Alan Eggleston (WA, Liberal Party) Share this | Link to this | Hansard source

My question is to Senator Wong, the Minister representing the Minister for Climate Change and Energy Efficiency. Has the minister estimated the increased costs associated with running hospitals, schools, courts, police and libraries and road maintenance of a carbon tax; and can the minister advise the Senate what the cost of a 10 per cent increase in electricity prices in the first year of the carbon tax is for these essential services?

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

There are a number of areas that the senator has mentioned. First, in relation to schools, as the senator would know, the Commonwealth government's contribution to schools funding is indexed, so as costs rise funding to schools is increased. This index­ation is changed annually, after consideration of movements in data that underpin what is known as the AGSRC. I am sure Senator Evans could explain that to you: it is the average government school—

Eric Abetz (Tasmania, Liberal Party, Shadow Minister for Employment and Workplace Relations) Share this | Link to this | Hansard source

Because you can't.

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

Wow, that was brilliant!

Eric Abetz (Tasmania, Liberal Party, Shadow Minister for Employment and Workplace Relations) Share this | Link to this | Hansard source

Thank you. It put you off!

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

You really have an intellect of the highest order, Senator Abetz!

Kim Carr (Victoria, Australian Labor Party, Minister for Innovation, Industry, Science and Research) Share this | Link to this | Hansard source

Yes, a towering genius!

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

A towering genius!

John Hogg (President) Share this | Link to this | Hansard source

Order! Return to the question and stop the—

Opposition senators interjecting—

Senator Wong, please resume your seat.

Honourable senators interjecting—

When we have silence on both sides, we will proceed. Senator Wong, please continue.

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

As I was saying, that gives you the average government school's recurrent costs. This means that cost impacts resulting from the introduction of the carbon price will be captured in this indexation and schools will automatically receive increased funding over time.

In relation to health services, the Treasury modelling estimates the average price impact on health services to be around 0.3 per cent. This group in the modelling would include hospital and medical services, optical and dental services and pharmaceuticals. To the extent there is any increase in costs due to the carbon price, current and future funding arrangements will automatically ensure that public hospitals continue to be properly funded. Public hospital funding in the National Healthcare Agreement is indexed at over 7 per cent in each year of the forward estimates. In addition, when we move to the new healthcare agreements the government has struck with the states and territories, the Commonwealth has committed to pay 50 per cent of the growth in hospital costs. I trust this assists the senator.

Alan Eggleston (WA, Liberal Party) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. Can the minister advise the Senate whether the government has factored full compensation into its carbon tax package for state and local governments to meet the increased costs associated with the carbon tax?

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

As you would know, COAG agreed in November 2008 to a funding package which, amongst other things, provided for new SPPs—that is, specific purpose pay­ments—in the areas of health care, schools, skills and workforce development, disability services and housing. Under that agreement each national specific purpose payment—

Honourable Senators:

Honourable senators interjecting—

John Hogg (President) Share this | Link to this | Hansard source

Senator Wong, resume your seat. Senator Conroy and Senator Abetz, you cut directly across my capacity to listen to Senator Wong.

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

I was referencing the national specific purpose payments agreed by the Council of Australian Governments in relation to a range of areas where Common­wealth funding is provided. Under that agreement on national SPPs, which includes health care, schools, skills, workforce dev­elopment, disability services and housing, funding is ongoing and indexed each year. Any increased costs that flow from the intro­duction of the carbon price will result in increased funding through these indexation factors under the SPPs.

Alan Eggleston (WA, Liberal Party) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. Given that the minister clearly cannot guarantee comp­ensation and in the light of the fact there will be a 10 per cent increase in electricity prices in just the first year of the carbon tax, can the minister explain how hospitals, schools, courts, police, libraries and road maintenance will be able to deal with the multimillion dollar impact on their costs? Will the minister advise us whether there will simply have to be—

John Hogg (President) Share this | Link to this | Hansard source

The time for asking the question has expired. It would have helped if you had not had a preface to your supplementary question.

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

I have to say I thought I provided a very detailed answer in response to the questions about the way in which indexation works. I would have hoped that the senator would understand how indexation works. That really deals with the issue he has raised.

The senator asked about public hospitals. I can say that we will not do what the Leader of the Opposition did when he was health minister, which was to cut $1 billion from Australia's public hospitals. They come in here professing concern on issues such as health and education, but what they really think is demonstrated by what they did when they were in government. The character of the Leader of the Opposition is demonstrated by what he did as health minister, which was to cut $1 billion out of Australia's public hospitals. That is the legacy of the Leader of the Opposition and it took a Labor govern­ment to fix it. Those are the facts, Senator. (Time expired)