Dana Wortley (SA, Australian Labor Party) Share this | Link to this | Hansard source

The Carbon Pollution Reduction Scheme Bill 2009 and associated bills house the detailed provisions on the emissions trading scheme. The CPRS Bill is the main bill in the CPRS package. The CPRS will make sure our nation invests in the industries of the future: renewable energies, including solar and wind power, and in employment utilising new technologies such as clean coal and geothermal energy. Such investments will create thousands of new, low-pollution-industry jobs. The CPRS will enable Australia to stand up and be counted in the fight against climate change. It will allow businesses and households to do their bit as well. The $75.8 billion Australian Carbon Trust to be established by the government is aimed at helping all Australians to make a contribution towards reducing our nation’s emissions. Its structures also will help to improve energy efficiency in businesses and commercial buildings. The government will take into consideration the effort made by householders who buy accredited green power when setting CPRS caps.

The scheme has been designed to give significant backing to jobs. Among measures to this end is the $2.75 billion Climate Change Action Fund, which will offer targeted assistance to businesses, community groups, workers, regions and communities. The government also has delayed the start of the scheme by one year to help Australian firms cope with the fallout of a global recession. There will be a fixed carbon price for one year of $10 per tonne, giving business certainty as the nation moves towards full market trading from 1 July 2012.

Votes for these bills are votes for Australia’s future—votes for our environment, for our economy, for our jobs, for our industries. They are votes for our children’s future prosperity and wellbeing. They are votes for our planet, our world, our humanity. Sure, we could sit on our hands and do nothing, just as those opposite did for almost 12 years while in government. Sure, we could also wait for the rest of the world to step out first before deciding whether to follow the lead of other nations. The opposition wants us to wait for Copenhagen and beyond. But we need to play a leading role in forging an international agreement and to arrive at the negotiating table with targets and a plan to get there in the form of a CPRS. Dangerous climate change will not wait. We cannot simply press the pause button on its progress, on extreme weather events, on the droughts and floods it fosters. It is currently, and will continue, placing our globe in peril.

Experts tell us that carbon pollution is causing the world’s climate to shift dangerously, resulting in extreme weather events, longer and more severe droughts, higher temperatures and rising sea levels. As one of the hottest, thirstiest continents on earth—led, I am sorry to say, by my home state of South Australia—Australia’s environment and economy will be one of the hardest and fastest hit by climate change. Had the former coalition government acted on climate change the transition to a low-pollution economy in the coming years would have been made much easier.

Of course, many opposite do not even accept the clear scientific evidence which mounts up day by day. Those among their number who do believe seem too timid and too weak to speak—to stare down the sceptics in their party room. The Rudd Labor government will not be scared off or intimidated by those who would rather wait and see what happens. We will act with the courage of our convictions, being emboldened by the knowledge that the right thing to do is to show the world leadership, crucial in the face of a heightening crisis. This government will not be responsible for the perpetuation of the philosophy that would let climate change rip unfettered. Does this ideology sound familiar: ‘Let the economy rip; let the environment rip’? This is far too serious an issue. It is far too urgent an issue.

Just as the global economic crisis has necessitated the strong leadership and the decisive action embodied in our jobs and nation-building economic stimulus packages, Australia needs to be proactive, even aggressive, on the issue of climate change. It never ceases to amaze that those opposite fail to learn from the ghosts of elections past. The Australian people were clear in their verdict in November 2007. Along with other things, such as workplace relations, they wanted the government to act and to show leadership on climate change. They were fed up with deniers who would not even ratify the Kyoto protocol let alone take further concrete steps to address this blight. Still these deniers call the shots—incredible, in view of the fact that their leader is not among them. Mr Turnbull is unable or unwilling to unite the party room over this. However, by his own admission, he not only believes in climate change he also says an emissions trading scheme is inevitable for Australia. In the Hansard of 26 May 2008, we read Mr Turnbull saying:

The biggest element in the fight against climate change has to be the emissions-trading scheme …

And yet he would delay and defer, rout and refer, rather than bite the bullet on this crisis.

