, and that's exactly what will happen, and the AWU recognises this. They want to implement import duties on all imported goods because they know this is going to cost jobs. They know that these costs that these big companies incur will be passed on. So I cannot support this bill the way it is, and I would like to hear from those opposite as to how they can qualify the net results of where they're going with the implementation of this bill.

4:40 pm

Photo of Kate ThwaitesKate Thwaites (Jagajaga, Australian Labor Party) Share this | | Hansard source

The Safeguard Mechanism (Crediting) Amendment Bill 2022 is a very important bill. It is a very important bill to be speaking on, and I'm very conscious that I am speaking today a day ahead of the release of the sixth IPCC report tomorrow. I've got to say I am dreading that release a little bit, because it's the sixth report, and these reports don't get any better. Each time, the picture gets a little bit more difficult. Each time, we find out more and more about how our climate is changing and about how the time we have to address that is getting shorter and shorter. Each time, the ask gets a bit more urgent. So, when the member opposite asks, 'What's so dangerous about carbon dioxide?' I do encourage him to read that report tomorrow. I think it will set out a lot of those facts he is looking for around what makes it dangerous, what it means for us here in this country and what it means for people around the world.

This is a genuine problem. It is a genuine problem that this government was elected to do something about because, as we continually hear from those opposite today on this debate, those opposite refused to. For almost a decade, they refused to address climate change, and the consequences of that mean that our country is coming from behind where we should, when we are trying to address this pressing, urgent issue that will affect our country, will affect our economy here, will affect our children's futures, will affect our future and will affect the future of our entire planet. From the get-go, since we were elected, our government has been focused on addressing the challenges climate change poses for Australia and for the world. We understand climate change is a crisis, and we are working to take action on that crisis.

As we do that, we're not doing that because we think we can ignore it. We're not doing it because we think this is a moral obligation. We're doing it because we recognise this is a necessity, and out of that necessity there are opportunities for our country. There are opportunities for our environment, for the climate, for our people, for the future of our country, and for the economy—for good jobs and secure industries of the future.

The Climate Change Act that our parliament passed in September last year laid the groundwork for climate action going forward. It set our government's target of 43 per cent emissions reduction by 2030 and net zero by 2050. It's putting Australia back at the table in global efforts to reduce climate change. It has done some of the work we needed to do to once again be seen as a responsible player globally, to be seen as someone who is doing our part within a region—our region, the Asia-Pacific—that we know is going to be and already is being particularly impacted by climate change. We are doing the work that puts us back in the conversations about all of that work that is happening internationally—the conversations with allies, with friends and with other countries that we were locked out of for nearly a decade because previous Liberal-National governments refused to take action.

This safeguard mechanism is the next important foundational step forward. It will require our country's largest industrial facilities to reduce their emissions, gradually and predictably, in line with our country's targets. This is a reform that will put Australian industry on the path to net zero by 2050 while also ensuring Australian businesses stay competitive as the world also works towards net zero.

For business and industry, this bill aims to support and encourage industry to unlock emissions reductions where they are most efficient. We know that some businesses do already have low-cost abatement opportunities ready to go and in fact could reduce their emissions faster than is required by the safeguard mechanism. This bill is designed to incentivise such action, enabling these businesses to be issued tradeable safeguard mechanism credits. Other businesses that have more limited abatement options can then buy these credits to help meet their required emissions reductions. Crediting and trading will lower the cost of reducing emissions, helping the safeguard mechanism to meet Australia's climate targets in a cost-effective way and enabling increased ambition over time.

Australian businesses and investors in Australian businesses know that the world is changing. They want to remain competitive in that world, and they know that they need the right signals in place to not just stay competitive but also innovate and thrive. Many businesses that operate facilities that will be covered by the safeguard mechanism have already made long-term climate commitments that match or surpass our country's climate targets. These reforms to the safeguard mechanism will provide strong investment signals for those businesses and provide a balanced scheme that is effective, equitable, efficient and simple.

Despite all of that, those opposite continue to ignore the realities of climate change. In my home town of Melbourne, we have quite a few electorates that changed hands at the last election. They changed from being Liberal or National seats to teal seats, and some of them changed to Labor seats. One of the key reasons those seats changed was that they saw that those opposite continue to deny that climate change is a reality. Yet even after that really clear message—that the Australian people know this is a reality, that the Australian people know that climate change is real and we need to take action—those opposite continue to come in here and ask questions like, 'What's so bad about carbon dioxide anyway?' They continue to deny. If we still had them in government, we would continue to delay. The opposition is putting our country's future at risk. So long as those opposite continue to refuse to take necessary, sensible, measured action to make reasonable efforts to reduce our climate emissions, they are standing in the way of a future for all of us.

It's not just the Australian people who have sent this message to the Liberals and Nationals; the Australian business community have also asked them to get on board with the safeguard mechanism. We know the Australian Chamber of Commerce and Industry said:

Past failure to deal with this reality has crimped certainty for industry and investors, and left our energy sector in disarray. Australian businesses and households are now paying the price.

They've made it clear they support the reforms to the safeguard mechanism:

This is the best way to secure the planning, investment and innovation that will underpin the decarbonisation of our economy without sacrificing reliability or affordability.

It's not just them. The Australian Industry Group says that this bill is 'essential policy infrastructure', that it's 'strongly in everyone's interests to pass it' and that it's 'needed for industry investment and for any political party's climate policy vision to work'.

The government has listened. We are leading the way on these reforms. We are taking action on climate change. We are working with business and industry so that they can grow and so that they do have a sustainable future in this country, because we absolutely should be a country with industry. We absolutely should be a country that makes things, and that's what this bill and the safeguard mechanism enable.

I understand there are also concerns about how the safeguard mechanism will work to drive down overall emissions. I want to thank the climate groups and the members of my community who have engaged with me so constructively about this. Obviously, as a country we have to make substantial emissions reductions in a relatively short period of time to meet our target of 43 per cent reduction by 2030. I want to be really clear: our government is absolutely dedicated to that task. We know that what we are doing is transforming our country and our economy so that we reap the benefits of being a green energy superpower.

We are of course coming from behind. We did waste nearly a decade under Liberal-National governments. We won't get there through slogans; we will get there through our government's investments in a clean energy future, through driving the reform we need to transform our economy and through reasonable measures like this safeguard mechanism and this bill. In less than a year since we were elected our government has already demonstrated we are committed to investing in green energy. We know this transformation is one that government can and should play an important role in. We're not standing by and we're not waiting for others to do it; we're stepping forward to work with business and industry and deliver a greener future.

We have our Rewiring the Nation plan getting underway, with some projects already beginning as part of our $20 billion fund to accelerate the decarbonisation of the grid. This includes in my home state the Marinus Link between Victoria and Tasmania and the Kerang link between Victoria and New South Wales, and both of these projects will help unlock renewables and put downward pressure on energy prices. Alongside this we are making up to $1.5 billion available for renewable energy zones in Victoria and for the development of offshore wind. These are substantial investments in projects that will transform how we power our country. These are good projects, they will deliver us renewable energy and they will deliver us jobs and industries that are sustainable into the future. Our government is delivering $300 million for community batteries and solar banks across the country, and I am very pleased we'll be seeing at least one community battery in Bellfield in my electorate. I think that will be important for the people in that community to have those benefits of renewable energy. I know there's interest from other areas of Jagajaga as well, and I'm happy to keep talking with community members about that. Our government is backing access to sustainable homes with a $125 million investment to encourage homebuilders and renovators to deliver homes with high energy-efficiency standards, including heat pump water systems, electrification and battery-ready solar panels.

Of course it's not just in Victoria; this work is going on right across the country. We have in Brisbane, which the member for Lilley is probably particularly interested in, the development of what could be one of the largest renewable hydrogen production facilities in the world; in Broken Hill, $45 million for a 250-megawatt renewable storage project; $47.5 million to develop a new hydrogen electrolyser in Western Australia; $160 million from the CEFC to fast-track the connection of the country's largest wind farm in Queensland with the national electricity market; and $500 million to help businesses progress innovative projects and technologies to reduce emissions. There are a lot more projects I could go through, but I am conscious of the time. But it gives you a sense of the scale at which this government is trying to operate. We understand the scale of the task before us to transform our economy to make sure it is one that is driven by renewables, that supports Australian businesses and that supports Australian industry, makes sure we are delivering right here the jobs of the future and makes sure we are securing this country's future economically, environmentally and in addressing the climate crisis.

I know the decade of denial and drift under the Liberals and Nationals was something my community were incredibly distressed about. I know they are worried. They too, like me, will see the headlines generated from that sixth IPCC report tomorrow and they will also feel a bit of dread. They will also wonder what the future looks like for their children, their community and of course our entire planet. We have to get this right. We don't get a second chance. We don't get a second world to do this work in. This is the time for this. This mechanism is such a crucial part of the work our government is doing to drive down emissions and to make sure we are transforming our economy and seizing the opportunities of the future, we're not being left behind and we're not being left with a country that is facing increasing natural disasters from an increasingly changing environment. We deserve better than that in this country. We can have better than that in this country.

This mechanism has been designed to make sure that we deliver a future that works for our communities, for our industries and for our businesses. It is a sensible, effective measure. It is one that should get support from across this place. This place does not have a good record when it comes to climate change. This is our chance to do better. This is our chance to take our place in history and make sure that we set this country on the right path to make sure that we are looking after our future, our children's future and their children's future. That's what this is about. This is about us being able to achieve those necessary emissions reductions that secure our future.

4:55 pm

Photo of Andrew WillcoxAndrew Willcox (Dawson, Liberal National Party) Share this | | Hansard source

I rise today to speak on the government's Safeguard Mechanism (Crediting) Amendment Bill 2022. The safeguard mechanism requires Australia's largest greenhouse gas emitters to keep their net emissions below an emissions limit, but the way that Labor has overhauled this policy means there is nothing safe for jobs in this bill, there is nothing safe businesses in this bill and there is nothing safe for the average Australian, who once again will be paying more under Labor.

This bill, according to the Albanese government, will help Australia achieve net zero emissions by 2050. This bill applies to facilities emitting more than 100,000 tonnes of carbon dioxide per year. We all know that the Albanese government announced it would cut emissions by 43 per cent by 2030. In order to reach the 2030 climate target, the Albanese government is forcing 215 of Australia's biggest businesses to cut emissions by five per cent per year or pay for their emissions output. Almost one-third of these businesses are in Queensland, in the electorates of Flynn and Capricornia, which surround my electorate. There are 28 industry facilities and major businesses affected by this radical and nonsensical tax. Some of these companies are Rio Tinto, Santos, Anglo American, BlueScope Steel, BHP and Glencore. These companies employ thousands of people from across our region. They provide billions of dollars through state royalties. They go into emergency services, our hospitals and schools, and they contribute hundreds of thousands of dollars to our communities through sponsorships, scholarships and donations.

Allow me to tell you a little bit about my electorate. Mackay, in the south of Dawson, is the base for many mineworkers, who travel over the hill into Capricornia or Flynn to work for the companies I have mentioned—not for fun but to earn a living. While thousands of our hardworking men and women go out west to work, their families and their homes are in Mackay. Not only is Mackay home to many mining and manufacturing workers; it's also a maintenance hub for the mining companies. It's not just the mineworkers and their families that rely on these jobs. Small businesses rely on people having jobs, and our house prices and investments rely on people having jobs. In order to have a healthy and thriving economy, people need to have jobs. We learnt this in school.

It's easy to see how reliant a place like Mackay is on the coal and manufacturing industries, but the Albanese government's extreme climate targets and the way it intends to meet them put all of these jobs in jeopardy. They put real estate investment in jeopardy, they put small business in jeopardy, and they put our children's future in jeopardy. This is typical Labor: create a problem, invent a tax for hardworking Australians, and then try to fix it. It doesn't make any sense.

For the past few minutes I've been telling the House what the Labor government wants you to believe the safeguard mechanism is and then what I believe it actually to be. You know the old saying: if it waddles like a duck and quacks like a duck, it's probably a duck. So let's call it for what it is. It's a tax on families, a tax on businesses and a big tax on regional Australia. It's carbon tax 2.0 and another major blow for the people of Australia and, more specifically, for the people of rural and regional Australia. It greatly concerns me that the Albanese Labor government is happily executing drastic climate targets with no consideration for the toll it takes on Australian jobs and on household budgets, at a time when the cost of living is skyrocketing, with increased mortgage rates, increased overdrafts for businesses, increased food and fuel costs and increased energy prices.

Leading up to the 2022 federal election, Prime Minister Albanese and his party promised there would be no carbon tax. Labor promised that not a single Australian coalmine would be impacted by their policy to reduce carbon emissions. But, after the election, the Albanese government says that any new gas or coal project will automatically come under the remit of the mechanism. We all know that the good folk in Central and Northern Queensland did not fall for the Labor promises at the 2022 federal election, and now you can see why. We are the type of hard-working, common-sense people who can see straight through porky pies. This is another broken Labor promise.

