House debates

Tuesday, 21 March 2023


Safeguard Mechanism (Crediting) Amendment Bill 2022; Second Reading

4:37 pm

Photo of Stephen JonesStephen Jones (Whitlam, Australian Labor Party, Assistant Treasurer) Share this | | Hansard source

JONES (—) (): I rise to speak on the Safeguard Mechanism (Crediting) Amendment Bill 2022. I'm speaking on this bill as a representative of some of the people who have the most to lose from poor climate change policy and who have the most to gain from climate change policy's success. First, it's worth going through what the bill does. The bill updates the objectives of the national—

Photo of Mr Tony BurkeMr Tony Burke (Watson, Australian Labor Party, Minister for Employment and Workplace Relations) Share this | | Hansard source

On a point of order, if I may.

Photo of Milton DickMilton Dick (Speaker) Share this | | Hansard source

I give the call to the Leader of the House.

Photo of Mr Tony BurkeMr Tony Burke (Watson, Australian Labor Party, Minister for Employment and Workplace Relations) Share this | | Hansard source

Thanks, Mr Speaker. The member for Warringah was in continuation on the bill, and I think we missed that. Is it possible for leave to be granted for the member for Warringah to continue her speech and then the Assistant Treasurer to—

Photo of Milton DickMilton Dick (Speaker) Share this | | Hansard source

Sure. My apologies to the member for Warringah.

Leave granted.

4:39 pm

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

Last year Australia signed the Global Methane Pledge: to cut 30 per cent of methane emissions by 2030. The International Energy Agency found fossil fuel companies in Australia are emitting about twice the methane that the government reports to the UNFCCC. We know from the report that was just released by the UN IPCC that the window of time to reduce emissions is closing and we must act with urgency. Not only are we losing our resources through these methane emissions but we're risking energy supply and cooking the planet, as methane is over 80 times more potent than carbon dioxide over the first 20-year period. If we were in a drought and had a leaking tap we would fix it, not open a new well. So it's time the government put in some gas leakage restrictions.

The safeguard mechanism reforms are an important opportunity for the government to bring in sensible measures for capturing and using that gas. The effectiveness of the safeguard mechanism will depend on the accuracy of the data it is based on, but the current reporting framework is too lax to ensure accuracy. Most oil and gas activities report based on national averages rather than actuals, and this needs to change. I've proposed amendments to ensure that Australian facilities adopt international best practice to ensure that we address this problem. I'm also proposing an amendment to cap fugitive emissions from coal and gas facilities within the safeguard mechanism.

This is an opportune moment to address energy sector methane emissions. If we don't get this right, we will lose the economic opportunities, with capital, workers and investment flowing to other jurisdictions such as the US, since their passing of the Inflation Reduction Act, and the EU, who are passing commensurate legislation as well. Australia will be penalised when trying to export goods. The European Union's Carbon Border Adjustment Mechanism will come into force in October this year, penalising carbon-intensive Australian exports. Australia's largest gas importer, Japan, has indicated it will preference low-emission gas.

In the context of this debate in relation to the safeguard mechanism, there are important amendments before the government, and I urge the government to come to the table and pass those sensible amendments. It is incredibly important at this time, with such a dire warning from the IPCC, that we establish a cap on gross emissions, that the government accept amendments and recognises the principle that gross emissions need to come down from this point, and that we set up a hierarchy of emissions reduction to ensure that the market and facilities prioritise on-site abatement, offset projects and then purchase offsets. We absolutely can do better.

4:42 pm

Photo of Stephen JonesStephen Jones (Whitlam, Australian Labor Party, Assistant Treasurer) Share this | | Hansard source

I'm speaking on the Safeguard Mechanism (Crediting) Amendment Bill 2022, and I do so as the representative of some of the people who have the most to lose from poor climate change policy and the most to gain from climate change policy's success when we get it right.

It's first worth going through what the bill does. The bill updates the objectives of the National Greenhouse and Energy Reporting Act 2007 to ensure net aggregate safeguard baselines decline, increasing industry and investor confidence to take action. It allows for the creation of a new unit type called the safeguard mechanism credits. It deals with matters like the issuance, transfer and ownership of the credits from facilities which beat their baselines. Through its use of credits, the bill will create an incentive for facilities to reduce their emissions if they have cost-effective opportunities. By doing so it will help to deliver Australia's climate change targets at lowest cost. The bill also allows rules to be made about interactions between the safeguard mechanism and the Emissions Reduction Fund. In this way it will support the integrity of both the safeguard mechanism and Australian carbon credit units.

The bill, in essence, is about certainty. It'll provide certainty for emitters so that they can plan for the future with a fuller and more stable understanding of their emissions obligations. It'll provide certainty for investors across the broader market, who will know that Australia is once again serious about climate change and that we're pursuing our climate targets at the lowest possible cost. It'll provide certainty for people who go to work every day in our large industrial facilities, and it's on their behalf in particular that I have taken an interest in this bill. Nobody should need any reminding of the importance of the steel industry to Wollongong and the Illawarra region, but I'm going to do it anyway.

From my back balcony at home, I look north across Lake Illawarra and see the stacks and smoke of BlueScope's Port Kembla steelworks. It's the biggest integrated steelworks in Australia and it's my constant reminder of the heritage of the region that I represent. Generations of men and women have made their living at Port Kembla and made a life in the Illawarra. Steel is at the centre of how the rest of Australia sees us, and it's not too much to say that this is central to how we see ourselves.

Right now, there are 3,000 people in the Illawarra who make their living directly from BlueScope's Port Kembla steelworks. That's a big number on its own but it's even bigger when you consider that there are thousands and thousands more who rely on it—suppliers, contractors, service providers and other local businesses—who get a share of the income that the steelworks brings to our region.

I'll also remind the House that steel remains a crucial strategic industry for Australia as we move into a global net zero economy. If we're going to build wind farms, transmission lines and other technology vital to our energy future we need steel. End of story. If you lost the Port Kembla steelworks, then thousands of people in the Illawarra would lose their jobs. With that, Australia would lose all its steelmaking know-how and experience.

Clearly, climate change is a great challenge to the steelmaking industry. BlueScope are the largest industrial carbon emitter in New South Wales. But between the financial year of 2012 and financial year 2022, over that 10-year period, the Port Kembla steelworks reduced its scope 1 emissions by 18 per cent. According to data from the World Steel Association, the Port Kembla steelworks ranks in the best-performing quartile for emissions efficiency of the 65 blast furnace and basic oxygen furnace facilities surveyed globally.

This all paints a picture of a steelmaking process that is carbon emission competitive, by global standards, but it has a way to go if it's going to play its part in reducing its carbon emissions. BlueScope are up to the challenge. They've announced a goal of absolute net zero missions by 2050 for all of its global operations. That overarching goal is supported by two interim emissions intensity targets for 2030. The first is a 30 per cent reduction in greenhouse gas emissions intensity for their non-steelmaking activities. The second is a 12 per cent reduction in greenhouse gas emissions intensity for their global steelmaking operations.

What does this all tell me? It tells me that BlueScope gets it, that they want to do the right thing. They are well aware of their role in our emissions reduction program. They're at the table, in good faith, working to find a way through to a lower emissions future. And the government is sitting across the table discussing these issues and listening. This is the real business of government, listening to understand the challenges and then finding a way through them, with reason and with calm. That's what my colleague the Minister for Climate Change and Energy has done, day in, day out, since the government was elected, and he's done it in a way that those opposite repeatedly showed themselves incapable of doing over the previous eight years.

The opposition's campaign against the bill treats us all like idiots. The bill concludes a process that they started. It was their energy minister, who is now the shadow Treasurer, who proposed it, and they continued it when they accepted the recommendations of the expert panel in 2020. There are things in this bill for which they allocated funding in their very last budget, not 12 months ago. But now they'll oppose it as part of their relentless substitute campaign, their relentless campaign to substitute rhetoric for reality.

People say that the politics of climate change has moved away from the politicians. But let me put this another way: the people have moved away from the coalition and its politics on climate change. The Australian people said so—resoundingly—in May last year. So long as the coalition go on television and talk about the lessons learned from the last election but then come in here and ignore those very same lessons, the people of Australia are going to continue to mark them down.

There is a message here for the Greens as well. Our objective is to decarbonise our economy, not to de-industrialise it. The technology for zero emissions steelmaking does not yet exist. There is hope. Emerging techniques on trial in Sweden and Germany are being piloted, with enormous government subsidies. They're about 10 years away from the large-scale commercial operations that would be necessary. This tells us that, to take the path to decarbonising steel, a credible plan will require a balance of reductions and offsets. Relying heavily on one or the other will undermine our national effort or impose unsustainable cost. The balance is everything. I note the comments of Dr Kerry Schott, who chaired the Energy Security Board from 2018 to 2021. She told the ABC this morning, and repeated the message at the National Press Club later today:

It would be a great shame … it would be really awful if the safeguard mechanism didn't get up.

She's dead right.

We know the board of BlueScope are carefully considering the application of the safeguard mechanism as they approach approval for the blast furnace relining, and it's important that they do so. Our message is clear: we want Australia to be in the steelmaking game and we want BlueScope to be at the forefront of steel manufacturing. Both the Prime Minister and the Minister for Climate Change and Energy have met with BlueScope, and I thank them for that. They have shown a sincere and persistent concern for the issues that have been raised with them. They show an absolute understanding of the people that I represent in this place and that the member for Cunningham represents in this place, and it's founded on an understanding of how important it is for this industry to continue and how important it is to our part of the world.

The design proposed in this bill has a mechanism to adjust baseline decline for trade exposed industries such as steel, and it will offer additional funding support through the Powering the Regions Fund. The bill will also set up a review looking into the risks of carbon leakage for industries such as steel. That review would look at the need for a carbon border adjustment mechanism to complement the safeguard reforms and to help industries like steel and cement. This is important. It will ensure that we support the decarbonisation of critical industries, of which steel is undoubtedly one. The bill sets us on two paths at the same time. One is the path to net zero emissions by 2050; the other is the path to a sustainable, viable, reliable and long-lasting steel industry and manufacturing sector, based in electorates like mine but serving all of Australia. I commend the bill to the House.

4:53 pm

Photo of Rick WilsonRick Wilson (O'Connor, Liberal Party, Shadow Assistant Minister for Trade) Share this | | Hansard source

While I rise today to speak against the Safeguard Mechanism (Crediting) Amendment Bill 2022, it's good to follow the Assistant Treasurer, who spent the last 10 minutes seemingly apologising to the people of the Illawarra region for the pain that is about to be inflicted on BlueScope Steel. Of course, even though BlueScope Steel sits in the member's electorate, as he quite rightly says it provides steel all across Australia, including in my electorate. It seemed like the Assistant Treasurer was foreshadowing problems ahead for BlueScope under the safeguard mechanism. If, indeed, they are forced to close their doors due to the requirement to reduce emissions by around five per cent per annum between now and 2030, we will simply see those emissions replaced and in fact increased, because that steel will simply be imported from North Asia, which is where the bulk of our steel currently comes from. Today I rise to talk not about the Illawarra region or BlueScope Steel, where the Assistant Treasurer mentioned one business that will be dramatically impacted by the safeguard mechanism; as a proud Western Australian, I am here to talk about Western Australia and the impact the safeguard mechanism is going to have on my home state and my electorate in particular.

With 10 per cent of the nation's population, Western Australia produces 50 per cent of the nation mercantile exports. I'm very proud of that. Much of that comes from my electorate, but a great deal of it—in fact, the majority—comes from the member for Durack's electorate; I know how proud she is of those hardworking people and those businesses that operate in her electorate. We have 50 per cent of our nation's mercantile exports and 10 per cent of the population, and Western Australia will cop 32 per cent of the impact of the safeguard mechanism. On a per-head-of-population basis, we're copping three times the hit other states are copping.

I will run through the very long list of businesses impacted in Western Australia. I will start with statewide businesses that provide services to people across Western Australia and mention some of the impacts they will have on the individual consumer. In this place we've heard the Prime Minister and the Minister for Climate Change and Energy stand up and talk about the Business Council of Australia supporting this, and other large businesses are calling for the introduction of this carbon tax. But I don't hear them talk about individual consumers calling for higher costs of, for example, gas. ATCO Gas Australia, a distributor of gas, is one of the companies that will be required to reduce their emissions by five per cent per annum—at a cost; these things don't come cheap. Centurion Transport, which distributes most of the groceries around the very large state of Western Australia—and transport costs are important—will be forced to increase their costs, which will mean the consumer will have to pay more when they go to Woolworths, on top of increased energy prices and other supply chain issues which are forcing up the cost of fruit and vegetables in the supermarket. Goldfields Gas Transmission Pty Ltd, another business which reticulates gas, and Alliance Aviation, which provides air services to regional towns across my electorate, are other businesses that will be caught up in this.

The Kwinana CSBP facility—I don't know much about anything else, but I know a little bit about agriculture. I know that when you force up the price of fertiliser, which is a key component particularly across the poorer soils of Western Australia, the cost for farmers goes up and the price of food goes up. Once again, you've got the consumer unaware of what's coming their way; they are already dealing with significant cost of living issues today, and they will pay more when they go to the supermarket. We've got fuel refineries across Australia that will be caught up in this, which means people will be paying more when they fill their tanks. Aurizon rail freight are caught up in this safeguard mechanism; that's the business that carts the bulk of the grain Western Australia produces—26 million tonnes this year, our second record crop in a row. Our farmers are doing an amazing job of producing the best, cleanest, greenest product in the world, but their costs are going up and their fertiliser prices are going to go up under this bill, and the cost of getting that product to a port to go on a ship is going to go up. There's a lot in this bill that Western Australians need to be aware of and need to be very wary of.