Of course, we know that climate change is not the only issue on which Liberal-National Party members are poster boys and girls for the ‘Do nothing’ campaign. Mr Turnbull and his colleagues would rather we did not invest in our nation’s infrastructure—our roads, our schools, broadband and industry. They do not want us to build the structures which will enhance the quality of our children’s education, our health care, our communications, our transport and the like, supporting and creating jobs at the same time. Yet they are happy to claim credit for such investment in their community newsletters and to attend openings of the very projects they voted against in this and the other place. They do not want us to invest in jobs—either those which exist today or future employment, including jobs in green industries. They have voted against a stronger future built on decisive action now. Their reason? It would be bad for our children.

Not only does that not make sense when it comes to nation building and jobs investment but it smacks of hypocrisy. How worried were the coalition for our children and for future generations when they, when in government, refused to ratify the Kyoto protocol or act on dangerous climate change? How concerned were they for future generations when they refused to say sorry to the stolen generations or to address Indigenous disadvantage? How bothered were they about the employment opportunities of future workers and their families when they disinvested in TAFE, turning tens of thousands of Australian students away from underfunded TAFE colleges, when they oversaw a ballooning skills shortfall or when they slammed through the draconian regime that was Work Choices? That legislation negatively impacted on thousands of Australian workers and their families. It is certainly difficult to take them seriously when they feign concern now.

We know that the opposition are horribly divided over climate change and are still debating whether it even exists. They will do everything they can to delay the Carbon Pollution Reduction Scheme’s introduction. What a disappointment. Australia should be part of the climate change solution, not just part of the problem as the sixth largest polluter in the world on a per capita basis. Passing these bills now will give business certainty into future years. Passing them now will be a crucial step towards the development of an international pact on tackling climate change at Copenhagen later this year.

Facing the ill winds of the global recession, our scheme will couch pollution reduction targets which are both responsible and appropriate given the need to shelter our economy and the jobs it sustains. For the first time, the Carbon Pollution Reduction Scheme will put a price on carbon pollution, therefore giving strong incentive to major polluters to cut their emissions. Taking such action on climate change will foster the growth of the renewable energy sector to 30 times its current size by 2050, according to Treasury modelling released in October 2008. The CPRS will, from its introduction in 2011, use the funds it raises to help households adjust to the scheme. This will ensure Australian families do not bear the burden of climate change. In addition, the government is working to encourage carbon pollution cuts before the scheme gets underway. Permits for carbon stored will be able to be generated by eligible reforestation projects from 1 July 2010. This will create economic opportunities in regional Australia.

The alternative to taking decisive action on climate change is unthinkable. If we do nothing, our economy will be left behind as we fail to take our place at a table full of low-pollution jobs. If we do nothing, future generations will be left to clean up a mess too awful to consider: global devastation on an unprecedented scale. As the Minister for Climate Change and Water, Senator Wong, said on 3 August:

We have long known that climate change threatens Australia’s economy, environment and way of life. We have long known that real action on climate change demands deep and fundamental economic reform. We have long known that central to this action is placing a limit and price on our carbon emissions.

In a country of over 21 million people, with 150 elected members of the House of Representatives and 76 senators, it is now up to one politician to determine whether Australia’s carbon emissions will continue to rise or whether we will start to reduce emissions for the first time ever.

That politician is, of course, Malcolm Turnbull.

                        …                   …                   …

… he must decide whether he wants to finish what he claims to have started—what he knows is right—and pass the Carbon Pollution Reduction Scheme.

For too long those opposite have turned their backs on action to address climate change. For too long they have argued amongst themselves about the existence and cause of climate change. For too long they have failed to confront the issue. The business community, environment groups and the Australian people expect the parliament to do the right thing and pass the CPRS this year. The Business Council of Australia, the Australian Industry Group, Shell Australia and a range of other businesses are calling for certainty on the CPRS so they can plan investments. Delaying passage of the legislation will directly undermine investment certainty at a time when business certainty is critical. It is time to act. I commend the bills before us to the Senate.

