David Johnston (WA, Liberal Party, Shadow Minister for Resources and Energy) Share this | Link to this | Hansard source

I move:

That the Senate take note of the answer given by the Minister for Climate Change and Water (Senator Wong) to a question without notice asked by Senator Chapman today relating to electricity prices and the renewable energy target.

In my motion, I could have used the term ‘responses’ because for two weeks now, in these sittings, we have not had one single answer from the government on any question—not one answer. It is patently obvious that they are not across their briefs, are not able to digest the most fundamental of facts associated with their portfolios and come in here with preset speeches to ramble away on the side to look like they are saying something when in fact they cannot answer even one question in two weeks.

That would not be so bad save for the fact that the emissions-trading scheme is bigger and more significant to our economy than the GST. It is going to do absolutely horrendous things to the costs incurred by electricity generators, particularly gas and coal generators. Can I draw the minister’s attention to an article in the Australian today, written by Matthew Warren. He starts his article by saying:

LABOR’S plan to dramatically increase the mandatory levels of renewable energy will cost the economy $1.5 billion and drive up power bills by 6 per cent.

That is just the renewable energy quotient: 20 per cent by 2020. What is going to happen if the minister happens to agree with Mr Garnaut—whom she has said is the touchstone of the Labor Party’s policy on an emissions-trading scheme—and Mr Garnaut says there is to be no compensation for gas or coal electricity generators, particularly on the eastern seaboard? What is going to happen to electricity prices? I can tell you, Mr Deputy President: they will go through the roof. The minister and her party have spent 11 years in opposition. They ran around during the campaign talking about renewable energy targets and all of that, but when they get into power they have absolutely nothing to back it up with. What that means is that mum and dad are going to have to foot the bill for this.

What we are saying is that the government needs to be very, very careful. An emissions-trading scheme is a very, very good thing for this country, but it must be implemented with tremendous care. The minister has given us absolutely no confidence that she understands the commercial risks in this policy. Can I quote the words of John Boshier, the Executive Director of the National Generators Forum. He talks on behalf of 21 major generators, and I want to quote what he has had to say in the Financial Review today:

Coal generators will be faced with the situation where they not only cannot recoup their high carbon costs but also find themselves generating far less electricity in a carbon-constrained nation. This will slash their asset values and render some unviable, leading to premature closure of plant ...

He went on to say:

If we accept what Professor Garnaut is advocating – no adjustment assistance – existing generators will have their asset values significantly reduced. These are the same owners and investors who will be central to introducing the new technologies that will underpin Australia’s transition to a low-carbon economy.

He then went on to say:

If electricity is not there when homes and industry need it, then the costs to the nation are immediate and immense.

These are the things that the minister should be acknowledging and saying that their policy will focus on seeking to avoid—that is, that they will go for the soft landing in implementing this policy and will be absolutely careful and conscious of not damaging the economy, by looking after those big gas and coal fired power stations, so that when the goalposts are moved they are in a position to play ball with the government’s policy and we go forward in a positive way. But the minister does nothing about this. She says nothing about fuel prices. She says nothing about grocery prices. She is going to impose mandatory targets on transport companies. Regional Australia is going to pay through the nose for this unless she gives us some confidence that they are at the forefront of her mind when considering this policy. It is absolutely crucial that she come in here and reassure Australia that she is concerned to look after business when she is instituting her emissions-trading scheme.

Ruth Webber (WA, Australian Labor Party) Share this | Link to this | Hansard source

Unlike those opposite, those of us on this side, on the Labor side, have always been very clear with the Australian public. We have always been very clear about the need to address the challenges of climate change, and the establishment of an emissions-trading scheme is part of that. We have never sought to shy away from that debate. We have been very clear with the Australian public. It is our priority; it is their priority. That is one of the many reasons that the Rudd Labor government was elected. As the minister has said repeatedly, the establishment of an emissions-trading scheme is one of the most far-reaching reforms in Australia’s economic history. We acknowledge that; Minister Wong has acknowledged that; the Prime Minister has acknowledged that. We have always said that that is the case. That is why one of the first things that we have done—bearing in mind that the Rudd Labor government has only been in existence since 24 November 2007—and one of the first actions we have taken is to outline our proposals to establish that emissions-trading scheme. In seeking to establish that emissions-trading scheme, the government is extremely mindful of the range of impacts that any emissions-trading scheme will have on all of the community. But it is a priority for our community that this be addressed, that climate change be addressed and that an emissions-trading scheme be established as part of addressing that challenge.