Coming back to my electorate in particular, I've counted around 20 businesses that will be impacted. It's not one business, it's not just BlueScope Steel; there are 20 businesses that will be impacted. I will name a few of them because some of them are quite iconic. The Kalgoorlie Nickel Smelter is an iconic business in Kalgoorlie. Many local people did their apprenticeships there and grew up working at the nickel smelter. That will be caught up in this particular new carbon tax. We've got the Super Pit, which sits at the top end of Hannan Street in Kalgoorlie and employs over 1,000 people. That will be caught up in this tax. Moving away from the Goldfields, we've got the Murrin Murrin nickel operation, which is between Laverton and Leonora. It's a very important business out in that part of the world. At Boddington in the south-west part of the electorate, which is a long way from Kalgoorlie, the largest gold mine in Australia will be caught up under this safeguard mechanism. Many, many important businesses will be affected but none more so, in terms of local jobs and people's employment prospects, than the Worsley Alumina refinery in the Shire of Collie. Owned by South32, Worsley employs about 1,800 people directly at the alumina processing plant, and there would be many hundreds more contractors and others that are supported by that business. So these are really important businesses that employ a lot of people.

Production of aluminium, in particular, and alumina is a highly energy-intensive business. I have spoken to South32 about their plans to reduce emissions. They can get to 12 or 13 per cent, I believe, but, beyond that, it becomes more and more difficult. At the moment they are currently importing—can you believe it?—coal from Newcastle to run the plant because the Collie coalmine, under the WA Labor government, can't provide coal either to the power stations in Collie or to South32. This is a business that employs almost a couple of thousand people directly and then many other hundreds more indirectly. If they chose to offshore that business—perhaps, move it to South Africa where they do their smelting—that would be 2,000-plus jobs that would be gone from my electorate. Quite frankly, I'm not sure how they're going to achieve this 35 per cent reduction in emissions over the next seven years that is required under this particular legislation, and that means that those jobs are at real risk. It will devastate that particular region if those jobs go.

Bizarrely, the Prime Minister, in question time today, linked the safeguard mechanism with somehow reducing the cost of living. I've really got no idea, whichever way you cut, dice and spin this, how you can suggest that that would result from increasing the price of aluminium, increasing the price of petrol, increasing the price of cement—all of these key commodities that we consume, whether it be a young couple looking to build their first house or the state government embarking on an infrastructure project that requires a lot of cement or steel. These costs are going to go up. There is no other way you can spin it. The whole carbon tax is designed to drive the cost of these products up; that's what it's designed to do. So how anybody can come into this place with a straight face and try and claim that this is going to reduce costs for people is beyond belief. I would say it is bordering on misleading the parliament.

One of the perverse outcomes of this particular policy is that these companies will be required to purchase carbon credits if they can't reduce their emissions. They've got to go and buy a carbon credit at $75 a tonne. Are the companies going to absorb that or are they going to pass it on to the consumer? They are going to pass it on to the consumer. That's what these businesses do; that's how they survive. But the real threat—and we're already seeing this under the current carbon reduction efforts by these companies—is that they're now going out into prime agricultural production areas and buying up productive farmland to plant trees under a 70-year covenant, which means that farmland will never be available for productive farming again. In my home area, farms have been around for 150-plus years, and they've never been more productive. Yet here we have the situation where companies are producing gas or iron ore or products that are finite products. Don't get me wrong. I support these industries to the hilt, but to take out productive farmland that will still be producing food in 150 years time—probably infinitely more than we're producing today—to meet these obligations of these companies to reduce their carbon emissions is, quite frankly, the definition of insanity. I think when the Australia people wake up to what is being proposed here, they will pretty quickly change their mind.

By way of observation, in the Netherlands on the weekend, where similar types of programs have forced farmers to reduce their emissions and nitrogen use by up to 50 per cent, we saw that the BBB, which is the farmers and citizens party—importantly, the citizens as well as the farmers—won the largest vote of any party in the regional electorates in the Netherlands. The government party that has tried to introduce this particular imposition on the Dutch farmers has now lost its majority, and the Prime Minister there will be in serious trouble.

I want to conclude with those comments on where this policy is headed and where it may well end up, and on the impact on Western Australian consumers, farmers, and, most importantly, the householders who are going to be paying more for their electricity and gas and paying more for food when they go to the supermarkets. I proudly stand here today opposing this particular piece of very bad legislation which seeks to impose a new carbon tax on the Australian people.

5:06 pm

Photo of Tony ZappiaTony Zappia (Makin, Australian Labor Party) Share this | | Hansard source

The latest IPCC report that was released only in the last day or so could not have been more clear. It reiterates that climate change is real; that temperatures have increased by 1.1 degree Centigrade since the pre-industrial era; that the earth is on track to reach an increase in temperature of 1.5 degrees Centigrade by around 2030, which is much sooner than had been previously expected; that, over the past three decades, atmospheric carbon levels have increased exponentially; that developed nations, as the highest per capita emitters, must do more to reduce emissions; that extreme weather events already costing the world billions of dollars each year in damage will continue to increase in frequency and severity; that environmental degradation is already so extensive that it is making a difference of the planet that we live on; and that climate change already causes food shortages and, indeed, an incredible amount of health costs associated with both food shortages and health related climate change impacts. The cost of that alone should be sufficient to say to people that we need to reduce carbon emissions—if not for the environment and for all the other reasons that we should do it then for no better reason than that it will create a much healthier society.

The reality is that global action has been way too slow for the last three decades, ever since this issue was raised as an international issue of concern and there was consensus that it was an international issue of concern. Whilst countries have come together over the years to talk about it, and certainly there have been a lot of changes made, we have simply not acted fast enough and sufficiently to constrain the effects of climate change. The reality is that the Safeguard Mechanism (Crediting) Amendment Bill 2022 is timely, in that right now, when that IPCC report is being discussed and debated, we in this parliament want to pass legislation that moves us forward in terms of reducing the amount of emissions here in Australia. The reality is that the global response, including our response here in Australia, must be not only escalated but also measured and realistic. If it's not realistic, we simply won't achieve the targets that we set. The targets that have been set by the Minister for Climate Change and Energy are, indeed, realistic if we are prepared to do the work that is required.

In the last three decades, the research and analysis of climate change throughout the world by literally tens of thousands of scientists has become more precise, more reliable and more credible. Yet, listening to members opposite, I hear so many of them, in my view, still questioning the science and the credibility of climate change. Quite frankly, I believe that most of their opposition to this legislation comes because they are still sceptical about the science that underpins the arguments on climate change.

The truth is that time is ticking and the world must do more to reduce both the rate and the impacts of climate change. Australia, as one of the highest per capita emitters of carbon, has both an obligation and a responsibility to play its part in reducing global emissions. If we don't act, why would other countries who, per capita, emit much less than us respond in the way that they possibly can? They will say, 'Well, if you folks, who are among the highest emitters, are not prepared to make some drastic changes to your own way of living, why should we?'

This legislation attempts to do that in a very responsible way. It places limits on the largest emitters here in Australia—the nation's highest emitters—and it provides credits to them for the reductions they achieve. The Albanese government has set, I believe, a very responsible emissions reduction target of 43 per cent by 2030 on 2005 levels. That's the baseline. Certainly, if we can do better than that, I'm sure we would all want to, and we should all strive for that. But at least setting ourselves a 43 per cent target gives us something to aim for. This legislation, I believe, allows us to achieve that.

Those entities who do better than reducing their emissions by whatever their limit is will get credits which they can in turn pass on to those other industries that, sometimes for very good reason, have not been able to reach the limits that were set on them. I think that that's a responsible way to deal with an emissions reduction strategy, because not every entity or every business is in the same position as another to make reductions. For some it will be easier than for others, and, where that is the case, they should, in a sense, share the load of reduction. Indeed, the notion of sharing the load was one that was raised some 13 years ago when we tried to introduce into this place the Carbon Pollution Reduction Scheme. Mr Deputy Speaker Georganas, you would recall the debates in respect of all of that, and that was all about trying to share the load where you can in fact have carbon trading as a marketable item. The reality is that this legislation—and I will come back to this in a few moments—does what is possible in this country. In fact, by doing what is possible, we would be able to make a huge difference to the amount of carbon that is currently being emitted in Australia.

I want to make a couple of other points that I think are relevant to this whole debate. The first is this: if Australia acts to reduce emissions by providing encouragement to industry to do so, there will be huge economic opportunities for those companies and other entities that get on the front foot. That has been proven time and time again. Those companies that are prepared to show initiative upfront are likely to be the ones that benefit the most in the years to come. So I believe that encouraging companies to follow that route means that, in the long term, they will actually benefit.

Secondly, the longer we delay, and the longer the world delays, the more difficult it is to transition and, quite frankly, the more costly it will be. So, if members opposite are concerned about the cost to their individual communities and their individual businesses, I can tell you that there is universal consensus that the cost will be much greater the more we delay this issue. Thirdly, if we don't act there is every likelihood that those countries that do act will start to impose penalties on our products because we have not done our fair share in reducing carbon emissions.

The fourth point I make—and I've made this point on other occasions—is that one of the areas causing an increase in atmospheric carbon dioxide is the additional consumption that the globe has embarked on—consumption that accrues from an increase or an improvement in the standard of living of people around the world. If we all consume more then there is more carbon produced. Combined with that is also the fact that increased population levels in total across the world make a difference to the amount of carbon that's in the atmosphere. Yet we very rarely talk about what we can do to reduce consumption and to perhaps look at the impact that population growth is having on carbon dioxide levels throughout the world.

I want to finish on this note. I mentioned the Carbon Pollution Reduction Scheme earlier on. It truly amused me this morning when I saw the Greens come into this chamber and talk about the need to do so much more to reduce carbon emissions in this country and how this legislation doesn't go far enough—they've been saying that all the way through—and how we need to act urgently and time is running out et cetera. In 2010 the Greens did not support the Carbon Pollution Reduction Scheme. Had they done so 13 years ago, it would not be the same race against time that we are facing right now. Carbon emissions in Australia would have been much lower. The transition ahead would have been much easier, less disruptive and less costly. All the crisis rhetoric from the Greens is simply not matched by their actions.

We see their hypocrisy and their double standards again with respect to this legislation. Whilst they call for more action to be done, the truth is that, when it came to voting on measures that could be achieved, they were nowhere to be seen and, in fact, voted them down. In my view, they should be held responsible for the situation we are in right now and for the climate crisis that we supposedly face here in Australia and across the world, because they opposed legislation which would have made a difference. It's always easy to come into this place, make claims about what we should be doing, grandstand—as the Leader of the Greens did today—and call for unrealistic changes when you're not in government. But when you're in government you are responsible for all of the people of this country and you're responsible for the impacts of legislation across all sectors of society. That is what this government, the Albanese government, is trying to do: bring in a responsible policy.

I finish on the words of the Minister for Climate Change and Energy in the debate earlier today, when he said:

These are the stakes. There are 205 million tonnes of emissions, between now and 2030, at stake in this vote. That is the equivalent of taking two-thirds of the cars off Australia's roads … fossil fuels covered under the safeguard mechanism emit, currently, 73 million tonnes a year … without a change of policy, this will grow to 83 million tonnes, but, with a change of policy, it will be a net 52 million tonnes. That's the question facing the parliament. It's a 205-million-tonne question facing this parliament as to whether we pass these reforms or not. That is the choice facing this parliament.

I think that those comments from the minister say it all, and I urge members to support this legislation.

Photo of Steve GeorganasSteve Georganas (Adelaide, Australian Labor Party) Share this | | Hansard source

I now call the member for Bonner.

5:19 pm

Photo of Henry PikeHenry Pike (Bowman, Liberal National Party) Share this | | Hansard source

PIKE () (): Bowman.

Photo of Steve GeorganasSteve Georganas (Adelaide, Australian Labor Party) Share this | | Hansard source


Photo of Henry PikeHenry Pike (Bowman, Liberal National Party) Share this | | Hansard source

That's alright, Mr Deputy Speaker. They're right next door to each other and both held by the same party.

One of my coalition colleagues called me over the weekend and told me he was having a nice, quiet Saturday evening. He'd just come back from a community event and was now sitting down to watch the second Godfather movie with his wife. The Godfather Part II, of course,is regarded as one of the greatest films ever made. I'm sure many members would agree. It is one of those incredibly rare sequels that is better than the original film.

Sequels rarely surpass the original, and in this bill we find the same rule applies. The Labor government's carbon tax 2.0 will be far worse than the original. I can't really say that the carbon tax mark 1 was much of a box office hit either. Labor still has many of the same cast over there, many of the same actors perhaps playing different roles. I doubt the public will be any more receptive to this horror movie the second time around.

The coalition supports action on climate change but understands that a balance must be struck between reducing emissions and ensuring the continuation of a strong, prosperous and sovereign Australia. It is easy for critics to say, 'We need to do more,' 'We need to go faster,' 'We need to go harder.' We've heard that from some of the crossbench and government members today. But governments have to operate in the real world. When dealing with an area of policy like this, which has such wide-ranging implications across our economy, we need balance. We need proportionality. We need action but nuanced in a way that ensures our long-term best interests.

When last in government the coalition grew the economy by 23 per cent, while also exceeding Australia's Kyoto targets, pledging net zero by 2050 and reducing Australia's emissions by more than 20 per cent compared to 2005 levels. The coalition understands how important it is to manage the needs of our environment and economy simultaneously. But what is clear from this bill is that this minister and Prime Minister do not.