Central and North Queenslanders understood the coalition's sensible approach of achieving net zero by 2050 and delivering this in a responsible way that balances emissions reduction with economic growth. The coalition government mapped out a plan to achieve net zero by 2050 without new taxes. The coalition believes in technology, not taxes. In government, the coalition committed $22 billion to bring down the cost of low-emission technologies—that is, hydrogen, ultra-low-cost solar, green steel and aluminium—leveraging up to $132 billion in private sector investment and supporting over 160,000 jobs. Once these technologies are cost competitive with the existing alternative, people will voluntarily make the change. Now, I'll tell you this much: at the rate we're headed, there won't be much of the Australian dream left in a couple of years.

We are seeing how the effects of taxes are affecting investment in Queensland right now. Major miner BHP will not make any significant new investments in Queensland due to the state government's coal royalty tax. There is a strong long-term demand from global steelmakers for Queensland's high-quality metallurgical coal. But we are being told that, in the absence of good government policy that is both competitive and predictable, companies are unable to commit to significant new investments in Queensland. Senex Energy's $1 billion investment plan to bring new gas to the east coast is at risk. BHP has also put plans for the Blackwater South mine in Central Queensland on hold for the foreseeable future. The Palaszczuk Labor government have firmly shot our state right in the foot with their coal royalties, and now the Albanese government is trying to do the same. Queensland businesses are set to pay an extra $4 billion in tax with Labor's carbon tax.

Our mining and resource sector is the No. 1 contributor to keeping our nation afloat, the No. 1 regional employer and the No. 1 industry for export dollars. This industry supports over 450,000 jobs for Queenslanders and 14,000-plus businesses, all of whom pay tax to help fund hospitals, schools, roads, our NDIS and all other government services. The thanks the industry and the workers get is to pay more tax and prop up a bloated Canberra bureaucracy. It's starting to become clear that Labor's carbon tax 2.0 will be devastating for regional and rural Queensland families. Life is already tough in the regions. We don't need another tax. Everyone is already tightening their belts. This will just add more pressure, and this is just plain irresponsible.

Meanwhile Labor's policy lets high-emissions electricity users completely off the hook. Some of our big banks, who are large energy users with their data centres, get off scot-free. It's the high-vis industries of mining and manufacturing who are coughing up again, not the suit-wearing industries that create emissions in the cities. But let's face it. We all know we pay more under Labor. We all know life is harder under Labor. Labor's carbon tax will drive up the cost of living at a time when Australian workers and families can least afford it. The businesses that do hang around will pass the additional costs straight on to consumers through higher food prices and higher prices for building materials. Currently the people in my region are dealing with interest rate hikes, rising energy costs, increases in insurance premiums, fuel hikes and cuts in roads and communications infrastructure, and they are now dealing with the fear of job losses.

A month ago the Prime Minister turned up in Mackay for a one-hour photo opportunity. He didn't take the time to talk to mining or manufacturing companies. He didn't take the time to talk to workers or small-business owners. He certainly didn't take the time to visit our substandard roads and note our lack of infrastructure. His lack of interest in the region is obvious and alarming. I often wonder: where did the Labor Party go? The old Labor Party would never put Greens policies above what was right for the high-vis worker. The old Labor used to stand up for miners and the resource sector. Now they just tax the life out of them. The Labor Party's constituency base used to be the working class, but these days it seems to me that they're in an identity crisis, because it's clear what they stand for and what values they base their policies on, and it's clear that they no longer value the worker. They penalise people who work hard and who want to get ahead without relying on government handouts. It is very clear to the people of Central and North Queensland that the Albanese Labor government are holding the regions back. Australians are always paying more under Labor.

5:08 pm

Photo of Fiona PhillipsFiona Phillips (Gilmore, Australian Labor Party) Share this | | Hansard source

I rise today in support of the Safeguard Mechanism (Crediting) Amendment Bill 2022 because I know this is a crucial step forward in our plan to power Australia and take genuine and effective action to reduce our emissions. As a country, we have been having this conversation for far too long. We have seen a decade of energy policy failures. We have seen a decade of inaction to address our changing climate. We have seen business uncertainty and missed opportunities in the renewable energy space. The list goes on. The Albanese government was elected to change all of this. We were elected to move our country forward finally, to end the climate wars and to finally put a plan in place for energy security, for business certainty and for investment in Australian made, a plan to rewire our nation, create the jobs of the future and drive investment in renewable energy—cleaner, cheaper power for local people and businesses.

We know that industry have been leading the way for years. In a policy vacuum created by government, they have taken charge and made significant changes to how they do business. That's not just because they know it's the right thing to do for our planet; it's because it makes good business sense. That's the key. This is actually critical for thriving and growing businesses, because there are better ways of operating, there are cheaper ways of operating and there is so much opportunity that has been wasted. There are cheaper ways of operating, and there is so much opportunity that has been wasted.

The Albanese government is working to end that waste. We are working to support businesses who have been going it alone for far too long. We want to support and encourage businesses to unlock emissions reductions where they are most efficient. The main purpose of this bill is to reward industrial facilities that are staying below their baselines, while at the same time giving other facilities new and low-cost ways to reduce their net emissions. The introduction of safeguard crediting and trading will lower the cost of reducing emissions so that we can stay on track to reach net zero by 2050 in a cost-effective way. A key point here is that many of the 215 facilities producing more than 100,000 tonnes of greenhouse gases a year that are included in the safeguard mechanism have already made long-term climate commitments that surpass Australia's climate targets. They know the world is changing and those who don't keep up will be left behind, so we are creating a supportive policy framework for them to help industry meet its commitments, to drive investment in emissions reductions and to create the flexibility businesses need to find the lowest-cost abatement measures

Businesses that stay below the baseline, which many are already doing, will be able to generate credits that they can trade. This bill will create the mechanism for that crediting and trading, and will deliver 205 million tonnes in abatement between now and 2030, which is equivalent to taking two-thirds of Australia's cars off the road. It is critical we get this in place quickly to help to drive down our emissions now. We simply must encourage business to innovate and thrive in a changing world economy. It is nearly impossible for large-scale transition to happen without adequate support from government and without an incentivising framework from government to make the right changes in the right places. Industry have been looking for this support for years and has been left to find solutions for themselves.

I have talked many times in this place about some businesses in my electorate of Gilmore, on the New South Wales South Coast, who doing just that: finding ways to turn waste into energy, setting up microgrids to power community facilities, investing in solar and other renewables to generate cleaner, cheaper power. Many people are trying to find a way, and they can and will, of course, because local business owners on the South Coast are adaptable and savvy. They know they have to, they know it is beneficial. But they also know it could be easier, it could be cheaper with more support and encouragement from government, so that's what we are doing. We're helping to keep local business competitive in a changing world, helping them to innovate and helping them to grow.

What does all of this translate to? Jobs—Australian jobs—just another arm in our plan to keep local people in well-paid jobs of the future. We're creating jobs while at the same time bringing down power prices and bringing down the prices of goods and services because producers can find cheaper ways of doing business, so we're helping with the cost of living. It's a positive feedback loop that we are setting in motion to support local people to bring down the cost of living and finally bring Australia into the 21st century. But we aren't focusing on just one policy, one trigger or one incentive to help us to move our economy forward and support local communities to transition to cleaner, cheaper power. We have already put in motion a range of other initiatives to help us do this because we know we need a package, not a single line item, if we are to keep Australia moving forward.

One policy package I'm particularly excited about is support for electric vehicles. The South Coast is home to Australia's largest electric vehicle charging station at the Silos Estate in Berry. Their superchargers can entirely recharge an electric car in 20 minutes, which means that not only are they doing their bit to encourage electric vehicles but they are also cementing their winery and the South Coast as a premier road trip destination for electric vehicles: good for the environment, good for the economy and good for business. The Albanese government has already delivered on our election commitment to make electric vehicles more affordable. Our electric car discount bill passed the parliament last year, reducing both the upfront and ongoing costs of owning an electric vehicle. Our National Electric Vehicle Strategy is also working to improve the affordability, supply and uptake of electric vehicles, helping more local people benefit from cleaner, cheaper transport.

Recently I attended the electric vehicle expo at Batemans Bay. It was a thrilling demonstration of everything electric. There were EV test drives and demos, and lots of questions were answered. I got to check out bikes, scooters, lawnmowers—you name it. Our wonderful Southcoast Health and Sustainability Alliance is at it again, supporting local people to find new and exciting ways to reduce their emissions and transition to renewables—just one of the many exciting initiatives that SHASA takes part in. We definitely can make the South Coast the go to for road trips in EVs, rolling out an EV friendly highway right up and down the coast. The drive is there for local business and communities, and the Albanese government is making sure they have the support of government as well. These are exciting times, creating jobs and revolutionising our economy—not by taking away, but by adding, supporting and growing tourism; supporting agriculture; supporting local people.

We know that we can create over 60,000 clean energy jobs in Australia by 2025, most of which will be in regional areas like the South Coast, with the right investment and support from government with our Powering Australia plan. We are going to need thousands of workers every year to enter the energy sector to build the massive infrastructure projects that we all need to meet our energy grid needs and reduction targets. On the South Coast we are poised and ready for these jobs. We are the perfect location for clean manufacturing, solar farming, battery production and more.

The Albanese government has launched the Australian Energy Employment Report survey to directly engage with employers to gain a more detailed understanding of our current and future workforce issues. We want to support the development of the jobs and training we will need to support our transition, to help local people take their place in the global race. We know Australia has the know-how. With the right investment we can be a world leader. We've already started with our New Energy Apprenticeships program. This program will create 10,000 new energy apprenticeships to help young people gain the skills they need for the jobs of the future. An eligible full-time Australian apprentice can receive a payment of $2,000 at six, 12, 24 and 36 months and completion; and part-time apprentices can get $1,000. This payment is to help meet the cost-of-living pressures and incentivise trainees to stay in training.

From 1 July we'll also have a mentor program so that these apprentices can get the ongoing professional development support they need to learn about the industry, build links and cement their place in the industry. I'm a former TAFE teacher who worked with work placements, so I know just how crucial this is not only in helping to further the education and growth of these apprentices but in helping to ensure they stay in the industry. We're building careers, not just jobs. And we're building them at home, in regional areas like the New South Wales South Coast. What could be more exciting?

But the Albanese government doesn't want to sit on its laurels. We need to be able to identify current and future workplace issues in the energy sector. This is where the national survey of energy sector businesses comes in: listening to industry, working with them directly to prepare for the future so that we can create a secure energy sector, help to manage energy prices and grow and develop local jobs. The Australian Energy Employment Report will guide businesses around the country to improve workforce planning, give them certainty to invest and make sure our policies are correctly placed to build jobs, skills development and training opportunities. I strongly encourage local energy businesses on the South Coast to engage with this survey so that the needs of our region are included.

Another exciting chapter in the Albanese government's plan to support emissions reduction, build local jobs and bring down the cost of living is the formal launch of consultation on Australia's first National Battery Strategy. If we mine it here, we should make it here. That is what we want Australia's approach to be. Global demand for existing and next-generation batteries is forecast to increase up to tenfold in the next decade. As we transition to renewable energy, being able to adequately and efficiently store that energy will become more and more critical to energy security. We want Australia to be a key player in the battery industry, and with such an abundance of natural resources we are uniquely placed to make that happen—not only that, but we also have the innovation and research capabilities to make this a reality.

As I've said already, we are not relying on one facet to create the jobs of our future. Boosting our national battery manufacturing capability will complement our National Electric Vehicle Strategy. It will support our 10,000 new energy apprentices, establish a Powering Australia industry growth centre to translate research into local jobs and investment. It will help to deliver the community batteries we have promised to communities like Maloneys Beach in my electorate, making communities more resilient and more sustainable and helping with the cost of living. Each of our policies is like one piece in a wider jigsaw puzzle that is working to push Australia forward and end a decade of stagnation. That's why I support this bill today.

Just one final comment: I must say how disappointed I am to see the Greens standing in the way of this legislation. I'm a firm believer that we must learn from the mistakes of the past and we must find ways to compromise and find a common way forward. Sadly, the Greens seem to be making the same mistake they made in 2009. That mistake led us down the path of a decade of inaction on climate change, a decade of energy waste, a decade of this country going in exactly the opposite direction to what the Greens say their whole agenda is about, politicking to the detriment of local people in our community. I implore them not to make that mistake again. Don't stand in the way of good policy that will support our transition, that will support and is supported by industry and that will support jobs growth. We can't afford to waste any more time. I commend this bill to the House.

5:21 pm

Photo of Barnaby JoyceBarnaby Joyce (New England, National Party, Shadow Minister for Veterans' Affairs) Share this | | Hansard source

This gives me, unfortunately, a sober view of how disconnected this parliament has become from the cost-of-living pressures that are now so apparent on so many people—whether they are in Coles with their shopping trolley, whether they are trying to pay their power bills, whether they are trying to pay for their fuel. Underpinning that is a whole range of climate policy issues that are driving it. We have got to move away from the mythology that, somehow, renewables are making power cheaper. It has never been dearer.

