Penny Wong (SA, Australian Labor Party, Shadow Minister for Corporate Governance and Responsibility) Share this | Link to this | Hansard source

I move:

That the Senate take note of the answers given by the Minister for Finance and Administration (Senator Minchin) to questions without notice asked Senators Wong and Sterle today relating to climate change.

Today we saw quite extensive reporting in the media, including on the front page of a number of Australian papers, of the Energy Supply Association of Australia, the ESAA—which represents electricity and gas businesses, which contribute more than $14 billion to the Australian economy—calling on the Howard government to back a national emissions trading scheme. So the energy suppliers themselves are calling on the Howard government to back an emissions trading scheme. We asked Senator Minchin about this and a couple of other matters today. We asked him about the fact that even industry is calling for the government to set clear policy settings to drive more sustainable outcomes and to drive a reduction in greenhouse gas emissions. Let’s just get this in context: not only have we had in recent times a range of major businesses calling for the government to take leadership on this issue—and I include, for example, the Insurance Australia Group, BP, Origin Energy, Visy and Westpac—but also we now have the industry which produces energy, the Energy Supply Association, which represents electricity and gas businesses, saying, ‘We need to look at an emissions trading scheme and we need to do it soon.’

What do we have with this government? We have a government of climate change sceptics, a government that is not prepared to show national leadership on this issue. And how did Senator Minchin deal with that in question time today? He tried to suggest that actually the Energy Supply Association was motivated—I think he said he detected this motivation—by a desire to ensure that other sectors of the economy receive similar scrutiny for their greenhouse gas emissions. It was really a pathetic answer, to try and suggest that their motives in calling for what is a substantial policy initiative were driven only by a concern about other sectors. That may well be an issue but that is no answer given the fact that you have significant parts of Australian business, leading Australian business operators, calling for the government to show leadership on this issue and calling for an emissions trading scheme. And what do we have? Frankly, we have climate change sceptics—climate change troglodytes—on the other side of the chamber refusing to do anything.

People should understand that the Howard government is well behind Australian business on this issue. I want to quote briefly some of the comments of Mr Brad Page, who is the Energy Supply Association of Australia’s chief executive:

“We’ve recognised for some time that climate change is a big issue,” Mr Page said.

“ Investment decisions about base load generation are going to be needed in the next few years if we’re to meet the expected growth in demand out to 2030 … So our position on emissions trading is about recognising that if politicians conclude we’ve got to move to a low emissions economy, we can’t do it overnight.”

So we have business taking a very practical and pragmatic approach to this, recognising that there is likely to be in the future an increased pressure on business for a reduction in emissions. In fact, they are recognising that there already is that internationally, in terms of our competitor economies and also in terms of investors and the community. The only people who have not woken up to the need for this are the members of the Howard government.

Today Senator Minchin went back to the hoary old chestnut. He went back to that old line: ‘We’re not going to do this; we’re not going to go down the national emissions trading scheme route until the rest of the world signs some.’ In other words, despite the calls by business for certainty and clear signals, the Howard government’s position is ‘let’s sit on our hands’. We know that the government is running a couple of different messages here. Perhaps it is because Senator Minchin’s position actually differs from that of some of his colleagues. We know he is a climate change sceptic. I want to remind the chamber that the possibility of the introduction of a domestic emissions trading scheme ahead of any global scheme was in fact raised in an issues paper produced by the task force on emissions trading commissioned by the Prime Minister. While we know there are differences of opinion within the government, the key issue here, and people should clearly understand this, is that leading Australian businesses—many in the financial sector and in the insurance sector, because they understand the risk, and in the energy sector; today it was the Energy Supply Association, which includes gas and electricity generators—are well ahead of the government on this issue. (Time expired)

Ross Lightfoot (WA, Liberal Party) Share this | Link to this | Hansard source

What surprises me about the argument that the opposition mounts over the criticism that it offers of the government for not rapidly ratifying the Kyoto convention is the obvious omission of the considerable unemployment that ratifying the Kyoto convention would have brought upon the workers in this country. I think it is just another case of the Prime Minister taking up what has been the usual role of the Australian Labor Party in past decades and becoming the champion of working-class people.