The fine balance that Australia needs to strike is being forsaken for political grandstanding. While there were years of balanced and sustainable emissions reductions that reliably met and even exceeded targets while maintaining strong economic growth, under the coalition, this government is attempting to distort the purpose of the safeguard mechanism—from a system that caps emissions to one that penalises businesses, imposes taxes and costs jobs.

Let's be fair dinkum about this bill. It does not tweak the emissions safeguard first introduced by the coalition. This bill, effectively, destroys that mechanism completely and replaces it with a souped-up version of the Gillard era carbon tax at more than three times the cost. This bill will impose a super carbon tax—carbon tax 2—on the Australian economy, on Australian businesses and on Australian households. All this is at the very time there are cost-of-living and inflation concerns, particularly concerns about higher energy prices, which are having a massive impact right across our nation. All this bill will do is make Australia weaker and poorer. Anything that leaves us weaker or poorer or in any way less able to rapidly build the capability that we need for close cooperation with our friends and allies, over the next few years, is not something we can either justify or reasonably afford.

Labor's new carbon tax will require 215 of Australia's largest industrial enterprises to each slash their carbon dioxide emissions by almost five per cent, each and every year, to 2030. These companies will be required to pay $75 per tonne of carbon dioxide that they emit over an arbitrary baseline set by the government, and, of course, this underlying carbon price will increase as the years go on.

Recent modelling by RepuTex reported in the Australian shows that annual baseline reductions will need to significantly increase, from 4.9 per cent to between 5.8 and 8.9 per cent from 2024 to 2030, if Labor's target is to be met. It is becoming clearer that even the 4.9 per cent year-on-year reduction required of our biggest emitters by this bill may itself pale into relative insignificance compared to where this mechanism may take us between now and the end of this decade.

The threats climate change poses will not be overcome by imposing draconian penalties on businesses, crippling our economy or increasing taxes. More tax and more government is rarely the remedy that results in greater innovation. Only policies that work with business and encourage technological innovation will help solve the climate problem. It is unfortunate that this Labor government fails to understand this critical point.

The bill has been referred to the Senate Environment and Communications Legislation Committee. The Senate Standing Committee for the Scrutiny of Bills has not yet commented on it. Stakeholders have expressed concern about the limited time frame for the consultation and the staggered release of key documents, particularly of the Chubb review, which they regard as limiting detailed consideration of the proposed amendments. Given all the virtue signalling and all the claims of transparency from Labor on this bill, it is somewhat perverse for this Labor government to deliberately stagger the release of the bill's draft. This approach has meant that many stakeholders have failed to adequately assess the full impact of the proposed changes. In fact, due to the sheer number of legislative instruments in this bill, there is not much for stakeholders to comment on at all. This tactic by the government is both highly irresponsible and potentially dangerous, especially when it relates to changes as important, as impactful, as the provisions that are contained within this bill.

This government and this Prime Minister are running away from scrutiny, and the use of excessive legislative instruments is clear evidence of this. According to the Environmental Defenders Office and the Australasian Centre for Corporate Responsibility, this approach leaves too much power in the hands of the minister and the Clean Energy Regulator. Of the two principal amendments made by this bill, neither was included in the exposure draft, and both conflict with stakeholder opinions. This is a government that aims to shirk parliamentary process to avoid detailed scrutiny of the controversial aspects of its policy. This is a dangerous precedent to be setting so early in the life of this new government. The minister informed the Senate just last week that he will not be releasing the Australian carbon credit units modelling. Of course, the previous government released the equivalent modelling when we adopted the policy to reach net zero by 2050. The question must be asked: what is the government hiding by failing to release this modelling? What does this modelling say that the government doesn't want the Australian people or the Australian parliament to know? The Liberal-National coalition will work in parliament this week to force the Albanese government to release modelling of its climate change policy or deny its legislation being considered in the Senate. The move is necessary because of the government's refusal to comply with the Senate order to release modelling on the impact of the safeguard mechanism. Labor simply refuses to tell Australians how its reforms to the safeguard mechanism will impact families, businesses and jobs.

Amidst a full-blown cost-of-living crisis—and we've heard a lot of mention of that this week in this place—Labor wants to introduce a super carbon tax and then hide modelling of its impact from those who will be forced to pay more for everything, from fuel to food and everyday materials. I make a point of doing a lot of doorknocking in my electorate—I've knocked on about 20,000 doors in recent years—and the conversations that I have with the constituents of Bowman are very much centred around concerns about the cost of living. We saw the default market offer come out last week, which outlined significant increases to energy costs for businesses within South-East Queensland. The conversations that I've been having at people's doors, at shopping centre mobile offices that I've been holding, at sporting fixtures, at community events, at retirement villages that I've been visiting, have all been the same. They've all been focused on the cost-of-living crisis that is occurring across this country. We need to take consideration of that when we're considering such a massive bit of legislation that has such broad impact across so many of our major sectors, which will of course trickle down to having an impact on household budgets and businesses all across this country.

Electricity prices are continuing to spiral out of control under Labor, with new increases of up to 23.7 per cent for households and 25.7 per cent for small businesses now announced. A proposed increase to the default market offer revealed last week will ensure that households in my electorate will be worse off by up to $383 a year, far from the promise of a $275 decrease that we had from the now government during the election period. Of course, we haven't heard much from them in defence of it since then, despite the coalition's best efforts during question time every day.

Labor's new carbon tax 2.0 will increase the price of everything of everything from food to fuel, at a time when households are already struggling to make ends meet. The safeguard mechanism is one more example of Labor weaponising recently legislated reduction targets. The changes proposed by this bill essentially disrespect the will of the Australian people by reimposing the Gillard-era carbon tax on Australians almost 10 years after Australians comprehensively rejected it.

While the government argues the mechanism will not affect businesses, this is blatantly untrue. Business groups may be too scared to publicly condemn the new government, but they are certainly sharing their views on this bill when they meet with us. Big business groups are sharing those views with us, and the small businesses within our electorates are sharing their views, as well. I can tell you that some of our nation's most important industries have a deep concern about what this will mean for them. Australians will be hard-hit by these changes. Increased production costs will result in an even higher cost of living, and a significant decrease in our international competitiveness will damage our economy, destroy jobs and erode our strength.

One final point that I would like to make is on Australia's security over the coming decades. A lot has been made of that in recent weeks, and we acknowledge the changing strategic landscape that our nation faces. We welcome the AUKUS announcement made recently by the Prime Minister in San Diego and the subsequent announcements and details that have been revealed. Of course, it was the former coalition government that established the AUKUS concept and struck the original deal. We welcome the moves by the federal government to take that threat seriously and prepare Australia for the challenges that we'll face over the next few decades.

Nations that seek to cast themselves in competition with us have no interest in hampering their economic growth through climate action, and we need to be sure that when we do take action it does not cost us our global competitiveness and ability to respond to threats as they emerge. We must ensure that we continue to produce what we need to produce, at a cost that's reasonable, for us to be self-sustaining and able to maintain our way of life despite the pressures that we'll be facing over the coming decades. We must ensure we remain prosperous enough to maintain and grow our defence capability while withstanding the economic pressures that will be brought to bear.

I congratulate the Albanese government for thinking long term about our national security, but we need the same long-term thinking about our economic capability and our domestic industry. We cannot risk the sovereignty of Australia or sacrifice the livelihoods of Australians simply to meet the self-indulgent demands of those who are well off enough to afford it. It may be an inconvenient truth, but this is precisely what the bill aims to do, what the Labor Party aims to do and what the government aims to do.

For a time, we may cop some criticism for taking a firm stand against this bill and not embracing the faith of those opposite, but dark days are coming. While the coalition sees the dangers and understands the tough decisions that must be made, only the government has the power to implement these decisions. The government needs to understand that my constituents and most everyday Australians want reasonable and measured action to address climate change. We want action based on evidence, balanced action, action that serves Australia's immediate and long-term interests. This bill is far from a balanced approach, and I will certainly not be supporting it.

5:33 pm

Photo of Mr Tony BurkeMr Tony Burke (Watson, Australian Labor Party, Minister for Employment and Workplace Relations) Share this | | Hansard source

by leave—I move:

That so much of the standing and sessional orders be suspended as would prevent the following from occurring in relation to proceedings on the Safeguard Mechanism (Crediting) Amendment Bill 2022:

(1) notwithstanding standing order 31, if the second reading debate has not concluded earlier, at 8 pm on Tuesday, 21 March, the bill being called on for further consideration, with the second reading debate continuing until either:

(a) no further Members rise to speak; or

(b) 10 pm; at which point, debate being adjourned and the House immediately adjourning until Wednesday, 22 March at 9 am;

(2) from 6.30 pm on Tuesday, 21 March until the adjournment of the House:

(a) any division called for being deferred until the first opportunity on Wednesday, 22 March; and

(b) if any Member draws the attention of the Speaker to the state of the House, the Speaker announcing that he will count the House at the first opportunity on Wednesday, 22 March, if the Member then so desires; and

(3) any variation to this arrangement being made only on a motion moved by a Minister.

In short, the impact of this motion is exactly as I explained to the House earlier. You'll all still have the same speaking time; none of that has changed. This action will facilitate getting through as many speeches as possible tonight, taking it through until 10 o'clock. There will be no votes or quorums tonight after 6.30, and debate on the bill will continue tomorrow.

At the moment, in terms of the number of speakers on the bill, we will get to consideration in detail tomorrow and be able to have a consideration in detail process of a decent length. It may even spill over into Thursday. Obviously, I'm aware that we could end up in a situation which will mean that more people add themselves to the speaking list. If we have to deal with that, we'll deal with that tomorrow. For the moment, hopefully, this means that we'll be able to deal with the bill in the normal way.

I want to thank in particular the Manager of Opposition Business and the opposition for their cooperation in making sure that this course was available.

5:36 pm

Photo of Peter KhalilPeter Khalil (Wills, Australian Labor Party) Share this | | Hansard source

In May last year, Australians voted for real action on climate change. They voted for a government that takes real action on climate change and makes it something which is significant and real and which will make a difference to the next generation—not just empty words. Climate change is an existential issue for Australia and for Australians, as well as for people across the globe, particularly in the Pacific. The Albanese Labor government is taking leadership in making a real commitment on this issue because this government is acutely aware of the urgency and the need to act. The IPCC report that has just been released reaffirms what we've all been concerned about all along. It reminds us of our agency. It also reminds us of the urgency to act and reminds us that we should have taken this action decades ago. This country was dealing with a decade of denial and delay—a decade of dysfunction.

Of course Australians are right to be concerned. People in my electorate of Wills are contacting my office because they are worried. They're worried about their kids' future, and they're worried about the world that their kids and their grandkids will inherit—as am I, as a father of two young children. We're worried about the prediction that temperatures will likely rise 1.5 degrees in the early part of next decade and that the impacts from climate change will be more severe than estimated in previous IPCC assessments. We're worried that the climate crisis is quickly altering the earth's atmosphere, oceans, land and frozen poles, which will mean that Australians will experience extreme weather, including heat waves and catastrophic flooding. We're worried that our children and our future generations will continue to suffer if we don't seize the opportunity this week in this place to make a real start on climate action. This is what the Australian people voted for last May.

The Safeguard Mechanism (Crediting) Amendment Bill 2022 provides for a safeguard mechanism that will provide this country with key building blocks as we work towards net zero by 2050 at the latest. We've always said that we can get there faster if we're permitted to make those investments in renewable energy. It's a floor, not a ceiling. The safeguard mechanism helps ensure that our largest industrial facilities reduce emissions in line with our national targets. It provides us with a system that encourages emissions reductions from our top emitters. That is crucial to reaching Australia's updated emissions reduction targets of 43 per cent by 2030 and net zero by 2050. More than 70 per cent of safeguard facilities and 80 per cent of safeguard emissions are already covered by the 2050 net zero target, which these reforms will help them achieve.

As part of the Powering Australia plan and funded in the last budget, the Albanese Labor government is investing in the decarbonisation of existing industries and creation of new clean-energy industries through the $1.9 billion Powering the Regions Fund. At least $600 million of this will assist safeguard facilities in reducing their emissions through energy efficiency upgrades, shifts to lower carbon processes or switching of fuels to electrification, hydrogen and biofuels. Why you would oppose that I'm not sure. I haven't heard a cogent or rational argument from those opposite.

These reforms help Australian businesses remain competitive as the world decarbonises. Why would you oppose that? They enable industries to be supported during this transition. Why would you oppose that? The crediting element will enable businesses to be provided with tradable safeguard mechanism credits that will incentivise more efficiency, and other businesses with limited abatement options will be able to purchase credits to help meet their emissions reductions. Why would you oppose that? Crediting and trading will actually help Australia and our industrial businesses to meet our climate targets. Why would you oppose that?

It's a cost-effective way of enabling us to continue to work toward our larger goals—and we've got to start. This parliament debated targets last year. We agreed to a 43 per cent target. That's our starting point. It passed through this parliament—that's democracy in action. Unless the safeguard reforms are passed, our projections will be lower than 43 per cent. Why would you oppose that? Is that why—because you want us to underachieve? You want to block business and industry from reducing their emissions? Is that what your opposition is about? This is real action and real reform. Maybe you oppose it because of that—because you did nothing for nine years. You went backwards for nine years. Maybe you want to oppose this bill because of that. Maybe you just want to oppose reducing emissions, which will alleviate pressure on households and energy bills and will actually create renewable energy jobs. That's a really good start to make sure that we're headed on a path, in a direction, that will help us transition into a renewable energy future. Why would you oppose that?

