Senate debates

Wednesday, 12 February 2014


Climate Change Authority (Abolition) Bill 2013; Second Reading

9:49 am

Photo of Kim CarrKim Carr (Victoria, Australian Labor Party, Shadow Minister Assisting the Leader for Science) Share this | Hansard source

The Climate Change Authority (Abolition) Bill 2013 and related bills come before the chamber in what is clearly a very black week for this nation. In less than six months in office this government has destroyed the automotive industry. It has done nothing other than to ridicule and abuse an industry that was determined to transform itself for the future. It comes at a time when this government is turning its back on every endeavour that manufacturers are making to transform the way they do business. It is for this reason that you would think that the government would be able to articulate a plan for the future, a plan to modernise the economy, a plan for innovation and growth, because it is at this time that we are facing these extraordinary pressures on manufacturing. But this is not a government that appears to have done any serious work in opposition to actually develop such a plan to respond to what it says now are inevitable changes.

We have a government that is paralysed by its own indolence. We have a government that is paralysed by an outdated, stale ideology. We have a government that offers nothing more than platitudes. But then what more would you expect from a conservative political party? I do not mean that in the Menzian tradition, but in the New Right tradition of trying to turn the clock back when it comes to issues that face the people of this country. This is the message of this particular bill. Last time the Liberal-National parties were in government they failed this country on the issue of climate change, and now that they are back in office they think that the leadership we should be offering is to try to drag the country back to a period prior to when they were in office last time.

This is legislation that, at its heart, seeks to undo one of our country's most historic and important reforms—that is, the preparing of this country to meet the challenges of the 21st century around issues of climate change. The government maintains a view that if it does anything here the sky will fall in. The fact is simple: Australia is in its 22nd straight year of economic growth; this is the time when you ought to deal with the issues of climate change, particularly if you want to see that growth continue. But what we have in fact seen is a government that wants to put its head in the sand and pretend that climate change is not real; it is not happening. That is the message it wants to send to Australian industry.

My experience dealing with business, dealing with industry at all levels, is that that is in fact not the view of most people who actually make things in this country, who actually do ensure that they have the enterprise necessary to secure the future. They know that they cannot turn their backs on the rest of the world; they know they cannot afford to be left behind. Business understands that in manufacturing there needs to be a constant process of improvement, a constant process of innovation, a constant process of achieving ever-increasing productivity. And that process is one that commenced centuries ago with the industrial revolution because it is a fundamental premise on the basis of which modern societies work—that is, the constant need to improve.

What this government fails to grasp is the unbreakable link between action on climate change and the need to modernise manufacturing—modernisation in terms of reducing the cost of energy, modernisation in terms of driving technological change that allows for us to be able to produce goods and services more effectively and with less impact on the environment, modernisation in terms of developing renewable energy sources.

We see with the automotive industry that there is a view in some quarters that this is old-fashioned stuff, that it is something we can dispense with. There is no recognition that this is actually cutting-edge industry in this country. The Australian automotive industry is amongst world leaders in terms of the capacities in material science, in light-weighting, in the development of gaseous fuels, in its capacity to expand our abilities in robotics and electronics more generally, in plastics and chemicals—in fact, an industry that spends some $700 million a year on R&D.

Manufacturing in its most advanced forms, the most elaborately transformed manufacturing, is fundamental to our science and technological base—our capacity to actually transform this society. But this is not an approach you will hear from this government, because they do not understand the importance of modernisation to harness the outstanding capabilities of our scientists and engineers, our abilities to find the new materials, the new and better processes, the new and better products, the new and better services and the new export opportunities.

The reality is simple: governments do need to be part of the solution to problems, not just to be part of the problem. That is what we know with this government: they do not want to be in the business of solving problems. What we need is to ensure that the policy settings are able to assist industry to adapt, to develop the new technologies, the new work processes, the new goods and services. It cannot be left to the individual firms. It cannot be left to the market alone. It requires the full resources of the innovation system: the capacity to harness our researchers, our universities, our scientists, our entrepreneurs, our workers to be able to find the better ways of doing things.

That is what real industry policy has to be about: to ensure that we are able to adjust to modernise and innovate. And that is what our climate change policies were aimed at: trying to find ways to actually be part of the solution rather than just being part of the problem. But what do we see from the other side? Overblown, distorted political rhetoric to suggest that the market really is a device that, by itself, can solve the problems of modern industry. That is failed policy, a policy that has historically not been appropriate—and it is not the policy that business itself has supported.

Take the Australian Industry Group—not known as a hotbed of militant socialism. What they say is:

Market mechanisms will generally be most efficient in locating and driving least cost abatement.

But they also say:

… bureaucratic or political decision making are usually poor substitutes for the judgments of market actors responding to price in light of their own circumstances.

But that is what we are being given in the government's attitude in terms of their policies on direct action. Climate change policy requires us to be able to find mechanisms that actually work, and that is why we argue that putting a price on carbon is the best mechanism to achieve that.