We are also seeing going hand in glove with the sentiment of the Safeguard Mechanism (Crediting) Amendment Bill 2022, and the safeguard mechanism and further taxes on the last remaining industries such as the last two oil refineries in Australia, that we are going further and further to a position that says the zealotry and religion of this building—which has trouble trying to change a flag!—can somehow change the temperature of the globe. We have to realise that we have to start putting the mother pushing the shopping trolley first. We have to start understanding that the family that can't pay their power bill comes first. We have to understand that the people who are struggling with their petrol and their fuel come first. This form of zealotry just goes to show you the disconnect that says, 'No, what actually comes first in this parliament is our belief that we are somehow going to single-handedly, by legislation, in Australia, with 1.2 per cent of emissions, change the temperature of the globe.' I'll tell you what you're going to do: you're most definitely going to change the temperature of their wallet, and it's going to become a cold and miserable place.

We have seen with this safeguard mechanism—we are talking about AUKUS. The government want net zero by 2050, which—surprise, surprise!—is around the time of the culmination of AUKUS. And what does AUKUS need? I presume it's going to need Australian steel. BlueScope will be taxed. The people driving to work will be taxed because there'll be a new tax on fuel. The gas that's required will be taxed for new gas production. The coal that is used for electricity is taxed. We say we must have a strong defence platform—and we must—but to support it, to pay for it, our nation needs to be as strong as possible as quickly as possible across every field. If it's important enough to spend $360 billion-plus on submarines, then it's important enough to have a more sober, clinical realisation of where we are in manufacturing and across myriad fields, and understand that, if we come forward and say the way we are going to help these people is by creating a new form of carbon tax, we're working at conflicting purposes. To encourage people to set up in this nation we must have the cheapest power. We don't have the cheapest wages and we don't want the cheapest wages. Global commodities place a price on a global mechanism. We used to have a strategic advantage. We used to have the cheapest power and now we don't. Unless we get back there then the mythical belief that we'll somehow have manufacturing jobs pour into Australia, when manufacturing can be done so much cheaper somewhere else, is just that: it's a myth.

We know that with the Labor Party it's coming unstuck. I had a ministerial visit last week. I never got a phone call in my office. I wanted one. It wasn't in the paper that the person was coming. This person did the best impersonation of a nuclear submarine I've seen yet. He just popped up and nobody knew he was there. It was Minister Bowen. He surfaced at Uralla—he just popped up. It was terrifying. No-one knew he was turning up. If they had known he was turning up, by gosh he would have got a welcoming party. The new transparency in government is the Chris Bowen nuclear submarine. You never know; he could turn up in Rockhampton. Be careful—he's very dangerous. He went up there so he could talk to a small group of people who were onside with him. There are a vast group of people who don't want transmission lines across their country and who don't want to be inside wind factories. We'll have more structures around the town of Walgett—with about 2,000 people—of over 260 metres high than the CBD of Sydney. That is an absurdity. Where people get it wrong is when they say, 'Oh, there'll be all these jobs.' They're contractors: they fly in and they fly out.

Another thing we realised is that, if you are going to put in a new coalmine, you have to put money in a trust for the decommissioning and rehabilitation of the site—you have to. If you put in any mine, you have to provide for the rehabilitation of the site. You can't get the DA through without it. But, with these wind factories, you don't need to do that. They just stand there and when they become obsolete—and, by gosh, they do; the first towers were three megawatt towers and now they're building 7½ megawatt towers—the cost of pulling down a tower is vastly higher than the cost of putting it up. So what do they do with them? They leave them there. They leave them there because—this is the trick—the farmer's responsible for them. They get paid the $30,000 a year per tower because they're responsible for them. Of course they don't have the $750,000 per tower to decommission them. This is going to be a blight on the landscape.

Now we go to the next section of this thing—the safeguard mechanism. They're going to fix the problem by bringing in a new tax on the industries we already have, and there is the solution of the Labor Party. When you bring up other zero emission technology solutions, such as small modular reactors and nuclear power, they say: 'No, we can't have that. We can't have those manufacturing jobs. We can't have that technology.' Hang on, but you support nuclear submarines, and they've got small modular reactors in them with highly enriched uranium. You know something? The uranium they use in those is actually uranium that was going to go into nuclear weapons. That uranium—some of it from decommissioned nuclear weapons—is used in the reactor. It's highly enriched uranium. But that's all right. They can do that, but they can't get their mind around small modular reactors. They say they want to employ thousands of nuclear technicians, who we imagine will predominantly be under the auspices of the Navy. What happens when these people come? Where will they work? Milk bars? Or—I don't know—will they work as farm labourers? If you had small modular reactors and a nuclear industry in South Australia, you'd actually have jobs for them to go to. You'd actually have high-paying manufacturing jobs and the capacity to produce zero emission power. But they won't do it because of the zeitgeist, the religion. Part of that religion, although it's pro zero emissions, is anti nuclear power. The rest of the world, as they always do, leave poor old Australia behind. Rolls-Royce are developing them, Skoda are developing them, Mitsubishi are developing them, General Electric are developing them and Westinghouse are developing them. Scandinavia, England, France, the United States of America, Argentina and Canada are miles ahead, as are China, Russia and even the United Arab Emirates and Czechoslovakia. Minister Bowen, the human nuclear submarine, who pops up silently, never to be known—the man who does the best impression of a rabbit just disappearing down a hole and popping up a hole—laughs. He says the CSIRO has told us we're the only smart ones. All those other countries are so silly. The only clever one, the only child who's walking in step, is Mr Bowen. All the rest are out of step. We should ring up Rolls-Royce, Skoda and Hitachi and say, 'Stop this. We've heard Mr Bowen. It doesn't work.'

Photo of Scott BuchholzScott Buchholz (Wright, Liberal Party) Share this | | Hansard source

I just remind the honourable member to refer to members by their title: the member for McMahon.

Photo of Barnaby JoyceBarnaby Joyce (New England, National Party, Shadow Minister for Veterans' Affairs) Share this | | Hansard source

The member for McMahon; I'm not quite sure what his job is at times. This is the issue. The safeguard mechanism is just an anachronistic approach that somehow you create something by taxing it. The whole purpose of taxing something is it becomes a disincentive. Then we've got the next thing, the credit offsets. Where does this go? Obviously if you're getting credit offsets you're going to farmland, you're going to other areas and you're going to turn them into carbon sinks. I don't know how that works unless we're going to evolve to a higher form of termite. As we move farmland to basically carbon sinks, how does the land operate? How do we get a return off it? What do we do with that? You haven't got cattle, you haven't got sheep and you haven't got farming; you've got trees—trees you can't cut down; you have to stare at them. That apparently gives a sense of moral righteousness; there they are. Somehow in this absurd equation you've got to say, 'That works, but what happens if there's a bushfire and the forest burns down. Do we have to buy more offsets?' How does this crazy equation work?

They prefer all the nuances, complexities and craziness of this safeguard mechanism over trying, alternatively, to say, 'Hang on, if we're building nuclear submarines and we actually believe small modular reactors work in nuclear submarines'—imagine when these nuclear submarines come into port. What happens if they turn on a light and light up the port? That's nuclear power. We're going to rush off to the nuclear submarine and say, 'You must now turn off all your lights, because we don't want nuclear power in Australia. You can park your sub here, but you can't have any lights on at the dock. Don't run an extension cord off there or anything like that, because we don't allow nuclear power in Australia, although we have a nuclear submarine with highly enriched uranium in the port.' If you can explain that one to me, Deputy Speaker, you're a better man than I am.

I would humbly suggest if you're going to have nuclear submarines then you start by trying to catch up with the rest of the world on the development of small modular reactors so you can actually have a nuclear industry that employees Australians and pays them large amounts of money. I'll make a prediction to you. Since the rest of the world—as I said, Hitachi, Skoda, Rolls-Royce, Westinghouse, General Electric, myriads of Chinese companies, New Scale, Ontario power companies—are all developing small modular reactors and now even developing microreactors, which are about the size of two coffee tables, smaller than this table in front of us, I reckon in about 2050 they're going to be around. You're going to see them on Pacific islands. They're going to be everywhere.

Somebody will have made them, and that somebody, because it's up to 20 megawatts—that's 20,000 people, just so you know, as a rough calibration—is going to make a bucketload of money out of making them. But you know where they're going to be? The person who makes the money out of them is going to be in the United States of America, England, France, China, Russia, Canada, Argentina and Scandinavia. But they're not going to be in Adelaide, because we were changing the temperature of the globe singlehandedly with a safeguard mechanism. That's how we're going to do it: the safeguard mechanism—a new tax. In closing I say be very careful of a parliament that takes days, possibly a week, to change a flag on top of it, believing it has the capacity to change the temperature of the globe by a new tax.

5:35 pm

Photo of Alicia PayneAlicia Payne (Canberra, Australian Labor Party) Share this | | Hansard source

It gives me great pleasure to stand today in support of this very important bill, the Safeguard Mechanism (Crediting) Amendment Bill 2022, a bill that is a critical step on our path towards net zero and a critical part of ending a decade of inaction on emissions reductions. It is a bill that will ensure that we get to 43 per cent emissions by 2030 and net zero by 2050, a bill which will finally get Australia back at the global table and with the respect of our international neighbours, and a bill that is an integral part of the very important work of decarbonising our economy and transforming Australia into a renewable energy superpower.

As on so many important issues, for three years I sat in this chamber in the last term in absolute despair as the former government stood in the way of action on the climate crisis. I listened to speeches denying the science, and the previous contribution from the member for New England was just another example of that; it continues. They have learnt nothing. They are not following the science. In fact, he actually referred to climate action as a 'religion' in his previous speech, and this is the sort of nonsense that the Australian people were subjected to by their former government for a decade. In parts of the country where there are concerns about the impacts of climate action, a big part of the blame for that is on the former government for this misleading, for the culture wars and for the absolute rubbish that we heard for a decade. I am very pleased now to be speaking in support of a bill that is going to put in place the important changes we need to get going along that path.

In the previous term we watched as the coalition tore itself apart over just committing to net zero. When they finally did adopt it, they had no plan on getting there and were basically treated as an international pariah at COP26 in Glasgow. Quite simply, no-one believed a word that the former Prime Minister said. He said at COP that his government was acting on climate in 'the Australian way', which I think brings 'the Australian way' into disrepute, because Australians are people who take action and get on with things, and what they were doing on climate action was absolutely nothing. He pledged to meet net zero by 2050 with no plan—just a pamphlet and an Abbott-era interim target.

While the world considered putting carbon tariffs on this country for Mr Morrison's inaction, the Australian people also passed their judgement and they voted for climate action at the election last year. They demanded real climate action and they voted for change, and that's what we're getting today. I know that my community in Canberra is an incredibly engaged and active community when it comes to climate action, and I know that it wants nothing less than the ambitious action we need because we are, in fact, in a climate crisis.

Last year, the world saw the largest single investment in climate action ever, and that was when President Biden signed into law the Inflation Reduction Act. The equation changed, and it changed dramatically. This new law directed close to US$400 billion in US government funding into the clean energy revolution. Whether it be subsidies for renewables, green transportation or transmission lines, this is a huge paradigm shift. As the Prime Minister has said in question time, this bill will have a huge impact around the world. It was, in essence, the starting gun for a hugely competitive race to become a renewable energy superpower.

The Inflation Reduction Act creates huge incentives for capital investment in manufacturing and other industries to be directed into the United States. That's why it's incredibly important that the Australian parliament passes this important legislation before us so that our nation is not left behind and, as Labor has been talking about for so long, so that we build on our natural advantages and become that renewable energy superpower. We are blessed with significant renewable energy resources, and if we can harness this opportunity and export it to the world this becomes our jobs opportunity. This government knows that, Australian businesses know that, and the Australian people know that and told us very clearly on 22 May last year.

The government also understands the huge challenges that come with decarbonising our economy. Increasing the share of renewables in our grid to 82 per cent by 2030 won't be easy. It requires a lot of investment and a lot of work to turn this ship around, and we don't have a whole lot of time remaining. Strong action this decade is critical to addressing climate change. I know that the people of my electorate expect nothing less than the ambitious action that we need, and I want you to understand that the action we are taking is incredibly ambitious. It will be a huge task to meet the targets we have set. 2030 is only 80 months away—80 months to fully transform how this country gets its energy. It's ambitious. It's important. It will be hard, but it will be done, and this bill is a key part of that work. The government wants this reform to commence on 1 July this year, and any delay will only make that task harder.

I'd like to congratulate the Minister for Climate Change and Energy on his hard work in bringing this bill before the parliament and informing Australians about the work the Albanese government is doing to take climate action. I'd like to congratulate him on his ambition, his openness and the consultative approach he has taken with all people with an interest in climate action, and also on his belief in science as central to this, which is something incredibly refreshing following the last 10 years under the previous government.

I was very proud that one of the first speeches I gave as a member of the government in this 47th Parliament was in support of the Climate Change Act that was passed by this parliament in September. Passing that legislation laid a critical foundation for climate action. An advanced safeguard mechanism is a crucial building block for Australia's long-overdue transition to net zero, a transition that was delayed and denied by the climate Luddites in the coalition for nearly a decade and a transition that is still opposed by many in the opposition—and again I point to the previous contribution from the member for New England.