Is it because there are still elements within the opposition party room that don't believe in any of the science, that don't think that we should take any action, that were responsible for torpedoing, for blowing up, for destroying I've forgotten how many—

Photo of Anne AlyAnne Aly (Cowan, Australian Labor Party, Minister for Early Childhood Education) Share this | | Hansard source


Photo of Peter KhalilPeter Khalil (Wills, Australian Labor Party) Share this | | Hansard source

Thank you; the member for Cowan has pointed out correctly that 22 different energy plans were completely blown up by the Liberal party room over a number of years. Maybe you want to oppose us getting on with it because you couldn't get on with it. For the first time in a decade, this parliament has an opportunity to put measures in place to reduce emissions from our biggest emitters.

Some honourable members may call for higher targets—we've heard that from many here—or feel that this isn't enough. To those members and those parties, I say: this government will work together with you in good faith towards emissions reduction. We would all agree that it would be great to have 100 per cent renewable energy by tomorrow, but our massive continent demands a network that covers thousands of kilometres and all types of terrains and climates. Our electricity system, our grid, is hopelessly and desperately outdated and cannot yet properly integrate the full capacity of the growing renewables sector. So let's unlock the potential. That's why we have a plan for $20 billion of investment into our electricity system, our grid, to make it up-to-date for renewable energy. That's what that is about.

We know that the opposition and others might want to make this a political issue. Maybe they're opposing because they want play politics, again. They want to move out of their party room and the destruction of their 22 energy plans over how ever many years to blow up any chance of us moving forward as a nation. But let's be sensible and rational here. We'll never make a start if we don't have people on the other side make the commitment and understand the need for the national interest, and for their kids' future as well. That's why we need real action on climate change. This government is the only party that is delivering action on climate change. We need people to get behind this. We need the opposition to understand the importance of this for the future of Australian business and Australian industry, and that the transition is going to happen whether they like it or not. We need others who feel that this is enough and to get behind this and not make the perfect the enemy of the good.

I have always found in politics that, if you are being attacked from each end of the spectrum with people on both sides saying it is either not good enough or they'll never support it, if you are somewhere in the sensible centre, you're doing the right thing most of the time or pretty much all the time. That's where we are right now. We are in the sensible centre looking towards reducing emissions and transitioning to a renewable energy future while making sure the transition is feasible for Australian industry and Australian business. And yet we have people, members on either side of us, who wish to not support this sensible step forward. We need crossbench support, we need everyone's support, even the opposition's support. A few of them might see the light here and put the national interest ahead of their party and political interest. Maybe—stranger things have happened.

But if the parliament votes against this policy, those opposite will be voting against emissions reductions. They'll be voting against a plan to transition Australian business and industry. They'll be voting against a future where we transition to renewable energy and all the benefits from that for our nation and for our climate. They'll be voting against any action on climate change. They'll be voting against a safe future for Australians. I call on the members in this place to consider the safeguard mechanism, to consider this bill on its merits and everything that it does for the future of Australian business and our reduction in emissions going forward. Maybe, just maybe, some might see the light and understand the importance of this bill for the national interest. I hope they do, and I hope the crossbench do as well, and that we get the support we need to move forward so that we can start investing in the transmission grid, getting it ready for the renewable energy future that is inevitable, despite those who think it will never come. I call on the members opposite to consider this bill in good faith and consider the important elements of this bill for business and for the future of renewable energy in this country. Hopefully, some of them might actually vote for it.

5:48 pm

Photo of James StevensJames Stevens (Sturt, Liberal Party) Share this | | Hansard source

I rise to speak against the Safeguard Mechanism (Crediting) Amendment Bill 2022 for many reasons, and the first is it's designed to increase global emissions, perversely. This is a bill that will drive industrial activity out of our economy to other economies that emit much higher levels of carbon. This is a bill that doesn't properly understand the challenges that heavy industry have, in particular, and expects them to achieve things that industrial chemistry and science are yet to actually develop and discover for them to apply to their sectors. These are sectors like the steel industry and like the cement industry, with their very complex industrial processes that are yet to find commercially viable solutions to the carbon emissions that those heavy industries undertake. By the by, I might indicate that I was very excited to be a part of the successful application for the HILT CRC, the Heavy Industry Low-carbon Transition Cooperative Research Centre application, led by the University of Adelaide, amongst other institutions, in my home city of Adelaide. It's looking to take on those exact challenges and to find solutions, commercial solutions, to the emissions that come from heavy industry. That's because a lot of those industrial processes are yet to have viable commercial pathways and processes that can decarbonise.

We're in a situation where this bill, a bill from the government, says to Australian heavy industry and high emitters: 'We are going to hold you to an unfair and unreasonable standard that we won't apply to your competitors, particularly those that, perversely, will be importing product into our country to compete against you. We will put a restriction on you that we won't put on the same production that occurs somewhere else.' This safeguard mechanism crediting scheme will have no impact on cement produced in China. It will for cement that's produced in Australia, so Australian cement is now going to be more expensive than, say, Chinese cement. I've got nothing against Chinese cement. I just think it shouldn't have an unfair advantage against Australian cement that's produced by employing Australians and that's invested in by Australian superannuation funds. Perversely, for companies like Adelaide Brighton from my home city of Adelaide, an iconic business, this legislation will put an impost on them that their overseas competitors selling into the Australian market against them won't have. The reality is that cement produced somewhere else is produced at a higher carbon intensity than Australian cement produced in Australia.

Under this bill, emissions go up; Australian jobs go down. We have a government that has a bill to increase carbon emissions across our planet by moving industrial production from a responsible economy like ours to anywhere but Australia. There's nothing in this bill that says, 'Equally, we will put some kind of mechanism on importing competitors.' If you're going to do it, at least be fair about it. What government in the world right now is disproportionately advantaging production from somewhere else against their own economy? This is treasonous. This is a bill that says we want to take Australian jobs, give them to another economy and increase carbon emissions at the same time. And that's something—

exactly—that the government will not be honest about with the people of this country because they know, if they were honest about that very simple proposition and equation, what the consequences would be. Instead, we have this surreptitious attempt to pretend that something is being done through this legislation to reduce emissions when, in fact, it's increasing emissions but also costing Australian jobs.

We're in the middle of a cost-of-living crisis. At the moment cement produced in this country is competing against cement that's being imported, with all the additional costs through that supply chain. Once you run Australian businesses out of business what's going to happen to the price of imported cement? I just wonder. Once we don't produce it and there's no competition from Australian production against sources of cement from other countries, I wonder what will happen to the price of cement in this country? Apart from the fact that it's continuing to emit carbon at a higher rate than Australian produced cement, we'll also have a situation, because we don't have sovereign production capability in this country, where we'll be completely at the mercy of prices being dictated to us by importers that have 100 per cent control over the market. We're destroying Australian sovereignty, destroying Australian jobs and increasing global carbon emissions through this bill.

Cement's not the only example, obviously. We know that in a lot of heavy industries there's high carbon intensity. We know that in steel, in aluminium, in a vast variety of industrial processes. Achieving carbon neutrality means tackling the challenge of those industries decarbonising. But the perverseness of the solution being, 'Let's just shut down that industry in our country and give it to someone else, let's just let all of the high-emissions industries exist not in Australia'—in success, that's what this bill achieves. That's the whole point of this bill.

The point of this bill is to penalise those exact types of businesses so they shut down in this country and so those same businesses in other countries increase their production output jobs in those economies, earn that income in those economies and increase their emissions, because they don't have anything like the standards we have in this country. And that's the outcome. It's a bill to increase global carbon emissions at the expense of Australian jobs. We do not support the lunacy of that proposition whatsoever.

When in government we invested heavily in looking for the research and development opportunities to decarbonise these industries in a way that keeps those jobs here in Australia. So if the HILT CRC that the Adelaide university are leading can develop—and we all hope that they can—transformative industrial processes to decarbonise elements of the supply chain in things like steel, cement and aluminium, then that would be a fantastic outcome. That's the pathway to decarbonise, doing it through R&D and growing the economy of this country, in the same breath.

Green steel, if and when we can produce it, means that it will happen in Australia. It will co-locate the production of green steel with where the iron ore is. If you're trying to get carbon zero or net zero green steel, you're not going to dig up iron ore and transport it somewhere else; you're going to process it in situ. Green steel, in the right circumstances, is extremely exciting for this country, because out there at the Pilbara you will take the iron ore, there where it is, and transform it into steel at that exact point. That will be the lowest carbon footprint of green steel, co-locating it with where the iron ore is.

If people like those at Adelaide university who are working on those industrial processes can decarbonise steel production and produce green steel, that will be an absolute jobs bonanza for the Australian economy. We all know, because of our mineral wealth in this country, that this can be the case across a whole range of industrial products and processes. The only thing that will stop it is if these industries are gone before we get to that point and if we drive all of our heavy industrial processes off to another economy. That's, essentially, what this bill seeks to do.

Major employers in my home state—I mentioned Adelaide, Brighton and Nyrstar at Port Pirie, which is a very significant lead smelter that my family has been very connected to through the Broken Hill North Mine. My grandfather was a mining engineer and had capital works there before and after the Second World War. All that lead goes to Port Pirie. The member for Braddon would know well that the zinc from there goes to Tasmania. These are exciting businesses that are very successful employers, and we want to keep them here in this country. We don't want to send that oxide off to be processed somewhere else because those businesses are being told, 'You're not welcome in Australia and we're going to put a huge tax on you and penalise you until you leave.'

Some people feel good that the accounting trickery of this shows a reduction in Australia's emissions. But when that is at the expense of a greater increase somewhere else and, at the same time, the loss of Australian jobs, then it's a completely unacceptable path to take.

The government, at times, like to talk about an orderly transition towards net zero by 2050. Sometimes they have arguments with members in this House, particularly from the Greens party, about the pace in which they're moving. This is the most frightening element of all the things they're proposing: de-industrialising our country. When those jobs are gone—they've been pretty important to our economy for a long time. We wouldn't be much of an economy if those sorts of industries weren't the backbone, as they have been for decades—in fact, centuries in the case of some of these complex mining and mineral processes. It's happened across the country and it's one of our great endowments and one of our great assets as a nation—the mineral wealth we've got and the industrial opportunities that raw material provides to our economy.

Regrettably, here in 2023, we are faced with the prospect that the government of this country, for the first time ever, is turning its back on that industry and saying: 'We don't want you anymore. We don't want those jobs in our economy. Instead we'd like someone else to have them.' It's disguised by this ludicrous proposition of reducing emissions when emissions will go up if this policy succeeds. If that production leaves this country, which is comparatively a much lower carbon intense economy, with much higher standards across the board environmentally and the like, and we move that production—which will still happen. The rest of the planet won't say, 'Now we want less steel and less cement and aluminium and less copper and less minerals'; in fact, hilariously, the transition to net zero needs a lot more minerals and metals to facilitate it. But we are, in essence, saying we don't want those industries here in Australia. In the coalition, we have to stand up against that. We have to stand up for those industries, for their value to our economy, for the fact that it is more environmentally friendly for those industries to continue on and succeed and thrive in this economy than in someone else's. We cannot and will not stay silent and fail to call out the perverseness of what is being proposed here—that is, that we say we want to de-industrialise elements of our economy, lose jobs and, at the same time, increase global carbon emissions, and put ourselves in a position where we are turning our back on the sovereign capabilities and sovereign industries that have been vital to the growth of our economy and to the security of our economy into the future and where we're now happy to be completely reliant on 100 per cent imports of all kinds of vitally important product that we currently proudly make in this country.

To the workers that will lose their jobs in these industries: in the coalition, we stand up for you, we back you and we are proud of the contribution you make to our economy. You're not doing anything wrong. You've got nothing to be embarrassed about. In fact, we appreciate you and what you're doing to create wealth and to grow the standard of living in our economy. We regret that we've got a government that holds a different view, but we will do all we can to support you. Fundamental to that is us opposing this bill.

6:03 pm

Photo of Helen HainesHelen Haines (Indi, Independent) Share this | | Hansard source

The Safeguard Mechanism (Crediting) Amendment Bill 2022 presents an important opportunity for Australia to head in the right direction when it comes to reducing our emissions and acting on climate change, especially when we have not been heading in the right direction for such a long time. The bill aims to reduce the emissions of our top national polluters. These 215 or so emitters, called designated facilities, are responsible for almost a third of Australia's emissions. For Australia to reach its national emissions target of 43 per cent by 2030 and to reach net zero emissions by 2050, these designated facilities must cut their total emissions by 43 million tonnes this year alone. Under the bill, companies can reach these targets by trading safeguard mechanism credits—or SMCs—which are generated by designated facilities for reducing their own emissions. SMCs are intended to incentivise companies to maximise low-cost abatement opportunities first. The bill also allows companies to offset their emissions through the purchase of Australian carbon credit units, or ACCUs.

The minister, in his second reading speech for the bill, said: 'The time is now to address climate change by tackling the emissions of our biggest national emitters, and this bill gets it done.' The minister is mostly right, because we must act now and we cannot wait any longer. I will support the passage of this bill, but I do so with caution.

I grew up on a farm. I live on a small farm now. Like millions of people in regional Australia, the climate has never been an abstract concept for me. During my first election campaign, in 2019, people across my electorate came to me, passionately wanting our parliament to address climate change. They knew then, as they know now, that, as long as greenhouse gas emissions continue, our temperatures will rise, our rainfall will fall, our bush will become drier and our fires will become bigger and hotter. In Indi, it's not only our fear of more frequent and intense bushfires that drives our calls for climate action; it's concern for our health, for our economy and for our connection to our magnificent natural environment both here at home and around the world.

