Tuesday, 15 July 2014
Clean Energy Legislation (Carbon Tax Repeal) Bill 2014, True-up Shortfall Levy (General) (Carbon Tax Repeal) Bill 2014, True-up Shortfall Levy (Excise) (Carbon Tax Repeal) Bill 2014, Customs Tariff Amendment (Carbon Tax Repeal) Bill 2014, Excise Tariff Amendment (Carbon Tax Repeal) Bill 2014, Ozone Protection and Synthetic Greenhouse Gas (Import Levy) Amendment (Carbon Tax Repeal) Bill 2014, Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Amendment (Carbon Tax Repeal) Bill 2014, Ozone Protection and Synthetic Greenhouse Gas (Import Levy) (Transitional Provisions) Bill 2014; Second Reading
It is times like this that I really have to reflect on what I have learned in my two years in politics and in the Senate and how students of political history or even students of politics are going to look back on this period in history. A few months ago I asked the head of the Antarctic Division about reports that week that there had been an irreversible collapse in the Antarctic ice sheet. And may I give a plug for some of the best scientists in the world, who are based in Hobart and work at the Antarctic Division, CSIRO and IMAS? They said, 'Yes. This has been a long-standing internationally cooperative study, and it is very disturbing.'
I weigh that up on one hand—that we have this developing evidence from our scientists that the world is rapidly changing, and more than we anticipated. And, on the other hand, I am standing here tonight, about to farewell the clean energy package—work that the Greens, and Labor, but especially Senator Milne and, previous to that, Senator Bob Brown, and a number of other people in my party have put their heart and soul into, literally for decades, to try and get action on climate change. And I have to ask myself: how did it come to this?
The more I have been thinking about this in recent weeks, the more it has really become obvious to me, and self-evident, that politics is about winning. Politics is about winning—not necessarily about the citizens or the voters in this country winning, and not necessarily about good policy winning, but about political parties winning, and people within political parties winning. That is what this is about.
I think about the Antarctic ice sheet and I think, 'How can we do things differently?' I think the editorial in The Canberra Times this week described Prime Minister Tony Abbott's style of politics as 'total politics'—you know, the 'do whatever it takes, say whatever it takes,' style of politics. That was seen especially in his three-year negative election campaign, on a policy that was only just coming into play and only just being implemented, and that he never gave a chance to succeed. Is it just this determination to win and to grab power and to put your political party before good policy and before the good of the people, or is it more than that? I actually do think that this fierce determination to win at all costs—say whatever it takes; lie; deceive—is a big part of it. But I also cannot help thinking that, when you have big backers—when you have people pulling your chain: big think tanks, with their ideologies, and special interests, vested interests, that are influencing your party and donating to your party—that has also had a really big role to play in why we are standing here tonight, seeing a very sensible policy, to tax carbon pollution which leads to global warming, which is the biggest market failure of our time, being thrown down the drain because of short-term politics and short-term self-interest.
As an economist and someone who has taught environmental finance, I am going to have to go back and have a good look at my textbooks, because this idea of government having a role to play in correcting for a market failure is an idea that goes back to some great thinkers from the last century, such as Arthur Pigou. Interestingly, I enjoyed Senator Leyonhjelm's first speech to the Senate the other night, where he plucked out—I must say, highly selectively—some interesting academics and great thinkers to support his philosophy and why he is here in the Senate. One thing he talked about was where individual freedom intersects with impacting on other people and the necessity for laws. That is exactly what we are dealing with here, with pollution. When a company's activity or an individual's activity impacts on someone else, it is exactly the same as looking at individual freedoms in our legal system. This theory that government has a role to play in correcting these types of behaviours is exactly the role that government has to play in fining people who offend or providing imprisonment or other services.
When a company dumps something in a river and it kills everything in the river and the fishing industry dies, a government has to step in and fine that company and provide incentives to make sure it does not happen again. In the same way, if I have a factory that is polluting the atmosphere and creating acid rain and that ruins the livelihood of farmers in my area, that externality—that external impact of my activity—once again has to be dealt with by government. Who else will do it if government will not? This is well-established economic theory. It is exactly the basis for what a price on carbon is. It is supposed to cover the externality gap that is caused by carbon pollution.
To get back to the very basics of what we are dealing with here, we are dealing with a comprehensive package. It is ambitious, showing global leadership on taking action on climate change—which my party deeply believes is necessary. I know lots of young Australians believe it is deeply necessary. From an economic perspective, it is the most efficient way of dealing with this issue of global warming.