The government certainly believe that the emission of carbon is a significant contributor to global warming. But, as the Prime Minister has said, we are not so much sceptics as realists. The reality of it, if you have a program that wants to stop the mining of coal in Australia, is that we are the biggest exporters in the world of both thermal and metallurgical coal. They are of the highest possible standards that you would find anywhere on earth. They contribute enormously to the coffers of Australia that not only allow for what we believe is full employment but also allow for an extraordinarily high standard of living.

The coal does not come from Western Australia, as do a lot of our exports goods that contribute to this unbelievable standard of living that we in Australia sometimes take for granted. In fact, the coal comes from the more populous states of New South Wales and Queensland. Victoria has brown coal, which is seen as the bogeyman of all electricity generation. Victoria, under a Labor government—as all the states and territories are—is the major contributor of CO and other nasty gases in Australia.

The government believes that, if you are going to replace something as fundamentally important as coal to the Australian economy, you must have a plan in place. The coalition government’s plan is that uranium could play a major role. I have visited several power plants throughout the world. I do not mean that I have just gone up to the gate and had a look; I have been into the reactors themselves, in countries such as the United Kingdom, Taiwan, Argentina and the United States. I have been into the power station at Calvert Cliffs, for instance, in the United States. Calvert Cliffs has two 1,000-megawatt uranium derived power stations. The production at Calvert Cliffs is on the edge of Chesapeake Bay, which is arguably one of the most environmentally sensitive areas of the United States. It produces electricity at about 3½c per kilowatt hour in United States currency. It is near Washington, District of Columbia—not the state—and Maryland and other populous states of America, but people see nothing wrong with that. The farmlands go right up to the concrete wall of the outer perimeter of the power station. If you are going to deny the production of uranium, which is cleaner, greener, safer and economically more viable than any other form of power generation, as well as ask not to have CO emissions from coal-fired power stations, you are leading Australia down a disastrous economic path.

I do not know what is wrong with the opposition sometimes, but I lose faith in ever having a real alternative, viable government, not that I ever want one but it would be nice to know that in the case of some of the sorts of political catastrophes that are going on at the moment—with the state government in the west and with the state government in New South Wales and with the state government of Queensland, and no doubt the others will pick this up—there is a viable government to replace these people at least at a federal level. But there is not. You cannot possibly have a government that caves in to the green movement; we all know that they are left-wing existentialists. You cannot have that without alternative, viable people at the helm of this nation. We are the ones that will do it. (Time expired)

Claire Moore (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

In response to a question today, the minister, Senator Minchin, said that his government was not going to ‘rush down a path’ in response to climate change. No, Minister, there is no way that anyone in this country could ever claim that the government was going to rush down any path in response to the incredibly important issue of climate change. In terms of process, what people in the community have been saying is: ‘What is the government doing?’

When we ask straightforward questions about what is actually happening in the government’s planning, we are given a list of publications that go back several years—and, indeed, there have been publications on various issues to do with climate change and our future. We are told, consistently, that the government did set up the first Greenhouse Office over 10 years ago, and we acknowledge that. There has never been, from this side of the chamber, any rejection of those statements from the government. However, we—and not just us but also the community—are demanding and expecting more.

We heard from Senator Wong, in one of her questions today, about the processes being put forward by businesses across Australia. These are not the people that the government usually dismisses lightly and labels. We heard in the recent contribution from Senator Lightfoot the tired old arguments, the labelling of people who have genuine concerns about the environment and have been pursuing these issues for many years. Once again, it is really easy to just whack a label on them and dismiss them, to call them ‘lefties’ and say they are people who have not got a realistic approach to the world.

Given that that is the background to the government’s arguments, it must be a little confronting for a government that has dismissed the arguments about the need for immediate and strong action on climate change to be confronted by such an amazing group of leftie radicals as the Business Council of Australia and the large businesses at the Global Roundtable on Climate Change, including General Electric, Ford, Toyota, Goldman Sachs and Wal-Mart! They are significant organisations and they are saying that there is an expectation of and a need for action.