The effects of climate change are already here, and as people are facing a higher cost of living I know that they are feeling the monetary cost of climate change—it's hitting them. Record rainfall last October has damaged our roads, requiring more and more money to fix them. Businesses in the high country of my electorate are already finding it impossible to get insurance, putting their very viability at risk. As these concerns grow, so, too, does the number of people that are dedicating their time and energy to fight for meaningful climate action. In Indi, the community group Wodonga and Albury Towards Climate Health, or WATCH, has more than 1,000 members. The local branch of the Australian Conservation Foundation also has more than 1,000 members, and the young people's group, School Strike 4 Climate, has over 2,000 members. These community groups based in my rural and regional electorate are non-partisan but are deeply concerned about human induced climate change.

In Indi we also have the most community renewable energy projects of any electorate in Australia. People are volunteering multiple hours a week to support their communities to be powered by 100 per cent renewables. They do this to improve energy reliability in times of emergency and build the local economy and also, importantly, to make a contribution towards emissions reductions. With these groups I co-designed the Local Power Plan and then introduced my Australian Local Power Agency Bill, which could achieve community energy scaled up right across the nation. My constituents' calls for meaningful action on climate change are loud and clear. And this is why I successfully amended the government's Climate Change Bill last year to ensure that regional Australia is at the forefront of climate change policy for decades to come. It's also why, in the last parliament, I fought for more Commonwealth support for home electrification through my cheaper home batteries bill. These proposals are practical, effective solutions to invest in renewable energy as a pathway away from our reliance on fossil fuels.

I spent my last term in parliament advocating on solutions to the climate crisis and I continue to do so in this parliament, including under this bill. I support this bill because, like my constituents in Indi, I want to see action on climate change. However, I hold genuine concerns that this bill and the safeguard mechanism don't go far enough towards genuinely reducing our national emissions. And I know I am not alone in those concerns. Under the bill, Australia's top polluters will be required to reduce their emissions by 4.9 per cent each and every year. The government says that for them to do this the scheme must provide flexibility by allowing companies to offset emissions. When the offset scheme was first designed it was intended to be a last resort. Companies were supposed to avoid, minimise, and mitigate their emissions first through technological and operational changes, and only when nothing else could be done could they turn to offsets. Under this bill, however, there are no limits on offsets and that means, for a company to succeed in reducing their emissions by almost five per cent each year, it can offset them 100 per cent. Companies can effectively buy their emissions reductions. Allowing emitters to offset 100 per cent of their emissions is no substitute for genuine, lasting emissions reduction. We should not allow unlimited use of offsets, and the bill should incentivise companies to abate emissions first.

I will support the amendments of my crossbench colleagues that limit the amount of offsets that can be used; require the safeguard mechanism credits, or SMCs, to be used by designated facilities before they can purchase ACCUs; remove any price cap on the ACCUs; and ensure any new entrants into the scheme are at net zero from the start. These are sensible amendments, and I hope they succeed. I also support calls to prevent any new coal and gas entrants to the safeguard mechanism. If we allow new entrants, our emissions will only get higher, blowing the safeguard mechanism's carbon budget and the burden to reduce emissions will fall on everyone. Instead of subsidising new fossil fuel projects, the government must continue to invest in renewable energy to facilitate a smooth transition towards a clean energy economy.

Scientists and researchers have also sounded the alarm about the integrity of the ACCUs in the current carbon market, and I take these concerns very seriously. Shortly after the election last year, the government commissioned a report by former Chief Scientist Ian Chubb to independently review the ACCUs. The review found that the ACCU scheme was fundamentally well designed, but Professor Chubb made 16 recommendations to enhance governance arrangements and transparency. This is just part of the story, though. Research by the Australian National University found that at least 70 per cent of ACCUs are not resulting in real emissions reductions. For example, credits can be claimed and sold for not clearing land that was never going to be cleared in the first place. There are clearly issues with the scheme's design. If offsets are a key part of the path for emissions reductions and net zero, we must be able to hold the ACCUs up to the light, and we can't do this if the companies that are in the business of ACCUs have ties to the fossil fuel industry while also advising the government on their climate change policies. There is a real risk that some companies may seek to exploit this system to increase their own profits while failing to deliver the environmental outcomes this bill is designed to achieve, and that our country so desperately needs.

For as long as I've been fighting in this place for action on climate change, I have also been fighting for integrity—integrity in parliament and in every decision and action of parliament. So, too, the ACCU market must have integrity. ACCUs must be based on scientifically backed and trusted methods. The regulator that approves ACCUs must be independent. If they're not, Australians should not and will not have faith in this government's safeguard mechanism as a cornerstone of its climate change policy. Professor Ian Chubb found that the government agency, the Clean Energy Regulator, should be stripped of some of its roles running and overseeing the system in order 'to enhance confidence and transparency,' and it should be replaced with a new body that would have increased responsibility and independence. I call on the government to fully implement the Chubb review recommendations as soon as possible. I also call on the government to heed the concerns of scientific experts about the integrity of the ACCU.

If this bill passes, it is likely that the demand for ACCUs will increase—in fact, it certainly will. The Minister for Climate Change and Energy admits that the agricultural sector will play an important role in meeting ACCU demand under the safeguard mechanism. Unfortunately, so far we've been given very little information about how the agricultural sector will meet these demands. Our farmers currently generate 16 per cent of Australian emissions, and right now countries all around the world, like the European Union, are considering tariffs on Australian agricultural imports because, in their minds, we have not done enough to tackle climate change. We know that farmers can earn credits through specific land management practices which increase and sustain carbon in soils, improve significant remnant native vegetation on their properties or reduce methane with herd management. They can sell these credits on the carbon market, potentially to our largest national emitters.

Many farmers I speak to across Indi tell me that they want to mitigate the impact of climate change and play a part in reducing national emissions, but not at the expense of their own livelihoods. They talk to me about the challenges in balancing these factors. The government has clearly fallen short of supporting our farmers in recent times, but we can change this. Farmers tell me that agricultural extension plays an important role in navigating farming enterprises' farming practices in times of great change. The government's $20 million Carbon Farming Outreach Program is a good start. The program intends to develop and deliver a training package for farmers and land managers on carbon market participation and low-emission technologies and practices. It's a good start, but it's not enough. I'm calling on the government to fully fund a network of 200 agricultural extension officers over four years around our nation. The Parliamentary Budget Office have costed this policy at $132 million over four years, and I really do say to the government you must significantly expand on your initial $20 million to support farmers. They're calling for additional support, and this is a way you can do that.

These extension officers would advise farmers on the technology, products and farming practices that would help them lower emissions, access carbon credits—either for offsetting or, indeed, insetting—and achieve net zero. These agricultural extension officers would be trusted and independent, and would know the farm's specific environment.

And it's not just farmers calling for this. In fact, the Carbon Market Institute, an independent body focused on the transition to net zero emissions that includes a wide range of members like Qantas and Wesfarmers, recommended to the Chubb review the establishment of an extension program that supports carbon market literacy amongst farmers and landholders. They need support to make the right decisions.

I've spoken to the minister for agriculture about this policy, and to the Minister for Climate Change and Energy, and I know there is an appetite in government to take this on. If the government want the agricultural sector to play a part in the success of the safeguard mechanism they must support agriculture to make decisions that are good for their business and good for the environment.

We must get the safeguard mechanism right, and we must do it now. We must not wait for another review. I urge the government to tighten the framework that is before them by adopting amendments that aim to genuinely reduce emissions. If they don't, the worst of climate change will be inescapable. The alternative—a healthy, safe, productive economy and society to leave behind for our future generations—is still within our reach, but only just. My constituents in Indi, like many other Australians around the nation, are watching this bill closely. This parliament was elected with a mandate to take meaningful and ambitious action on climate change—'meaningful and ambitious'. Let's not miss the chance to deliver a bill that delivers on this mandate.

6:17 pm

Photo of Nola MarinoNola Marino (Forrest, Liberal Party, Shadow Assistant Minister for Education) Share this | | Hansard source

As a farmer, I've always supported the coalition's very practical and effective approach in dealing with climate change, particularly in relation to water and water security. For us, as farmers, it's the most important part of our businesses. I've supported what we did with Landcare and clean energy technology as well. In government, we reduced emissions. We were on track to achieve a 30 to 35 per cent reduction when we looked at our 2030 targets. We also beat our Kyoto targets and we saw $40 billion invested in renewables in our time. We also made sure that Australia remained strong, that its economy remained strong, and we were a prosperous nation growing the economy by 23 per cent, even during the time of natural disasters, COVID and a range of other issues that we had to deal with.

In government we supported and achieved practical emissions reductions in a system that rewarded businesses that were reducing their emissions in the understanding that transition takes innovation, significant investment and time to achieve. Instead, the Labor government is punishing businesses and industry by imposing a carbon tax—one of the highest and most punitive in the world—with mandatory reductions that will be both difficult and costly to achieve, particularly in some sectors and with some businesses.

This additional carbon tax on businesses and industry for things like fertiliser, cement, gas extraction, manufacturing, plastic, steel, lithium, silica and our remaining fuel refineries will have to be passed on to consumers through higher electricity prices, higher food prices and higher prices for building materials. That will drive up the cost of living at a time when Australian families and workers can least afford it. I read recently that the IMF has said that Labor's 43 per cent emissions reduction target could cost the equivalent of at least 4,500 per household every year by 2030. In contrast, a big US survey showed the average person was prepared to pay an additional US43c a week to mitigate climate change. As I said, the five per cent year-on-year to 2030 reductions for business in hard-to-abate industries will be difficult, will be expensive and will actually take longer than expected to achieve, particularly when the technology needed to drive the reductions in those businesses is still in the innovation and development stage.

I don't want Australia to lose jobs, businesses or industries. I think there are only five cement manufacturing facilities in Australia, which is 1,300 jobs and 20,000 downstream employees. Many small and medium civil-works businesses in regional, rural and remote Australia depend on the cement industry, and we can't afford to lose these companies and these jobs overseas. They are competing with cement imported from China, a country which produces over half the world's cement, has vastly lower production and labour costs and definitely doesn't have one of the most punitive carbon taxes in the world.

Western Australia's resources sector is definitely in the firing line with the carbon tax. This is a sector that achieved a record $230 billion of sales in 2021, accounting for over half of the national goods exported in that year. They support more local jobs and play a critical role in carrying the nation's economy, particularly through the pandemic. As a reward for their billions of historic investment, the inherent financial risks and their hard work providing for over 156,000 people, the federal Labor government is punishing them with one of the highest carbon taxes in the world, on top of increasing energy costs, potential industrial action, strikes and pattern bargaining—all increasing the costs of doing business. And this is at a time when the shortage of labour is actively driving up costs and increasing sovereign risk to projects.

Equally, business and industry have to be able to apply the lowest and most cost effective emissions reductions. My understanding is that around 32 per cent of the companies affected by Labor's carbon tax are based in WA—companies such as Woodside Energy, Chevron, Worsley Alumina, Alcoa, Iluka Resources, Tronox and CSBP. Mining companies have actually warned the government about the potential for closures. They are also concerned about the damage to exports for the trade exposed industries, given many of the companies they compete with globally are producing in countries where there are no carbon taxes at all. This, of course, means they will bear an even higher cost of production than their competitors. Those of us who live and work in and are passionate about rural, regional and remote parts of Australia know this is where these companies operate and provide the jobs. It is our communities and local jobs that are most affected.

We know that the east coast LNG sector is still coming to terms with Labor's gas price caps, putting at risk new investment in LNG at a time when AEMO has said there will be serious shortages of gas and energy on the east coast. Adding to this risk, if any potential new LNG proposal considers that carbon capture and storage and/or hydrogen are their lowest cost options, this will need policy certainty but long lead times—this is the time and transition factor—however, the Labor government is actively preventing new CCS projects at safeguard facilities from being able to qualify for ACCUs.

I want to talk about some of the affected companies in my electorate that will have to pay Labor's carbon tax. I don't want to lose any one of these. I don't want to see them become unviable and have to close. At Kemerton in my electorate, Simcoa operates the only silicon manufacturing operation in Australia. It is one of the largest and most modern silicon smelters in the world. The plant produces a superior high-purity silicon metal. It provides unique advantages in producing semiconductor silicon chips, solar panels and lightweight aluminium to reduce fuel consumption and emissions. However, Simcoa is caught between two conflicting policies: federal Labor's safeguard mechanism emissions reduction requirements and state Labor's ban on hardwood logging in Western Australia. Hardwood is essential to maintaining the quality and high purity which drives Simcoa's subsequent market advantage. Simcoa uses charcoal as a chemical reductant critical for stripping the oxygen atoms off the silicon dioxide—the conversion process itself. So here we have a domestic and global demand for a critical mineral necessary to help reduce emissions across a range of sectors, but Simcoa will have to comply with federal government safeguard mechanisms at the same time its processing and quality product is being compromised by WA state Labor government policy. So we can see here that, for practical purposes, there is a conflict between carbon emissions reductions and the barriers directly in the way of what is a critical mineral, silicon, needed to reduce emissions. There is no doubt that silicon is playing now and will continue to play an important and increasing role in emissions reduction in the future.

The Safeguard Mechanism was originally designed to incentivise businesses, as we know, not to add to their cost of production through a punitive carbon tax. The former government was working with business and industry, really through technology and innovation, not taxes. Under Labor's carbon tax, should emissions intensive sectors not be able to reduce their emissions year on year, and if they are not able to secure enough ACCUs up to $75 a tonne carbon tax, there are penalties of $275. Albemarle in my electorate is producing another critical emissions reduction mineral, lithium, the lightest of all minerals, used in batteries, aircraft, you name it. They're in Kemerton in my electorate. When the five trains of production are commissioned, this plant will be one of the world's largest lithium production facilities. But it will have to pay Labor's carbon tax.

