Matt Thistlethwaite (NSW, Australian Labor Party) Share this | Hansard source

Here we have it again: yet another piece of misinformation, another missive from the Orwellian motion-writing department of the Liberal Party of Australia. In that great tradition of anti-reform, anti-change, do-nothing conservatives, here they are again, dishing up in the Senate the same old scaremongering, the same old attempts to terrify the Australian public into believing their scare campaign around the important public initiative of pricing carbon in our economy. Those on that side are well and truly glass-half-empty people—to borrow a phrase used by the Governor of the Reserve Bank, Glenn Stevens last week—because here they go again with their scare campaign around the important policy of pricing carbon.

Let us get to a few of the facts about carbon pricing in Australia. The first fact is that both the coalition and the Labor Party have the same target for emission reductions in our economy: five per cent by 2020. We have the exact same target. With that in mind, the question then becomes: what is the most efficient, effective and, importantly, the cheapest way of reducing emissions in our economy over time? There has been a lot work undertaken to answer this question. In fact, no fewer than 37 parliamentary inquiries on that question have been undertaken in this place since 1992. They include the Shergold report, which was established by none other than former Prime Minister John Howard. John Howard asked Professor Shergold to inquire into that exact question—the most efficient and effective and the cheapest way of reducing carbon emissions in the Australian economy. All 37 of them, including the Shergold review, recommend a market based mechanism as being the cheapest, most efficient and effective method of reducing emissions in our economy—the same scheme that Labor is implementing with its clean energy future package.

Another fact is that not all Australians will directly pay the carbon price. The 500 biggest polluting companies in our economy will bear the direct liability for paying a cost associated with their carbon emissions. Initially, it will be $23 per tonne before we move to a market or floating price in three years time. There will be indirect costs; we know that. We have been upfront with the Australian people about that. Some of the 500 biggest companies will pass on their costs and that will result in an increase in electricity costs and other expenses for households and small businesses. But what we have done is asked the Treasury to undertake a modelling exercise to estimate what those costs will be for families and for small businesses in our economy—and they have done exactly that. It is the biggest economic modelling exercise in this country's history. It is even bigger than the GST modelling that was undertaken in 1998.

Let us put this into context. The GST was modelled by the same people in Treasury in 1998. They said that the price effect from the introduction of the goods and services tax would be 2.49 per cent on the consumer price index—in other words, prices in our economy would rise by 2.49 per cent. Guess what the figure came in at when the GST was introduced? The price effect, the CPI, rose by 2.5 per cent. They were spot on then and they will be spot on now. What they have said this time, after undertaking the modelling, is that the price effect of the government's clean energy future package will be 0.7 of one per cent on the consumer price index—in other words, prices will rise by less than one per cent. That is one fifth of the effect of the goods and services tax when it was introduced in 1998.

Another fact is that if companies try to price gouge, if they do try to increase prices, we have given additional powers to the Australian Competition and Consumer Commission to investigate and prosecute those organisations. Let me tell you: it is working. I had a mate of mine who works for a construction company ring me a few weeks ago. He said, 'Mate, this doesn't sound right. A contractor that we use has attempted to push their prices up and to use the carbon price as an excuse.' I said to him, 'Mate, go back and ask them to put it in writing and tell them that, if they are not comfortable with it, you will refer them to the Australian Competition and Consumer Commission and get them to check whether or not this particular company is taking the mickey, so to speak.' He did that. He rang back a couple of days later and said, 'You know what, mate, thanks for that advice because it worked. They've changed their tune. They wouldn't put it in writing and they've reduced their prices.' They know that they will be prosecuted if they seek to price gouge under the new scheme.

We know that there will be price effects, but we believe that the economic decision that is being made by this country is in the best interests of our country. We are transitioning from an industrial economy to a clean energy future. It is the equivalent of the economic transformation that occurred in our economy over 100 years ago, when we moved from an agricultural society to an industrial society. During that period it was a difficult transition, but we supported families and we got through it. In the end, it was better for our economy. It resulted in changes in capital flows and it also resulted in increased investment in new technology, new industries, jobs growth and wealth creation for this country. We are about to enter the next phase of our economic development and again there will be new investment, research and development, jobs growths and growth for our economy.