The Albanese Labor government is now fixing this mess, and this bill today is another important milestone on our journey to net zero, because there is no point in a target without action, and we developed our target after modelling what we could achieve. We have always said this is a floor, not a ceiling, and we want to deliver the best and fastest reduction that we can. Reducing emissions is the action that is desperately needed. We know Australia is one of the world's biggest emitters per capita, but we have natural advantages, and we could be among the lowest.

This bill will reduce emissions by reforming the safeguard mechanism and allowing us to meet our legislated targets. It will require Australia's largest industrial facilities to reduce their emissions gradually and predictably, cutting their baselines by 4.9 per cent each year between 2024 and 2030, in line with our national targets. Australian businesses have seen the future, and many have made strong emissions reduction commitments. We don't want our country to be left behind as the world moves on, following the science. The safeguard mechanism covers around 215 large industrial facilities—those that produce more than 100,000 tons of greenhouse gases a year and account for around 28 per cent of Australia's emissions. About 80 per cent of the safeguard facilities are already covered by corporate net-zero commitments, representing around 86 per cent of scheme emissions. These reforms help them to work towards these targets. The national targets, which I've already mentioned, are to cut emissions to 43 per cent below 2005 levels by 2030 and to net-zero emissions by 2050. These are ambitious targets. The safeguard reforms are expected to save 205 million tonnes of emissions in the period to 2030. To put that in perspective, 205 million tonnes is equivalent to taking two-thirds of Australian cars off the road in the same period.

So to the people of my electorate: I have had many meetings with people about this safeguard mechanism, and I have met with many national stakeholders as well, and I understand the genuine passion that you have for this and the genuine concern that you have that we must take the most ambitious action we can. I just want to put that in perspective. This is a huge change that we are embarking on and that our government is leading. If there is any question about the ambition, in the short time that we have been in government we have made climate change action a huge focus. There is an incredible list of things we have already put in place. I don't want to turn my speech into a list speech, because it would take it all up, but we are really doing our absolute best towards taking the action that we need and making Australia the renewable energy superpower that we can be.

As I say, the targets will not be easy to meet, and it will take deliberate and sustained effort. Our Powering Australia plan will build on the existing safeguard mechanism so that we can make the required cuts. The safeguard mechanism provides an established, legislated framework that will place emissions limits called baselines on large industrial facilities. These facilities are the country's largest emitters outside the electricity sector and contribute about 28 per cent of total emissions. Facilities that beat their baselines will be issued with tradable credits, and these credits will provide an incentive for all facilities to reduce their emissions if they have cost-effective opportunities, helping to deliver Australia's climate targets at lowest cost. This system gives an incentive for all those covered facilities to reduce their emissions and access lowest-cost abatement. These reforms to the safeguard mechanism are supported by business because they will provide certainty into the future and the confidence that industry needs to take action. As I said, it's only 80 months until 2030, and any delay will make it harder to meet our 2030 targets. Delay will create uncertainty for investors and require business to do more in a shorter time to achieve targets.

It's also important to note the support for this bill from industry, because we need to build collaboration. For too long climate action has been undermined by those seeking to create division for their own political advantage. Labor has sought to build support through consultation. We have consulted widely on these reforms, including in industrial roundtables, and have received more than 280 submissions on the design. The Chubb review also concluded that Australia's carbon-crediting scheme arrangements are sound and identified a number of opportunities for improvement. The government has accepted in principle all recommendations and is now working with stakeholders to implement them.

We took our policies and plans to the election and won a strong mandate from the Australian people to take strong climate action. As I've said, the people of Canberra accept nothing less, because they accept the science and they have seen the climate crisis as the lived reality that it is, particularly in the Black Summer bushfires of 2019-20, when our city, which usually has some of the most beautiful air in the world, had the worst and most hazardous air quality in the world for around a month, in about January. We actually went into a form of lockdown. People were wearing masks in the street; this was before we knew about that from the pandemic. Our airport was closed. A lot of our shops and businesses were closed. People with health conditions were told to stay indoors and have air conditioning on or to relocate, which obviously for many people was not an option. So in Canberra we have already experienced the very real impacts of climate change, as, of course, have those in our region who lost homes and businesses and lives in those bushfires. The incredible ecological scale of that will stay with Canberrans forever. I know that it stays with me as a local member who was relatively new at that time. The sentiment from my community will always stay with me.

In the past week, in the non-sitting week, I have had many meetings with constituents who raised concerns about this safeguard mechanism. They want to it be the strongest that it can be. Again, I just want to say that our government is a government led by science. We absolutely are. We are a government that wants to get this done as quickly as possible. We have a minister who has engaged across the board with the environment movement and with business and industry, because it is important to have their support. The climate emergency is Australia's jobs opportunity. That is a positive thing. Perhaps it wasn't emphasised enough in the past. There is still concern around the country about the impacts of climate action. Why wouldn't there be, when a government, for over a decade, told people that this was a bad thing when it was an absolutely urgent thing?

I am so proud that, after three years of calling out for climate action from opposition benches in the last term, that we have a government that is taking it, and taking it with the urgency and ambition it deserves.

5:50 pm

Photo of Andrew WallaceAndrew Wallace (Fisher, Liberal National Party) Share this | | Hansard source

I often start my speeches in this place with a brief reflection on the coalition's track record whilst we were in government. I do this not because I want to reminisce about the glory days of when I was sitting in that chair, for example; I do it because I want to remind members, and those watching, that the coalition delivered.

The coalition did take action on climate change. We support real action. We didn't just speak about it. We got on with the job. We're not just an opposition shouting out, making promises or arguing for argument's sake. We had a plan; we delivered on that plan. The safeguard mechanism was our policy. It was a core part of the plan to drive down emissions while backing innovative technologies. We will support the government in delivering a balanced approach to reducing emissions, addressing pollution and ensuring Australia remains a strong, prosperous and independent nation. But, unfortunately, the Safeguard Mechanism (Crediting) Amendment Bill 2022 does no such thing.

Our balanced plan delivered real action on climate change because we are the party of direct environmental action. We are the party of the National Heritage Trust. We are the party of water security, landcare and clean energy technologies. Those opposite so often shout, interject and browbeat about the coalition's environmental record, but the facts speak for themselves. After nine years in office, we had grown our economy by 23 per cent in the face of natural disasters, COVID-19 and an economic crisis. At the same time, we left office on track to exceed our 2030 Paris target, headed for a reduction in emissions between 30 and 35 per cent. That was better than Canada, it was better than Japan. it was better than New Zealand and it was better than the United States. Australia led the way on the 2020 Kyoto targets, beating them by more than 459 million tonnes. We reduced 20 per cent of emissions on our 2005 base level, and we were headed towards net zero by 2050.

In our last five years alone in government, we invested $40 billion into renewable energy. Renewables now make up one-third of Australia's energy generation. This led to the creation of as many as 160,000 jobs. We supported over 6,900 clean energy projects in Queensland through the Clean Energy Finance Corporation. In 2021 we installed 6.1 gigawatts of renewable capacity, more than in the entire term of the previous Labor government. Let me say that again in case those opposite missed it: in 2021 we installed 6.1 gigawatts of renewable capacity, more than in the entire term of the previous Labor government. Nearly one in three homes, of course, have photovoltaic cells on their roof: the world's highest rate of solar rooftop panels. While Labor denigrated our farmers and our miners, we actually delivered on renewable energy. We invested $250 million into recycling modernisation and $3 billion into the Great Barrier Reef protection. We introduced the Threatened Species Strategy. We positioned Australia to be a true leader in Antarctic stewardship, science and security. We rolled out $52 million in the Digital Environmental Assessments Program. We invested $590 million into biosecurity measures and $200 million into the Environmental Restoration Fund. We balanced historic economic growth with record emissions reduction and environmental action. You really can have the best of both worlds, and we did it without taxes. Our agenda was, simply put, technology, not taxes; progress, not platitudes. We wanted measurable progress on emissions reduction without giving families and their businesses the bill. We got on with the job and we delivered, because that is what good governments do. They set a target and they achieve it. This was our approach.

The Albanese Labor government have not taken this approach. They have taken a very, very different approach, but it's an approach that Labor have trod before. They've chosen to reject a balanced approach, and Australian families and their businesses are now paying the price. Labor proposed to price carbon dioxide at $75 a tonne. Australia will have a price that is three times as high as the one set by the previous Labor government, and it is set to rise to $100 by 2030.

Let's not be mistaken about this. This is a carbon tax dressed in the garb of a safeguard mechanism. It's just another attempt to dismantle good coalition policy. After a decade of emissions reduction being balanced with economic growth, Labor is now rushing to impose drastic cuts on Australian businesses. The safeguard mechanism has been working well for years as a system to cap emissions whilst the economy has grown. But Labor cannot help themselves. They're now changing the purpose of the scheme from one that stops emissions by encouraging businesses and backing technology to a scheme that punishes businesses and imposes more and more taxes. It's as if they want to make Australian businesses uncompetitive. It's as if they want Australian businesses to become unviable.

This Labor government had the audacity to claim that industry supports this policy. This same federal Labor government claimed that industry supported its reckless and unprecedented industrial relations reforms because they attended the jobs summit it slapped together in 2022. Do you remember that—the jobs summit? You don't hear them talk about that much anymore, do you? The fact is that many, if not all, of the industries covered by the safeguard mechanism have strong concerns about many aspects of this Labor government's policy. Key Australian industries are incredibly worried. Think about critical mineral resources like copper, coal, gas and iron ore. We are world leaders in clean minerals processing. I know you know this, Mr Deputy Speaker Buchholz. Yet Labor want to dissuade investors and send them elsewhere. Most of our competitors do not have any national carbon pricing scheme in place at all. Just think about that. What cruel government would squander Australia's natural competitive advantage by taxing hardworking Australians and their employers? What strange, self-sabotaging government would surrender one of Australia's core economic strengths and discourage global investment? I'll give you a hint. It's those members on that side.

Producers of cement, steel and aluminium—large employers—once again have been ignored by Labor. Labor's ignorance, incompetence and indifference in pursuit of this policy will drive up the cost of construction and manufacturing. On the Sunshine Coast, construction accounts for 18,123 jobs. It's about 12½ per cent of the local workforce. As I said, it has a value-add of around $1.9 billion to our local economy. Manufacturing accounts for 8,024 jobs, or 5.5 per cent of the labour force. It has a value-add of around $890 million to our economy. These are crucial sectors for employment and economic growth on the Sunshine Coast. Labor's failure to address the cost-of-living crisis, as well as its obsession with red tape and wacky climate policies, is going to cost many in my community their livelihoods.

Think, Mr Deputy Speaker, about rail and transport. Think about the logistics. Think about utilities and infrastructure development. Think about agriculture, forestry, fishing, retail, health care and technology. It's all of these industries that are going to suffer. It's not just the mining and energy sectors at risk from Labor's poorly packaged green tape that we're debating here today. Labor's sneaky carbon tax will affect almost every industry, every household and every Australian.

Perhaps most egregiously, they've put this policy on the table without any modelling. I know if people are listening to this they're thinking, 'No; surely they haven't introduced this policy without any modelling to see what sort of damage this is going to cause to the economy.' Those opposite make bold and untested promises to gain power, and then they present half-baked policy experiments to the Australian people, hoping that feel-good photo ops distract them. Recently, in Senate estimates, it was confirmed that the government has not undertaken any assessments of impacts of this policy. The government has not analysed how some of these severe emissions reduction targets—the most severe in the world—will deliver Labor's aspirations of a 30 per cent reduction by 2030.

Labor did not model the economic impacts of its policy on investment, on jobs and on household budgets. Let's not be mistaken—it will be Australian households who will pay the price, and that is happening now. In question time, the Minister for Climate Change and Energy was trying to argue that because those opposite, the government, put in place caps last year, Australians should be jumping for joy—that we've never had it so good because instead of an increase of 50 per cent they're only paying an additional 30 per cent. Well, you try telling that to the average punter at home. I think the average punter at home will have a very different view about what's good for them from what this government says is good for them. Let's not be mistaken. As I said, it will be Australian households who pay the price.

There's no modelling of the expanding credit market the government wants to use and no assessment of demand for carbon credits or their price. We do know that if demand for carbon credits exceeds supply then businesses will be lumped with a penalty of $275 per tonne of CO2. They promised 97 times that power bills would be cut by $275. Now, without warning, they're imposing a $275-per-tonne tax onto Australian businesses. In this last-minute climate policy, we have a litany of unanswered questions. Will businesses pay that $275 per tonne? Will they just suck it up and say, 'Oh, you know, we won't worry about that; we'll take that off the bottom line'? I don't think that's going to happen. We all know that businesses are going to pass that down the line. It will be consumers that pay the price, and ultimately it will be businesses that pay the price, because this policy, make no mistake, will result in businesses having to close their doors because they cannot compete on a world stage. Those members opposite should reflect on that—that this policy, which has not been modelled, will close businesses and people will lose their jobs.

Photo of Russell BroadbentRussell Broadbent (Monash, Liberal Party) Share this | | Hansard source

That'll cut emissions!

