John Williams (NSW, National Party) Share this | Hansard source

My third and final question to the minister is: what compensation will there be for local government? During our Senate inquiry, we heard that Tamworth Regional Council would pay an extra $300,000 for electricity alone. The reports are that there will be a five per cent increase in the cost of road building. In New South Wales we have rate pegging. Last year the rates were pegged at 2.8 per cent. That does not include water, sewerage and other charges. In Inverell Shire Council, for example, their rates went up around $250,000 in income this year, brought about by rate pegging of 2.8 per cent, controlled by the state government, and their wage bill has gone up some $450,000. Now they face an increase in electricity and in road building. With their rubbish dumps, what are their rubbish emissions? Do they come under the 25,000 tonnes when they group together the emissions out of all their rubbish dumps? What is the compensation to local government? That is my third and final question.

But I take you back to that constitutional item. How does the government wangle its way around the Constitution, which is above this parliament? The minister agrees that in Western Australia, Queensland and New South Wales those coal fired generators are properties of the state. That is who they belong to. They might be in the name of Macquarie Generation or various other names, but they are properties of the state, and the Constitution clearly says you cannot impose any tax on property of any kind belonging to a state. So those are my two questions. Firstly, how do you get around the Constitution under this proposed carbon tax? I think it is against the Constitution. I think it is in breach of the Constitution. Secondly, what is going to happen to local government? These are the last two questions I will be asking, Chair, because I know time is of the essence and Senator Birmingham has a quick question before we get into amendments from Senator Xenophon, I think.

The whole problem with this tax is that you are going to strangle the business sector. One day, over that side of parliament, you will realise where our nation's wealth is derived from. It is the business sector that employs people, pays tax and gives money to governments, which you then use to give out pensions and provide services and hospitals and aged-care facilities. You are going to compensate low-income families and pensioners, but you are doing nothing for abattoirs competing in the world market. We know what it is going to do the cement industry. We have already had two factories close in the last 12 months. The first was in Rockhampton. Now they have announced the closure of the factory in Kandos, where I think 96 people are directly employed plus all the businesses and the truckies and those that hang off and rely on that industry. This is where you have got it so wrong. You are strangling business, the very sector that drives our nation's wealth. You strangle our business sector, you strangle our economy and you strangle our nation financially. You might be able to compensate people, and that might shore up your votes if the compensation is 20c a week more than the cost is going to be, but here is the problem: you are going to put the costs onto local government and our industries competing overseas, and I question whether this is simply in breach of the Australian Constitution.