We had, towards the end of last year, a gathering of faith groups—people who usually gather to talk about their natural concerns about their own lives and the future of our community. One of the priorities for this gathering of faith groups was to say that there needed to be an identification and acknowledgement of, and a unified plan to look at, the impact of climate change in our community. That is not too demanding. That is not asking for too much. And it certainly is not asking for someone to rush down a path. However, when there are other groups that come forward—as we have heard today from Senator Wong—to talk about environmental demands, what happens is that the government tries to attribute motivation. They look at the statements that are being made and, instead of looking at what the demands are—which are that there needs to be action taken—they attribute motivation. Well, I think, Minister, the motivation is concern and a need for a future.

During the recent Senate estimates processes, considerable numbers of questions were asked of various departments about what processes had been undertaken specifically on economic modelling of the impacts of climate change. I think there has been much more awareness, both at home and internationally, since the release of that significant report in the UK. But, nonetheless, we asked quite specific questions of the government and their public sector workers about what economic modelling had been done. I would have thought that there would have been a simple answer, ‘Yes, this has been done,’ or ‘No, it hasn’t.’ But after sustained questioning, it became clear that there has not been any formal economic modelling by this government about the impact of climate change. There has been the production of documents; there have been reviews; there have been reports. Senator Minchin mentioned a number of those in his response to questions without notice today.

But the specific question is: what has this government done, through its economic facilities—through the Treasury, through the department of finance—on the economic costs and impact of climate change? That, to me, is something that all Australians need to know. It is something that cannot be dismissed lightly. People cannot be labelled just for wanting to know what economic position has been taken. Instead of hearing that all-too-easy abuse and rejection of people who have alternative views, we want to know what is happening. Creating structures is not taking action. Writing papers is not taking action. And if we are all going to be sitting here waiting for the report on 31 May— (Time expired)

Grant Chapman (SA, Liberal Party) Share this | Link to this | Hansard source

The Labor Party in this debate are referring to Senator Minchin’s answers to questions without notice today on climate change. We just heard a comment to the effect that Senator Minchin had responded to one of the questions by saying ‘we are not going to rush down a path’ with regard to climate change and emissions trading. That is a very correct response from the minister because this is an issue that requires very careful consideration and a considered policy response. After all, in recent times, with regard to emissions trading, we have seen the value of carbon credits in Europe fall by some 75 per cent, with, obviously, financial and economic consequences attaching to that—the danger of financial uncertainty. So, if we are going to introduce a dramatically different system, a new system, to deal with this issue, we need to be able to ensure that it is going to be a stable system, that it is a practical system that will work and that it will be sustainable in the long term. So it does need very careful consideration.

In that context, the government has provided billions of dollars of funding in recent times for its Low Emissions Technology Demonstration Fund. Those funds have been made available to a number of organisations to enable them to conduct research and development with regard to emissions trading. There are the coal sequestration projects—several of those are receiving funding. Solar Systems has received funding to establish a major solar energy project in Victoria. So the government is taking very positive initiatives in this regard.

The comment reported today by the Energy Supply Association of Australia with regard to an emissions trading scheme is one more contribution to the debate. The statement of the ESAA highlighted the complexities involved in designing and implementing an emissions trading system—again, an issue that demonstrates the need for very careful consideration before we move forward on this. Last week we had the report from the National Generators Forum which highlighted the hypocrisy of the Labor Party on this issue. It highlighted the fact that, under the Rudd-Garrett plan for deep emissions cuts, the future use of nuclear power would be inevitable. Without nuclear energy and nuclear generated electricity there will be massive and unsustainable increases in energy prices for all Australians. Australians are very sensitive to increases in energy prices. Even though they are, as is the government, concerned about the future of our environment, they have a strong and legitimate concern about the future cost of their energy. Unless we are prepared to adopt the nuclear option as part of emissions cuts, then those energy prices will increase unsustainably. The National Generators Forum report showed that there will be billions and billions of dollars in costs in requiring the full range of low emissions technologies to be applied. As I have already mentioned, nuclear energy will be an important part of minimising or avoiding those costs.

Even with nuclear power and clean coal technology, under Labor’s scheme electricity prices are projected to double. I am sure the community would be very sensitive to that projected increase in energy prices, including the price of household electricity and the electricity used by industry and business. It would be an unsustainable increase in energy costs certainly in the short term, and even in the long term it would severely damage the competitiveness of Australian industry. We already know in our current circumstances that energy prices are going to rise, but the result of Labor’s policy, especially with their ratification of Kyoto and their refusal to consider the nuclear option, will be energy price increases, a detrimental impact on industry and, importantly, a detrimental impact on jobs. Australian people and Australian workers in particular are rightly concerned about their future employment prospects. They do not want jobs destroyed as a result of government policy.