Photo of Andrew WallaceAndrew Wallace (Fisher, Liberal National Party) Share this | | Hansard source

That will cut emissions. This is a major reform, and Australians deserve to know how it will impact them and their families and their businesses. They deserve to know what impact this will have on the availability, reliability and affordability of their electricity. Labor have not provided an assessment of how many new safeguard mechanism credits could be created under this legislation. They have not told us how they'll support trade exposed industries. Businesses should know whether they can afford to keep their lights on. Instead, Labor is keeping the Australian people in the dark.

6:05 pm

Photo of Libby CokerLibby Coker (Corangamite, Australian Labor Party) Share this | | Hansard source

Reforming the safeguard mechanism will ensure Australia's largest emitters play their part in meeting our national targets, ultimately reducing emissions by 43 per cent by 2030 and achieving net zero by 2050. I know the importance of this because every day I receive emails and phone calls from my local community in Torquay, in Ocean Grove, in Waurn Ponds, in Bannockburn demanding stronger climate action, and every day my region sees the impacts of climate change. We face coastal erosion that is causing damage to beaches and infrastructure from the Bellarine to the Surf Coast. We face the prospect of more flooding, like we saw this summer in Inverleigh, Mount Duneed and Drysdale, we face the prospect of more bushfires and more extreme weather events, and we see the increasing stress on already endangered flora and fauna and on rivers like the Barwon and the Moorabool.

This is why the Albanese government has taken action with the Safeguard Mechanism (Crediting) Amendment Bill, and, it should be noted, there has been wide consultation with the Australian business community, which is behind us. The framework set out in the bill will limit emissions from large industrial facilities and encourage them to reduce their emissions and disincentivise non-sustainable new facilities from being opened. The mechanism will apply to facilities that emit more than 100,000 tonnes of CO2 emissions each year. One of the key proposals is the allocation of a proportional share of the national emissions reduction target to the top emitters. This will ensure they reduce their net emissions at the same rate as the rest of the economy between now and 2030 to meet the 43 per cent emissions reduction target. This will require aggregate safeguard emissions to fall from an estimated 143 million tonnes this financial year to no more than 100 million tonnes in 2030. All up, these emitters are estimated to deliver around 205 million tonnes of abatement by 2030.

Another component of this bill is to retain the existing reduction adjusted intensity baseline framework, ensuring safeguard baselines grow and fall with production. This approach has been strongly supported, as I said earlier, by the business sector and demonstrates that this new framework will not penalise growth. Rather, jobs will flow from this policy and from climate change policies. The government proposes a hybrid approach where baselines start close to facility site-specific values and transitions to industry average benchmarks by 2030. The hybrid approach will deliver the same emissions reduction, ensuring safeguard facilities contribute their share of the national emissions target.

The government also proposes to set baselines for new facilities at international best practice, adapted for the Australian context. This recognises that new facilities will have the opportunity to use the latest technology to build best-practice emissions performance into their design. With that, I hope the National Reconstruction Fund can endeavour to push our local regional industries to take up these opportunities, and I will be making sure those in my region have that opportunity. We want to reduce competitive distortion between new and existing facilities, and international practice will also apply at existing facilities if they begin producing new products. Additionally, flexible compliance arrangements will be available from day one. These arrangements reduce compliance costs without any change to the overall environmental outcome. Safeguard mechanism credits will be automatically issued to facilities with emissions below their baseline. Facilities can sell these credits to other facilities, surrender them to meet compliance obligations or bank them for future use. The government proposes facilities be allowed to bank credits until 2030, to give facilities flexibility around the timing of their abatement activities. This will help reduce costs. The bill also allows for facilities to borrow up to 10 per cent of their baseline for the following year to provide further flexibility.

Access to domestic offsets for compliance will continue unchanged. This will allow facilities to access cost-effective abatement outside the scheme—for example, in agriculture or land management. Further, the government has accepted in principle all recommendations of the Chubb review and will work with stakeholders to implement these changes. Extended multiyear monitoring periods will be made available on a facility-by-facility basis to give businesses flexibility while they invest in new technologies that reduce their emissions.

This government wants to work with industry and with business, but we want the outcomes. Together we can get there, but we need to work together to ensure that we support industry—that it's not affected—but that we reduce our emissions to zero by 2050. While many safeguard facilities support their use in the future, they understand the rules for international units relating to credits under the Paris Agreement are not yet settled. The government may consider including international offsets in the future, so long as they are of high integrity and contribute to Australia's Paris Agreement commitments.

Given the urgent and unprecedented challenges we face, it is absolutely essential that the government's proposed reforms commence from 1 July this year. The need for these reforms is both ambitious and necessary, and it is critical that we act now. The risks of delaying progress on climate action are simply too great, and the consequences of inaction will be felt for generations to come. On that, I know my community would not be the same without the incredible natural environment around us. It sustains the jobs in our region. It brings people to our region to work, to visit and to live.

The former government failed in its duty to protect the environment for too long. In doing so, it failed to look after our communities. We called on the former government to introduce strong national environmental standards. We called on them to establish a genuinely independent cop on the beat for the Australian environment and to fix the environmental failures caused by their massive funding cuts. The EPBC Act is one of those policies we aim to change. All our calls have fallen on deaf ears. It's no surprise, then, that those opposite in the coalition have been critical of this bill—a bill that was represented by the member for Hume himself. Although the former government's plan was far from perfect, baselines were set above emissions and facilities were given permission to increase their baseline to boost their emissions. The result: industrial emissions increased over time. We will not make the same mistake. We will prioritise results, not political points, with this bill. Why? We simply cannot afford to delay action any longer. The climate challenge demands a response equal to its scale and urgency.

The proposed design of the safeguard mechanism amendment, guided by the principle of effectiveness, equity, efficiency and simplicity, strikes an appropriate balance between a range of stakeholder views. It will provide a clear framework for businesses to operate—one that is sustainable, responsible and forward-thinking. It is not a threat to economic growth or job creation but, rather, a vital tool for driving and supporting the transition to a net zero future—one that we all want. Australian businesses recognise this. They recognise the importance of having a clear policy framework to drive and support the transition to net zero—one that will help them remain competitive in a world that is rapidly decarbonising. These reforms ensure accountability that will see businesses keep previously made commitments. The vast majority of businesses are already committed to reducing their emissions and transitioning to a net zero future. Our reforms will simply ensure that all are held to the same standard, creating a level playing field that rewards innovation and investment in clean energy.

The proposed amendments to the safeguard mechanism have received support from stakeholders across all sectors including industry, business and environmental groups. The Business Council of Australia, the Australian Industry Group and the Australian Chamber of Commerce and Industry have all welcomed the reforms. They recognise that this amendment will help advance jobs and that this bill is a necessary step on the path to a more sustainable and prosperous future for our nation. They recognise that we need to take action on this real climate challenge, and they know that this amendment is a vital part of that effort.

By taking decisive action now, we will provide our economy with the confidence and certainty to plan and prepare for the future—a future where our economy thrives and our position as a global leader in sustainability flourishes. For this reason, the Albanese government is serious about meeting our 2030 targets. Therefore we must also acknowledge that we cannot achieve our emissions reduction targets alone; we must collaborate with our partners abroad to address the global climate crisis. The proposed reforms will help to limit our exposure to carbon border adjustment mechanisms that many countries are implementing and ensure that we remain competitive in a rapidly changing global economy. Let us take this opportunity to demonstrate our leadership, our commitment and our determination to rise to the challenges of our time for the sake of our beaches, our native animals, our world heritage sites, our coastline and the ancient sacred sites of our First Nations people, for the benefit of everybody who wants to see a future where there are not the disasters and the impacts that we currently see. It is time for us to take action and lead the way towards a more sustainable future.

I'd like to thank my local environmental groups who have advocated for positive action on climate change. Some, like Australian Parents for Climate Action, have their concerns. They've come to see me; I'm catching up with them next week. I want to assure this group—and all those groups that feel passionately about climate change and reducing our emissions rapidly—that this government is listening. We're absolutely committed to 43 per cent emissions reduction by 2030 and net zero emissions by 2050. Credits will enable the 250 industry emitters to have a direct pathway to helping us achieve our goal of zero emissions.

I urge all in this House to support this bill. Let us not let the perfect get in the way of the good. We must end the climate wars and give Australians hope for a future where we can reach zero emissions and create thousands of new clean energy jobs. I commend this bill to the House.

6:18 pm

Photo of Russell BroadbentRussell Broadbent (Monash, Liberal Party) Share this | | Hansard source

I feel I've passed this way before many times—many speeches. If you listen to the member for Jagajaga today, you'd say that the Safeguard Mechanism (Crediting) Amendment Bill 2022 is the greatest thing since sliced bread. If you listen to the member for Corio, you get the same message, but there were some underlying messages that came through to me as I listened to a number of the speeches today. And, while the member for Corio is still here, I thought her speech was very effective on behalf of her electorate, but then she said, 'We've got to support businesses so they're not affected.' Hang on! All of the press releases and all the information says that all of these businesses are going to be affected. It's just about how much they're affected.

My concern with the legislation is that we don't know how much they're going to be affected. We haven't got any idea. Nothing I've read in all the information tells me exactly what it's going to cost. Now, I know governments can't get everything right, Treasury doesn't get everything right and the climate group don't get everything right, but shouldn't there be some reasonable guide where I can tell my community what it's going to cost? There are 215 of these big organisations across Australia, and of course this will capture more as time goes on, because as a business grows, they come under this target. It says here in Chris Bowen's own press release—to the ABC, of course—you can't reduce production to reduce your emissions, otherwise people would have an incentive not to grow their business. He said, 'No, you can't do that; we won't count that. We're going to do a separate assessment of every organisation and then tell you what your 4.9 per cent target is.' Who's going to make the assessment, for heaven's sake? I'm simple; I come out of business. I just want to know what you're putting forward, and what it's saying here is we want to give business the heads-up on where we're headed as a nation. But this 'Federal government to lower emissions ceiling on biggest polluters by 4.9 per cent each year' is supported by all these people. It doesn't say how; it just says this is what we're going to do.

As you know, this type of legislation was introduced by a previous government, and in that previous government I saw people on the other side heavily criticising the legislation at the time. In fact there wasn't one speaker from the Labor side supporting the legislation that was brought forward then—not one. So we've done a complete reversal where they're totally supporting the same type of program, but instead of making it voluntary, where businesses could do their very best to reduce those emissions—we were getting there; there's proof in the pudding—now they're saying, 'We're making it mandatory because we're the government that makes things mandatory. If business doesn't do what it's told, we'll make it mandatory and we'll get all these senior business leaders to bow down before us—

Photo of Andrew WillcoxAndrew Willcox (Dawson, Liberal National Party) Share this | | Hansard source

Bend the knee.

Photo of Russell BroadbentRussell Broadbent (Monash, Liberal Party) Share this | | Hansard source

and bend the knee to our program, what we've decided to do.' That's exactly what's going on here. At the end of the member for Corio' speech, which was a good speech, on the topic—she got the talking points right—she also said, 'Hey, this goes down really well with my local environment groups, all about my coastline, my rivers and the things that are happening.' Do you think this legislation will make one ounce of difference to the erosion that is happening around all of our Victorian beaches at the moment in a 200-year cycle we've been expecting for ages? Only very strong man-made groynes, rock walls and other processes can stop that. We've actually built on land in this nation that 200 years ago was ocean and sand dunes. There are shells in my backyard at Phillip Island because that's where the sea once was.

We're saying these bushfires are being caused by climate change. How dare I even suggest they're not all caused by climate change. Could they be caused by bad management of our forests for 200 years and more recently in the last 50 years? We saw that in the last bushfires that went through New South Wales and Victoria. Did they have a problem with their townships where there'd been Indigenous management of the forests? No, they didn't. But step outside the Indigenous management and the places were torn to shreds by fires, because of our management of our environment. I take the blame.

In this legislation I would back you 100 per cent if I hadn't heard it all before and believed that the legislation was actually going to do what it is suggested it will do. What it will do is it'll put the price of steel up, it'll put the price of cement up and it'll put up the price of products that come from those steel and cement products. Some of our biggest companies are going to have to cover higher costs because of this legislation—that's acknowledged by the government. But do they acknowledge how much harder it will make it for a first home buyer to be able to get into a home, or that a backyard shed will increase in price? I'm not saying it'll become unaffordable, but a backyard shed is going to cost you a whole lot more. Your little shed in the backyard is going to cost you a whole lot more because of this legislation. Do you know that all your main buildings will cost a whole lot more because of this legislation? Do you know that these companies will have diminished output because of this legislation? And do you know that in China their emissions are rising because they're building power station after power station after power station after power station? Of course their emissions are going up because they've got greater product going out. And yet this bill says if you increase your business and you have greater emissions, it is only natural that as our economy grows our emissions are going to grow. So how do we deal with that in this legislation? I thought the proposition before the nation prior to that was a much better proposition than this is because of all the unknowns that are in this legislation.

