Senate debates

Tuesday, 5 July 2011

Matters of Public Importance

Carbon Pricing

Photo of John HoggJohn Hogg (President) Share this | | Hansard source

I have received a letter from Senator Fifield proposing that a definite matter of public importance be sub­mitted to the Senate for discussion, namely:

The Gillard government's continued determination to impose a carbon tax and put Australians under further cost of living pressures.

I call upon those senators who approve of the proposed discussion to rise in their places.

More than the number of senators required by the standing orders having risen in their places—

I understand that informal arrangements have been made to allocate specific times to each of the speakers in today’s debate. With the concurrence of the Senate, I shall ask the clerks to set the clock accordingly.

4:55 pm

Photo of Mathias CormannMathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | | Hansard source

It gives me great pleasure to speak to the matter of public importance proposed by Senator Fifield for discussion by the Senate:

The Gillard government's continued determination to impose a carbon tax and put Australians under further cost of living pressures.

The government's push to put a price on carbon on the basis that it would help reduce global greenhouse gas emissions is a very expensive hoax. This government has previously sought to mislead the Australian people and has previously sought to take advantage of the Australian people's goodwill towards the environment by trying to impose another cost, which will push up the cost of living.

This is a government which, in the lead-up to the 2007 election, supposedly was committed to doing things to address cost-of-living pressures. Ever since, the cost of living has gone up, up and up. We had the GroceryWatch fiasco and the Fuelwatch fiasco from this government. None of that worked. None of that was thought through. Australian families are dealing with very significant cost-of-living pressures, in particular because of the financial misman­agement of this government. The truth of the matter is that a carbon tax in Australia, in the absence of an appropriately comprehensive global agreement on price emissions, includ­ing for trading competitors in other parts of the world, would push up the cost of every­thing. It would make us less competitive internationally—so it would cost jobs—and all of that without helping to reduce global greenhouse gas emissions.

In effect, the government is proposing to make overseas polluters more competitive than even the most environmentally efficient equivalent business in Australia. This is why it is a hoax. This is why the Carbon Pollution Reduction Scheme legislation was defeated in the Senate. Not only did the coalition vote against it, the Greens also voted against it, Senator Xenophon voted against it and Senator Fielding, as he then was, voted against it. Only the Australian Labor Party voted to push up the cost of everything to make us less competitive internationally, to put jobs at risk, to put our energy security at risk—and all of that without helping to reduce global greenhouse gas emissions.

The Minister for Finance and Deregu­lation, Senator Wong, today outrageously misled the Senate. I asked Senator Wong today why the government was proposing to exempt petrol but not electricity from the carbon tax. Electricity is a very important service for families and businesses across Australia and is responsible for significantly increasing cost-of-living pressures. The minister dishonestly read out a quote which she pretended was a quote from a speech that I had supposedly given to the Senate. The minister lied to this chamber. The minister misled the chamber.

Photo of Stephen ParryStephen Parry (Tasmania, Liberal Party) Share this | | Hansard source

Order! Senator Cormann, you will have to withdraw that remark concerning the minister.

Photo of Mathias CormannMathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | | Hansard source

I withdraw the reference to lying but I do seek an apology from Minister Wong, who no doubt deliberately misled—

Photo of Stephen ParryStephen Parry (Tasmania, Liberal Party) Share this | | Hansard source

Senator Cormann, you have to completely withdraw the reference.

Photo of Mathias CormannMathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | | Hansard source

I completely withdraw the reference.

Photo of Stephen ParryStephen Parry (Tasmania, Liberal Party) Share this | | Hansard source

Thank you, Senator Cormann.

Photo of Mathias CormannMathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | | Hansard source

I just point out what Senator Wong said I allegedly said in a speech in September 2007. Allegedly I said, 'This will be the most comprehensive ETS in the world, broader in coverage than any scheme currently operating anywhere; a world-leading scheme to cover 70 to 75 per cent of total emissions. By including large emitters alone, the scheme would cover 55 per cent of total emissions; however'—and she said that this was the best bit out of my alleged speech—'by including transport and other fuels the coverage of the scheme is significantly increased.' Minister Wong told the Senate only two hours ago that allegedly these are comments that I made in this chamber. I absolutely deny that I have ever said any such thing, so the minister should correct the record at the earliest opportunity.

Let me make the broader point: I actually happen to support effective action to reduce global greenhouse gas emissions. The coalition happens to support effective action to help reduce global greenhouse gas emissions but the government's carbon tax, the government's proposed emissions trading scheme, the government's proposed Carbon Pollution Reduction Scheme in the last parliament, are not effective strategies to help reduce global greenhouse gas emiss­ions. The reason that they are not effective in helping to reduce global greenhouse gas emissions is that they move to reduce emissions in Australia in a way that will increase emissions in other parts of the world. This is where people across Australia are taken for fools. They are being asked to make a sacrifice. They are being asked to pay more for electricity, they are being asked to pay more for food—they are being asked to pay more for everything, even though this government knows that it will not lead to a reduction in global greenhouse gas emis­sions. The reason it will not is the failure in Copenhagen to reach agreement between relevant countries around the world around schemes to price emissions.