Judith Adams (WA, Liberal Party) Share this | Link to this | Hansard source

I rise this evening to speak to the Carbon Pollution Reduction Scheme Bill 2009 and related bills. To start with, I would like to highlight the concerns relating to the Rudd government’s Carbon Pollution Reduction Scheme bills. It is very important to Australia’s economic survival that we look towards a global solution and not simply an Australian solution. We are producing only 1.4 per cent of the world’s CO2 emissions and yet we are trying to hold economic and carbon-emitting powerhouses such as China and India to ransom. Australia’s emissions trading scheme must be on par with the rest of the world and be part of a global agreement. Otherwise it will be a case of our country being at such disadvantage it could affect all of our exports and therefore in the long term our economic longevity. Our emissions trading scheme must take into account what is happening globally, or the competitive position of Australia could be severely damaged.

Do we want to see Australian jobs, investment and CO2 emissions being exported to countries that do not have a price imposed on carbon? Australian jobs are the most important aspect in all of this and should not be forgotten. In recent months companies have publicly indicated the cost of this proposed scheme in terms of jobs. The Minerals Council of Australia has found over 66,000 jobs will be lost. Rio Tinto has stated that, put simply, the CPRS as proposed will cost jobs. Xstrata predicts that between 5,000 and 10,000 jobs nationally may be lost. BlueScope and OneSteel say hundreds of jobs would be lost across the country and 12,000 jobs that the Port Kembla Steelworks supports would be under threat. Ford Australia believes the ETS will drive jobs overseas. Jobs will be lost throughout Australia, and this is a disaster. The government constantly dismisses any research relating to jobs, but this is no longer a credible response. States and territories have done their own research; businesses have done their research. It is time for the government to listen to this research and to look at the concerns from businesses across Australia.

The coalition have stated that we will offer bipartisan support to the government for the carbon abatement targets we take to Copenhagen in December. This would, therefore, allow Australia to attend a conference with a united Australian position for a global commitment to addressing climate change rather than to arrive with legislation that could conflict with everything other countries, including the United States, might suggest. The desire for Mr Rudd and Senator Wong to rush this legislation through prior to Copenhagen is deeply flawed and could greatly affect our country’s future economic reputation. It would be premature for Australia to be locked into an emissions trading scheme that is not in line with the rest of the world. It is important that Australia continues to have a global perspective and an external view rather than focuses internally. Although the safety of our economic future is imperative, this can only be ensured by going to Copenhagen with targets for discussion, not legislation.

I now would like to turn to the uncertainty around the 2015 deadline for the introduction of a CPRS for agriculture. As a former farmer of 38 years, like my colleague Senator Nash I believe agriculture should not be part of the CPRS. Instead, the government should allow agricultural offsets. Australian farmers will still feel the impact of the CPRS through the price rises in fuel and transport, chemicals, fertilisers, electricity, farm inputs and other goods and services. A large problem with including agriculture in the CPRS is the sheer number of businesses who individually produce only small amounts of carbon emissions. The greatest impact of the CPRS on agriculture would be in relation to livestock production. This would result in an increase in production costs, decreased demand and therefore decreased production.

The agricultural sector has reduced its emissions by 40 per cent since 1990 through various measures, some voluntary and some not. The involuntary measures have come at a significant cost to many sections of the industry. I know myself that with farm practices like no-till, reducing burning off stubbles, planting perennial grasses and planting many trees along creek lines we have done our part, as have all the farmers in my area. They certainly keep doing this. Younger farmers are taking up many different initiatives. They are really handling the agricultural sector’s emissions. I commend them for this. They are all looking for different ways to keep up this practice. Unfortunately, as Senator Wong cannot come clean on whether or not agriculture will be included in this 2015 deadline, it is having a huge effect on the stability of the farming communities and also regional employment. Buying another property or looking to invest in different aspects of farming is all on hold. I would implore her and her government to make a decision so that we all know just where it is going. If the CPRS is introduced for agriculture that sector will change dramatically. It could be the death of our regional towns.

