George Brandis (Queensland, Liberal Party, Shadow Attorney-General) Share this | Hansard source

I move:

That the Senate take note of the answers given by the Minister for Finance and Deregulation (Senator Wong) to questions without notice asked by the Leader of the Opposition in the Senate (Senator Abetz) and Senator Birmingham today relating to the carbon tax.

When President Obama left our shores last Thursday afternoon, not only did he leave behind him the legacy of an enhanced ANZUS relationship and the announcement of a military presence by American Marines in Darwin; he also left a legacy much more consequential to our immediate domestic politics. He blew the carbon tax out of the water. He did that by telling journalists at his press conference the previous afternoon that there was no way that the United States of America would have a carbon price or a carbon tax by 2016 or indeed in the foreseeable future. In making that announcement he destroyed the assumptions upon which the modelling for the Gillard government's carbon tax depends.

Both Senator Abetz and Senator Birmingham, in their questions to Senator Wong today, identified those aspects of the modelling which depend upon the assumption of there being a global carbon market in which the United States and other major Western economies—and, in the case of Senator Birmingham's question, the OPEC nations as well—will participate. That is a foundational assumption of the modelling upon which the carbon tax depends. It is therefore a foundational assumption for the projections of the cost to Australians of the carbon tax. It is a foundational assumption for the assessment of the compensation to households which the government says it is going to pay through the tax and transfer system.

We only have to look at the document which Senator Abetz read—that is, the incomplete, redacted but nevertheless extensive document which sets out part of the modelling upon which the carbon tax depends—to see that what Senator Abetz asserted in his question and what Senator Birmingham asserted in his question was absolutely true. If one reads from pages 31 and 32 of this lengthy Treasury document, one sees that the modelling is said to depend upon the assumption that, among other things, the signatories to the climate change framework convention at Cancun, now 89 of them, will reduce their emissions at the low end of their 2020 pledges. If you look at table 3.1, which underlies that text and sets out a summary of international global action scenario assumptions, the mechanism is described as follows:

… from 2013 to 2015 uncoordinated global action, no trade in permits, differentiated carbon prices. From 2016 onwards, countries trade, either bilaterally or through a central market.

So the existence of an international carbon market—which one also sees from the table that appears on that page of the document that the United States and China and India and Japan and Canada are participants in—is, as I said earlier, the foundational assumption of this analysis. But we know that it will not happen. President Obama has told us that it will not happen in the case of the United States. Mr Harper, the Prime Minister of Canada, has told us that it will not happen in Canada. There is no reason to believe that it will happen in China. In fact, the foreign minister, Mr Rudd, who at the time of the Copenhagen climate change convention was the Prime Minister, accused the Chinese of sabotaging that climate change convention.