Mathias Cormann (WA, Liberal Party, Shadow Parliamentary Secretary for Health Administration) Share this | Hansard source

The Rudd government’s proposed emissions trading scheme is deeply flawed. If the government’s goal is to help reduce global greenhouse gas emissions, it will not achieve that through its ETS. It will not help reduce global greenhouse gas emissions. In fact, the Rudd government’s Carbon Pollution Reduction Scheme Bill 2009 and related bills could well result in more global greenhouse gas emissions than there would be without them. The scheme is not going to do anything for the environment. It is a scheme that will cost jobs and put pressure on our economy.

You would think that a Labor government would care about jobs. But, in this modelling exercise, do you think they assessed the impact of their proposed emissions trading scheme on jobs? No, they did not. They, in their absolutely inadequate and flawed modelling—modelling that is as flawed as the emissions trading scheme itself—included full employment as a modelling assumption, rather than trying to assess employment as a modelling result. They started off telling their model that we are going to have full employment. However, there is going to be an impact on jobs in the steel industry, as we were told in Wollongong when we went there with the Senate Select Committee on Fuel and Energy. We were told 20,000 jobs are at risk in Wollongong. If you tell your model that we are going to have full employment and then 20,000 jobs go down, it says, ‘Oh, well, jobs are going to go up somewhere.’ That is a function of the flawed model that this absolutely flawed government have put together: 20,000 jobs go down over here, so 20,000 jobs must go up over there.

The only category that was left where jobs could go up was ‘green jobs’. So if we are going to have jobs lost everywhere, as the coal industry, the steel industry and a whole range of other industries say, and if you cannot find another category for jobs created, the model says, ‘Oh, well, it must be green jobs.’ Then the government say, even though it is a function of the way the model was put together: ‘Look at this! Isn’t this great? We’re going to have all these new green jobs,’ not telling people who are not diligent enough to look at the fine print that it was not a modelling result but a modelling assumption. They have not modelled the impact on jobs. They have not modelled the impact on regional Australia. In fact, they say it is too hard, too difficult. Heaps of witnesses before our particular committee inquiry said it can be done and there is absolutely no difficulty. In fact, the New South Wales government commissioned Frontier Economics, who did exactly that work. Frontier Economics, who used exactly the same modelling methodology and exactly the same databases et cetera were able to do the work that this government refused to do.

I say it again: compared to the reference scenario, the Rudd government’s scheme will actually make things worse for the global environment, not better. Let us reflect on this for a moment. If there was a price on carbon in Australia in isolation of what is happening in the rest of the world, what would that mean for the LNG industry, for example, which could prosper here in Australia? We have a lot of untapped gas reserves which could contribute to a reduction in global greenhouse gas emissions by displacing coal fired power stations in China and Japan. Yet under this scheme they are going to be worse off than all of the competition they are facing from companies overseas that are not facing the same cost. If you had the trifecta—good for economic growth, good for jobs and good for the environment—surely a scheme introduced by a government in Australia should make it easier for such an industry to develop, to grow and to prosper, rather than make it harder. This scheme is going to make it harder. We are going to tie our hands behind our back, rather than doing everything we can.

I will put a few facts and figures around this. For every tonne of additional emissions in Australia through the production of LNG, we can achieve a reduction in emissions in China of 5½ to nine tonnes and a reduction in Japan of 4½ tonnes. So, if your objective truly was to reduce global greenhouse gas emissions, rather than politically grandstanding, and if you were really focused on reducing global greenhouse gas emissions, wouldn’t you design your scheme such that the Australian LNG industry could grow and prosper so that we could maximise our potential to reduce global greenhouse gas emissions? But, no, we have not done that.

Let us go to steel, cement and other industries. An industry in Australia which is at world’s best practice environmentally—that is, the best in terms of having the lowest level of emissions for a particular activity, compared to any other company or business conducting a similar activity anywhere else in the world—will face a cost not faced by any of the others, including the more polluting businesses in overseas jurisdictions. They will be less competitive, so they will get less business. The businesses that are going to get the business are those that are more polluting, and the businesses that are going to grow are the businesses that are more polluting. The businesses in Australia that are operating at world’s best practice environmentally will not do well. That business will get shifted to businesses that are more polluting. That will result in more greenhouse gas emissions—as a direct result of what we are trying to do over here.

A particular witness, Spitfire Oil, appeared before the fuel and energy committee. They said: ‘We’ve got this great new technology, this great new process, which actually will help to have a significantly lower level of greenhouse gas emissions around oil production. However, we won’t be able to get it off the ground because we’ll be competing with imports that are going to be more competitive. Even though we’re much more environmentally friendly and even though our emissions are significantly lower, we’re still going to have to pay a price for carbon that others overseas won’t have to pay.’ So, for businesses that are more environmentally friendly and that are trying to pursue new technology, you are actually going to make it harder to compete with more polluting businesses, as a direct result of what is being proposed here. In fact, that particular enterprise, which is a very creative and innovative enterprise, is looking at relocating offshore. Australia is probably going to lose that particular enterprise, Spitfire Oil.