The government's economic modelling assumed that a whole series of countries would have emissions trading schemes in place in 2010. The government assumed that Canada, Japan, the US, the Russian Federa­tion, Bulgaria, Romania, Switzerland, the Ukraine, Iceland, Lichtenstein, Monaco —all of them—would have emissions trading schemes in place with similar policy settings as the emissions trading scheme then pro­posed here in Australia. Of course, none of them do. The government assumed that China would have an emissions trading scheme in place by 2015 and of course they will not.

I do refer the minister to some comments that I did make in my first speech, and I urge her to be more accurate and more precise in reading the comments that I have made in this chamber on this issue. This is what I said in my first speech in this place:

Climate change is a challenge we are facing as a global community. If we take a sensible and considered approach—

I emphasise 'considered approach'—

to meeting that challenge, Australia can play a pivotal role in facilitating the production of clean energy for the world.

…   …   …

we are blessed with immense reserves of clean energy in the form of gas and uranium. No other place in the developed world has such reserves. Moreover, the growing bulk of this energy is being exported directly or indirectly in the form of processed resources to China, the epicentre of the world’s growing energy challenge.

Our greatest possible contribution to addressing climate change is to export more energy. Each unit of clean energy exported from Australia reduces the consumption of less clean energy in China and elsewhere and, therefore, reduces greenhouse gas emissions.

That is actually something that would make a positive difference. It would help us to reduce global greenhouse gas emissions while also growing our economy in Australia. But it is actually something that would be harder under the government's scheme. If the government puts a price on carbon here in Australia when other comparable countries around the world do not, when our trading competitors do not, it will make it harder for us to attract invest­ment to increase our energy production here in Australia. It will make it harder for us to maximise our opportunity from producing LNG, exporting it to China, Japan and other places, displacing coal in those markets and reducing emissions in the process.

What the government proposed to do was counterproductive then and it is still counter­productive now. It will be very interesting to see, given that the Greens voted against the Carbon Pollution Reduction Scheme because they shared our judgment that it was in­adequate, whether and why the Greens take the view that this tax that is going to be announced on Sunday is going to be more adequate.

The government's modelling of all of this is also completely flawed. The government is not only inconsistent with all of this; the government is actually dishonest as well. In relation to the modelling of the impact of a price on carbon in Australia the Treasurer said that Treasury modelling showed that it would not have an impact on jobs. The Treasury modelling did not show anything of the sort. The Treasury modelling assumed it. The Treasury modelling included a technical assumption that over the long run a price on carbon in Australia would not have an impact on employment. If you include an assumption in a model you cannot then turn around and say the modelling shows that. If you tell a model that jobs are not going to decrease, that jobs are going to continue to increase, that unemployment is not going to be impacted then it is entirely dishonest to turn around and say the modelling shows this. The other thing the modelling shows is that the government expects lower real wages as a result of the carbon tax. Lower real wages together with the increases in the cost of living as a result of this toxic tax are a very toxic combination, which is why the Gillard government stands condemned for its broken promise not to introduce a carbon tax under a government that Prime Minister Gillard leads.

5:05 pm

Photo of Doug CameronDoug Cameron (NSW, Australian Labor Party) Share this | | Hansard source

I just find it absolutely hypocritical for Senator Cormann to come in here and complain about Senator Wong in question time when Senator Bernardi stood up and completely misrepresented in such a blatant way what Senator Pratt said in a speech here on Monday, 4 July. Senator Bernardi had the opportunity to apologise to Senator Pratt, because it was quite clear that Senator Marshall completely demolished what was being put. Senator Bernardi should be in here apologising to Senator Pratt for what he said. But it is typical of the coalition to come in here and misquote the reality. They take parts and extracts out from a speech. We can all do that. I have Senator Cormann's first speech in the Senate in front of me now, the speech that he just quoted from.

He quoted the start of the speech. What he did not do was to go on and say how much he supported a national emissions trading scheme in that speech. He said:

The government's recent announcement—

remember, this is the Howard government—

of a national emissions trading scheme, including offsets for trade exposed industries, is a positive and sensible approach to addressing global warming.

He just goes in there, he picks little pieces out without giving the full picture of the backflip that he is involved in at the moment. It is a big backflip on his position at the moment.

And what did Sir Robert Menzies say about behaving like this? He said:

Nothing could be worse for democracy than to adopt the practice of permitting knowledge to be overthrown by ignorance.

Let me tell you, knowledge is being overthrown by ignorance every day of the week in the coalition. You only have to look at the Leader of the Opposition when he stands up and says every economist in the country has got it wrong. He goes on to say that every scientist in the country has got it wrong. What is happening on the other side of this chamber is anti-intellectual. It is all about short-termism, about short-term politics that will not last. It cannot last because they will be exposed for the mis­representations they are putting forward.