Covering direct emissions from agriculture within the ETS is inappropriate. There is a potential for economic and social impacts leading to significant detrimental environmental outcomes in areas such as water run-off, biodiversity and Australia’s inability to continue to make a contribution to global food and fibre supplies. This is something that Australia excels in. If we have this penalty put upon us, we will not be able to continue to produce food and fibre as we have in the past. The international goalposts have been shifting, with the United States, the United Kingdom, Canada and European countries having ruled out covering their direct agricultural emissions under a cap-and-trade scheme.

Two-thirds of Australian farm produce is exported, and this will mean that Australian farmers will be isolated if agriculture’s direct emissions are covered within the ETS. I have some data from the National Farmers Federation on the impact. The farm cash income for an average beef farm would fall by over 60 per cent if agriculture’s emissions were covered by the ETS cap with a carbon price of $25 per tonne of carbon dioxide. On an average beef-sheep farm, the income would fall by 47 per cent, and on an average sheep farm it would fall by 30 per cent. With wool prices as they are, I think this might be the end of the wool trade.

If agriculture is included and Australian and New Zealand agriculture is covered by an emissions trading scheme and other countries are not, it puts us at a disadvantage. As a gauge, with agriculture covered by the emissions trading scheme at $25 per tonne of carbon dioxide and not accessing free permits, a beef producer with a thousand head of cattle would be required to pay approximately $237,000 per annum for permits, a sheep producer with 3,000 sheep would be required to pay approximately $15,000 per annum for permits and a grain farmer producing a thousand tonnes of grain would be required to pay approximately $3,500 per annum for permits. Research undertaken by the Australian Meat Industry Council indicates that additional costs of the ETS for meat processors from 2011 will be of the order of $5.64 per beef animal and 78c per sheep. Similarly, dairy farmers estimate that their direct costs from ETS would be between $6,000 and $9,000 per farm in 2011, rising over time. So the impact on agriculture is not only economic; areas such as regional employment, trade, water and environment will also be affected. The agricultural sector needs assurance that its export competitiveness will not be placed at risk as a result of the ETS. Farmers are vulnerable to increasing costs that will result from the implementation of an ETS.

The Rudd government now has no alternative but to respond and eliminate all uncertainty around the 2015 deadline. This will enable Australian farmers to proceed on an equal footing with all trading partners. The world population is expected to increase 50 per cent by 2050. That will be nine billion people to feed. Therefore, as our international counterparts are excluding agriculture’s direct emissions from their schemes, it is vital that we do the same. Our farmers need to be provided with certainty. The Rudd government must commit to not covering agriculture now or in the future.

Australia confronts a food security responsibility. If we accept ETS coverage of Australia’s farm sector, 1.6 million Australian jobs and $32 billion a year in farm exports will be at risk. Agriculture requires an alternative approach which will provide them with an incentive based means of reducing emissions and best management practice where they can continue to make contributions. As I have said before, this is improving all the time. Growing vital food and fibre production will continue. Farms, as biological systems, omit carbon, but unlike other sectors they also absorb it back into soils, pastures, crops and trees. Australian farmers are already world leaders in low-emission farm systems, and I would encourage them all to continue in this way. Once again I say that it is very important that the Rudd government commit to not covering agriculture now or in the future as part of the emissions trading scheme.

Marise Payne (NSW, Liberal Party, Shadow Parliamentary Secretary for Indigenous Affairs) Share this | Link to this | Hansard source

I begin by commending Senator Adams on her consideration of the potential impacts on the agricultural sector in this country by a scheme such as the one before the chamber tonight in the Carbon Pollution Reduction Scheme Bill 2009 and related suite of bills. The considerations that she raises are very important.