One of the other affected industries will be the aluminium industry. There are several smelters in Western Australia. This industry is an important Australian industry, our highest-earning manufacturing export, contributing around $16.9 billion in exports to the economy each year. The three parts of this industry are primary aluminium, alumina and bauxite. We are a major global player and, more importantly, it's an economic powerhouse in regional Australia, directly employing 17,000 people and indirectly supporting 60,000 families, mostly in regional Australia. It's an industry that is affected by this Safeguard Mechanism carbon tax. Given that the primary aluminium sector in Australia is the seventh largest global producer, electricity accounts for 30 to 40 per cent of a smelter's cost base and is a key driver of competitiveness. So why make it more expensive for them? But the industry already has some of the lowest emissions intensity of alumina production in the world. They are doing what they can—some of the lowest emissions intensity in the world.

We are the largest producer of bauxite, a high-earning manufacturing export and, as I said, important in employing local people. They are committed to sustainable production and recycling, whether it's bauxite, aluminium or alumina. I often feel as though the Labor government is determined to create the impression that the 200-plus entities covered by the Safeguard Mechanism are not actually committed to emissions reduction, when the opposite is the case. Our alumina industry has some of the lowest emissions intensity in the world. The sector's key global competitors in refining are China, Brazil, India and Saudi Arabia, none of which have a mandatory emissions target or a carbon tax at all, and certainly not one of the highest in the world. The two refineries in my south-west will be affected, Alcoa in Wagerup and Worsley Alumina near Collie in the member for O'Connor's electorate.

The Australian Aluminium Council has indicated that aluminium is and will be one of the most widely required elements in the global clean energy transition. It is a critical mineral, and it should be added to Australia's critical minerals list along with copper and nickel. That would identify Australia as a supplier of choice, one with significant experience and success in delivering a quality product in any market. That's something positive that could be done. The Wagerup alumina refinery is one of the world's most environmentally and technologically advanced refineries, and one of the lowest emitting refineries in the world because it runs on gas. They employ so many people in my part of the world in secure, well-paid jobs locally that have set up families and workers for life and retirement. Local businesses and regional contractors have also benefited from their presence. So we can't afford to lose or compromise their operations because of this carbon tax.

Over the years, there have been industries that have had challenges. We used to have about 300 dairy farmers in the Harvey shire alone. Now we're down to between 110 to 115 in the whole state. Many who were historically workers in this area have taken up jobs at the refineries. There are businesses operating in hard-to-abate sectors where deployable technology is still evolving and not yet available. What regional Australia cannot afford is to see any of our existing businesses caught under Labor's carbon tax and either forced into offshore processing and manufacturing or lost altogether. That's the 'technology, not taxes' approach that we need. The alumina industry underpins the economy of the Bunbury port. It's a major export out of that port and very important. It's a beautiful, fine white powder, for anybody who's never seen it. It is a beautiful product and one that's handled very efficiently through the port of Bunbury. It is a product that I'm particularly proud of when I see it in that form.

I also see where there are serious concerns as well around a number of the businesses that come to us, not necessarily just to their peak bodies but to us as local MPs, telling us about the difficulties that they're facing and will face through this carbon tax, particularly if they're in an industry where it is very difficult and will take time and they're relying on technology and innovation. We really need at all times, for those businesses as well, affordable, reliable, dispatchable and accessible power. That underpins our manufacturing and even our households. It's something that we certainly have concerns about in Western Australia, given the state Labor government's indications about power in Western Australia as well.

6:32 pm

Photo of Zoe DanielZoe Daniel (Goldstein, Independent) Share this | | Hansard source

Concern about climate change is central to the make-up of the House of Representatives today. It's one of the reasons we have the crossbench we do. We were elected to tell the truth, to tell it like it is. So I'll be direct. I am concerned that under this legislation actual carbon emissions will not go down.

I want this legislation to pass and to work. I really do. The IPCC's AR6 synthesis report released today builds on the already large pile of evidence that current climate policy around the world is inadequate. The report found that current nationally determined contributions, including Australia's, make it likely that warming will exceed 1.5 degrees and make it harder to limit warming to two degrees. The consequences of this are dire. True action matters for the environment, our health and our future prosperity. After extensive discussions, I supported the government's Climate Change Bill, putting into law a 43 per cent emissions reductions target. It's not enough, as I said at the time, but it was a big step forward, and the Goldstein community welcomed my amendment to make it clear that 43 per cent was a floor, not a ceiling.

The government states that the legislation now before this House is a crucial building block for Australia's transition to net zero. I agree wholeheartedly that it could be. With the legislation promising to tighten the limits on safeguard facilities year on year, this could theoretically work to reduce Australia's emissions. The legislation is designed to force Australia's 215 biggest polluting facilities, those admitting 100,000 tons or more of CO2 equivalent annually, to cut emissions by almost five per cent a year through to 2030. They're so big and so polluting that between them they contribute a full 28 per cent of our total carbon emissions. But this legislation raises a big question. That is whether it's really about incentivising polluters to reduce their emissions or fostering creative accounting that allows them to offset their way out of doing so. This is a particular concern when it comes to sunset industries in the fossil fuel sector. Gas and coal companies may be incentivised to go for broke to profit while they can, buying unlimited carbon credits to offset their pollution until they phase out—carbon credits that may not even reduce emissions as they claim to.

Experts have long raised concerns about the integrity of Australia's carbon credits. Some of these concerns have to do with additionality—that is, carbon credits are being issued for projects where the emissions reduction activities would have happened anyway, without the incentive of carbon credits. This means that companies purchasing carbon credits can claim they're reducing their emissions when in fact there's no net reduction taking place. This is particularly dangerous under the safeguard mechanism, where Australia's biggest polluters will be allowed to purchase unlimited offsets for their millions of tonnes of emissions—offsets that don't really offset anything.

The recently completed government-commissioned Chubb review into the integrity of Australia's carbon credits recommended that projects issued with credits meet requirements that, if adopted, would go a long way to addressing their present lack of integrity. The minister has declared that the government supports all 16 Chubb recommendations in principle. Therefore I will later be proposing amendments to the legislation concerning two of the methods by which Australian carbon credit units, or ACCUs, are issued: human induced regeneration and the landfill gas method. The amendments relating to human induced regeneration and landfill gas are consistent with the recommendations made by the Chubb review—as I said, recommendations this government has agreed to in principle.

The human induced regeneration method is about issuing carbon credits to projects that allow cleared native forests to regenerate. Research by experts at the ANU has found that carbon credits have been issued in instances where land was never cleared in the first place. The legislation should exclude carbon credits issued to projects under the human induced regeneration method except where they meet four criteria: one—that the land area must previously have sustained forest, which was lost at some point from clearing or another event; two—regeneration on the land must have been stopped by grazing pressure or another suppressor during the 10 years prior to the project's registration; three—the proposed reduction in grazing pressure is necessary to regenerate the area; and four—the area must not contain any mature trees and shrubs at the project commencement. These conditions, in fact, are already required of projects under the human induced regeneration method, but they're not currently being enforced by the Clean Energy Regulator. Projects are being issued with ACCUs in circumstances that are contrary to the law. Unless they meet these conditions, carbon credits issued under the human induced regeneration method should not be available to safeguard facilities.

The second method my amendments deal with is landfill gas. In this case, projects that capture and destroy methane, a greenhouse gas from landfill, are issued with carbon credits. Most carbon credits issued under this method come from a handful of projects. Seventy per cent of credits for landfill gas projects are issued to just 20 sites. These projects are old, large sites using the landfill gas capture to generate electricity, also known as generation based projects. At present, regulation around baselines for the landfill gas method is inadequate. Baselines are supposed to represent the portion of methane that would be captured if the site did not receive any carbon credits. For example, if a project has a 30 per cent baseline, it means that only 70 per cent of the methane captured and destroyed at the site is taken because of the incentive provided by the carbon credits. Under the method, only the 70 per cent is credited; the baseline 30 per cent is deemed to be non-additional because it would have happened anyway. For a significant number of landfill gas projects, the baselines are too low. They do not reflect the amount of methane that would be captured if the project didn't receive carbon credits.

There are two reasons landfill gas projects would still capture and destroy methane even if they stopped receiving carbon credits: (1) because landfills are required to control biogas and methane emissions under state and territory environmental laws and (2) because, at generation sites, they profit from the sale of electricity and renewable energy certificates. When the landfill gas method was originally established, the industry agreed that the minimum baseline that should apply to new projects was 30 per cent. But the oldest, largest, most heavily regulated and most profitable sites were given a sweetheart deal that allowed them to have lower baselines. Ten or so sites have zero per cent baselines. This is the equivalent of saying that some of the largest landfills in the country are allowed, under state environment laws, to emit as much biogas as they like. The effect of these concessional arrangements is that sites are getting free money for activities that would happen anyway because of regulations and the incentives associated with the electricity and renewable energy certificate markets. In effect, this is double dipping.

Therefore I propose that carbon credits issued to large generation-based projects under the landfill gas method be excluded from the legislation, except where the baselines are no less than 50 per cent. For smaller projects under this method, the baseline minimum would be 40 per cent. These baselines should also be upward sloping—that is, the larger the landfill, the higher the baseline—and the baselines should increase over the life of the projects. Emissions reductions under these methods are not necessarily additional, a criterion essential to ensuring Australia's overall emissions decrease, and especially so among our largest polluters. My amendments would ensure that carbon credits from these projects cannot be issued to safeguard facilities, whose emissions are so large that we cannot afford any room for questionable offsets. These amendments are about integrity.

Meanwhile, the price of these carbon offsets is capped at $75, likely lower than a free market would dictate. On several fronts the government argues that the market will execute the energy transition. Indeed, market-driven demand for offsets and resulting higher prices may be a natural incentive. Yet, with this price cap, the government seeks to artificially manage the market. This is inconsistent. I know that some of my crossbench colleagues have similar concerns and plan to move amendments designed to address this apparent anomaly. I support these amendments.

Speaking of inconsistency, there is a deep disconnect between this legislation and approving new coal and gas developments. I do understand the argument that for several years gas will be needed as we ramp up renewable energy, fix the grid and enable extraction of critical minerals essential for the development of cleaner technologies. But this must not be a smokescreen for projects which are not going to aid in a transition to renewable energy but instead serve to maintain the dominance of the fossil fuel industry. It's important to mention, too, that there is a burden introduced here for other industries. Aluminium, for example, would have to overperform on carbon emissions reduction to compensate for unlimited new gas and coal. The government, it appears to me, is creating a problem while trying to solve one.

To that end, I'm also proposing to bring forward the time line for review of the safeguard mechanism's policy settings. The government has said a review will take place in 2026-27. This is too late. The review should be conducted in calendar year 2025 so that necessary adjustments to the safeguard mechanism can be made sooner to ensure we're on track to reach our 2030 emissions reduction target. There may well be arguments that this shorter time frame makes it harder to present reliable data, but my proposed time line will give us up to a year and a half's worth of information. Given the urgency of the challenge, the sheer quantity of carbon emissions the safeguard facilities emit, we must have some evidence as early as we can to make sure the scheme is working and, if it's not, modify it so it does and the legislated 43 per cent cut does not disappear in a cloud of smoke.

The answer to climate change cannot be found in low-integrity offsets. The IPCC calls for deep, rapid and sustained reductions in greenhouse gas emissions. It is essential, therefore, that the legislation represents the urgent, robust and effective reduction in emissions committed to by this government and that it creates true emissions reduction.

6:44 pm

Photo of Michelle LandryMichelle Landry (Capricornia, National Party, Shadow Assistant Minister for Manufacturing) Share this | | Hansard source

The introduction of Labor's safeguard mechanism is an attack on the hi-vis workers of Australia and the heavy industries that keep the lights on in our country. The safeguard mechanism is carbon tax 2.0 with a facelift that only serves to punish the people who drive our economy. Not unlike the carbon tax of the Gillard era, the safeguard mechanism serves to place a dollar figure on carbon emissions. When Julia Gillard introduced her carbon tax, the price she put on a tonne of carbon was $23. Now the Albanese government has decided that each tonne will cost a business $75, and by 2030 it will increase to $100 a tonne.

The climate change minister announced in January that 215 heavy industry businesses will be required to purchase credits. It will also be mandatory for these facilities to cut their emissions by five per cent every year until 2030 in order for Labor to hit its climate targets. The 215 businesses—two of which are Australia's last oil refineries—include 66 coal mines, 36 gas facilities, 26 iron ore mines and 49 manufacturing facilities.

Of those 215 businesses that will be hit, 63 are located in Queensland. All but two of these businesses are situated in the regions. Central Queensland will become the epicentre for Labor's carbon tax, with almost 75 per cent of the facilities located in just two federal electorates. Twenty-eight operate in my electorate of Capricornia and 18 in the electorate of Flynn. Some of the facilities affected in my electorate include a rail freight facility, a magnesium processing plant and a number of mines across the electorate, all of which contribute heavily to the economy.

In Capricornia alone the total economic contribution of the resources sector in the 2021-22 financial year was worth over $315 million in gross product and 1,918 locals were employed in it. One hundred and sixty-six local businesses and charities situated in my electorate of Capricornia shared $50 million in direct spending in this same period. Coal, metal and gas mining has pumped $9.4 billion back into the Queensland economy and one in every six jobs in the state is within this sector.