The carbon package was not just a price on pollution. On its own, a price on pollution may not necessarily do the job. But this package was very cleverly structured to collect the revenue and collect the data and information that is necessary for a flexible pricing scheme further down the track. It was also necessary to collect that revenue and direct that revenue towards behavioural change in the economy, towards providing a green bank that is going to invest in renewable energy projects, through, for example, ARENA or the Clean Energy Finance Corporation, or provide money for a climate change authority or for a whole range of other initiatives that were absolutely complementary and necessary to transition the economy here in Australia—and, hopefully, overseas—to a clean energy economy and along the way create hundreds and thousands of new jobs and incentivise innovation, research and development and new technology and new jobs in the industries of the future—all the sorts of catchphrases that you hear in this chamber. Yet it is being thrown out. It is being thrown out because of this government's total politics, its determination to win at all costs, regardless of whether this is a good policy—good for the Australian economy and good for the future of our grandkids.
And may I say, as to the emissions reduction targets that have been talked about in the media recently: five per cent below 1990 levels by 2020 is not enough. There is no point in reducing emissions unless those emissions have been reduced enough to actually tackle the problem that has led to things such as the collapse of the West Antarctic ice sheet. That is our moral obligation not just as senators but for every citizen.
It does not help when you have vested interests, special interests, pushing their agendas. Senator Waters talked about $18 billion that would be collected on forward estimates. That $18 billion would fill a pretty big hole in anyone's estimates in tackling a budget that needs to be reduced and brought towards surplus; just like fixing the mining tax would also help plug holes; tackling tax minimisation and avoidance overseas; tackling fossil fuel subsidies for the mining industry. There are so many different ways we can raise revenue sensibly to reduce debt in this country. But instead we have a range of budget measures that have been introduced to take money off those who can least afford to pay it—off the most vulnerable.
Once again I have to ask myself in the dead of night: why do we do these things? What is driving this? I have no doubt about the special interest theory. I have no doubt about the influence that lobbyists have. And it is not just in the mining industry—it was very obvious when we saw the previous Prime Minister Kevin Rudd being deposed around the whole debate on the mining tax and of course the aggressive advertising of the mining industry to prevent that tax from going ahead. I have also seen it with container deposit schemes in this country. I have seen the lengths to which Coca-Cola and the beverage industry will go to prevent a recycling refund scheme that works everywhere it has been implemented, because they see it as an impost on their profits regardless of the public good. We are seeing it with the big polluters in this country.
So, instead of doing what economic theory tells us and taxing big polluters, we are actually going to take a couple of billion dollars' worth of taxpayer funds to start with and pay the big polluters. That is correct. We are going to pay the big polluters under this government's Direct Action Plan. So it is $18 billion down the drain and then the taxpayer has to cough up money to the big polluters. It is not as if they do not get given enough already.
I would like to read you a couple of lines from 'The economists' open letter', which was published last week in media right around the country. The letter supports a price and limit on carbon pollution and is from a number of very well respected economists right across this country:
We are writing this open letter as a group of concerned economists with a broad range of personal political views, but united in the judgment that a well-designed mechanism that puts a price and limit on carbon pollution is the most economically efficient way to reduce carbon emissions that cause global warming.
Such a mechanism is a necessary and desirable structural reform of the Australian economy, designed to change relative prices in a way that provides an effective incentive to consumers and producers to shift over time to more low-carbon, energy-efficient patterns of consumption and production.
Then it goes on to talk about how a well-designed price and limit on carbon pollution has benefits to other schemes. This is from leading academics in this country. Why aren't we listening? I will tell you why we are not listening. It is because it does not suit the political mantra of this government, which is: 'Axe the tax, the toxic tax'. It does not suit the vested interests that pull their chains.
I noticed that Mr Murdoch—who, none of us could deny, is a very influential man in this country—said on the weekend that he pretty much thinks climate change is a waste of time and we should all be very sceptical of whether climate change is real. That is coming from a guy who controls nearly half the media in this country and has significant international influence on what everyday Australians read every day. Is it any wonder we are facing the troubles that we are in trying to take effective real action on climate change?