We are, therefore, focusing on designing measures that will assist households, particularly low-income households. That should be a priority, and it is a priority. We are focusing on designing measures that will assist them to adjust to the impact of carbon prices. Everyone in Australia understands that if we fail to act on climate change—which for too long those opposite did—the costs will be much greater than if we start to take responsible action now. Part of that responsible action is consultation with our community and consultation with all of the players. That is why we have a process by which we will unveil any proposed emissions-trading scheme. The central principles of this government’s approach to establishing an emissions-trading scheme are: the scheme will be a ‘cap and trade’ scheme that has maximum practical coverage of greenhouse gas emissions and industry sectors; the scheme caps will be designed to place Australia on a low-emissions path in a way that best manages the economic costs of transition and provides incentives to develop and invest in low-emission technologies; the scheme will address the competitive challenges facing emissions intensive trade exposed industries in Australia; and the scheme will also address the impact on strongly affected industries.

The government will also develop measures to assist households—as I say, particularly the low-income households that those of us on this side are quite rightly concerned about. We will develop measures to assist them in adjusting to any potential impact of carbon prices.

In acknowledging those priorities and in acknowledging the importance of this issue not just to this government, not just to the Australian community but to the world, the Rudd Labor government has announced a timetable for introducing the emissions-trading scheme. We have announced a timetable that allows for consultation and development. There will be an emissions-trading scheme and it will start in 2010. In the lead-up, between now and 2010, the government will release a green paper on emissions-trading design in early July. That will outline various potential approaches to establishing what is a very significant economic reform within the Australian economy. So we will release a green paper—we have already announced that. In December 2008 the government will publicly release exposure draft legislation, because what is most important when you are establishing this significant economic reform is that you need to look at the development of measures that will assist industry to adjust, and that will assist low-income earners, and that there is consultation with the community and the development of certainty. (Time expired)

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

The cost of living is affecting struggling families right around Australia. Let me remind the Senate that throughout the last election campaign we saw the current Prime Minister and the current Treasurer wandering the country, talking endlessly about the cost of living, the cost of petrol, the cost of groceries—deliberately creating the false expectation that they would fall under a Labor government. But since the election we have had an eerie silence on this issue. Can I remind the Prime Minister and the Treasurer that the real problem is that the cost of living is vitally important to all Australian families, but particularly to struggling families.

All we have seen over recent months from the Treasurer, the Prime Minister and other ministers is an attempt to lay the blame for this on the Howard government. We saw this again today with Senator Sherry’s answer to a question, claiming that the previous government had increased expenditure at the average rate of 4½ per cent per year. Let me remind the Senate that the then opposition, the Labor Party, matched that expenditure with their promises every inch of the way. But of course what they ignore is that those increases in expenditure by the previous government, apart from ensuring that Australia’s security was established and was firm, were designed to share the benefits of the buoyant economy which our policies had created with those who were less fortunate and those who were in need.

Senator Sherry’s comments remind me of the statement from St Augustine: ‘Lord, help me to be pure, but not yet.’ They did not want to be pure back in the days of opposition. They wanted to win votes by matching the policies and the initiatives of the then Howard government. But, now they are in government, they want to be pure and they want to condemn those increases in expenditure which, as I said, provided for the needy in our community. They want to use that to try to rewrite history with regard to the outstanding performance of the Howard government in building a strong economy.