The CPRS legislation, in global terms, presents for the chamber and the parliament’s consideration the question of tackling climate change. I want to indicate that this is an issue that I take very seriously. I cannot be categorised in the disparaging way that those opposite have endeavoured to characterise others. That approach is perhaps not terribly constructive, but I guess that is their problem and not mine.

Climate change is best tackled from a position of economic strength. To effectively meet the huge cost of tackling greenhouse gas abatement requires a few fundamentals in place: people in jobs, businesses performing strongly and an economy in a state of growth. As a country that produces—as others among my colleagues have said—only 1.4 per cent of the world’s CO2 emissions, there is no Australian solution to climate change; there is, in reality, only a global solution. The design of any Australian emissions trading scheme must be responsive to the existence or absence of a global agreement. We see at the moment stark differences emerging between this government’s approach and the legislation endorsed by the President of the United States, Mr Barack Obama. Amendments that were made in May to the draft US emissions trading legislation include very specific provisions providing 100 per cent protection to US export and import competing industries in any future emissions trading scheme until 2025. What is more, that bill now says that a reduction in protection of these industries will only occur after 2025, when more than 70 per cent of global output from that sector is produced or manufactured in countries that have a scheme equivalent to that operating in the United States.

You would think that that would be a wake-up call for the Prime Minister and for Senator Wong. It is absolutely unclear to me why this government is so unwilling to acknowledge the importance of taking into account the United States scheme. A submission, for example, from BlueScope and OneSteel to the Senate Economics Legislation Committee on 4 June this year made exactly that point:

Given the global significance of the US, we believe that it is important to obtain a clear understanding of the design of the United States’ emissions trading scheme ... and to fully consider the implications of the US approach for the design of Australia’s CPRS.

If an emissions trading scheme does not take account of what is or is not happening in other countries, it will, by definition, end up flawed. It will also seriously damage the competitive position of many of our own industries and ultimately see Australian jobs, investment and CO2 emissions being exported to countries when no price is going to be imposed on carbon. It seems to me that a badly designed scheme is worse than no scheme at all.

Now, we were promised by the now Prime Minister, before the election, that there would be an introduction of an emissions trading scheme which would produce deep cuts in CO2 emissions but would not disadvantage Australia’s export- and import-competing industries. The fact is, though, that that promise has not been fulfilled and the government’s scheme is in disarray. It is in disarray because it has been rushed to suit a cravenly political timetable. It is in disarray because the design is not flexible enough to cope with the global financial downturn and fails on all counts. It is in disarray because it will cost jobs, kill investment and do very little, if anything, to reduce CO2 emissions.

It is reckless in the extreme to rush the introduction of this scheme without knowing the outcome of the December global climate change summit in Copenhagen, without knowing what the United States will do and without knowing the full impact of the global financial crisis on our real economy. And when we do look at the international scenario we see that the government seems to be taking great pleasure in inferring that around the world a great deal of action is taking place on emissions trading schemes. But the evidence actually does not add up. Of course, I have already noted that the United States scheme is currently under development, and even individual states’ schemes in the United States have not advanced very far—mostly because community focus has shifted to the impact of the global financial crisis.

The Canadian scheme, for example, has been put on hold while they wait and see what the US does. And in Europe effectively it is little more than a pilot scheme so far. They require business to purchase from the government at auction just four per cent of permits. In contrast, what this government will require is for business to purchase 70 per cent of permits, while the United States administration is looking at a requirement that business purchase 15 per cent of permits. So in terms of setting the price on carbon there is very little in place, or even in advanced planning stages, as far as this issue is concerned, in the rest of the world.