I would like to talk a little bit about Tasmania. The Greens often get criticised as not being 'economically friendly' or 'not delivering on jobs' in my home state. I have talked about this till I am blue in the face: the price on carbon has been a very positive thing for Tasmania. I have an email here directly from Hydro Tasmania that gives me all the information. They said that 'in the financial year 2012-13, the first year of the carbon price, profit before fair value adjustments was $237.7 million.' Hydro Tasmania said that this result was 'the largest in our history and more than double the previous record set last year'. It led to total returns to government of $263 million and a dividend of $115.7 million. To put that in perspective, that is nearly 13 per cent of the Tasmanian government's non-Canberra revenues. That pays for schools for hospitals for policing, for homelessness and issues that we have in every state. Tasmania is under the pump. I notice that Senator Leyonhjelm and others are happy to try and take GST off Tasmania, yet they are going to support the repeal of a price on carbon when Tasmania is one of the biggest economic beneficiaries of a price on carbon.
Hydro Tasmania goes on to say:
Over the next two years Hydro Tasmania expects to return more than $450 million to the State. However, the outlook after that is challenging as a result of a range of factors, including a subdued wholesale market for electricity driven, in part, by reducing overall customer demand and uncertainty around future carbon pricing in Australia.
While the businesses provided strong returns to government over recent years and is again on track to make a record underlying profit this year, the financial outlook for the next few years is challenging for Hydro Tasmania. They say that they expect profits will fall below $20 million in 2015—that is, less than one-tenth of levels under a price on carbon and the clean energy package. That is something the Greens with Labor have delivered to Tasmania.
Hydro said in the media last week that 100 jobs are going to be lost when the price on carbon goes. That is 100 jobs in Tasmania. That is a very significant loss to my state; not to mention the funding cuts we are seeing to CSIRO and the Antarctic Division around climate science and the uncertainty that is creating. This is in a community—especially in Hobart in the south of the state—that is absolutely critical to Tasmania. And it is not just critical because it employs a lot of people. It is strategically critical because it is something that my state very proudly has a competitive advantage in. We are world leaders in climate science based out of Hobart.
It really concerns me that on one hand we have a government that is unwinding action on climate change, which is what we are debating here tonight, and on the other hand it has the world's best scientists leading research on climate change. At what point does the science on my left hand start embarrassing the government on my right hand? They do not want to hear about the collapse of the Antarctic ice sheet or ocean acidification or extreme weather events and the damage it is doing.
Let's talk a little bit about extreme weather events. Every scientist who understands global warming has talked about the expected increase in frequency of these types of events. Just today we saw a settlement payout to victims of the Victorian bushfires of nearly half a billion dollars. In the future those types of events and the risks that they pose will need to be managed by governments and communities. Climate change is going to cost our economy. There is the death and destruction it is going to do to communities and the damage it is going to do to ecosystems. Some things you cannot value in monetary terms, but it is absolutely important to our spirit and who we are. The loss of species and biodiversity is irreplaceable. How are we going to manage that if we do not take effective action now?
When I used to teach students, I said to them, 'You don't have to believe in climate change to take action. You don't need proof to be prudent.' That is what the insurance industry has run on for hundreds of years. You do not have to have proof; you just need to take sensible risk management action. Being weak on action on climate change and putting the questionable increase in electricity bills ahead of action on climate change is not only dangerous but very sad. That is all I have heard in this chamber.
Senator Macdonald and others come in here day in and day out saying all the slogans and all the nonsense. I hope that when he retires he goes away and is proud to tell his grandkids that he worked in the Senate to try and lower people's electricity bills. I hope he goes away and is proud of that achievement. All I can say to people like Senator Macdonald and others is: we may not win this battle tonight, but we will be on the right side of the chamber when the division bell rings and we will be on the right side of history. People like Senator Milne and Senator Brown, who have taken this action, are going to be remembered when they are gone, but people like Senator Macdonald will not be. We are the only ones who have the courage to stand up and implement this, and also take all the rubbish day in and day out that goes with it, and still stand here with dignity and say that we are going to have another go because we are not going to let big polluters and special interests, which have so much vested interest in protecting their profits, win over action on climate change, especially when the rest of the world is starting to catch up. We have shown global leadership in this area, and that in itself has to be worth something. One day this country will be remembered for it. But, the way we are going now, we are an international embarrassment on so many levels, whether it is whaling, the environment, refugees and what we are doing to some of the most vulnerable people in the world, or action on climate change. We are currently an international embarrassment.
We have three years, maybe less if we go to a double dissolution—and I certainly hope we do—to throw this government out, take some action on climate change when it is needed and stand up for our grandchildren's future.