We are providing assistance to households to make the transition. This is what peeves me about the opposition's motion. We are doing all we can to support households and families with cost-of-living pressures. There are elements of the household assistance package which support most Australian households in this country. If you are a single pensioner, you will get a $250 increase in your pension on an annual basis. There will be $380 for couples to help them make the transition to a clean energy future. If you are a student, you will get $190 per year in assistance to help you make the transition to a clean energy future. If you are a job seeker, you will get $180 as a single and $300 as a couple in assistance from the government to help you meet those cost-of-living pressures. We are providing tax cuts for most Australians. Anyone who is earning less than $80,000 a year will get on average a $300 a year tax cut. We are tripling the tax free threshold from $6,000 to $18,000 to ensure that it is a massive tax break for low-income people in this country. In the recent budget, we announced a schoolkids bonus because we understand the cost-of-living pressures that families are facing with sending kids to school—the cost of school uniforms, shoes, books, bags and all those sorts of things. There is $410 for each primary school student and $820 for each high school student. This is support for families in their bank accounts to help them meet these cost-of-living pressures. We are increasing the family tax benefit, up to an extra $600 for families under this government to provide support to help meet cost-of-living pressures.

  We live in the real world. We know that people are facing cost-of-living pressures associated with increasing electricity and gas prices, but people have to be conscious—and this is why the opposition's motion is a complete fabrication—that the carbon price has not started yet. You cannot possibly blame the carbon price for the increases in electricity costs which have been imposed on families to date. We all know that the reality behind increases in electricity costs is state governments upgrading the network infrastructure, particularly the high-voltage transmission wires that transport electricity from a power station to a substation in the local area. These wires have been upgraded in New South Wales. State governments have undertaken the process of upgrading the network and there have been quite high increases in electricity costs associated with that.

  In New South Wales over the last 12 months there has been an 18 per cent increase in electricity costs, all due to network upgrades. If you read the decisions of the Independent Pricing and Regulatory Tribunal, IPART, they point to the fact that network upgrades have been associated with increasing costs. In the coming year there will be a 20 per cent increase in electricity prices in New South Wales. Some of that is because of the carbon price but, guess what? We said that the cost effect would be 10 per cent. We were upfront with the Australian people: a 10 per cent increase in electricity costs because of the carbon price. The Independent Pricing and Regulatory Tribunal confirmed the Treasury's figures. In their most recent decision to increase electricity prices by 20 per cent they admitted that the cost of the carbon price will be 10 per cent or lower, not greater, consistent with the Treasury modelling. Yet here we have the opposition again coming into this place trying to blame the carbon price solely for increases in electricity costs. Most increases have been due to network upgrades undertaken by state governments.

What has been the response of the New South Wales state government? Bear in mind what I said earlier about the fact that the federal government is conscious that there are cost pressures associated with electricity and gas prices. Our response in the recent federal budget was to introduce a supplementary payment to assist families to meet costs associated with electricity and gas prices. It is $210 for singles and $350 for couples, to help them meet increasing electricity prices. Compare that to the New South Wales Liberal government. Its response to electricity price increases, solely the result of network upgrades undertaken by that particular government, has been a $75 rebate—a measly $75 announced in their recent budget, compared to $350 support from the Australian government. That is a stark reminder of the difference between our parties when it comes to supporting families with meeting cost-of-living pressures in our economy.

What is the response of those opposite to some of these issues? How are they going to support families into the future? The answer is simple: we do not know. The Australian public would not have a clue, because those opposite will not announce any of their policies; they will not come clean with the Australian public about what plans and services they intend to cut. As usual, we have had some leaks from those opposite, from their shadow cabinet. They indicate that those opposite are planning $70 billion worth of cuts to services when they come to government. That will be their welcome present to the Australian public if they get elected in this country—$70 billion worth of cuts to services.

What will those cuts to services do to cost-of-living pressures and support for households and families? When we came to government we increased the childcare rebate from 30 per cent to 50 per cent—a great support for families to help meet the cost of sending small kids to childcare and getting an important start on education. Is that on the chopping block? Who knows? It possibly is. Medicare, support for universal health care, something that families rely on to ensure they make ends meet, is that on the chopping block? Perhaps it is. They will not tell us. We have programmed increases in the pension. During the 11 years of the Howard government they did not increase the pension once but since we have come to government we have done it twice. What is the prospect for increases for pensioners? We have already seen Joe Hockey begin to back away from the National Disability Insurance Scheme, which will provide a lot of support for people who are living with disabilities and their carers to meet their cost-of-living pressures. (Time expired)