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

The committee is considering Tax Laws Amendment (2008 Measures No. 1) Bill 2008 as amended, and amendment (1) on sheet 5489 by Senator Milne.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Senator Milne gave an outline of this amendment before the break. It is an important amendment because it would change the schedule to ensure that what purports to be a carbon sink program, but which is not, would move in some direction towards becoming a legitimate carbon sink. Amongst other things, Senator Milne’s amendment requires that the trees that are put into the ground for the purpose of sequestrating carbon have to be there for at least 100 years—that is the intention. As the schedule in the bill stands, there is no time requirement at all. It is an astonishing piece of legislation, which purports to provide for a carbon sink, but which does nothing of the sort.

Under the current managed investment schemes, if an investor wanted to invest in a future woodchip or sawmilling product by putting in a plantation, they are going to grow them for at least 15 to 30 years—80 years, as far as sawlogs are concerned. That is more of an assurance than we have in this bill, which is supposed to help save the planet from carbon going into the atmosphere. It is totally untoward that the government has said that they want this legislation through and will tell us what their guidelines are going to be in assessing legitimate carbon sinks somewhere down the line. We get carbon sink legislation and then we get an explanation from the minister.

I would ask the minister to tell the committee what the definition of a carbon sink is under this legislation, and why not the 100-year rule that Senator Milne wants to bring in? What is it that the government finds in this amendment that is going to, in any way, do other than help the government to achieve its stated purpose?

Barnaby Joyce (Queensland, National Party) Share this | Link to this | Hansard source

I believe that some of the issues the Greens have brought up are valid and do need addressing. These are the sorts of issues that will be addressed as we go forward in the inquiry. I think there are serious questions as to whether you truly want a carbon sink. This is one of those peculiar instruments about which I have a greater sense of scepticism than I imagine the Greens do. There is a collective communion that, regardless of whether this is what you wish to achieve, you are not going to achieve it.

I am really concerned about some of the advice that has been given in this chamber, especially in the discussions about what a capital deduction is. We now hear that land is not capital. There will be a lot of tax lawyers who are going to be fascinated about that and very perturbed too. There is only capital and revenue. If it is not revenue and it is not capital then what is it? Invisible? There is nowhere else for it to exist.

I understand fully the sentiment of what the Greens are providing here, and I have stated before that the reasons that I will not be voting with them are: firstly, it will be unsuccessful—it will not pass the Senate and it will not pass the lower house; and secondly, it would compromise our capacity to get a Senate inquiry up, which is the best mechanism for ventilating this issue further. I see that the inquiry has been circulated here, as moved by Senator Ronaldson. I am very appreciative of that process going forward—it has taken a bit of heartache, but that is very good. At least Senator Ronaldson has reacted to the issues which have become apparent, and I commend him for that.

Where to from here? I think that, as of right now, the Australian people are awake to this and they are going to be absolutely furious when they find that large coal companies get tax deductions to put up the price of groceries in their shops. I think that is basically what it comes down to. I implore the Prime Minister to show that he has the capacity to work quickly and adroitly on an issue that is before him. Maybe this has gone under everybody’s radar; maybe everybody has missed this one. As it is an issue that is now getting strong public airing, let’s deal with it and fix it up.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I rise to ask for further clarification from the government on the financial implications of the Tax Laws Amendment (2008 Measures No. 1) Bill 2008. It says that in 2008-09 we will have forgone $4.7 million in revenue, in 2009-10 the figure is $8.5 million and in 2010-11 it is $11.1 million—making a total of $24.3 million forgone from the government revenue by virtue of the cost of this tax deduction. So I would like to know from the government how many hectares they expect to be planted out under this tax deduction scheme if this is the amount of money that is in the estimates for it. I would appreciate that.