But what else did we hear today? From Senator Wong we heard bluff and bluster in response to the question I asked, a very simple question about the impact of Labor’s increased mandatory renewable energy target on electricity prices—a massive increase in that MRET to 20 per cent, compared with what it was under the previous government. That is going to have an enormous impact on electricity prices, and that again will be most detrimental to those who are struggling, who find it difficult to make ends meet. They are going to introduce this mandatory renewable energy target at a much greater level without any inclusion of clean coal or clean gas as part of that target. It will apply only to solar, geothermal and hydroelectricity, and they are not going to offer any incentives to industry to meet that MRET. As I say, a massive increase in electricity prices will be the result of that—again, unaffordable for so many people in our community.

Apart from those initiatives that are going to increase the cost of living, what have they done? Establish one inquiry after another—an inquiry every four days—rather than taking responsibility for policies, making decisions and announcing decisions that will be of benefit to the Australian community. It is because they have no answer that they are establishing these inquiries. They went around the country creating this expectation that they would reduce petrol prices, that they would reduce grocery prices, but they do not have one policy to put in place to bring that about.

Of course, the cost of living affects every single parent, affects every pensioner and affects every self-funded retiree. Every time one of those people visits the shops, every time they fill their shopping bag with the necessities of life, they know that the cost of living is going up and they judge their pension, their allowance or their wage against what they can buy with the money they have. But Labor do not address these concerns. They simply set up another bureaucratic based inquiry that will not solve the problem.

It is also informative to look at statements that Labor made before the election. On 10 June they said their sole purpose was to ensure that Australian families are not paying 1c more to fill up their car than they should. Of course, that depends on what you mean by ‘1c more than they should’. Labor obviously have a different interpretation of that from the opposition. But that leads us on to the issue of groceries, where they created the expectation that they were going to wave a magical wand and reduce the price of groceries. But what have they done in relation to that? They are now going to increase the fuel tax on trucks and increase the cost of truck registration, a major component in the cost of groceries. (Time expired)

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

I can understand why you are laughing, Mr Deputy President. It is just amazing when we come into this place today and hear these same people who had 11½ years to do something about petrol prices and grocery prices. The compassion they are demonstrating and their sudden care for low-income families in our community is quite laughable.

You had 11½ years to tackle these problems and you did nothing. The attitude that you took to the last election and the previous three elections was: spend, spend, spend—whatever it takes as long as we get back into power and have the red leather seats. That is all you were interested in. But, when it came to climate change, I remind you gentlemen on the other side who are still in the chamber that you were the sceptics. You were the ones who went to the last election and told the Australian community, ‘There may be a problem with climate change, not too sure, but let’s see what the polling says and we might actually respond to it.’ It was the Rudd Labor government that took the most decisive action by signing the Kyoto agreement. The Rudd government is out there delivering on the promises that Labor took to the last election. We are not the ones with an 11½-year record of core and non-core promises.

Let’s get a few facts on the table. Regarding the questions that were asked today, to all ministers but including to Minister Wong, if people on the other side actually listened they would have found that the answers given were fairly, clearly and decisively. Let me remind senators, when it comes to climate change, the Rudd Labor government has the record up to now. We are the ones who, in the first 100 or so days that we have been in power, have taken action that shows we understand that it is a huge problem. It is not going to be resolved overnight. When it comes to issues like emissions trading, we are very mindful of its impact on our communities and our households. We will be consulting with the community and with the experts to make sure we come up with a plan that will have long-term benefits for the Australian community and the global community. We do not take our responsibilities lightly. We have been in government for a very short period of time—

Eric Abetz (Tasmania, Liberal Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

But you’re claiming credit for a lot of things!

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

but, if you look at the opposition, they had 11½ years to put some runs on the board and failed to do so. The interjections from those opposite I find quite interesting. The government are committed to ensuring that the benefits and costs of emissions trading are spread fairly across the community. The government will take a careful and deliberate approach to finalising the scheme design, drawing on many sources of advice to achieve the best-quality policy outcomes.

We heard the sudden compassion that senators have espoused in this debate, so let’s go back to the real legacy of the former Howard Liberal-National government. They left us with the worst skill shortage this country has ever experienced. They did nothing about skilling up Australian workers. Their quick-fix solution was to import workers and undermine Australian workers in their workplace.