We have no explanation from the Labor Party as to how they are going to achieve their promised 60 per cent cut in greenhouse emissions. They pretend they can wipe the slate clean and achieve these emissions without any pain but, as I have already said, it will in fact involve significant increases in energy prices, significant loss of industry competitiveness in this country and significant cuts in employment opportunities. We need some policy hard work to be done by Labor on this, which they have not done. (Time expired)

Helen Polley (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

I rise to take note of answers given by the Minister for Finance and Administration and Leader of the Government in the Senate, Senator Minchin, on the issue of emissions trading in Australia. The answers given by the senator indicate just how out of touch this government is. I think the contribution that has been made by two of the senators from the other side makes that very clear to us on this side.

Another year and nothing has changed with this government. The Prime Minister and his key ministers remain sceptical about climate change and in the process are neglecting to take action. By the time they wake up and see the damage that has already been done it may well be too late. While the Howard government have in the past repeatedly ignored the warnings of scientists on climate change, they are now ignoring international business warnings on the effect climate change will have on our economy. The Global Roundtable on Climate Change has called on all governments to accept the science that climate change is real and set strong targets for greenhouse pollution reductions. This recommendation includes encouraging energy efficiency and carbon trading.

The global roundtable of business is not small fish in the business world. It includes companies like General Electric, Ford, Toyota and Wal-Mart. These companies, which are household names, have joined the growing list of those concerned that the cost of inaction on climate change will far outweigh the price of acting now. Australian businesses are already worse off as a result of the Howard government’s continued failure on climate change. Australia’s economy is on the line here. Australian jobs will be lost if action is not taken now.

Yet it still seems that the Howard government is oblivious to the effects of climate change. Despite delivering 11 federal budgets, the Treasurer has never mentioned climate change. That is 11 years in a row without a single mention of what could be the greatest challenge ever to face mankind—although, after comments Mr Costello recently made in the Age newspaper, it now appears that he is leading the Howard government in displaying at least some level of commonsense. He has said that he is now prepared to accept that the science is correct. He concedes that human activity is responsible for carbon emissions that are a direct factor in the changing environment. Even with this revelation, it appears that the difference of opinion within the government continues, with the Minister for Finance and Administration telling the media that he is still sceptical about climate change and opposed to emissions trading. For a minister in a key portfolio such as finance to openly display his cynicism is sure to have an effect on whether the Howard government makes any attempt to meet its responsibility to look at a carbon price.

While the Howard government continue their squabbling over climate change, debating no doubt whether the scientific proof fits with their agendas for Australia, business is suffering. Australian jobs are already being forced offshore—my home state knows that only too well with the recent closure of Blundstones—because businesses are functioning without access to the multibillion dollar carbon trading market, without access to new markets through the clean development mechanism and without the prospect of planning for a shift to a low carbon economy.

The Prime Minister has paraded his usual rhetoric on climate change and carbon trading. He says his government will not be panicked into making a decision that impacts on the economy. I do not think that taking action after 11 long years is showing any sign of panic. While the Prime Minister takes his time, the economy is already hurting and the Howard government will find that it is a long way behind public opinion and business on the issue of climate change. Australians know that climate change is an issue that must be tackled now, and a major step towards that is establishing an emissions trading scheme. With the current government unwilling to take the action so urgently required on climate change to ensure Australia’s future prosperity, Australians will also realise that the only way they will see the kind of action that is needed to tackle this issue is with a change of government to a Rudd-led Labor government.

But it is not only on the issue of carbon trading that the Howard government is failing Australians and the environment. In other corners of the globe governments are embracing the prospect of wind power, and in 2006 the industry experienced yet another record year, with expansion at 32 per cent. In Australia it is a different story, with $13 billion of stalled projects across the country. The Howard government’s refusal to commit to a carbon trading scheme is leaving our electricity producers unwilling to commit to clean coal technology or able to provide extra capacity for our major residential corridors along Australia’s coastline.

Question agreed to.