The government talks about a soft hit on the economy. What's a soft hit on the economy and what's a hard hit on the economy? This is going to be just a soft hit on our own economy. Is that the same type of soft hit that has been wrought upon white paper manufacturing in this country? The courts have decided they know better than governments in our regional forest agreements and other agreements we have regarding the management of our native forests, where right now in Victoria 400 forestry workers in one area or another are being paid to do nothing. Every week 400 of them are being paid to do nothing because our whole forest industry is caught and stuck in the courts, and the state government of Victoria is doing nothing about it. They have the power and the authority to end this tomorrow. The same ideology is driving this legislation as is driving what's happening in Victoria. And you say: 'Oh, it doesn't count. We're saving our forests.' Unless you are going to make pallets out of recycled plastic to take the steel that members in this House produce in their electorates, you actually need hardwood pallets for those exchanges of heavy freight. You can't use pine; it's not strong enough. Two years ago it was identified that, unless there were more hardwood products being sawn through the sawmills and put into pallets, we're going to run out of pallets. If you run out of pallets you stop moving freight around this country or around the world.

Photo of Scott BuchholzScott Buchholz (Wright, Liberal Party) Share this | | Hansard source

The member for Monash, you make a very good point. I'm going to exit the chair on a duty roster, but before I leave, a point was made earlier on and it's a correct point. You've alluded on a couple of occasions to the member for Corio in your speech when referring to the previous speaker. It was actually the member for Corangamite. Can we get the Hansard to address that please.

Photo of Russell BroadbentRussell Broadbent (Monash, Liberal Party) Share this | | Hansard source

Thank you for correcting me. The member for Corio is equally guilty actually, but thanks for drawing it to my attention. I won't make that mistake again; I have very high regard for the member for Corangamite. Having said that and having been corrected, I haven't been corrected on the fact that there are 200 people totally supported by their union, the CFMMEU forestry division, begging the Victorian government to do something about this issue so that we have the pallets needed for our exports and all the internal freight moving round Australia—no pallets; no freight.

All of these things have consequences. This legislation has consequences. All this side has asked the government of the day is: what are the consequences? 'We have a 43 per cent reduction in emissions by 2030, which is in seven years time, and it's going to affect all of these 215 businesses—end of story.' Can you explain what the cost will be for us to get to that by 2030? 'No, but we'll have a 43 per cent reduction.' To the detriment of whom? Who's going to lose their jobs? What businesses won't to be able to operate under this process? Is it a crime in this day and age to ask reasonable questions of the government of the day about the policies they've put in place? There is nothing I've read here, or in the excellent talking points I was given by the coalition, on what the cost is going to be. Nobody knows. It could be anything.

Are we going to risk our most important industries? I heard the members of parliament on this side of the House—on the coalition side, the opposition side—talk about how it's going to affect individual companies in their electorate. Those companies are probably not part of the big business spruikers. They're just businesses trying to get along in a very difficult world. I recognise that. We recognise there are changes in the climate. I've been seeing changes in the climate since 1990 when I came into this place and recognised there were differences and there were practical things we could do. I've seen every government struggle with it. But to come in and implement it this way will, I believe, be a detriment to the nation.

I also haven't seen one of these programs, in all my years in the House and out of the House, come to fruition with the promises and dreams that were made in the process of implementing the legislation. I've never seen one. I've never seen one state government meet its targets for emissions reduction—not one. I've heard a lot of promises, usually just before elections—a lot of promises and a lot of guarantees. My state government—the Andrews government—is actually introducing the State Electricity Commission of Victoria back again, with renewables. Because I'm out of time: every time I've seen an announcement on renewables, the price of power goes up.

6:33 pm

Photo of Shayne NeumannShayne Neumann (Blair, Australian Labor Party) Share this | | Hansard source

I am pleased to speak on the Safeguard Mechanism (Crediting) Amendment Bill 2022. For too long too much time has been devoted in this country and in this place to fighting the climate wars. It's been on full display today by those opposite. The political infighting has seen Australia not just stand still but go backwards in taking action on climate change, and we've missed the economic and job opportunities that come from real action on climate change.

When I was first elected in 2007 I wanted to take action on climate change, like so many of those people who were my friends who got elected in 2007. We well remember in December 2009 the Greens torpedoing the Rudd government's Carbon Pollution Reduction Scheme and the mindless negativity and relentless attack on the Gillard government carbon price from Tony Abbott. As prime minister, he changed it and got rid of it, and as opposition leader he relentlessly attacked it. In the coalition's subsequent lost decade, they tore themselves apart on policy after policy—22 failed energy policies. The National Energy Guarantee couldn't even last 24 hours. It didn't even last from question time to the time the then Prime Minister, Malcolm Turnbull, talked about it in his caucus room. Our nation has seen prime ministers and leaders come and go over these issues. We've heard leading experts like Professor Ross Garnaut, along with eminent public servants like Ken Henry and Martin Parkinson, lament the climate denialism and the missed opportunities. Australia's progress on climate change didn't just lie stagnant under the coalition; it went backwards. Under the coalition not only was there a lack of domestic investment; everything was undermined, including our international reputation.

Today we've seen the coalition's failure on full display. We've had chunks of the National Party over there still lurking back and lamenting that Sir Joh Bjelke-Petersen is not the Premier of my state of Queensland. They are in complete denial on climate change. We've heard speaker after speaker from the National Party from my home state of Queensland. But there have been Liberals here—I call them Liberals; they're really conservatives—who think that, if climate change is real, we should do nothing; we shouldn't pass this legislation. 'If we do something, we shouldn't pass this bill,' is the other argument they run, and 'If we do this, it won't make any difference at all.' On the other hand, they say, 'If we do this, it will cost too much.' The previous speaker was saying both. He couldn't work out which one he wanted to do. He is better than that, frankly. We have a lot of respect for him on this side of the chamber, but he is better than running that circuitous, false argument that he did today.

Overseas, other countries are looking at what we've done. They're looking at carbon tariffs. They're looking at the former government's stubbornness, truculence and obstinacy about taking action on climate change. They are looking at the fact that this government, the Albanese Labor government, wants to take action on climate change. If we take no action on climate change, we risk carbon tariffs from those in Europe and elsewhere. Other countries are discussing that. We're risking that by doing nothing. At the last federal election, we saw the people of Australia give a clear message. They'd had enough of the division. They'd had enough of the dysfunction. They voted for a party and individuals who wanted to take action on climate change.

Some of those opposite, from their contributions today, seem to think that somehow they were put on the other side of the chamber accidentally, inadvertently, that the people of Australia made a mistake, and they're really the natural party of government. But they don't show that they're the natural party of government, because they don't show responsibility and listen to the business community, the conservation groups, the unions and other people who want to take action on climate change. They fought amongst themselves and couldn't work out that the people of Australia wanted to do something and take action on climate change because they've experienced floods, fires and all manner of natural disasters, in just about every state and territory.

Those opposite couldn't, in nine to 10 years, bring themselves to come up with a policy to take action on climate change. Who can forget direct action? The member for Monash should remember that we wouldn't support direct action, because it was a failure. So they brought in the safeguard mechanism—they brought it in—and today they've spent the whole day trashing their own policy, and they intend to vote against it when this comes to a vote. It's their own policy. So many of those opposite were sitting there, from 2014 onwards, supporting the safeguard mechanism. The trouble was they didn't give it teeth. They weren't taking any action.

In my home city, we've been hit hard by floods—three major floods during my time as the federal MP, in 2011, 2013 and 2022. In my electorate we know that climate change is real. We've experienced climate extremes—droughts, heatwaves, floods. The people in my electorate, whether they're farmers in the Somerset region, business owners in Ipswich or young people in Springfield and Ripley, know that climate change is real.

This bill builds on what we need to do, what the Labor policy was. Renewable energy alone can't reduce our emissions enough. We need to do more. We won't reduce our emissions unless our top 215 industrial emitters, who are projected to overtake electricity generators as Australia's leading source of emissions, reduce them. Emissions from these 215 facilities account for over 28 per cent—close to 30 per cent—of the nation's total emissions. The safeguard mechanism, devised by those opposite, applies to designated large facilities—those facilities who produce more than 100,000 tonnes of greenhouse gases a year.

Before the last election, we put on the table what we were going to do—the Powering Australia plan. We committed to reducing national emissions to 43 per cent below 2005 levels by 2030 and net zero emissions by 2050. We've legislated those changes. As a key part of that, we adopted the Business Council of Australia's recommendation for facilities already covered by the previous coalition government's safeguard mechanism that emissions be reduced gradually and predictably over time to support international competitiveness and economic growth. It's consistent with industry's own commitment to net zero by 2050.

The bill gives effect to that commitment by delivering an enhanced safeguard mechanism. Combined with subordinate legislation, it sets out a baseline, safeguard rules and Australian carbon credit units—ACCUs. This followed an independent review by Professor Chubb—the Chubb review—to ensure that the carbon credit framework was credible, had coherency and had integrity. The largest emitters will make a proportionate contribution to the 2030 target by reducing the baseline by 4.9 per cent annually from 2024 to 2030. The safeguard mechanism places a limit on the greenhouse gases the largest emitters can emit by assigning each one with a baseline. Each year, the largest emitters need to prove their annual emissions are below the baseline. They have to report to the Clean Energy Regulator. Each facility which emits more greenhouse gases than the baseline must take action to offset the excess emissions by buying and surrendering ACCUs. If facilities produce fewer emissions than their baseline, they are rewarded with safeguard mechanism credits equivalent to one tonne of emissions. These SMCs can be sold or traded to other parties over the baseline to reduce their net emissions. These SMCs are not offsets; they can be banked and they can be used. That's how it operates.

The next stage of what we're doing is to release the draft design of our reforms that will be implemented by regulation. This follows the comprehensive consultation paper and the consideration of more than 200 submissions. Those opposite have just ruled themselves out on this issue. Of course, the safeguard mechanism is not new; the former government brought it in. Really, it's a tacit acceptance that the direct action policy and the Emissions Reduction Fund of those opposite, when they were in government, was a failure. It was never going to meet our emissions targets. Those opposite, in 2020 and 2021, went on to announce a plan to credit safeguard facilities below their baseline, but they never delivered it; we are delivering it. Incredibly, they now oppose it and make speech after speech trying to run this half-baked scare campaign based on some old, tired talking points the member for Monash was raving about just before in the chamber. The chutzpah, the hypocrisy, is simply breathtaking.

The problem is the coalition's policy was so poorly designed that those facilities were allowed to increase their emissions, which is why industry and experts are calling for reform. The coalition has entirely dealt themselves out of any debate here. We've got a situation where the Business Council of Australia, ACCI, the Australian Conservation Foundation, the National Farmers Federation—every group that you would think those opposite might actually listen to, they're not listening to. These reforms are critical, and the business community will have the certainty they've been crying out for. It's been carefully designed to cut pollution in our biggest industrial emitters, minimising costs and allowing industry the flexibility to choose the least-cost abatement opportunities. It's equivalent to taking two-thirds of Australia's cars off the road between now and 2030. It's ambitious, but it's a sensible, prudent and business-friendly option.

Any delay is going to make it harder to hit our target. The fact is that if our reforms are passed there'll be a scheme to bring down emissions from the biggest emitters. If it's not passed, there will be no such scheme and emissions will continue to rise. It's so disappointing that those opposite can't listen to the business community and have decided to oppose this bill, as they did with the National Reconstruction Fund Corporation Bill and with the Carbon Pollution Reduction Scheme all those years ago.

While it's a disgrace that those opposite have failed to support this, I expected better from the Greens political party; I really did. The Greens come into this place and criticise us constantly about it but don't tell the public that they're actually in a form of negotiation with us. Do the Greens really expect that their supporters—the ones that doorknock for them, hand out how-to-vote cards or vote for them—will be happy if they sit with those opposite and do not take action on climate change, after they torpedoed the Carbon Pollution Reduction Scheme? It would be an act of folly for the Greens to oppose taking action on climate change twice. When push comes to shove, they would have opposed taking action on climate change twice. Their arguments for wanting to do so would lack all form of credibility. There's an old biblical saying: 'It's not the hearers of the word but the doers who are righteous.' They're not doers, the Greens, if they oppose the legislation. They're just the hearers of the word; they are not the doers.

I call on the Greens political party to do the right thing and vote for this legislation. I'm proud to be on this side of the chamber. We want to take action on climate change. I say to the Greens political party: back this safeguard mechanism. This is a legislated path to taking action on climate change. Do not make the same mistake you made before. Our EU partners, and so many other countries, are implementing carbon boarder adjustment mechanism, or carbon tariffs. That would impact our business community and it would impact jobs.

As the Minister For Climate Change and Energy has pointed out, it would be irresponsible to place bans on traditional energy supply like coal and gas, so the Greens are really out of step. I would encourage them to listen to the voice of the Mining and Energy Union and the Australia Workers Union, who have urged the Greens to play a part in this legislation, to support this type of work. They should listen to the unions in relation to this issue, and those opposite should listen to the business community. We need to make a massive transformation in this country to a renewable energy economy. We need to make sure we take action on climate change.

I want to thank the government for this legislation. It will make an appreciable difference to farmers, to consumers, to business opportunities and to those in the suburban parts of my electorate. We need to take action on climate change, and those constituents who have put me here for six terms believe it and know it.