Eric Abetz (Tasmania, Liberal Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

What did you do with the one million unemployed?

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

My comment to those senators on the other side is very clear.

Gavin Marshall (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

Don’t waste your time on them.

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

I do not believe that we do waste our time when we get up and speak, even though there are interjections opposite. The Rudd Labor government has a plan to address the inflationary problems left by the Howard government, who went to the last election espousing that they were the great economic managers. Quite clearly the Australian people saw them for what they were. Now we are in the process of addressing those inflationary problems, as well as problems such as climate change and petrol prices. We are out there looking after Australian working families. We are also looking after those from low-income backgrounds within our society to ensure that they get a fair go. One thing about the Rudd Labor government that will be recorded in history is that we are there delivering on our promises. We will keep our election promises and ensure that all Australians have a fair go.

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary Assisting the Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

The Labor Party is very rapidly developing a reputation, well earned, for being incapable of answering questions during question time. Today we had this spectacle of Minister Wong, Minister Carr and the leader, Minister Evans, simply unable to address a question. Very simple questions were asked. I do not think Senator Wong has yet answered one question she has been asked. Senator Carr tried, I have to say, but simply could not answer the question: how much will it cost? It is very simple, and he was not capable of answering it. His actions today were the same as they have been since we came into this new parliament: Labor ministers simply incapable of answering the most simple questions.

Senator Polley raises the issue of petrol prices. I will tell you what the Howard government did about petrol prices: we actually stopped the automatic half-yearly indexation of petrol prices that the previous Labor government had implemented.

In all these things you have to look at what Labor do in office, not what they said, when in opposition, they would do in office. During the time of the last Labor government, we saw record interest rates of 17½ per cent on housing loans—I have my bank statement to prove it. You might recall inflation being in double-digit figures. They are accusing us of three per cent inflation and saying how terrible that is. When we came into power inflation was about seven or eight per cent, but it had been 11 per cent under Labor, and now they are again trying to make the public of Australia believe that they will do something about inflation.

Petrol prices under the Howard government dropped because we did the only thing a government can do, and that is stop the automatic indexation. If you want to do something about petrol prices, Senator Polley, get Mr Rudd to slash the excise on petrol and then you can do it. Before the election, the Labor Party and Mr Rudd wandered around Australia promising that grocery prices would come down, that interest rates would come down and that petrol prices would come down. What have we seen since the Labor government came to power? Petrol prices have gone up, and what have the Labor government done? They have set up a committee or something. Since the Labor government have been in power, grocery prices have gone up. What have the Labor Party done? They set up another committee. Since the Labor Party have been in power, interest rates have gone up twice, and yet we are looking again to the sorts of interest rates that we saw at the time of the last Labor government.

There is a report out today that the Labor Party would be very interested in having a look at. A new economic analysis says that Labor’s mandatory renewable energy target of 20 per cent by 2020 is unnecessary, will cost the economy $1.5 billion and will drive up power bills by six per cent. How is that going to help working families: petrol prices, energy prices, electricity prices up by six per cent? Labor have also whacked a new charge onto transport—a new charge on trucks. Of course, trucks carry food, and those of us who live in rural and regional Australia are particularly dependent upon trucks moving goods up to where we live. But the additional charges that this Labor government and the state Labor governments are going to put on trucks will mean that our costs for groceries will rise even further; hence, the cost of living will go up. There is another thing that they are talking about—well, I think they are talking about it. You never know with Mr Garrett—remember, he famously said before the election, ‘We’ll promise everything before the election and then change it after the election,’ and you can never be quite sure whether he has got to the change area yet—but he says he is going to put an extra tax on shopping bags. What are shopping bags used for? To take home the groceries. So, again, ordinary working Australian families will be attacked by this government. The increased energy price, the increased petrol price, the increased trucking price and the increased cost of shopping bags are all adding to inflationary pressure. Quite frankly, the Labor government have no idea what to do—(Time expired)

Question agreed to.