Christine Milne (Tasmania, Australian Greens) Share this | Hansard source

I draw Senator Macdonald’s attention to the fact that hydro power does not drive vehicles. I am talking about transport fuels. Australia’s single biggest monthly bill is for imported oil, and that is threatening to blow out the nation’s trade deficit as well as inflict more pain on motorists. The average trade deficit in the previous 12 months was $1.4 billion, meaning that, despite record commodity prices and strong global growth, the trade deficit has shown little improvement over the past year. When I came into the Senate I was horrified to find that the government had failed to understand that we are facing an era of oil depletion. We are already in a situation where the age of cheap, plentiful, easily accessible oil is over. I moved a motion in this Senate for an oil inquiry, which we are undertaking, and the community is welcoming it because it wants a strategic plan for addressing Australia’s future transport fuels.

Secondly, the government says that this will somehow help small business because it will extend, if you like, the ability to buy diesel without paying the excise—reducing excise to make diesel more easily available. But it does not address the fact that oil prices are going to continue to go up. It is not about trying to give people short-term relief on fuel prices; it is about the long-term switching of people onto alternative fuel supplies so we are not dependent on imported oil and ever-increasing high costs. That is the strategic nature of going with an alternative fuels plan—it is addressing a long-term reality that Australia cannot provide for its own oil so we need to go into a system of providing an alternative transport fuel.

This particular bill does not address climate issues, and I will get to that in a minute. In my view, it shows there is no long-term thinking. It is a complete missed opportunity. It does not address urban congestion; it does not address the public health issues to do with air quality because of vehicle emissions; it does not address the accessibility of cities and the economic cost to Australia of congestion; it does not address the oil issue; it does not address the climate issues; it does not address regional growth, regional development and regional jobs by way of the development of biofuels; and it does not address the opportunities for new export industries around those alternative fuels. As I said, it does not help small business. What it does do is help the big oil companies. The government’s predisposition in all these fuel tax areas has been, regardless of what it says about small business, to facilitate the big oil companies.

I will talk about the changed nature of the world. If you talk about reform then you look around and ask: how has the world changed and how do I have to respond to it? The world has changed because it is a world suffering global warming and oil depletion. Let me talk about global warming first. It is real. We know the icecaps are shrinking, the sea levels are rising, there is acidification of the oceans and there are extreme weather events by way of floods, droughts and fires. We are now looking at climate accidents whereby, if the West Antarctic icesheet or the Greenland ice were to disappear and slip into the ocean, we would have a five- to seven-metre rise in sea level. Your fuel tax reform does not look too hot in those circumstances.

We have human induced climate change; the issue is urgent. We have 10 to 15 years. We in the Senate right now have the opportunity to deal with it, but after that it is too late. You cannot leave it for a change of government. You cannot leave it for the next generation of senators. It is up to us. We have 10 or 15 years. We are the ones who are going to have to look at people in the future when they say, ‘Why didn’t you do anything about it when you had the opportunity to do so?’

The minister has said that we need a 60 per cent reduction in greenhouse gases by 2050. I ask: how much of that reduction are we going to expect as a result of a reduction in transport emissions? How are we going to get to this? What is our short-term target to reduce the transport effort in greenhouse gases, and what is the target for doing so? We know that, at the moment, transport and energy emissions are the greenhouse gas contributors: 50 per cent come from energy, 14 per cent from transport. From the Greenhouse Office we know that between 1990 and 2004, transport emissions grew by 23.4 per cent. What is worse still—and I would like the government members to take this in—is that by 2020 it is expected that there will be a 78 per cent increase in greenhouse gases from transport over 1990 levels.

Surely it is appropriate for a fuel taxation regime to address our greenhouse gas emissions. What is more, the fuel tax inquiry in 2002 said that fuel tax is an appropriate instrument to address greenhouse gas emissions. Obviously some forms of taxation are not, but this one is—fuel tax can address greenhouse gas emissions. Also, fuel tax arrangements should not impede or distort future developments of innovative technical solutions which can address fuel policy objectives. That is precisely the point that is being made here on alternative fuels. So you should have a fuel tax regime which assists us in our effort on greenhouse gases and which does not stop or impede the development of innovative technologies. How should we work to achieve this?

Fuel tax should not be based on energy content; it should be based on carbon emissions. If you had done that you would have internalised the externalities, or the costs, of CO. So you would have a range, with at one end biofuels, alternative fuels having very little or no fuel tax, and at the other end the worst fossil fuels would be on the highest level of fuel tax, based on life-cycle analysis. Real reform would change the basis of fuel tax. That would deal with Senator Joyce’s issues and with my issues. It would deal with rural development, employment and a whole range of things. All you have to do is change your head space: stop thinking about fuel tax based on energy content and look at it in terms of its carbon content.

Secondly, you would need to have a fuel tax system that encouraged the development of alternative technical innovation. One of those innovations is, for example, the electric car. In Australia we have had a real effort to stymie the production of electric cars. The Reva car is still stuck in limbo because no government in the country will license it at the moment. There is the potential to go with small electric cars for commuting in Australian cities.