6:48 pm

Photo of Jenny WareJenny Ware (Hughes, Liberal Party) Share this | | Hansard source

I rise to speak on this bill, the Safeguard Mechanism (Crediting) Amendment Bill 2022, which purports to revise the safeguard mechanism applying to Australia's largest emitters to achieve net zero carbon emissions by 2050. The safeguard mechanism has been designed to accommodate the unique circumstances of the electricity-generation, transport and waste sectors. I was present in the House today when the member for Blair called those on my side a disgrace, on a number of occasions, for our purported failure to support action on climate change and on this legislation. I would just say this on that point: having spent most of my professional career before entering this place as a planning and environmental lawyer, I am particularly interested in this proposed legislation. The coalition does support action on climate change. I support action on climate change. In my first speech in this place, I said:

… climate change … is one of the leading contemporary issues facing our country and our world. It is important, though, to remember that when we are talking about climate change it is not just about the climate. It is about the environment. It is about the local environment—the parks, the waterways, the green spaces and biodiversity.

My approach to this is through traditional conservative and Liberal pathways, using the markets to incentivise businesses to innovate to address both our climate change and the environmental issues facing our nation. As we transition to new technologies and a new economy, we must maintain affordable and reliable energy to Australian households and businesses, and, in that vein, those on my side of the House did not necessarily support the climate change legislation because of the specific 43 per cent mandate. It was not properly explained by the Labor government then as to how they would get there, and this legislation today also demonstrates some intellectual laziness in its approach. I'll talk about that as I go through this legislation. Furthermore, I attended COP27 last year at the invitation of the Coalition for Conservation to understand how other countries throughout the world are moving towards net zero; how industries, farmers, governments and the private sector are moving towards net zero; and how a government can facilitate those industries and businesses to do that in Australia. For the member for Blair to assert that none of us on this side are interested in climate change is completely disingenuous.

The current position in relation to the safeguard mechanism environment in which we find ourselves is that it commenced operation on 1 July 2016—that's right, under a Liberal government, under a coalition government. To date, it has operated as a greenhouse gas emissions reporting mechanism for around 212 of Australia's largest industrial facilities—that is, facilities that emit more than 100,000 tonnes of carbon dioxide equivalent in one year. The scheme at the moment applies only to covered emissions, which are defined as scope 1, or direct emissions, including fugitive emissions and emissions from fuel combustion, waste disposal and industrial processes such as cement and steelmaking. Some scope 1 emissions are not covered by the current safeguard mechanism legislation. These include, for example, legacy emissions from the operation of a landfill facility, emissions which occur in the Greater Sunrise unit area or joint petroleum development area, emissions from the operation of a grid connected electricity generator in a year covered by the sectoral baseline and emission not currently covered under the National Greenhouse and Energy Reporting (Measurement) Determination of 2008. By implication the definition excludes scope 2 and scope 3 emissions which are indirect emissions such as emissions from the use of sold products and services. Therefore, at present, if a facility's scope 1 emissions exceed its baseline, the facility can apply for a new baseline or surrender carbon offsets, which for these purposes I will call ACCUs, to offset emissions or apply for a multi-year monitoring period or for an overall exemption.

An increasing number of facilities—and as at the time of giving this speech we are now at nearly 19 per cent—are now covered by a multi-year monitoring period. This allows a facility to reduce average net emissions over a two- to three-year period. In practice, however, the mechanism applies to facilities mainly in the electricity generation, mining, oil and gas, manufacturing, transport, construction and waste sectors. The mechanism does not apply to smaller enterprises that fall below the reporting threshold currently in the NGER Act. There are also four categories of statutory exclusion from the mechanism 1. The bill purports to amend relevant other legislation to alter the safeguard mechanism so that covered facilities must reduce their scope 1 or direct emissions into the future. This bill at the moment provides that key elements of this scheme will be implemented via amendments to existing legislative instruments made by the minister. This is important as it's talking about changes being made simply through regulation rather than coming back to the House for legislation and consideration, and that will mean that it will bypass the other place in terms of its scrutiny.

While I and many on this side of the House support changes to support our industries, our organisations, our people and our country to move towards net zero, there are concerns with this specific legislation, expressed not only by the coalition but also by key industry stakeholders. Indeed, one part of the member for Blair's speech that I did agree with was that even the Greens party are not supportive of this legislation, albeit for very different reasons. Particularly, I have no idea what impact this will have on businesses and industries in my electorate of Hughes. That is because the Labor government has not identified the cost of this legislation to businesses, to our economy and to our people. While I support a debate being held on the question of how we balance the need to reduce emissions to reach a cleaner future, we must balance this against how Australia also remains strong, prosperous and independent.

In government, the coalition, through its introduction of the initial safeguards mechanism legislation, achieved its targets and the economy grew. It grew up to 23 per cent in the nine years the coalition was in office. For example, we met and exceeded Australia's Kyoto targets. We signed Australia on to achieving net zero by 2050. We reduced our emissions by over 20 per cent on our 2005 base level, putting Australia well on track to beat our Paris treaty commitments. After almost a decade of emissions reduction being balanced with economic growth, Labor is now rushing to impose this bill, which could lead to drastic cuts on Australian businesses.

The safeguard mechanism has been working well for years as a system to cap emissions while allowing our economy to grow. Now Labor proposes to change the purpose of the scheme to one that stops emissions by encouraging businesses and backing technology to a scheme that penalises businesses and instead backs greater taxes. The coalition in government supported a trading system that rewarded businesses that voluntarily reduced their emissions. Again, this was very well supported by businesses, so I'm still perplexed as to why the member for Blair said that we did not engage with the business community. The coalition's plan for the safeguard mechanism was to create incentives and support businesses that made the transition to net zero. This is what governments should be about—facilitating an environment where businesses and individuals can move towards net zero.

Despite the strongest economic headwinds in decades, and having already whacked businesses with higher energy prices, businesses will also now be hit with what is in fact a carbon tax, if this legislation is successful. By pricing carbon dioxide at $75, Australia will have a price that is three-times higher than the one set by the previous Labor government, and it's set to rise to $100 by 2030. This could lead to Australian businesses becoming very uncompetitive. Many of our trading partners do not have a carbon tax at that level. Many of our trading partners and international competitors for key industries—this includes cement, copper, coal, gas and iron ore—do not have any national carbon pricing scheme in place at all. This can only then cause our businesses, our exporters, to struggle to compete in these markets. This not only means less export revenue; it means less investment and fewer jobs for Australians.

The government in Australia has already hit Australian households with higher costs of living, and this legislation shows that it is determined to hit them again. The carbon tax could well lead to higher building material costs, higher fuel costs and higher transportation costs that will hit our supply chains, including the food we source from regional Australia. The coalition understand Australians want action on climate change. We support action on climate change. But we in this house, as we vote on this legislation, and Australians in general deserve to know what costs we are all facing under Labor plans. Again, this is another part of this bill that has remained silent.

It should come as no surprise, but in Labor's rush it has provided no evidence of the impacts of its policy to introduce a carbon tax by reforming the safeguard mechanism. A major reform, like the proposed changes to the safeguard mechanism, means that Australians deserve to know the impacts. So why then is the Labor government keeping the Australian people in the dark? For example, Labor failed to get Treasury to model the impact of this policy before pushing it on Australian industry. On the economic impact of this policy, Labor has again been silent. Australians are not being told how this reform will affect them. The government has claimed that industry supports this policy, but the same government claimed industry supported its industrial relations reforms because they attended its jobs summit.

What we do know is that many of the industries covered by the safeguard mechanism have strong concerns about many aspects of Labor's policy. Key parts of Australian industry such as producers of cement, steel and aluminium are large employers, but these businesses are in hard-to-abate sectors. These are the industries that have been ignored by Labor. Just this week, for example, the CEO of the freight company Aurizon highlighted the perverse incentives in Labor's policy. It has the potential to increase rail freight costs to the point where road transportation becomes cheaper, even though it has a higher emissions intensity. Again, this shows that Labor has not done its homework on this legislation. It shows it has not properly assessed these issues, particularly the potential financial impacts on Australians.

Senate estimates recently confirmed that the government has not undertaken any assessment of the impacts of the policy. Labor did not model the economic impacts of its policy on investment, jobs and growth, and Australians will be the ones left to pay. There is no modelling, for example, of the expanding credit market the government wants to use. There is no assessment of demand for carbon credits or their price. What we do know, though, is if the demand for carbon credits exceeds supply, Australian businesses will be slugged with a $275 penalty per tonne of carbon dioxide.

Therefore, to conclude, the coalition is supportive of moving to net zero. The coalition is not supportive of a lazy bill where the work has not been done to advise Australians on the financial impacts. Thank you.

7:03 pm

Photo of Jerome LaxaleJerome Laxale (Bennelong, Australian Labor Party) Share this | | Hansard source

Last year the Albanese government was elected to take climate action, and we've hit the ground running. Amongst a long list of achievements, we also enshrined our emissions reduction targets into law—opposed by those opposite. If our current government and all future governments don't meet those targets, they will be breaking the law.

This bill, the Safeguard Mechanism (Crediting) Amendment Bill, is a critical policy instrument in our path to achieve these legislative targets. Without this system we will not meet them. While most of the changes to this policy can be done by regulation, this legislation formalises the crediting scheme. This scheme allows those who offset their emissions by more than the mandated 4.9 per cent per year to bank those credits for future years or sell them on a market. This is a good amendment to an important policy. It encourages our largest emitters to go harder and rewards them for doing it. I applaud the minister for bringing this legislation into the chamber and bringing on this debate. But we know that the debate on this piece of legislation is a bit bigger than the technical changes we are seeking to make. On issues of climate, we know through history that, unfortunately, it nearly always is a bit bigger. With the safeguard mechanism, we are faced with an opportunity to take strong climate action that Australia and Bennelong voted for.

For over a decade, the wellbeing of our planet has been used as a political football rather than being treated as the crisis that it is. The science is clear: climate change is real and it's caused by human activity. The consequences of inaction are dire, with rising sea levels, more extreme weather events and threats to our food and water security very real. We have a responsibility to future generations to act now to reduce our greenhouse gas emissions and to transition to a cleaner, more sustainable economy.

Yet, despite the overwhelming evidence of the need for action, we have found ourselves in an ongoing climate war—one that the people of Australia voted to end. The previous government's record on climate action is one of delay, denial and disregard for the future of our planet, and it's a record the coalition are happy to maintain. They voted against our Climate Change Act, and they have said they will vote against this. You would have thought that after the last election they would have read the room. Australia voted for action on climate change, and those opposite continue to ignore our country.

On the other side of this place, we have those who deny the science, ignore the warnings of experts and cling to the false promise of continued economic growth at any cost. They had 10 years to do something about climate change and the threat it is to our environment, and they chose over and over again to do nothing. The previous coalition government repealed effective climate policy that was addressing climate change and a policy that encouraged a shift towards cleaner energy sources. The Liberals told Australia and the world that they weren't serious about tackling climate change and that they would not take any urgent action to stem the climate crisis, and then they backed that up with 10 years of inaction.

The former government failed to meet emissions reduction targets, and they delayed the implementation of renewable energy policies. They signed the Paris Agreement but then made sure that their initial emissions reduction targets would be too low to limit global warming, which was the whole point of signing the agreement. They made it clear that the only action they would take would be to issue empty press releases. The National Energy Guarantee, a policy designed to reduce carbon emissions and promote renewable energy, was delayed for years. They had 22 energy policies, and they all failed.

The former government's lack of urgency in implementing renewable energy policies shows a disregard for the urgent threat of climate change and a delay in transitioning to a cleaner energy system. In 2017, those opposite dismissed the link between climate change and the bleaching of the Great Barrier Reef. They had scientific evidence in front of them, but they ignored it. They were being criticised by UNESCO for failing to stop agricultural run-off from impacting ecosystems, and yet again they ignored it. There's a bit of a pattern going on here. Just last year, days before the federal election, it was revealed that those opposite had been hiding a scientific report on mass coral bleaching events on the Great Barrier Reef, trying to cover up the evidence to shield themselves from criticism during the campaign.

Those opposite cut funding for two organisations that support the development of renewable energy in Australia. Despite the critical role that these organisations played in the transition to a low-carbon economy, the Liberals and Nationals cut funding to both ARENA and the Clean Energy Finance Corporation in their time in government. The list goes on. The transition to a low-carbon economy requires a significant investment in renewable energy, and both ARENA and the CEFC played a crucial role in facilitating that investment. Those opposite know that their long-term inaction on climate change and the environment cost them at the last election.

It's important to know all that context, because here we are yet again. Once again we have a Liberal-National coalition in this place actively opposing and criticising sensible, achievable climate policy. This is a policy that is backed by business and by industry, and it is, in fact, an enhancement of the coalition's own legislation that they brought to government. Not satisfied with blocking government policy, they're now voting against their own policy. It's absurd. Then we have the Greens, and it seems that they haven't learned the lessons from 2009 when they also voted against sensible emissions reduction policy. While I remain hopeful that they can work with the government with sensible and achievable amendments, all indications are that they have continued to take an approach that has been counterproductive and divisive. When we have had opportunities to bring in legislation and policy that plays a significant role in addressing climate change opportunities, the Greens continue to oppose and reject a proposal which the government has a mandate to deliver.