When they talk about cost of living, again the hypocrisy from the coalition is huge. The coalition mounted the biggest attack ever on the cost of living of Australian workers when they introduced Work Choices. We know that Work Choices is on the rise again. We know that the Leader of the Opposition's trickery has been exposed by Peter Reith. The opposition leader was exposed for the trickery of promising Peter Reith that he would support him, and then doing a show-and-tell with Peter Reith's opponent and saying: 'I'm voting for you. Even though I asked Peter Reith to stand, I'm not going to be there for Peter Reith.' We saw the sort of trickery that is within the Leader of the Opposition and we know that Peter Reith stood up and belled the cat. He said that Work Choices will come back. That is what is underpinning what Peter Reith is about.

And what about Work Choices? What about AWAs? In 2006 the majority of AWAs—89 per cent—removed basic award conditions; 70 per cent of the AWAs, which were the pride and joy of the Howard government, removed shift loadings; 68 per cent removed annual leave loadings; and 65 per cent removed penalty rates. Those opposite have the hide to come in here and argue that they are concerned about the cost of living for Australian families when they were ripping away shiftwork loadings, ripping away annual leave loadings and ripping away penalty rates. Sixty-three per cent of AWAs removed incentive based payments and bonuses; 61 per cent removed days to be substituted for public holidays; 56 per cent removed monetary allowances; 50 per cent removed public holiday payments; 49 per cent removed overtime loadings; 31 per cent removed rest breaks; and 25 per cent removed public holidays. That is the kind of consideration that the coalition has for the living standards of Australian workers. Get rid of their penalty rates, get rid of their shift loadings, get more industrial relations so-called 'reform' under the banner and say that this is flexibility. That is what happens to workers under coalition flexibility, and workers will soon understand that despite all of the arguments that are being put up by the Leader of the Opposition—that is, that he cares about working families and the forgotten few—he is all about returning to Work Choices. We know that is the position, and we know that is exactly what will happen.

Australia, in my view, does need to deal with global warming. What we are saying is that our position is far superior, and that is backed by every economist of note in this country. In fact, the coalition's direct action policy has been costed by the Treasury to be $30 billion. Who is paying that? It is not the polluters who will pay; it is the taxpayer who has to find $30 billion for this nonsense of a policy that those opposite would put in place. A coalition government would then try to pick winners in the market. There will be no investment certainty for industry. A much-needed economic reform will be ignored and replaced by a stopgap political position. That is all it is, because there are many on the coalition side who know that the market approach is the best way. They understand how the market works, and they understand that the market approach is the best approach.

But the problem is that the extremists, the climate change deniers, are in control. It is the climate change deniers who will certainly be leading the charge for the coalition on this issue. We have a Leader of the Opposition who is one of the few leaders of any political party in the country, or in the world, who would meet with Lord Monckton. It is a bizarre position for someone who tries to say that they are concerned about the future of this country to meet with someone who is described as a bag carrier for Margaret Thatcher, who is described as someone who has absolutely no credibility in the UK. Lord Monkton has claimed he is a member of the House of Lords when he is not, he has claimed to be a Nobel laureate when he is not, he has claimed to have single-handedly won the Falklands War by persuading the British Army to use germ warfare on the Argentines and he has claimed to have invented a cure for Graves' disease, multiple sclerosis, influenza, food poisoning and HIV. That is the sort of people that the leader of the coalition is mixing with. Is there any doubt as to why his views would be so mixed up and so bizarre on these issues? I understand that Senator Cormann attended a conference where Lord Monckton spoke. I am told that he actually stood in the queue to get Lord Monckton's autograph. He stood in the queue to get Lord Monckton's autograph! What a bizarre position for anyone who would try to claim some economic credibility or some credibility on climate change—to be queueing up to get Lord Monckton's autograph. Imagine doing that.

Senator Fifield interjecting

Coalition senators are now interjecting, because it is so embarrassing that you have got a coalition frontbencher queueing up to get Lord Monckton's autograph. That shows you the level of debate and the level of competence in the coalition. It is absolutely nil; it is zero. You have got no credibility at all. (Time expired)

5:14 pm

Photo of Mitch FifieldMitch Fifield (Victoria, Liberal Party, Manager of Opposition Business in the Senate) Share this | | Hansard source

Thank you, Acting Deputy Presi­dent Ludlam.

Photo of Doug CameronDoug Cameron (NSW, Australian Labor Party) Share this | | Hansard source

If you had been there, you would have asked for his autograph as well.

Photo of Mitch FifieldMitch Fifield (Victoria, Liberal Party, Manager of Opposition Business in the Senate) Share this | | Hansard source

I am certain that Senator Cameron has lined up for Hugo Chavez's autograph in his time.

At the outset can I say how delighted I am to see Senator Feeney rejoining his Labor Party colleagues. There was a very large picture in the Australian today of Senator Feeney as the 10th member of the Australian Greens. He had a big smile on his face, but I am sure he was a little distressed when he saw the paper.

Photo of David FeeneyDavid Feeney (Victoria, Australian Labor Party, Parliamentary Secretary for Defence) Share this | | Hansard source

My leadership skills are needed everywhere!

Photo of Mitch FifieldMitch Fifield (Victoria, Liberal Party, Manager of Opposition Business in the Senate) Share this | | Hansard source

That is right, you are much in demand! It is, of course, that unholy alliance that we see on the other side of the chamber that brings us to this matter today:

The Gillard Government’s continued determination to impose a carbon tax and put Australians under further cost of living pressures.

