Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Hansard source

Thank you, Mr Acting Deputy President. The point here is that even inside the Labor Party people are increasingly aware that this carbon tax will not all of a sudden become popular come 1 July 2012. People inside the Labor Party now understand that, where all of the hopes that were put into getting the public on side with this broken promise in the past have failed, people after 1 July 2012 will become increasingly aware that this is a bad tax based on a lie which will push up the cost of living, push up the cost of doing business, make us less competitive internationally, cost jobs, result in lower real wages and take significant potential economic growth out of our economy.

I refer the Senate to an article in the West Australian today. The headline is 'Carbon tax won't save Labor, say Ruddites'. I quote:

Kevin Rudd's supporters—

and I would not want to reflect on the chair, but there are people who must be identifying themselves as Kevin Rudd supporters—

say the July 1 introduction of the carbon tax will not be the "game-changer" being promised by Julia Gillard and Wayne Swan, increasing the likelihood of the Labor leadership being revisited in spring.

And so it goes on. I strongly encourage senators to have a good read of that article by Andrew Probyn in the West Australian.

That is the point. Those people who are talking to Andrew Probyn, those people inside the Labor Party who are backgrounding and briefing Andrew Probyn about their concerns about the Labor-Greens carbon tax, are 100 per cent right. They are right because 1 July is not going to be the key date. What is going to happen as of 1 July, progressively moving forward, is that Australia will be heading in the wrong direction. Australia will be heading in a direction where the government is imposing sacrifice on the Australian people that will not make a difference. We are heading in a direction where the Australian government is going to impose cost increases on the Australian people that will not actually lead to reductions in greenhouse gas emissions.

All you have to do is look at the government's own Treasury modelling. The government's own Treasury modelling shows in black and white that emissions, even in Australia, will continue to rise under the carbon tax. The Treasury modelling shows that under the carbon tax the cost of living will continue to go up and up. The Treasury modelling shows that under the carbon tax real wages will be lower than they otherwise would be while prices and the cost of living will continue to go up. That is a very toxic combination—lower real wages than there otherwise would be and higher prices than there otherwise would be. The carbon tax, in those circumstances, at the worst possible time, will of course have significant consequences for people's quality of life.

If it was a sacrifice imposed on the Australian people that would actually make a difference, we would be having a very different conversation. But to actually ask the Australian people to make a sacrifice for something that is not going to make a difference is cruel. It is outright cruelty. People should look at the Treasury modelling to get a sense of some of the implications of the government's carbon tax in that regard.

One of the things that really shocked me in the government's own Treasury modelling was when I looked at 2050. As a result of the carbon tax, our GDP in 2050 is expected to be $100 billion lower than it otherwise would be. We have to bear in mind here that this Treasury modelling is based on some very generous assumptions that are designed to minimise the perceived economic impact that the carbon tax will have. For example, there are assumptions that the US, China and others will have equivalent carbon pricing arrangements in place by 2016, which of course will not be the case. We have to remind ourselves that in the context of the CPRS Treasury modelling the government assumed that the US would have an emissions trading scheme equivalent to our emissions trading scheme in place by 2010. It did not happen then and it will not happen now.

Despite all of these errors and heroic and unrealistic assumptions that are designed to minimise the perceived economic impact of the carbon tax in Australia, let us just take the modelling figures as they are. Even the government's own Treasury modelling shows that by 2050 our GDP will be $100 billion lower than it otherwise would be. 2050 is the out year. Some people might say, 'That is a long time away. Who cares what happens in 2050?' None of us is going to be around. Senator Carr ain't going to be around. I am not going to be around. So who cares about what is going to happen in 2050? We should care because it is not what happens on 1 July 2012 that matters; what matters is what happens between now and 2050. What is important is what happens over the 38 years or so between now and 2050, which is the period that the Treasury modelling looks at. If you look at the cumulative impact year after year after year then you will see that in today's dollars the impact on our economy from the carbon tax, according to the Treasury's own modelling, is a loss of economic growth, a loss of GDP, of $1 trillion. That is a staggering amount to take out of the economy as a result of the carbon tax between now and 2050. $1 trillion in today's dollars is effectively the whole GDP for the whole of Australia for a whole year. It means that as a result of Labor's carbon tax, the carbon tax that we were promised we would not get, every single person across Australia who works will be expected to work for nothing for a whole year in order to pay for the impact of the carbon tax between now and 2050.

Some people might say, 'So what? People across Australia should be expected to work for nothing for a whole year between now and 2050 to pay for the impact of Labor's carbon tax because it is such a great thing.' If that were the case surely you would want to know that, if you were going to work for nothing for a whole year—every working Australian will have to work for nothing, effectively, for a whole year—that sacrifice was actually going to make a difference. But, no. If you look at the Treasury modelling again you will see that emissions will continue to grow. They will continue to go up.

The government would say, 'But they will grow by less than they otherwise would have.' That is true. According to the Treasury modelling, emissions will grow less than they otherwise would have. But what happens to the emissions that otherwise would have happened? They will just be transferred to other parts of the world. Those emissions will go to China, the US and even Europe, because the carbon tax even in Europe is much lower than the world's biggest carbon tax here in Australia.

This is a bad tax. It is a tax that is based on a lie. The Australian people will judge this government very harshly for the very bad impacts that will flow from this carbon tax over many years to come until such time as the coalition—hopefully after the next election—can rescind this carbon tax once and for all. (Time expired)