Not only has this uncompromising approach made it difficult to achieve meaningful action on climate change over the past 14 years but it has also created a sense of hostility and division amongst the Australian people. This approach has also alienated many Australians who are concerned about the environment but who are worried about a swift and rapid change. They're painted as climate deniers or enemies of the environment, and the Greens have further entrenched the political polarisation around climate change and made it more difficult to build a broadbased consensus for action. That's what Australians voted for at the last election. It was an opportunity to end the climate wars. Business, industry and the community had a very long look at this policy which was released a long time ago. Labor was delivered a mandate to implement this policy, yet we have those opposite opposing it against the wishes of the majority of industry across the country. Achieving meaningful action on climate change requires cooperation and consensus building between different stakeholders. To date and in our recent history, the Greens have made this more difficult to achieve, as have those opposite. Climate policy should not be political, yet again and again and again, the environment is politicised. It's something that Australians voted to end.

Like many in this place and like many people in my electorate in Bennelong, I too want ambitious action on climate change. I would personally like to see us reach emissions reductions greater than the 43 per cent we have legislated. Like many in my electorate, I too look forward to a time when coal and gas are not an integral part of our electricity generation and when more and more renewable energy is providing emissions-free, cheap power to our grid. I too have reservations on the unlimited use of carbon offsets by big emitters. I too want to ensure that those offsets are genuine and that they stack up. But what's worse is voting down this legislation and destroying the consensus that Australians voted for.

I simply won't stand in the way of a policy that will allow us to make progress and take steps towards our climate goals. I won't be one to shoot down a good policy because it isn't perfect. We've been down that route. We've seen it before, and look where we are today. I won't stop pushing and fighting for ambitious policy in action, but I also understand that Australians voted for consensus and they voted for this policy. It's time for the Greens to recognise the importance of balance and compromise in achieving their environmental goals and to work collaboratively, both in this place and outside, towards a sustainable and prosperous future. We have a responsibility to act now to ensure a sustainable future for generations to come. We need to take action right now to meet our emissions targets. I wish we had another 10 years up our sleeve, but we saw what those opposite did. They wasted that time when we should have been reducing emissions. We need to make sure that our country's largest emitters are playing their part in meeting our national targets. We have the opportunity to do that right now with this bill.

The safeguard mechanism needs to be reformed. With this enhanced version, we can ensure that Australia's transition to net zero is well supported with robust legislation. It will ensure that Australia's largest industrial facilities are on the path to reducing their emissions predictably, gradually and in line with our legislated targets. These reforms will make sure that, as we decarbonise and reduce our emissions, Australian businesses will remain competitive and active. According to a report by the Climate Council, the safeguard mechanism amendment has the potential to reduce emissions from large industrial facilities by up to 50 million tonnes by 2030, which is the equivalent of taking 10 million cars off the road each year.

I'm aware of the criticisms of some regarding this policy. I want to speak specifically about concerns regarding the offset provisions. It's a matter of reality that we must decarbonise Australia while maintaining and caring for our economy and jobs. This bill gives major industrial emitters—whether they be aluminium smelters, concrete producers or miners—the opportunity to deliver the majority of their emissions reductions by choosing low emissions options while they're planning for their future. This bill will influence the next set of investment decisions by major emitters by prioritising and highlighting low-emissions technologies over other available options.

Carbon offsets provide the opportunity for some, where technology doesn't exist, to have a clear path to net zero. When carbon offsets are done correctly and with integrity, they can ensure that big businesses are funding environmental protection and registration. We know that the minister has taken steps to ensure that our carbon offset system is better than the one we inherited. The Chubb report made further recommendations to the scheme to ensure that it will continue to align with our expectations and best practice, and the government is working with stakeholders to implement those recommendations.

I'm hopeful that, as our country finally works together and achieves climate consensus, the undisputed short-term need for the use of offsets will diminish. I would hope that future governments could review the use of offsets to encourage real reduction as opposed to just net reduction. Unlike some in this chamber, I don't believe offsets are the same as emissions reductions, but I wholeheartedly acknowledge their importance at the beginning of our nation's decarbonisation journey. I don't believe they should be used in perpetuity and without accountability, but I understand their importance, particularly at the start of this journey.

I'd say to those opposite to again listen to industry on this. We know that the Australian Chamber of Commerce and Industry have been very clear in support of this safeguard mechanism. They said:

This is the best way to secure the planning, investment and innovation that will underpin the decarbonisation of our economy without sacrificing reliability or affordability.

We have industry calling out for fundamental change to the decade of inaction on climate change, and we have the Australian voting public calling out for the same thing. We cannot waste this opportunity again, as it was wasted years and years ago. That's why industry backs this. That's why our community back this. They're sick of the climate wars. I'd encourage those opposite, in particular the Greens, to support this legislation, which is crucial to the government meeting its emissions reduction targets.

7:18 pm

Photo of Zali SteggallZali Steggall (Warringah, Independent) Share this | | Hansard source

I rise to speak on the Safeguard Mechanism (Crediting) Amendment Bill 2022. I'd like to start by noting that it is disappointing how many in this place, on both sides, have talked politics rather than specifics about the legislation and how it could be improved—for example, members of the government, like the member for Bennelong, could have actually engaged with the amendments that have been presented and tabled and said whether or not they intend to support them or argue for them in the caucus room. That's what the public ultimately wants to know.

Since 2019 it has absolutely been my focus to champion stronger action on climate change and put forward sensible solutions that should be able to be bipartisan. I put forward a climate change bill, which in fact would have made this mechanism unnecessary because it would have ensured that we had clear guidance on pathways to decarbonisation from an independent climate change commission. That is a proven method in other countries, like the UK. Unfortunately, that wasn't progressed by the government, so here we are tinkering around the edges of a policy that my predecessor in Warringah implemented when he dismantled the Carbon Pollution Reduction Scheme, and we know it is a far-from-perfect method. In fact, it has failed to deliver any significant emissions reduction in the heavy-industry sector. But, that said, if done right, the safeguard mechanism has the potential to significantly contribute to the achievement of emissions reduction targets. It does cover, in Australia, facilities that emit over 100,000 tonnes of carbon dioxide equivalents. These are the biggest emitters in the country, excluding the power companies. There is some argument that, in fact, this should be extended to more facilities that are high emitters and that they should be captured. We know there are about 215 facilities included at present and they represent about 20 per cent of our national emissions.

It's difficult to comment with finality on the bill because we don't know ultimately where we it will end up, and there are still conversations I'm having with the minister and other members of the crossbench and the Greens in this House and the other place. But it is important to point out that the safeguard mechanism bill is an important pillar of the government's climate policy. We know we had to push the government to acknowledge that the 43 per cent emissions reduction by 2030 is really a floor not a ceiling and that we have to be more ambitious than that, which means the levers we put in place in this bill, the very pillar to deliver the government policy, has to be capable of greater ambition. That's why so many of the amendments are important.

What this bill does, to cut through all the explanations, is it sets up safeguard mechanism credits as a new form of incentives to help large emitters accelerate decarbonisation. If they overachieve their emissions reduction beyond the 4.9 per cent per annum baseline set by the government then they are given a credit that can be traded to other safeguard facilities at market price. This is a good initiative and one that rewards actual abatement. From there, things get a little bit more complicated. The regulations, the rules around this, are still being developed, and, while there has been good progress in discussions with government, it is still not sufficient. I welcome the consultation process that has occurred so far, but we need to point out that there is room for more ambitious targets if we are genuine in committing to the Paris Agreement and the target temperature of close to 1.5 degrees. In all this discussion, apart from the political grandstanding that goes on in this place, we have to remember what the ultimate goal is, which is keeping warming to a livable status to make sure that we have stable environments in our communities so that our way of life can continue. That has to ultimately be the goal.

The 30 per cent reduction in emissions from safeguard facilities by 2030 is good, but it really should have been 30 per cent from 2005 levels, like all other emissions, not from today's level. The devil's always in the detail of just what you're requiring the industry players to do. Adjustments to baselines for emissions for safeguard facilities and that new facilities will have baselines set in accordance with global best practice are good things. The initiative to set five-year budgets for safeguard facilities post-2030, in fact, is in line with the carbon budgeting approach proposed in my own climate change bill. However, the mechanism does have some gaps. It must address gross emissions. We must prioritise real abatement over purchase of offsets, especially for coal and gas facilities. The mechanism should set a higher decline rate for coal and gas facilities. I totally accept that for about 50 per cent of facilities—heavy industries, steel, ammonia, cement, concrete—it will be incredibly difficult. But for coal and gas it is not difficult, and they should be able to have higher decline rates, which should be in this bill. We should not be allowing unfettered use of carbon offsets to achieve reductions—again, in particular for coal and gas facilities. A new fossil fuel entrant should enter the scheme net neutral. They should be displacing high-emitting alternatives.

Finally, we must improve methane measurement reporting and validation, and set these facilities on a path to minimising emissions and capturing methane. Methane is 26 to 28 times more potent than carbon dioxide in capturing heat and creating global heating. It is up to 80 times more potent over the first 20 years of emission. This must be a priority for all these facilities. I'm pleased to hear the government contemplate that there will be a cap on net total emissions for safeguard facilities. That can have a meaningful impact in terms of controlling total emissions from our largest polluters and restricting new entrants. But let's get real: that number in the discussion paper does nothing. It has to make its way into the legislation or even the regulations to have some accountability and to ensure some transparency of achievement.

The number of 1,233 million tonnes of net emissions is far too great. It has allowed room for growth in emissions and new entrants. The minister himself has said there is a buffer zone built into this to allow for new projects. It allows for at least three large new gas projects to come online—Pluto, Browse and Barossa, Western Australian projects—despite the fact the International Energy Agency tells us 'no new coal and gas' to have a chance of staying close to 1.5 degrees. Modelling from RepuTex shows that the potential for new entrants, especially fossil fuel producers, risks blowing out that budget and, with it, our 2030 target. The modelling shows that financially committed new projects will be substantial, totalling some 56.6 million tonnes of CO2 equivalent, leading to the budget being exceeded by 30 million to 35 million tonnes. The minister and the government dispute that, but we should be requiring new fossil fuel entrants to come online net neutral. We need to ensure that they are not adding to emissions and that they don't force other facilities covered by the mechanism to work harder to keep within the overall budget. It pits new entrants against potential growth industries in critical minerals and manufacturing. We've got cement and steel smelters and fertilisers. These are industries that will remain in the future. We need to invest in new energy sources to support their transition, not make their life harder by continuing to approve fossil fuel projects that will increase our emissions but have limited life span.

The new mechanism allows for unfettered use of offsets to achieve reductions. This is concerning and creates a disincentive to invest in onsite abatement and real decarbonisation. It might, in fact, encourage some facilities to wait when we know there is urgency. In other countries such as the US, they are moving on and investing in important new industries such as green hydrogen. The unlimited use of offsets in Australia provides companies the opportunities to wait on decarbonisation and invest in offsets rather than in the inevitable technology and actually abate emissions. We should be working with industry to bring down the cost of green hydrogen as an input and creating incentives for business to decarbonise now, accelerating the transition, and not have any incentive for facilities to wait.

Capping the offsets at $75 per tonne allows industry to pay their way out of cutting emissions more cheaply than the market may otherwise determine. That's concerning. There could be a shortage of credible offsets in the market. Just a few days ago, in fact, the New South Wales Treasury recommended including carbon emission pricing in line with the EU emissions trading scheme that is currently at $123 per tonne and rising in real terms. The escalating cost of offsets is more reflective of current market demand for offsets, and I think it will incentivise the creation of offsets as well as industry to actually invest. We must implement the recommendations of the Chubb review, as a matter of urgency, to boost the integrity of the scheme to ensure that facilities are investing in quality offsets. If not, all this is an accounting trick. It won't add up to anything, and we will have an escalating disaster when it comes to our emissions.

The bill itself establishes a new form of offset, the safeguard mechanism credit, which is a good thing. This is granted when a facility achieves reductions in emissions greater than the 4.9 per cent decline rate. It is a good thing. We want to incentivise accelerated emissions reduction. The legislation needs to establish a hierarchy of emissions reduction for: firstly, onsite real abatement; secondly, offset projects; and, lastly, as a last resort, purchase of offsets. SMCs—safeguard mechanism credits—represent real growth reductions in emissions. That is what we should be aiming for and prioritising.

Lastly, it's very important that we address methane. The key gap in this proposed legislation so far is greater transparency and accountability for methane emissions by the designated facilities. Last year, Australia signed up to the Global Methane Pledge: to cut 30 per cent of methane emissions by 2030. Most people think methane just comes from agriculture, and we have this ridiculous discussion about barbecues and farting cows. What we really need to talk about is the fact that fossil fuel mining creates 40 per cent of our methane emissions, and we absolutely can do something about this. This legislation is the mechanism by which we can absolutely do that.

Debate interrupted.