The story of the carbon tax is really one of deceit, political incompetence, administrative incompetence, policy incompetence and a desire to avoid scrutiny. I think it is important that we start with deceit. It has almost become a cliche, but that does not take away from the outrageous nature of the statement of Julia Gillard before the last election, declaring—and let us say it again: 'There will be no carbon tax under a government I lead.' There were no ifs, there were no buts, there were no qualifications; it was meant to be taken as a statement of fact. I wonder how many Australians would have voted for the Australian Labor Party

Photo of John WilliamsJohn Williams (NSW, National Party) Share this | | Hansard source

A lot less.

Photo of Mitch FifieldMitch Fifield (Victoria, Liberal Party, Manager of Opposition Business in the Senate) Share this | | Hansard source

A lot less would have voted for the Australian Labor Party if, before the election, Julia Gillard had said, 'There will be a carbon tax under a government I lead.' Because, if they heard those words, they would have been quite justified in thinking: 'Prices are going to go up; cost-of-living pressures will increase.' The result of the election could well have been different.

The Australian people were denied the opportunity at the last election to have a say on this particular policy. On this side of the chamber we have sought to provide a mechanism for the Australian people to have a say. We have proposed a bill for a plebiscite so that the Australian people can have their say. We think that that is an opportunity that the Australian Labor Party should embrace. If they really have the strength of their convictions, if they really believe in their policy, if they really believe in the rightness of their cause, then they should have no hesitation in putting it to the Australian people. In fact, they should relish the opportunity to argue their case in a campaign before a plebiscite to convince the Australian people of the rightness of their cause. But they will not, because they know that the Australian people would reject that plebiscite. It is for the same reason that they failed to come clean with the Australian people at the last election, because they knew that the Australian public would reject the proposal for a carbon tax.

I also referred to political incompetence. It is bad enough that the Australian Labor Party lied to the people at an election, but you would think that they might at least have a political objective in mind. They might be sneaky, they might be tricky, but you might have thought that it was part of some grander political scheme, some grander political tactic to give effect to their policy. Yet, since the announcement of the proposal for a carbon tax we have seen the greatest display of political incompetence which you have to go a very long way back to find the equal of. The government has, time and again, said that this is a major economic reform. It is not. Economic reforms have a number of characteristics. They lighten the burden on business or they lift productivity or they see more people employed. This policy does none of those things, yet the government persists in saying that this is an economic reform and likening it to the introduction of the GST and the new tax system.

When the coalition sought to do real economic reform on the scale of the new tax system, we spent the year making the case for change. Then, after having done that, we then released a complete package accom­panied by 500 fact sheets that pro­vided answers to every question. People might not have liked the answers but at least there were answers. We released cameos for every household type to show the net benefit for every sort of Australian household. This government has not done that basic work. This government has not done—just look at it in terms of pure politics—what is the politically smart thing to do when you are prosecuting a case. When you want to make the case for change, you make the case for what is wrong then you present your solution and then you argue the solution. This government has comprehensively failed to do that.

This has also been an exercise in policy and administrative incompetence. We have heard the government declare—they have leaked out bit by bit, tiny bits of this policy—that petrol will not be subject to a carbon tax, that the carbon tax will not increase the cost of fuel for Australian motorists. But when you ask the government, 'Well, what will be the effect on small business?' they cannot tell you what small businesses might be in, what small businesses will be out. They cannot tell you whether farms will automatically qualify as a small business. They cannot tell you what will be the effect on major transport companies or what will be the effect on major trucking companies. These questions cannot be answered and yet they then have the temerity to accuse the opposition of running a scare campaign. Asking basic questions, asking legitimate questions of detail is not running a scare campaign; it is seeking information on behalf of the Australian public.

The government have declared, 'Trust us. At no stage will there be any effect on the price of petrol.' Very curiously, this government have announced a Productivity Commission inquiry into the taxation of petrol. Mr Acting Deputy President Ludlum, I know this is something that your party sought and I know why your party sought it—or I could hazard a guess. You would only propose a Productivity Commission inquiry into the taxation of petrol if you wanted the taxation of petrol to increase.

I do not believe for a second that this government will honour their commitment that petrol prices will not be affected by a carbon tax. The government lied about imposing a carbon tax in the first place, so why would we believe them on this? Let me be generous for a moment and assume that we can take the government at their word. Why have this Productivity Commission inquiry if the intention is not to increase fuel excise? The question that this government need to answer is: will they guarantee that the current rate of fuel excise will not increase under this current administration?

The government also need to answer the question: will the freeze on the automatic indexation of fuel excise, which the coalition government introduced, continue during the life of this government? The other question that the government have to answer is: will any fuel go up in price as a result of tax increases due to the government's response to the Productivity Commission inquiry? If the government cannot answer to each of those questions no, no and no then we know what the real agenda is. The real agenda of the Australian Labor Party and the Greens will be for petrol to go up in price. It may not be as a direct result of a carbon tax but, as sure as night follows day, the fuel excise will be increased. Automatic indexation: I would not be surprised if that made a comeback.