So, under the design of the government’s proposed scheme we would be taking a major leap in comparison with the rest of the world. And our very great concern, which has been articulated so effectively by a number of my colleagues, is that the Rudd government has deliberately ignored the impact of this proposed scheme on Australia’s competitiveness and on jobs in the first years of transition if our major competitors do not reciprocate. The design of the scheme assumes that Australia’s major competitors will move to put in place a major new tax on carbon across their own economies, including their export- and import-competing industries, in the early years of the scheme. In fact, the government seems to have assumed that the United States would introduce an equivalent scheme by 2010, China by 2015 and India by 2020. But none of this is remotely possible. Let us suppose that China, India, Indonesia, the countries of the Middle East and South America and other competing developing countries do not apply a tax on carbon for 15 years or 20 years or even longer; we cannot even rely on Treasury for modelling of alternative scenarios or methods.

So all we have before us is a self-serving, misleading and irresponsible exercise, and that is before we even get to contemplate the costs of this proposed ETS. For most Australian families it seems that the annual tax that the government will impose, through this scheme, on electricity and other energy intensive companies, will result in a 30 per cent to 40 per cent rise in power bills, and, indirectly, in increases in the price of most services and items purchased. There will be significant added direct and indirect tax on agricultural and manufacturing businesses, which are competing against foreign products where no such tax now applies.

What is even more concerning is the potential for tens of thousands of jobs to be put at risk, the permanent and serious shrinkage of major regional centres—both Senator Adams and Senator Nash have referred to that this evening—and the loss of major investments. But this has been for what gain in terms of the impact on CO2 emissions? Possibly little or none. One $4 billion proposed investment in my own state of New South Wales to extend an aluminium smelter at Kurri Kurri in the Hunter Valley will be shelved. That decision alone will see the loss of 15,000 construction jobs and 3,000 permanent jobs.

I said earlier that on any reading this proposal before the Senate is in disarray. It does not even adequately encourage complementary measures. The way it is currently designed means that actions that individual Australians or families take to reduce emissions will not do anything to reduce the overall output of greenhouse gases—it will just allow more emissions by industry up to the cap. Areas such as agriculture and our huge commercial building sector are effectively ignored as sources of abatement.

The government has argued—I heard Senator Wortley doing this earlier—that pushing this legislation through the parliament will give business certainty. Well, it seems to me that what businesses want is a scheme which preserves their international competitive position, not the certainty of being fundamentally unable to compete. As Anglo Coal Australia Chief Executive Officer Seamus French has said, certainty is not preferable to getting the design right for business. He said:

We don’t want the certainty of a bullet.

The government’s claims that their flawed emissions trading legislation needs to be rushed through the parliament have also been undermined by the executive secretary of the UN Framework Convention on Climate Change, Yvo de Boer, who revealed that the UN does not require countries to have legislation in place before the Copenhagen meeting. This view has received further support from Jonathan Pershing, US Deputy Special Envoy for Climate Change, who indicated that US legislation may not be passed by the time of the Copenhagen meeting. He said:

... it does not block a deal. You can have a deal without having the legislation.

As we have been saying repeatedly, Australia needs to go to the UN conference with a united position on targets, not a flawed scheme for the sake of some personal aggrandisement of the Prime Minister and the Minister for Climate Change and Water.

In the end, it seems to me that the only certainty that we have with regard to this scheme—the certainty that senators on the other side have spoken about—is that it will certainly produce job losses. Over recent months, corporation after corporation have publicly recorded the cost of this proposed scheme in terms of lost jobs. A number of those have been cited in the chamber again today. The Minerals Council has found that over 66,000 jobs will be lost or foregone. BlueScope and OneSteel say that hundreds of jobs would be lost across the country, and the 12,000 jobs that the Port Kembla steelworks supports in my own state would be under threat. And as was discussed in question time today, through my questions to the minister, even the Labor Treasurer of New South Wales, Mr Eric Roozendaal, is concerned about the effects of the scheme—the risk to jobs and the need to ameliorate risk, not to go headlong into the scheme that the government has before the parliament at the moment.