We also say that there has to be government support to assist industries to transform their behaviours. We know of the short- and medium-term impacts of carbon pricing on the emissions-intensive trade-exposed industries. We also know that there has to be appropriate transition arrangements to support companies that are prepared to invest in themselves, prepared to invest in the research and development that is needed. But, what does this government do? It takes away industry support such as the Clean Technology Program, which has seen hundreds of businesses enjoy the benefits of investment that comes from new technologies. We have seen that co-investment with manufacturers brings down emissions and impact on the environment and allows them to modernise their operations. The Australian Industry Group said:

This program has made a significant contribution to maintaining many businesses’ competitiveness at a time of sharply rising energy prices, including the impacts of carbon pricing.

In the past the Parliamentary Secretary to the Minister for Industry has been quite a fan of the program. He thought it was, in fact, sufficiently worthwhile to go to a winery in the Hunter Valley this month and congratulate the company on the large solar field array it had constructed through this program. He even put out a media release so that other companies could follow the example. Of course, the project was 50 per cent funded by the Clean Technology Program. So, I congratulate the parliamentary secretary for the discovery, but I do not suppose he has ever brought to the attention of the public that the government's plan is to actually get rid of this program.

The program is an exemplar of Labor's approach. We listened to the scientists and we listened to the best experts available. We were in the business of modernising the Australian economy and allowing Australian businesses to modernise their operations. That is the most effective way we can assist to solve the problem rather than be part of the problem as this government is.

Mike Sandiford from the University of Melbourne wrote that the recent bout of electricity emissions was an example. He said:

In fact, in the one key sector that counts—the electrical power sector—emissions are declining rapidly. It's the sector that counts because it is most directly affected by the carbon tax—

as he calls it. Mr Sandiford went on to report:

… emissions have fallen 14% over the past two spring seasons since the carbon tax was implemented. In total spring emissions are down almost 20% since the peak in the spring of 2008, just five years ago.

He also said:

At face value, the figures point to an increase in the rate of emissions reductions since mid 2012, coincident with the start of the carbon tax. On the back of a persistent decline in emissions, our electrical power sector emissions are falling at unprecedented rates.

This is the basis of results that we can start to see, which you would have thought this government would have taken some notice of. What we have is, in fact, an ideological hatred that blinds this government from the facts. It persists in trying to cripple industry in its capacity to compete and to modernise. And, of course, it says that the carbon price is part of that scapegoat.

In November 2008 the average value of the Australian dollar was around 65c, by November 2009 it was up to 91c, in February 2011 it was around one dollar and it remains around about 89c or 90c, which I saw on the TV last night. This is an extraordinary sustained period of a very high dollar, and it has played havoc with the manufacturing sector. It is not just the fact that the dollar is so high but the fact that it is so volatile. It has increased some sectors by as much as 30 per cent. Our exporters and producers have been hit very hard, and they are struggling and often unable to compete with the cheaper imports. But, of course, what this government's approach is doing is not to deal with the problem but to stand in the way of a solution by not wanting to work with industry to secure the future.

The Productivity Commission is very big on making the point that particular sectors of the economy, in its view, get far too much support from government. For instance, some ridiculous figures are often cited in regard to what the Productivity Commission regards as the cash transfers in the automotive industry. It claims the figure is $1.1 billion; it includes tariff support in that. But the actual value of the sector is around $21 billion, as I was reminded by an article in The Conversation this morning which draws our attention to these figures. What the government also fails to acknowledge is that there are many sectors that have secure government support. I quote from the article in The Conversation this morning, which refers to the ATO's recent annual report about the value of tax foregone in various industries:

The 2013 report showed the superannuation industry received A$33 billion worth of tax concessions. This tax foregone was made up of the contributions on superannuation which … only taxed at 15%, and concessional tax on capital gains paid by super funds, which is also taxed at 15% … Then there is the $1.5 billion private health insurance rebate; or the $4 billion mining diesel fuel rebate. These are not classified by the Productivity Commission as industry assistance—

which, by any normal measure, you would have to say would be difficult to explain. The simple point I am making here is that governments need to provide support to industry. They make choices all the time. There is no talk in this government about removing any of those other concessions but, when it comes to providing support for industry to be able to modernise, this government says that is corporate welfare.

Of course, what the government is in the business of doing in that process is actually standing in the way of innovation. This government is not in the business of assisting innovation. It is not in the business of providing support for science, research and innovation. It has no jobs plan. While it is telling business to compete and modernise on its own, we know that governments around the world provide support to their industries to make the necessary changes to secure prosperity for the future. What we have is a government that says that some industries are more worthy than others. The government will support some industries, but it will not support manufacturing, it will not support industry being able to transform itself and it is even failing to understand how significant the consequences of its own policies are.

What we are seeing today is yet another example of a backward-looking government that wants to betray working people, because it is only through the capacity to secure new investments and new jobs through new technologies that we can ensure that prosperity is spread throughout this country. The alternative is pretty straightforward. There will be winners and losers from this government, but most people will not enjoy the benefits of modernisation. There will be some people who will be forced into less skilled, less secure part-time or casual work, and there will be those who will have no work at all. This is the price that the country will pay for a government that essentially wants to live in the past.


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