Australians are worried, genuinely worried, about cost-of-living increases because this government went to the last election declaring there will not be a carbon tax. Guess what? There is going to be a carbon tax. This government have said that petrol prices will not increase as a result of the carbon tax. It might not be because of a carbon tax; it may well be because of an increase in fuel excise. This government need to answer those three questions that I put today. This government stand condemned for their dishonesty. This government stands condemned for its attempts to evade scrutiny.

How curious it is that the government will release, we hope, the complete and final package two or three days after the parliament rises, as we enter the biggest parliamentary break of the year. There is only one reason for that: this government want to avoid scrutiny. The Australian public will see their tactic for what it is. The government should abandon this carbon tax and they should listen to the Australian people.

5:25 pm

Photo of Carol BrownCarol Brown (Tasmania, Australian Labor Party) Share this | | Hansard source

I rise in today's matters of public importance debate with great pleasure because there is no government which has done more to ease the cost-of-living pressures faced by Australians. In my contribution, I will highlight the significant policies and initiatives implemented by the Labor government to tackle cost-of-living pressures.

Whilst the Labor government has been steadfast in our commitment to support jobs and the Australian economy, this is not the case with those opposite. The biggest threat to jobs in Australia is the coalition. The biggest threat to the cost of living is the coalition. The biggest threat to the economy is the coalition, and it is because of their decision to refuse to tackle climate change in any real way.

The coalition policy of direct action poses a real threat to Australia by taxing Australian families. This is in stark contrast to the Labor government. We have been clear about our intention to tackle climate change and to place a price on carbon. A price on carbon is a price on pollution. The carbon price will mean Australia's 1,000 biggest polluters will be required to pay for every tonne of pollution they emit. As the government has outlined, this is the most effective and cheapest way for us to build a clean energy economy.

It is important that those opposite take note of this as it goes right to the very heart of their ill-conceived MPI motion. All of the revenue raised from the carbon price will be used to provide households with fair and generous assistance to support jobs in the most affected industries and to invest in clean energy. I will go into further detail on the household assistance package later in my contribution but I want to come back to the point that, right from the beginning of our announcement that the Multi-Party Climate Change Committee would investigate plac­ing a price on carbon, the government have consistently said that we would provide generous household assistance to offset any price increases incurred under a carbon price.

Whilst the Labor government have strongly committed to supporting households while we are taking action on climate change through our carbon price, this does stand in stark contrast to the direct action policy championed by Mr Abbott, the Liberal Party and the Nationals. The direct action policy will cost families, will hit the budget, is environmentally ineffective and is virtually friendless among economists and the business community. In fact, the Liberal Party's direct action plan will cost the average family $720 and will cost the budget over $30 billion. Figures show that the direct action policy would actually cost $30 billion, not the $10.5 billion claimed by those opposite. This means that when the direct action policy is fully implemented, the average Australian family would be $720 worse off under Mr Abbott's direct action policy—not to mention that the direct action policy is totally ineffective. Figures show that it is so environmentally ineffective it will not go anywhere near reaching the bipartisan target of minus five per cent. What we have with the direct action policy is that it will cost $30 billion, it will be the taxpayers who are left footing the bill, householders will not receive any assistance and it is totally environmentally ineffective. As highlighted by the Labor government, Mr Abbott's policy represents a climate change con job. This is hardly surprising, considering the Liberal Party is led by a man who does not believe in climate change and whose only political tactic is to oppose through dishonest scare campaigns and mindless negativity. Compare this to the Gillard Labor government. As I mentioned earlier, we have said right from our announcement that our intention is to put a price on carbon, and households will be generously assisted under our carbon price plan. The Prime Minister and the Treasurer will release further details of this assistance on the weekend.

We have already announced that all fuel, including petrol, diesel and LPG for passenger vehicles and light commercial vehicles, will not be subject to a carbon price. This is because the government is acutely aware that petrol and fuel costs are a major expense on the family budgets. Those opposite have spent months trying to convince Australians that petrol would be included as part of the carbon price. This was nothing more than fearmongering, a scare campaign of the highest order.

The government is also putting place generous household assistance to support Australian households. The Treasurer has already announced that about nine out of 10 households will receive some form of assistance through a combination of tax cuts and an increase in their pension or family payments or other forms of payments to help them with cost-of-living pressures. The vast majority of those households will not lose a cent because of the carbon price.

We are also introducing a buffer to further protect low-income earners. We will provide a safety net of 20 per cent to assist these low-income households. Over three million income earners will get a buffer of up to 20 per cent in tax cuts and payments over and above meeting the price impact of the carbon price.

We are also ensuring that self-funded retirees, who have worked hard all of their lives and provided for their own retirement, are supported through the transition to a carbon price. The government is acutely aware that a number of self-funded retirees have had a tough time in recent years with the impacts of the GFC on their retirement savings. So the government is providing financial help for around 280,000 self-funded retirees, equal to the extra payments that we are providing to pensioners, part-pensioners and carers.