Let me be absolutely clear about one thing. I support and the coalition supports—and we supported it when in government—an environmentally-responsible ETS as part of a coordinated global response to climate change. It is our strong view that the design of the Australian ETS should be completed only after the passage of the US legislation through the congress and after the conclusion of the Copenhagen climate summit in December. Every other political party, conveniently ignored by speakers on the other side, and every other interested group with any credibility—except, apparently, the government—knows that this ETS legislation is flawed and it needs to be improved if we are to save jobs and protect small business and industry in Australia; prevent carbon leakage, which will only frustrate any net global CO2 abatement; and have a decent scheme in place.

The coalition has again and again endeavoured to find a better outcome on this legislation in the event that the Prime Minister remains determined to force through an early vote. Firstly, we set out nine principal issues that need to be addressed in Labor’s scheme for the coalition to support it, including, fundamentally, the principle that an Australian ETS should offer no less protection for jobs, small business and industry than an American ETS does for American jobs, small business and industry. The principles that the coalition has set out are practical and clear. They will ensure an effective Australian ETS scheme which protects jobs and industry and which could be converted, if there were a willingness to constructively engage on the other side, into appropriate amendments for legislation. But from the very start there has been an abject refusal to consider anything like that. They have adopted a take-it-or-leave-it approach, and that intransigence will ultimately cost this nation.

Faced with that and faced with the refusal to even discuss alternative views, the coalition together with Senator Xenophon—as he alluded to in his remarks this evening—commissioned independent economic research by Frontier Economics to measure the real impact of the scheme. The results, released yesterday, are compelling. They show that this emissions trading scheme will, effectively, unnecessarily drive up electricity prices, destroy jobs and expand the size of government. They make it clear that the government should recognise the flaws in this CPRS legislation and begin constructive engagement with the coalition, minor party senators and other stakeholders to design a more effective scheme.

In fact, with the changes that are proposed within the research to which I have referred, the CPRS could actually be made twice as green, with a much lower cost to consumers and the economy and a net improvement of 68,000 regional jobs. It could deliver an unconditional 10 per cent reduction in Australia’s 2000 greenhouse gas emissions by 2020, compared to the government’s five per cent unconditional target. By treating the electricity generation sector in a less punitive manner, household power bills would rise not by the extraordinary amount that the government’s scheme will produce but only by about five per cent in the near term. Five years into the scheme, average annual household power bills would only be around $44 higher, compared with the potential for $280 under the CPRS, based on this research. For regional Australia, the government’s scheme would cost 26,000 jobs; Frontier Economics’ proposed changes would lead to net gains of 42,000 regional jobs. Overall, the cost to the Australian economy over the next 20 years in net present value terms could be reduced by about a third. They are relatively modest proposed changes, and with them the ETS could be made far less harmful to jobs, to investment, to the regions and to the Australian economy and so, importantly, have a much more positive impact on the Australian environment.

On any assessment, the design of the Rudd scheme fails on all counts. It will cost jobs, kill investment and, frustratingly, do very little—this is such an important point—to reduce CO2 emissions. We believe that it would be premature to lock Australia into an emissions trading scheme that was out of step with the rest of the world, given that the next international climate change conference in Copenhagen is only a few short months away and given that the United States administration and the congress are well advanced in finalising US legislation for an ETS. Why wouldn’t we defer this consideration until after the Copenhagen meeting? But the government appears determined to push this through. If the government does not defer this, it will be choosing to create unemployment. It will be choosing to vote against Australian jobs, against the Australian economy and ultimately against the Australian environment.

Mary Fisher (SA, Liberal Party) Share this | Link to this | Hansard source

I am no expert on what, if anything, is happening with our climate—nor am I any expert on, if something is happening, what might be the cause of it. There are plenty of others who do profess to be so expert. But the particularly interesting thing is that those who do profess to be so expert are unable to agree on what, if anything, is happening in respect of our climate and unable to agree on, if something is happening to our climate, the causes thereof and, in particular, the extent to which man is contributing to those changes.