The government has taken away incentives for renewables in the non-transport sector, using oil for electricity. I cannot believe this. The Greens brought in a sun bill many years ago that would have abandoned the diesel fuel rebate and instead returned that rebate for investment in photovoltaics. Rural, remote and regional areas could have made the shift from diesel generators across to photovoltaics and other renewables. It would have stimulated the renewable industry and it would have meant that the cost of production, the cost of living in those areas, would be significantly less than it is now, because they are having to pay higher and higher diesel fuel prices. Okay, so you have taken the excise off them, but it does not matter; the costs are still ultimately going up. The government could have done something about it. It could have embraced the sun bill. It could have helped in the transition to get the monkey off the back of the rural sector in terms of the ongoing higher costs of diesel and fossil fuel based transport.

We have had many speeches on biofuels. It is clear that this legislation completely undermines the Energy Grants (Credits) Scheme Act 2003 and the Energy Grants (Cleaner Fuels) Scheme Act 2004, and it impedes the development of a sustainable biofuels industry. It stops the promotion of biofuels as an alternative fuel source in Australia. That is an absolute disgrace. There have been endless submissions to the oil inquiry. Numerous people have contacted me about that. What we are obviously seeing is the government extending the number of diesel users not only in the country but also in metropolitan areas and, at the same time, taking away the excise rebate received by rural users of biofuels. It is totally discriminatory and it is undermining the development of a whole new industry sector.

We should be going with that broader industry sector and we should have a total policy. It is no good just having an ethanol policy. It is no good just having a natural gas policy or an LPG policy. We need a fuel policy for Australia which looks at those sectors that do rely on existing oil supplies more heavily than most—and one is the aviation sector. Where there is not an easily replaceable, substitutable fuel, they are the sectors that are going to take the most oil in the future. We have to help other people to move across to alternative sources of fuel to address greenhouse gases.

What should we do? Firstly, we should identify the size of the transport emission reduction task. What are our short-term, medium-term and long-term tasks to 2050 to reduce greenhouse gases in the transport sector? Secondly, we should develop an integrated energy industry employment policy and a road map to get us to those targets. We should see fuel taxes as part of achieving that plan by asking: how do we reduce greenhouse gases in the transport sector and create jobs and industry innovation at the same time? How do we help those people in Australia who are currently dependent on fossil fuels, on petroleum and diesel products, to get off that dependence and onto alternatives?

When I talk about an alternative fuels policy, the reason I say that it is not just about ethanol or natural gas is that we need the whole mix. We need a strategy for having the whole mix. We need to consider what land area would be needed to grow some energy crops and whether that would threaten food security and food supply in the longer term in a global context. We need to consider whether it would have adverse consequences by driving tropical deforestation to put in palm oil plantations and the like. We need to look at where the opportunities are for biomass development and where the opportunities are for cellulose, for example, to get into the alternative fuels market and so on. There are lots of things that would need to be considered in an alternative fuels policy, within the context of an Australian industry energy employment policy. That is where the government is completely lacking and is letting Australia down.

In conjunction with the fuel tax, what you would need to do would be, first of all, to reduce the impact of the vehicles that you have on the road. That is where you would bring in mandatory minimum fuel efficiency standards and mandatory minimum vehicle emission standards. Then you would set stamp duty on the environmental performance of cars in a formula that looked at both fuel efficiency and emissions. You would promote alternative fuels, through the fuel tax and, as I said, by taxing fuel on the basis of carbon emissions. Then you would do all the things we are trying to do with alternative fuels. You would also remove the perverse incentive to fuel from the fringe benefits tax. You would upgrade government car fleets. As I have indicated previously, you would promote hybrid vehicles. You would also reduce vehicle use overall by investing in public transport and urban planning measures that would get more people off the roads and onto public transport, walkways, bicycle ways and the like. You would get transport off the road and onto rail. You would also work on travel demand reduction. They are the obvious things that we should be doing in this country.

When it comes to vehicle efficiency standards, I have made this point over and over again, and I will continue to make it: China has set much higher vehicle fuel efficiency standards than we have. Theirs are mandatory and ours are only voluntary. The environment considerations in this bill are a total joke. All that participants in the Greenhouse Challenge Plus program have to do is to identify their greenhouse gas emissions, develop action plans for greenhouse gas abatement and report to the government on their actions. They are not required to do anything other than report on what they might do. They are not actually forced to do anything.

This whole thing is a joke. This is where the government lacks any kind of integrated strategy. You have Senator Ian Campbell talking about the need to reduce greenhouse gases, acknowledging the role of transport, and then you have Senator Ian Macdonald saying we have to take off the excise and make it cheaper out there, which effectively means ‘use more oil’. Then we have a trade deficit because we are importing oil, and we are taking away the incentives, promotion and development of innovative alternative fuels. This is madness. You have not got a comprehensive policy objective of taxation. What is your policy objective of taxation in this country, apart from getting revenue to buy votes at election time? That is an obvious strategy. Apart from that, where is it taking the country? The country has stalled. We have no direction in Australia. It is business as usual. In fact, it is a step back to the past and a resource based economy with virtually no manufacturing sector, no cleverness and no innovation. All that is going overseas, and being driven overseas by this head in the sand approach that the world has not changed and that the industrial age is still with us—and it is not.

Real tax reform, real transport reform and real fuel tax reform would have seen the shift to taxing greenhouse gas emissions. It would have dealt with climate change and it would have dealt with oil depletion. These are the two greatest factors affecting civilisation—not just the Australian economy, but civilisation. We only have 10 to 15 years to deal with them. I put to the government: let us have a discussion about real reform. Let us achieve a comprehensive way of looking at the world, which would mean that we would not have these constant fights over ad hoc measures that contradict one another. That is why I will not be supporting these bills.