We are implementing a comprehensive assistance package to support Australian families when the carbon price is imple­mented. This government has a strong track record of supporting Australians with cost-of-living pressures. Since coming to govern­ment in 2007, we have implemented a number of policy initiatives designed to reduce the cost-of-living pressures faced by Australians.

In order to support our families and ease this pressure on cost of living, the government is committed to returning the budget to surplus in 2012-13. Even as Australia experiences some devastating natural disasters, we remain committed to delivering this budget surplus, and we are on track to do so.

To ease the pressures on the cost of living for Australian families, Labor is first and foremost delivering a sound fiscal strategy. We have offset new spending to deliver savings that will hold the bottom line and combat any write-down in government revenue as a result of the high dollar. As part of this year's federal budget the Treasurer has announced that we will provide more tax assistance to Australian taxpayers on lower incomes. This will help encourage work and provide some modest help with cost-of-living pressures.

The government will increase the low-income tax offset from 50 per cent to 70 per cent. This will put something extra in the weekly pay packet—whilst it is a modest amount, we know that every little bit helps. The increase to the low-income tax offset will mean that someone with an annual income of $30,000 will get an extra $300 during the year in their regular pay.

When coming to office, we delivered the most significant pension reform since the introduction of the pension system 100 years ago. We gave over three million age pensioners, disability pensioners, carers, wife pensioners and veteran income support recipients increases in their pension payments. Since the reforms began, in September 2009, the pension has increased by $128 per fortnight for singles on the maximum rate and $116 for couples combined on the maximum rate. We have also changed the way the pension was indexed, to better keep pace with the cost-of-living pressures faced by those people on income support. Those opposite had over a decade to do something for age pensioners and they failed. They rode high on the economic boom, and failed to look after Australian pensioners.

This government has also increased the childcare rebate from 30 per cent to 50 per cent, to better keep in line with the rising costs of child care. As part of the budget, we announced changes to the way the childcare rebate payments are made. Parents now have the option of the rebate being paid directly to the childcare service or direct to the parent, as well as a range of options as to when the rebate is paid, whether it is fortnightly, quarterly or yearly. We recognise that Australian families need more help with their childcare costs and we have acted to support them. The latest changes provide greater flexibility to better assist Australian families with cost-of-living pressures.

Time does not allow me to continue with the list of initiatives that the government has introduced to support Australian families, but let us be clear: the Labor government is delivering significant reforms to reduce cost-of-living pressures by also providing improved public services for the Australian people.

5:36 pm

Photo of John WilliamsJohn Williams (NSW, National Party) Share this | | Hansard source

I rise to speak on the matter proposed for discussion by the coalition to the Senate today concerning the cost of living. Remember, prior to the 2007 election, that Mr Rudd said, 'I will put downward pressure on grocery costs,' just like he said, 'I will put downward pressure on fuel prices.' So we had Fuelwatch—about $13 million was wasted on that—and GroceryWatch. And, of course, the big cost to everyone is the interest rates that they have to pay on their home loans. There have been seven interest rate rises. Why? Because the government is stimulating the economy to the outrageous extent of borrowing money and spending it. We know about the waste of the programs: the pink batts program, Building the Education Revolution and Green Loans—what a farce the green loans were. So what is the biggest concern of the average Australian family, out there, working, today? The cost on their home loan. Seven interest rate rises—the next thing you know, we will be heading back to the days of the Keating administration, when Mr Keating was federal Treasurer and we were paying 25.25 per cent interest. Those were scary days. But the cost of living is going to go up because now we have a price on carbon being introduced. That is despite the promise which all of Australia has heard, time and time again: 'There will be no carbon tax under the government I lead.' That was the famous statement made by the Prime Minister. It was, of course, supported by the Deputy Prime Minister and federal Treasurer, Mr Swan. He said words to the effect, 'These are hysterical claims by the coalition,' during the election campaign, 'that somehow if we win government we will bring in a carbon tax.'

Well, the opposition at the time, the coalition, was correct—because now, this Sunday, we will get the details. We cannot get them this week while parliament is sitting! No, do not be scrutinised by the parliament! Wait until the long winter break when we all leave Canberra, and bring it out on Sunday! It must be all summarised; we are getting all the nice things about it, like no increase in the price of petrol. What about the diesel for the truckies? As I said earlier on in my speech today in this very chamber, in many, many country towns we do not have rail; everything comes in by road. If the price of diesel goes up for the truckies, the price of freight goes up for everything going into the towns: groceries, food, clothes, hardware—you name it; all of them will go up in price. That is another addition to the cost of living. And for what?

I must make this point: Senator Carol Brown, in speaking earlier on, said our policy, the direct action policy, is going to cost so much money. That is simply wrong. To get farmers to increase the carbon in our soil will cost virtually nothing because they are saving on the cost of fertiliser—$1,200 a tonne for DAP at the moment. That is where the saving is. More carbon, less fertiliser—that is the incentive for farmers to increase their carbon.