There are 14,303 businesses and 1,415 charities that have all shared in $27 billion of direct spending. Nine billion dollars in royalties from the resources industry was put back into Queensland through funding for our hospitals and upgrading key infrastructure. There have been many federally funded projects that without the wealth of regional Australian mines would never have happened. Major projects in my electorate of Capricornia, such as the $45 million Rockhampton Airport redevelopment, $136 million for flood proofing the Bruce Highway into Rockhampton, $183.6 million for the Rookwood Weir project and $166 million for safety upgrades to the Eton Range, were all made possible by the resource industry.

While the resource industry has been a mainstay of the Australian economy for the past 100 years, the strength of the industry was particularly noticeable during COVID—supporting the Australian economy it helped cushion the blow of damaging economic impacts that have been experienced over the past few years. The growth within the resources industry has been nothing short of astonishing. In 20 years, the gross value added to the Australian economy grew from $35 billion in the 2000-01 period to $222 billion by 2020-21.

The announcement by the Labor government to impose a carbon tax has a more far-reaching effect than just on the companies operating these facilities. It will affect how much families pay to switch a light on and put fuel in their car and will lead to higher grocery bills. In my electorate of Capricornia families and businesses are struggling with the cost-of-living crisis.

A local, family-run bakery in my electorate has been struggling to keep up with the costs of skyrocketing power prices, wage increases, raw materials and transport costs, which are on the rise each week. Another constituent of mine lives in the rural town of Clermont which is over three hours from his closest major hospital. Unfortunately, he has been diagnosed with cancer and makes a six-hour round trip to his closest major hospital for treatment each week. These necessary journeys now cost this pensioner $200 extra a week to his budget and continue to grow as the months go by.

Under this Labor government the cost to the bakery and my constituent will only go up, as more taxes are imposed to punish the industries that carry the nation. This will, in turn, be passed onto consumers—the mums and dads raising families, and the pensioners and the small family-run businesses that are the backbone of the economy. During this cost-of-living crisis, what these people need last is price hikes on the basics, such as food and power, because those opposite need to meet a legislated target. Right now, our focus should be on supporting new technologies that can deliver affordable and reliable energy as well as supporting the industries that can deliver this.

Queensland supplies the world with elements, minerals and metals, supporting the economic development of Australia and many other nations. Australia is on the edge of a key resources mining boom to meet the high demand for critical minerals that are required when creating low-emissions technologies, batteries and electric vehicles. An electric car requires six times the quantity of minerals than a regular vehicle. A wind turbine requires several more times the quantity of minerals than a gas- or coal-fired power station. More than 220 tonnes of coal is needed to build a wind turbine. It is a rather inconvenient truth for climate activists that in order to decarbonise our nation we need more mining.

This is a key to reducing the living pressures families, right across Australia, are facing. With the cost of living already bringing people to their knees, now is not the time to impose new legislation to make it harder for families or risk heavy job losses across an industry that has supported Australia to become what it is today. The previous government invested about $2.5 billion in resource industries that support us. Thousands of new jobs were created to help families and the towns in which they live. The coalition had the road map to reach net zero by 2050 without sacrificing the economy through loss of productivity.

Unlike the Labor Party, we believe in technology, not taxes, to achieve these goals. There was $22 billion committed to bring down the cost of low-emissions technologies, such as hydrogen, ultra low-cost solar, green steel and the aluminium industry. Investment in these technologies resulted in up to $132 billion of investment in the private sector, and 160,000 Australians were supported through employment. These industries are proven to bring growth and support the economy. Yet the Labor government are wanting to impose further legislation to stifle the industry and prevent further growth and investment—while, in turn, driving up household bills even further to meet their climate objectives.

The push by Labor and the Greens to meet their objectives is destroying land that is prime agriculture pastures and national forest. As I'm seeing in the town of Eungella, in my electorate, the Labor Party are willing to sacrifice pristine wilderness that is home to the platypus and is one of Queensland's most ecologically diverse national parks. This government are so determined to meet their targets that they are willing to provide $32 million to the Queensland Labor state government's hydro project that will destroy subtropical rainforest and agricultural land that is the food bowl for Central and North Queensland and ruin the lives of those who will be forced out of their homes. This is all so that people in the cities can feel better about where their power comes from.

This is not to say that the coalition is against emissions reductions. As the Leader of the Opposition has stated, the coalition does support emissions reductions. What we are not backing is Labor's move to legislate taxes to reach targets. Our country and its people cannot afford the economic ramifications of stopping major infrastructure development. In my home state, the state Labor government increased coal royalties and this has had major negative impacts across Central Queensland.

Following the Palaszczuk government's decision to create higher coal royalties, BHP suspended its plans to build a new coal mine, causing the loss of $1 billion investment into the region, and 750 construction jobs and 1,200 mining jobs were lost, while BMA, that has delivered $17 billion back into the Queensland economy, has stated they will not make further investments into Queensland. These decisions have dire consequences for the small rural towns that rely on these mines to boost their economy. Nationally, the effects of the safeguard mechanism are already beginning to occur, with Ampol revealing that they will suspend investment decisions worth hundreds of millions of dollars due to Labor's energy policies.

During the coalition's time in government, we supported a carbon trading scheme that allowed businesses to voluntarily reduce their emissions while being rewarded. Labor's changes to the safeguard mechanism will force businesses to buy credits. This is a tax. The safeguard mechanism carbon tax 2.0 is going to drive up living costs at a time Australian workers and families can least afford it. Businesses will be forced to pass the increased cost of production on to consumers through higher electricity prices, higher food bills and higher fuel costs.

During a time when we as a parliament must look at putting downward pressure on inflation, interest rates, cost of living and business, the Labor government is determined to make decisions that will negatively impact the industry and everything that relies on the benefits that resources bring. Our economy is already under the strain of a Labor government, and we are not 12 months into their leadership. Labor do not have tangible solutions to see our country through the cost-of-living crisis. Their only plan is more taxes—taxing the companies that drive the economy, bring investment to the regions and deliver jobs that support families and the community. It is clear that energy intensive companies and agribusiness, transport and mining will be hit. That is why we got rid of the mining tax and the carbon tax.

Day after day the Prime Minister talks about everything but the cost of living—the No. 1 issue Australians are facing. This government has broken multiple promises to ease living pressures and instead has taken actions which have directly placed pressure on interest rates and electricity prices. Families and businesses across Australia are still waiting on the promise delivered 97 times during the election that their electricity bills would be reduced under a Labor government. By the government's own admission, power prices are set to rise by more than 63 per cent, and gas by 40 per cent, over the following two years. Families and businesses cannot afford this. New solutions, not taxes, must occur. The global demand for mineral and energy commodities will continue to accelerate as new technologies are calling for large supply of our resources. Hundreds of thousands of jobs are on the line if the Labor government continues with the regime of punishing the resources sector with taxes. The ones to suffer will be families and communities that greatly benefit from the industry.

6:57 pm

Photo of Monique RyanMonique Ryan (Kooyong, Independent) Share this | | Hansard source

I rise to speak on the Safeguard Mechanism (Crediting) Amendment Bill 2022. Today's IPCC Synthesis report confirms that the climate crisis is pushing us to the brink of an irreversible catastrophe. We have already seen the devastation caused by extreme weather, intensifying heatwaves, catastrophic fires and floods, climate driven water and food insecurity and irreversible losses to vital ecosystems. Today's report told us that a child born today is likely to experience three to four times as many extreme climate events in their lifetimes as their parents have, and that the world will be as much as four degrees hotter than today by the time that child is 80 years old. But the report does sound a note of hope: there are still feasible and effective ways to reduce emissions to keep global warming to 1.5 degrees. This will require every country to fast-track its climate efforts in every sector and on every time frame.

The IPCC has also told us that if that policy effort was consistently applied across the world, in every sector of every country, we would see a halving of global emissions. We cannot make real progress on Australia's emissions reductions with a flawed safeguard mechanism. We cannot meet our 2030 reduction targets with the safeguard mechanism currently before this House. Urgent climate action requires an effective safeguard mechanism. It requires big polluters to cut their emissions.

We have already seen what legislative failure looks like in this space. Under the Abbott and Morrison governments, facilities subject to the safeguard mechanism actually increased their pollution. Baselines was set so high that they drifted happily above each facility's actual emissions levels, like a methane-filled Hindenburg, floating flatulently above the horizon of our climate hopes. Even when those baselines were breached, no facility was penalised by the Clean Energy Regulator.

The only effective way to decarbonise our economy is to stop generating new emissions. The next best way is to minimise and then to abate those emissions. The last and least effective option is the use of carbon offsets. The government's legislation will allow heavy polluters to purchase Australian carbon credit units and safeguard mechanism credits.

But we have to realise that a carbon offset program can never really neutralise the effect of emissions. Planting trees will never equate to preventing pollution. In Australia we're painfully aware of how millions of hectares of forest can be destroyed by fires, which are becoming more frequent and more catastrophic due to climate change. Meanwhile, pollution remains in the atmosphere for centuries after any forest stops absorbing carbon. Our current offsets program lacks integrity. The recent Chubb review revealed that carbon credit payments have gone to individuals who claim to restore vegetation that was never really threatened, to property owners who returned land to natural vegetation via natural causes and to people for burning landfill gas. Australia's offset system is laughable, yet this system continues to dominate the amelioration strategies that are critical to the safeguard mechanism, which we are debating today.

It is extraordinary and deeply disturbing that this government has set no limits on carbon offsetting under safeguard mechanism 2.0. Rather, it proposes that facilities can use any combination of ACCUs and SMCs to offset up to 100 per cent of their harmful emissions. This means that we have joined the Republic of Kazakhstan as one of a small but very select group of two wealthy countries that allow big polluters access to 100 per cent unlimited offsets. The government isn't even asking facilities to try to demonstrate genuine efforts to cut their emissions. While this remains the case, any real prospect of the scheme reducing emissions is gone. The Parliamentary Library found that the cost of using purchased carbon credits would be less than 0.1 per cent of the profits of the big fossil fuel companies. Can we realistically expect those companies to do anything else than go down the 100 per cent offset pathway? Unlimited offsets give these companies a cheap and an easy way to account for emissions, rather than making the genuine cuts we need by investing in process and technology changes.

It has been suggested that offsets might become so expensive that it won't be feasible for high emitters to rely on them. For that to happen, they would have to increase in price by several orders of magnitude for their costs to represent a real burden to industry. However, the government has chosen to cap the price of ACCUs. Should the market drive the price higher, the government proposes to supply them at the capped price with taxpayers forced to cover the difference. High emitters will be able to continue with their cheap greenwashing, subsidised by Australian taxpayers. Most ACCUs in Australia are derived from the land sector. If the safeguard mechanism triggers an explosion in supply of those offset, the land impacts of offset plantations will be severe.

Last week I met with Farmers for Climate Action who are concerned about the potential for cashed-up fossil fuel companies to buy up our farms and to use quality agricultural land purely for the purpose of greenwashing their expanding emissions footprint. Consistent with the findings of the International Energy Agency, we have to stop licensing and funding new fossil fuel projects. We know that 116 new coal and gas projects are in the development pipeline in Australia and their projected emissions are equivalent to those of 200 coal fired power stations. Many are export projects with no viable role in a clean future economy. Those likely to proceed this decade could generate enough emissions in 2030 for the coal and gas sector alone to exceed this safeguard mechanism's entire emissions budget. Every new highly polluting project our government approves adds to our overall emissions and the difficulty of achieving Australia's national emissions reduction target.

Like so much of our dodgy climate accounting, this safeguard mechanism fails to include the emissions produced by the fossil fuels that we export. Allowing 100 per cent offsets on the emissions from the extraction and export of fossil fuels is akin to the miracle of the disappearing carbon. The problem is there's no such thing as a miracle. Carbon from our coal and gas exports will be emitted overseas at the point of burning, and those emissions are not accounted for in our accounting. These new coal and gas projects will leave no room for non-fossil fuel facilities currently covered by the safeguard mechanism, such as those for iron ore, fertiliser, cement and aluminium. The new fossil fuel projects will consume the limited supply of high-integrity offsets, making them more expensive and less available for those hard-to-abate sectors of our economy. These industries could well become uncompetitive if they are forced to shoulder a bigger burden to allow for new fossil fuel developments.

In its current form, this legislation does not differentiate between projects important to our future economy and the fossil fuel projects which should be phased out. The only provision in this legislation dedicated to new entrants is the application of as-yet undefined international best-practice baselines. Baselining new facilities in line with global best practice should mean that they replace less emissions-effective facilities over time via market forces. But, under the new proposed settings, new entrants will be given the same emissions decline rates as existing facilities. They'll be allowed unlimited use of ACCUs and SMCs to cover their emissions obligations. Trade exposed industries will have access to government assistance and may even be allowed access to a more lenient baseline decline rate. It's perverse.

A further problem is the move to baselines assessing the intensity of emissions rather than absolute emissions. In practice, this could allow individual emitters to increase their overall emissions as long as they decrease the intensity of emissions per unit of production. In so doing, they could generate safeguard mechanism credits and then sell them to other companies which are above their baseline. Absurdly, under this scenario, the proposed reforms would actually incentivise facilities to increase their overall emissions, even as they're improving their emissions intensity.

In order for the safeguard mechanism to be effective, facilities have to demonstrate real progress in achieving emissions reductions before they can purchase offsets to meet their regulated baselines. We have to have a hierarchy of offsets. True abatement must come first, followed by abatement elsewhere in the sector via safeguard mechanism credits, with ACCUs to be used only in limited numbers for a limited period as a last resort. Over time, we must ensure that the use of offsets, in absolute numbers, is phased down. Those offsets have to be of greater integrity than those supplied in the flawed system review by Chubb.