I am still waiting to find out, and will keep on asking, whether the trees can be cut down. If you are going to have a carbon sink forest, it must be in the ground to accumulate carbon. We supposedly have a whole-of-government approach to climate change and we supposedly have a Prime Minister’s department with a climate change unit in it which is determining government policy. Given that the Minister for Climate Change and Water has to, by legislative instrument, make guidelines about the environment and resource management that will pertain to the plantations planted under this legislation, will the government please tell me whether the guidelines are going to be the same as those that exist already in the Greenhouse Friendly Forest Sink Abatement Projects? If that is the case then it is rubbish and it is not worth anything because all it is doing is giving forestry companies who want to plant a plantation and get the money from the fibre in the end an additional income stream along the way. If they are intending to plant those plantations for fibre then why should they be given additional double-dipping, if you like? Their intention would have to be to have a carbon sink, but they could soon change that along the way. Under these rules they do not even have to do that. They can say they want it as a carbon sink and then they can manage the area for both forestry production and carbon.

The government have been utterly remiss. They do not understand just how controversial and how bad this legislation is. They just picked it up straight from former Treasurer Costello and brought it in here because NAFI wants it, the coal industry wants it and the aviation industry wants it. They happily brought it in here knowing that, because the member for Wentworth had drawn it up previously with the former Treasurer, Peter Costello, the member for Higgins, they will get it through for the big end of town. They do not care about the consequences for small rural communities. We have seen it. It is not just happening in North Queensland. My colleague Senator Siewert was telling me about south-west Western Australia, where it has also had really bad impacts. There have been particularly bad impacts in terms of hydrological implications. You come in and fill up a district with these plantations and they take water out of the catchment, so it has huge implications.

My amendments say that these trees must be mixed species and of a local variety, that an easement must be put over the property so that they are there for 100 years and that there must be an ecological evaluation which looks at hydrological impacts, plus surrounding conflicts in land use. What is wrong with that? Why will the government, the opposition and the Nationals not support that? If you are serious about carbon sinks, why would you not actually want them to be carbon sinks if that is your genuine reason?

In my view, this is a complete rort by companies in order to undermine the integrity of an emissions trading system. They know they are going to get a cap. They know they are going to have to reduce their emissions. So instead of reducing their emissions at the power station, at the cement company and in aviation, what they can do is try to offset those emissions by taking up massive areas of land and planting them out as plantations. They have the option then to flog them off to somebody else as fibre if the pulpwood price is high. Alternatively, they can sell them in the carbon market if the carbon price is high. So they have a double option. They even have the option under the government’s existing rules for a forest company to manage the area for both fibre and climate. This is a complete and utter rort: a managed investment scheme on steroids.

As I have said, I want to know why the government will not tell the Senate whether these trees can be cut down. It is a very simple question. Why can we not be told now? Since they have calculated a cost, they must be calculating a hectarage. Where is that? Instead of being given that, we get treated with complete contempt. They have the numbers and they do not care. I know that Senator Abetz has been there in the back row supporting this for the forest industry because it is yet another rort for them on top of what they got from the grants schemes over which he presided in the last period of government. He is there supporting it. In the background, Senator Minchin and Malcolm Turnbull, again, are there supporting it, just as they supported it last year. The only reason it did not go through on the last day before the last federal election was that I pointed out at the time that if you go and tell rural Australia what you are up to they will be absolutely horrified. It was essential legislation at that point and was then changed to non-essential. So that is the context in which we are debating this legislation.

Since Senator Wong is now in the chamber, I think that as the Minister for Climate Change and Water she should be prepared to tell the Senate what the guidelines are that she, by legislative instrument, as it says in this legislation, will be putting out for these carbon sink plantations. If we do not know that, we are buying a pig in a poke. That is what is happening here. Rural and regional Australia do not like it and do not want it, and they have said quite clearly they do not. It is no use saying, ‘We’ve been caught out.’ We have not been caught out. It is clear what this means. There are a lot of people sitting in this chamber who support it.

I do not want any bleeding hearts around rural Australia saying, when the disaster sets in, that we could not have known what the ramifications were. The Senate knows what the ramifications are and, frankly, does not care enough to repeal the legislation. Therefore, senators should be prepared to stand up and say, ‘We actively did it because we wanted to have offsets and not put too much pressure on the industries to reduce their carbon emissions.’ So that is the context in which we are dealing with this. I think it is incumbent on the government to provide those answers. It is also incumbent on the government to explain why the schedule from this bill was put into another bill as well, so it was live in two bills, and why it came up to the Senate live in two bills when one of those bills had been deemed noncontroversial. That is how it got through here, and then they moved to take it out. It is an absolutely cynical move from the government.

Progress reported.