Senator Carol Brown interjecting

I will run you through it, if you like, Senator Brown. Simply balance the magnesium and calcium in your soil, increase your microbe population and let nature do its job. And, for every one per cent by which you increase soil carbon, that is 50 tonnes of CO2into the soil. Do that over the 450 million hectares of Australia's agricultural land by three per cent and you 100 per cent neutralise—not five per cent; 100 per cent neutralise—Australia 's emissions for more than 100 years. But, no; we want to go down the road of this $10 billion or in $11 billion tax—or whatever the figure is going to be; they will not tell us, Mr Acting Deputy President Ludlam. We will find out on Sunday when we are out of this place.

Compare that to Europe with its emissions trading scheme. Thirty countries in total are in the emissions trading scheme in Europe. Those 30 countries between them produce 14 per cent of the world's greenhouse gases—10 times more than Australia, which produces 1.4 per cent. Those 30 countries combined in Europe produce 14 per cent. And what is the total cost of their emissions trading scheme? Five hundred million dollars a year over 5½ years. Compare that to Australia: $10 billion a year? If we get a $20 tax it is going to be $10 billion plus.

So we are going to tax 20 times more in Australia for 1.4 per cent of emissions, compared to those 30 countries in Europe that produce 14 per cent of emissions. Is that fair? Of course it is not fair. Then we will see it: if these businesses do not get financial relief, we will see them pack up and move overseas—the cement industry, the brick industry, the aluminium industry, the steel industry. We all know the cost of production in Australia and we know what will happen: they will be moved overseas.

And make no mistake about it: the carbon tax will add to the cost of living, as Professor Ross Garnaut, the climate change expert, said. The climate change expert—I do not know what he read; I mean, he is not a scientist himself, but he is such an expert on the climate! He is an economist, but he is a scientific expert! He is such an expert, he ran the idea past us that we should do away with our ruminants. Well, the government is already trying to do away with the cattle industry. We have seen the actions of the last two weeks that have now driven the price of cattle down 30c a kilo live-weight in every market in Australia; $120 to $150 a head. And tomorrow they start shooting cattle in Western Australia, which is an absolute disgrace. It brings back memories for me of the early nineties when I had to shoot 1,000 sheep, and it is not good fun, I can tell you. But that is now what is happening and this is what we are up against. So the idea was: do away with the cattle, and run—kangaroos! Yes, that is Professor Garnaut's idea. I can just imagine it out there: forget your kelpies and your border collie sheepdogs—bring the greyhounds out to muster the kangaroos! What you do with them then, when you get them in a corner—I know what we used to do with them when we got them in a corner, but I won't repeat that here! Then we will process that, because the kangaroos are not ruminants. That is simply outrageous.

So to get back to the argument on the cost of living: let us take Qantas. What will Qantas do? They are not a small business, so they will not get exemption on fuel, going by what has been leaked to the media. Qantas will pass on the cost of the carbon tax to its passengers, the airline's CEO, Alan Joyce, says. Mr Joyce says that a carbon price of between $20 a tonne and $30 a tonne would cost the company an estimated $100 million a year and passengers about $6 on domestic flights. We cannot digest the full cost, he says. That is the point. You are going to tax the so-called polluters. Of course they are going to hand that on.

The Australian Trucking Association—what do they say? Two point six per cent of Australia's greenhouse gas emissions come from heavy vehicles. Every $10 carbon tax will add 2.7c a litre to the price of diesel. So, for each $25 of carbon tax, the price of diesel will increase by 6.75c per litre. Of course, the Greens will want to get more as far as dollars in the tax go. The beef industry is already suffering from the absolute mess this government has made of it and the total knee-jerk reaction of dropping the guillotine down on the whole export industry. The Cattle Council says that beef producers can expect to pay an extra $7,000 a year if fuel use in agriculture is hit with a carbon tax. The Cattle Council says that under a carbon tax price of $35 a tonne—and, remember, the Greens will be happy to see it at $100 a tonne—the average Australian beef producer would lose 11.7 per cent of their net farm income five years after the introduction of a carbon tax. This is just another slug for the beef industry, which employs over 120,000 people a year and contributes $7 billion annually to the economy.

What is going to happen to the brick industry and the cement industry? Brickworks Limited is a major manufacturer and employer in the building industry, operating 31 manufacturing sites nationally and employing around 1,500 people. They have already voluntarily reduced their CO2 emissions by 30 per cent, but they believe they will be facing a combined income carbon tax of initially 45 per cent, climbing to 60 per cent. Several of their sites will become unsustainable and result in the loss of many jobs.

Whether or not we get this tax, which will add to the cost of living in Australia as Professor Garnaut has said, will come down to the votes of two Independents. The families will pay. It will come down to the Independent member for Lyne and the Independent member for New England. I suggest that Mr Oakeshott and Mr Windsor actually survey their electorates. We just had the results this week of Mr Windsor's survey of his electorate on same-sex marriage and various other issues. It was on everything but the carbon tax: taxes, euthanasia—you name it. But not the carbon tax. He claims he is the people's representative. Well, come Sunday, when the details are released, I look forward to surveying the seats of New England and Lyne and seeing what the people think.