Government funding provided to facilities must be used exclusively to support genuine process and technology changes. Public funds should not be spent on technologies which have already failed to demonstrate a clear benefit. We should be committing to investments analogous to those supported by the Inflation Reduction Act in the US, which will drive the rapid development of new net-zero carbon technologies at scale. We should not pursue short-term wealth by continuing to prop up fossil fuel infrastructure destined to become stranded assets.

New fossil fuel facilities must be required to account for all of their emissions without reliance on offsets outside the scheme. In practice, this would mean that new fossil fuel entrants have to achieve net-zero emissions from facility commencement. New coal and gas facilities should not have access to special deals or supports intended to help existing facilities cut their emissions. New gas projects disguised as expansions through use of existing processing facilities have to be seen and classified as new projects. New fossil fuel projects should not have access to more lenient baseline decline rates through trade exposed baseline adjustments. These special conditions should be reserved for those facilities in genuinely hard-to-abate sectors essential for Australia's ongoing development to a net-zero-emissions economy.

We should separate fossil fuel facilities from hard-to-abate sectors. We should cap their emissions separately, irrespective of expansion or new developments. Total emissions for gas and coal have to be progressively lowered, and intensity measures must not be allowed to overrule caps or baselines. The safeguard mechanism legislation should ensure that total emissions caps are protected, at every level of governance, against gaming by the coal and gas industries.

The previous government and this government have produced legislation allowing big polluters to increase their emissions as long as they buy offsets. As it has been presented, this legislation will not drive investment in renewables and it will not stop the opening of new coal and gas projects. The proposed safeguard mechanism 2.0 does not require a single company to even begin to decarbonise.

The Minister for Climate Change and Energy, Mr Bowen, has repeatedly told us that his 43 per cent target for emissions reduction by 2030 is a floor, not a ceiling. There is a flaw in the safeguard mechanism. The flaw in the safeguard mechanism is the lack of ceilings—ceilings on the emissions released by facilities under the mechanism, ceilings on the amount and number of offsets, and ceilings on the damage done to our climate and the carbon released into our atmosphere. Getting the safeguard mechanism right will deliver enormous benefits: continued prosperity in a zero emissions economy, new job and industry creation through innovation, and a livable environment for Australians in the decades to come. If this government is serious about climate change, the safeguard mechanism has to have an explicit plan for diminishing emissions over time. It must address the question of new entrants to the scheme and it must cap the use of offsets.

We need all sides of this House to work together to improve this complex, vital piece of legislation. In its current form, it's very far from perfect. It's hard even to call it 'good'. Kooyong elected me to support urgent and meaningful climate change. This bill falls far short of that, but I support it in the hope that this government will allow amendments to its third reading and that, with time, we can effect the change that we all need to see.

7:11 pm

Photo of Bob KatterBob Katter (Kennedy, Katter's Australian Party) Share this | | Hansard source

It's wonderful to look back and realise that I said that, if you free-market the electricity industry, then you will skyrocket the price of electricity. One of our members of parliament in the political party I belong to, the KAP, never gives a speech where he doesn't say that Peter Beattie said that, if we privatise the electricity industry, there will be more competitors and the price will be forced down. When he said this, the price was $674 a year. The price went over $2,000 a year, and now it's over $3,000 a year. Why did it go up to $2,000? The free marketeers tripled the price of electricity in Queensland, and, when they'd finished with us, we had the environmentalists, and they've taken the average price of electricity up another $1,000 a year.

There are people in this place that argue that solar power is cheap and, actually, it is. In fact, I might even say that it's very cheap. But, because there's no-one buying the grid system power—coal-fired power—during the day, in order to keep the power stations open, they've got to increase dramatically the price of their power because otherwise they'd simply have to close the power station. I don't know if anyone in this place actually thinks about the country or about our society, but both sides have said that affordability is the big question. You talk of affordability, and you're going to abolish the coal-fired power industry. All I can say to you is that you will increase by another $1,000 a year the price to consumers. My street in Charters Towers is a very good example. There is only one house out of the 23 houses in the street that has solar panels, and that is the house of the only rich people in the street. All of the rest of the people on the street are on moderate incomes or are retired pensioners. Not one of them has solar panels on the roof. The only rich people in the street are the only people with solar panels. So the poor people are paying three times as much for their electricity to subsidise the rich people. The rich people on our street happen to be me and my wife. My wife is the rich one, not me. We have now taken ourselves into a situation where the poor are subsidising the rich. Infinitely worse is that the government are imposing cost structures upon industry. The Safeguard Mechanism (Crediting) Amendment Bill 2022 imposes those cost structures.

In dog-eat-dog international trade is where the rubber meets the road. If you can't compete, then you'll become a Third World country. We still describe ourselves as an advanced industrial country. Well, someone else can decide about 'advanced', but one thing that we're most certainly not is an industrial country. We're even a mining country. Mining is when you dig out of the ground and sell a metal. We dig out of the ground and sell the ground. That's called quarrying, so we're a quarrying country—the most primitive of activities is left to the Australian people.

There is no doubt in my mind—and I want to put this on the public record by saying it in the House now—that by imposing these costs upon industry in Australia you will lose the steel industry, the aluminium industry and maybe even the copper industry. They will all be gone. So what do you have left of industrialisation? When I went into parliament some 50 years ago and when I went into the ministry 40 years ago, all of your household appliances were made in Australia. Your car was made in Australia—72 per cent of cars were made in Australia. All of your petrol was made in Australia. Now, none of the household appliances are made in Australia, none of the cars are made in Australia and none of the petrol is made in Australia. If you want to buy everything from overseas, that's fine; that's your choice. But you've got to sell something, and we have nothing to sell.

When Jan Carstensz wrote a report on northern Queensland for the governor of Batavia, he said that the place was inhabited by people who didn't wear much clothing, spent all their time on their beaches, didn't appear to do much work and produced nothing of value to the rest of the world. When I quote this, I'm constantly regaled by people laughing and saying, 'So what's changed?' But—like the last bit—we don't produce anything of interest to the rest of the world, except iron ore and coal. So you take out the coal.

Let me be very specific. The last time I looked at the figures, there were only three export items: coal, iron ore and gas. The gas was given away, so we get nothing out of the gas. I'll quantify that: we get $600 million out of the gas. Qatar produce and export the same amount of gas, and they get $29 billion. We pay $49 for a unit of gas when—the fertiliser plant in Mount Isa's paying that sort of figure, I would imagine; that's the cost of gas in Australia—in America, they're paying $6. There are people in America paying $4 a unit. How can they possibly compete? The fact is, they can't, so they, like everything else, are doomed to fail, and they're doomed to fail because you're handicapping the horse with weight that it simply can't carry and be competitive in the race. Here, tonight, we are putting yet another huge burden in the saddle pack of our horses that we bet on and we depend upon for our income. If you want to keep the hospitals open, then you've got to earn money. If you close the coalmines in Queensland, you close the hospitals, because there's no way there will be enough money to keep them open.

In conclusion, China is building our solar panels. They're building 200 coal-fired power stations. Whilst they send all the solar panels to the morons in Australia, they in fact are going into coal. You've got to say, 'Well, who's smart here, China or Australia?' I know where I'll be putting my money on that one. Not only are we going to be priced out of the world market; we are not going to have enough electricity to switch the lights on. That's not my comment; it's AEMO's comment, and they're dead right—8,000 megawatts are going offline over the next four or five years as the coal-fired power stations close. Congratulations to you all for closing the power stations, but there's a little problem: you can't switch the lights on because there are only 2,000 megawatts coming on from Snowy 2.0.

The crossbenchers have done a wonderful job here, and I'm very proud to be one of them. We're talking about transportation, and we can lower our emissions footprint, I think, by about 23 per cent if we proceed down the pathway that we're proceeding down. So don't turn the lights off and don't cost us out of the world market. The patron saint of greenies, Al Gore, in his book said his first solution was ethanol. Have a look at the world map of ethanol countries. There are only two countries that have no ethanol: Australia and Africa. That is not including, of course, the oil producing countries; they don't have ethanol. But all the rest of the world—except for that very small number of countries that are the oil producers—is on ethanol. It's the first solution, and it's the easy thing to do. Of our total exports of $400 billion, instead of sending $40 billion overseas every year to buy fuel we can produce it here in Australia ourselves, so the $40,000 million goes into Australian pockets and not overseas. In the meantime we are going to cut emissions by 23 per cent, yet after all the pain you have inflicted upon the people of Australia you have got to 16 per cent over 12 years. There are poor people on my street that are paying three times more for their electricity than they should be when the rich people are laughing because they've got solar panels on the roof.

There is no fairness, no justice, no intelligence, no good sense, and there will be a day of reckoning for the people in this place. If you, Deputy Speaker Goodenough, and the major parties can't see it coming, just look at the political reality: more than one in three people voted against you at the last election. Neither of you got more than one in three, but we, the people on the crossbenches, got more than one in three. They're trying to tell you something. Even the most avowed anti-Green such as myself has always said we need a pullback on the CO2. Even before it became popular, when I was still in the state parliament, I said, 'When you've got something increasing at an increasing rate, there is a problem.' Where I come from we use the expression 'you take a bit of a pull on the reins'. As far as I'm concerned you've taken no pull off the reins but you've shot the horse out from under you completely.

Let me be very specific: 8,000 megawatts are vanishing. Eraring and five other major power stations in Australia have announced their closure over the next five years. In that same period of time, the much maligned Malcolm Turnbull, and I'm most certainly no fan of Malcolm Turnbull, I can assure you—I'm sorry about this, fellas, but he goes down in the history books because he is the only one who has increased our ability to be able to produce electricity, with the Snowy 2.0. There are 2,000 megawatts coming on from Snowy 2.0 and 8,000 megawatts going off, and AEMO has told you that you won't have any power. Even if you want to build a coal-fired power station now, even if you want to do that, there's a nine- or 10-year wait time. So already you are in a situation where you can't supply the electricity. Instead of moving at 100 miles an hour to fix the problem you're going to close more coal-fired power stations.

I wish someone here followed science. I wish people here just understood what the hell they're talking about. Don't live in a fairytale fantasy land of the latest fashion ideology, of saving the globe and saving the planet and all those sorts of things. Live in reality land, where there is a problem, and an increasingly worsening problem, with CO2. I don't go along with climate change, but in the oceans a very serious problem arises if you keep pumping CO2 up there. A very serious problem arises in the oceans—speak to the scientists and they'll tell you—so we need to pull back. We can pull back 23 per cent of our emissions by doing what the crossbenchers are advocating in the area of transportation.

Now let me turn back to electricity. I know a lot about it. As I said at the start, I was the first person in Australian history to put in a standalone solar system. I got a lot of fame and fortune out of it. Later on, I was the minister for electricity in Queensland when we had the cheapest electricity in the world by a long way—$674 a year, and it's now over $3,000 a year. Now, this is what you do: you build a 2000-megawatt Heliae algae pond power station. What's that? It's coal fired but you are producing CO2, and CO2 is a magical asset. It can be fed to algae, and the algae will make diesel for you—and I pay a tribute to the minister for the environment, Tanya Plibersek, because she actually knows the names of the algae which you can use to produce diesel fuel or fodder for pigs, chooks, cattle, human beings and fish farms. Algae is a very valuable stockfeed. It can be used either way. (Time expired)

7:26 pm

Photo of Kylea TinkKylea Tink (North Sydney, Independent) Share this | | Hansard source

In May 2022 communities across Australia, including my own in North Sydney, set a clear message to this place of national government: climate inaction and prevarication needs to end. And we, sent here by our communities, must do everything we can to ensure faster, tangible action to keep global warming below 1.5 degrees Celsius. This is not to say we should act irresponsibly, but rather we must embrace all of the skills and thinking present in this place, and across our wider community, to develop smart ways we cannot only take stock of where we are but also can enact a transition plan which will ultimately transform not only our economy, but more broadly our place in the world.

As I stand today to speak on the Safeguard Mechanism (Crediting) Amendment Bill 2022, the weight of my community's faith that I will speak their truth in this place is something that I am honoured to carry. I need to be clear: in its current form the safeguard mechanism bill does not meet my community's expectations. It is not bold enough. It is not ambitious enough. And, ultimately, it is much less than this government could do given that, more than any other government in the past 100 years, this government has been given a clear mandate to move our country forward in a nature-positive fashion.

While this legislation is not perfect, it does provide us with the scaffolding for a more effective framework to drive productive change at an industrial level. The question then that I believe we must answer as we debate this legislation is: are we brave enough to make decisions today, the ramifications of which will be long felt into the future in a positive fashion?

This legislative amendment should not be looked at as simply a short-term solution to deliver on a political promise made at the last election. Rather, it should be seen for what it really is, which is one of the most important first steps in fundamentally transitioning and transforming our future economy so that both our nation and our planet can thrive. In this context, I am committed to working with the government to ensure petty party politics does not ultimately impede what can be a very important and significant step for our nation.

Just this past week, the latest Australian Productivity Commission report specifically called out the hodgepodge of narrow and sometimes inconsistent federal, state and territory abatement measures that impose unnecessarily high costs on the community while delivering ineffective abatement. From my perspective, the Productivity Commission report adequately described the limitation of a framework that is arguably the result of a series of decisions made within the context of successive election cycles, rather than from a true leadership mindset. Describing the decarbonisation of the economy in the next three decades as a huge transformation, the commission warned that the difference between doing it efficiently and doing it poorly will be a major determinant of the living standards of all Australians. Indeed, the report said the economic costs of this approach are increasingly apparent, laying bare the reality that decisions to avoid technology-neutral, economy-wide abatement mechanisms— (Time expired)