We have a Prime Minister who is a self-professed policy wonk, a self-professed expert at developing policy, and he promised to deliver the Australian electorate evidence based policy. In the context of the government’s CPRS, that means, pretty simply, identifying the problem that his policy will supposedly fix, proving the cause of the problem and proving how his policy solution will fix that problem. That means, if he wants to introduce his CPRS, the Prime Minister must prove what is causing the problem that he says exists and show that his CPRS will fix it. He is not doing that.

Instead, the Prime Minister is proposing a CPRS that will cost jobs. It will export carbon without making any meaningful contribution to a global solution  Through his CPRS the Prime Minister is asking the Australian people to choose between lower wages and higher unemployment. It has been a little-debated point that, in order to maintain constant employment—which the government says its CPRS will do; it is saying that the Carbon Pollution Reduction Scheme will not jeopardise jobs—the modelling underpinning constancy in employment will assume a reduction in real wages over time. It assumes that real wages would be less than they otherwise would be were it not for the CPRS. Has the government told Australian workers that they will essentially take a cut in real wages over time in order to maintain jobs constancy across the economy? I think not.

Under questioning in the Senate economics committee inquiry hearing into the CPRS bill on 29 May, respected economist Dr Brian Fisher, formerly of ABARE, now of Concept Economics, said:

… what the Treasury has done is to make an assumption that, if we take the full economy, for every job that is lost in one place there will be another job of some description elsewhere.

He went on to say:

… to make that work what both the Treasury and I have done in the national modelling is to allow the real wages of workers to fall. We have held total employment constant, but to allow that to occur we have allowed real wages to fall.

What is happening here is that real wages have to be lower than they otherwise would have been to maintain everybody in a job. Nobody is being very forthcoming about that particular assumption.

So, in response to my question, ‘Both you and Treasury are saying that in order to stop job losses you are going to have to incur pay loss?’, Dr Fisher responded, ‘Yes, reduce real wages.’ Under questioning in Senate estimates, Treasury officials essentially confirmed this. Ms Quinn from Treasury, in response to questions on Wednesday, 3 June about the effect on real wages of the CPRS, said that real wages would ‘grow slightly slower than they otherwise would’. She went on to say, ‘but in all scenarios real wages continue to grow’, but the point is that Treasury have confirmed that real wages will grow slower than they otherwise would under the government’s CPRS in order to maintain jobs. Hence the choice for Australian workers is between keeping their jobs and having lower real wages.

The indirect costs of the scheme on business, especially agriculture, are significant and have been commented upon by others in the chamber tonight. They include the impact on dairy farmers, who could see their incomes falling by 1.9 per cent as early as 2011. By 2015 the effects on Australian broadacre agriculture could see falls in income of between 9.1 and 14½ per cent. So why is the government rushing ahead of the United States? Why is the government intent on rushing ahead of the Copenhagen negotiations? We are not a big carbon emitter. We emit a total of 1.4 per cent of global emissions. Yet it would seem we are intent on risking our economy by rushing.

Even if we accept that there is a risk that we should manage—because it does make sense to do what we can to improve the environment and lessen what might be man’s negative impact on the environment—it does not make sense to manage that risk by creating a CPRS certainty, a certainty that will cost jobs and export carbon without making any meaningful contribution to a global solution. It just does not make sense for those like Australia, who contribute amongst the least to global emissions, to sally forth and sacrifice the most domestically for negligible gain globally. It does not make sense for a small global player to go big or to go early. Indeed, we would be going so early that we could almost be going it alone, because there is no guarantee that the big emitters would ever join us—and, certainly, there is no guarantee that they would join us in the short term. The Rudd government’s CPRS is all Australian pain for no significant global gain. I will be voting against the bills.

Debate (on motion by Senator Conroy) adjourned.