Then, I will forward those results on to Mr Windsor, and we will actually see if he is the people's representative. He attacked us back in 2003, saying that there is nothing wrong with going along with what the people think; we are there to represent the people. Well, Mr Windsor, we will see, because I know from the literally hundreds of people I have spoken to, and the emails and the correspondence, that the people of New England are furious with this whole idea. They are absolutely furious, because they know it will do nothing for the economy as far as creating jobs, it will cost them a fortune and it will do absolutely nothing for the environment. We look forward to those surveys.

5:46 pm

Photo of John FaulknerJohn Faulkner (NSW, Australian Labor Party) Share this | | Hansard source

The reason to act on climate change, the reason to have a carbon price, is because the earth is warming. And the fact that the earth is warming is not at issue. It is a 100 per cent absolute certainty. I have previously commended to senators, and I do so again, the reports of the Inter­govern­mental Panel on Climate Change and those produced by our own scientists at the Bureau of Meteorology and the CSIRO.

The IPCC's fourth assessment report finds that global warming is unequivocal. Further, the vast majority of the scientific community accepts that greenhouse gases resulting from human activity have been the main cause of global warming. The IPCC reports that emissions of greenhouse gases due to human activities have grown by 70 per cent between 1970 and 2004, and it states that most of the 'observed increases in global temperatures since the mid 20th century are very likely to be as a result of human activities'. As far as Australia is concerned, the CSIRO and the Bureau of Meteorology have presented the most recent picture of our climate. Both these organisations have decades of experience observing and reporting on Aust­ralia's weather and conducting atmospheric and marine research.

We hear an awful lot of hocus-pocus in the climate change debate, so what about some facts?

Fact: on temperature rises, the CSIRO and Bureau of Meteorology have observed that since 1960 the average temperature in Australia has increased by about 0.7 degrees. Whilst temperatures have varied in different locations, the overall long-term trend is clear and there can be no denying Australia has experienced warming over the past 50 years.

Fact: the number of days with record hot temperatures has increased each decade over the past half century. The decade 2000 to 2009 was Australia's warmest on record.

Fact: according to the World Meteoro­logical Organisation, last year, 2010, along with 2005 and 1998, were the warmest years on record globally.

Fact: the CSIRO and Bureau of Meteorology have also reported that the rate of sea level rise increased during the 20th century. From 1870 to 2007, the global average sea level rose by close to 200 millimetres.

Fact: over the period of 1993 to 2009 sea level rises have ranged between 1.5 to three millimetres per year in the south and east and seven to 10 millimetres per year in the north and west of Australia.

And, fact: these agencies have also reported that over the period of the last 50 years, the surface temperatures of the oceans around Australia have increased by about 0.4 degrees Celsius.

As for the future, the CSIRO and the Bureau of Meteorology have projected that Australian average temperatures are going to rise by 0.6 to 1.5 degrees Celsius by as soon as 2030. They have also said:

If global greenhouse gas emissions continue to grow at rates consistent with past trends, warming is projected to be in the range of 2.2 to 5.0 ºC by 2070.

Now, I acknowledge that no-one can be certain about all the long-term impacts of climate change. But we do know without doubt that the risks are immense. And we know that, in the view of many experts, Australia, more so than other developed country, is particularly vulnerable to the negative consequences of climate change. There will be social impacts, there will be economic impacts and there will be environmental impacts. I believe that it is the responsibility of government to act in these circumstances. I do not come to this debate as a Johnny-come-lately. To a great deal of entrenched opposition at the time—not to mention rampant paranoia—I supported the adoption of a low-level carbon levy way back when I was Minister for the Environ­ment, Sport and Territories during the years of the Keating government. I held the view then—and I remain committed to it now—that as a responsible member of the international community it is essential for Australia to play its part in reducing global emissions. I have always hoped that our country, as a prosperous and intelligent nation, would be at the forefront of tackling this great challenge.

In many other countries governments of divergent political persuasions have resolved to play their part in reducing global emissions. Take Canada, like Australia a large country with high energy consumption, which has four of its 10 provinces—British Columbia, Manitoba, Ontario and Quebec—partnered in the Western Climate Initiative along with seven USA states. British Columbia has its own carbon tax, due to reach $30 a tonne of CO2 in 2012. Quebec has a carbon price on hydrocarbons. The European Union Emissions Trading Scheme commenced in 2005. Twenty-seven EU countries and three non-EU countries have entered into the scheme, which covers half the EU emissions. Some EU parliaments, of course, have also supported a levy on carbon.

Our New Zealand friends, in the words of their Prime Minister, have an ETS that works. I have to say we sure do have some catching up to do. The New Zealand ETS is a system where one New Zealand unit, or NZU, gives the right to emit one tonne of carbon dioxide. For example, companies that mine natural gas have to surrender NZUs to the government, whereas owners of forests that absorb greenhouse gases earn NZUs from the government.

I believe the Australian economy will be hurt and Australian jobs will be lost if we fail to put a price on carbon. I understand, hear and read that the government's two-stage plan for a carbon price mechanism, starting with a fixed price before transitioning to an emissions trading scheme, will be announced on Sunday. Consistent with my long-standing views, I for one will welcome it.