Ron Boswell (Queensland, National Party) Share this | Link to this | Hansard source

Let me first welcome Senator Wong. I know that she will be pleased to hear my speech on carbon tax. I am not sure we will share any great values on it, but maybe she can learn a bit.

We are debating 18 clean energy bills that are going to severely impact on Australia's business, regional areas, mining, householders and food processors by driving up costs, making business less competitive and forcing jobs offshore. This will all be a futile bid, because this is not going to achieve anything. The carbon tax is the greatest confidence trick ever perpetrated on Australia. I say it is a confidence trick because it is modelled on an assumption that the rest of the world will have some form of carbon reduction that will roughly equate to Australia's carbon tax by 2016—and there will be no less employment. Both assumptions are loaded into the GTEM model.

This model has only ever been seen by Treasury, despite the Senate Select Committee on the Scrutiny of New Taxes pushing for the release of the model for months and months. Despite Senator Cormann and me being told time and time again that the modelling is available, the reality is that it has never been available. Last week, Meghan Quinn, from the Treasury, said that Henry Ergas, Brian Fisher and Warwick McKibbin had access to the modelling that would allow them to publish results of the impact of the carbon tax. That is blatantly not true. Neither Fisher nor Ergas nor McKibbin—Australia's most prominent economists—have been able to obtain the model. Dr Brian Fisher looked at Meghan Quinn's comments about the model being available, went down there and asked for it and was refused. After months of trying to get this modelling, some light was shed by Phillip Glyde from ABARES. When asked by Senator Cormann, 'Would an independent third party be able to have sufficient access to the GTEM model to run the same modelling scenarios as Treasury ran to produce the carbon tax?' Phillip Glyde said no, it was not possible. I find Mr Glyde to be one of the straight shooters.

Dr Brian Fisher wrote to Meghan Quinn, from Treasury, asking for the modelling after Ms Quinn said it was available. He said he was prepared to pay for it but he was told by Treasury to make further inquiries to Wayne Swan. I asked Ms Quinn whether we could get the modelling during a series of Senate estimates inquiries. Despite being told that it was available on a number of occasions, no-one has ever obtained the modelling. At Senate estimates last week, Senator Cormann and I again asked Senator Wong for the modelling. The minister weaved, ducked and dived trying to avoid the question. She tried to filibuster on how much modelling and how many hundreds of pages she had released, but the cat was belled when Meghan Quinn told the estimates committee that the most recent public release of the model carried by ABARES was in documentation in 2007. That would have been in the Howard government era.

Senator Cormann and I continued to ask for a commitment from Senator Wong to release the modelling, only to be told that she would take the question on notice. We asked Senator Wong five times, and she said five times that she would take the question on notice. We are still waiting. On 21 October, Henry Ergas said that it had taken three months and 10 hours to get an admission that the modelling was not available to anybody—not to him or anyone else. I asked Ms Quinn a number of questions:

Senator BOSWELL: So, if Professor Ergas were to go with a cheque in his hand and say, 'I want the modelling and I am prepared to pay for it,' it would be available to him? Is that what you are saying?

Ms Quinn: He would be able to pay for the models used by Treasury and, yes, he would be able to receive those models.

Senator BOSWELL: Comprehensive models?

Ms Quinn: Yes, he would be able to obtain them from the providers of those models.

This is blatantly not true, because he did try. Everyone has tried to get the models but no-one has been successful.

The government today is putting through a new series of clean energy bills which will apply if the carbon tax passes the Senate. This tax will cost the nation, to GDP, $33 billion by 2020 and $1 trillion by 2050. This is not a Boswell statement; this is from chart 5.13 of Treasury paper Strong growth, low pollution: modelling a carbon price. It is the government's own model. And we are going to spend $1 trillion by 2050 and $33 billion by 2020. This is a model that has never been seen by any third party. Economists have sought access to modelling and have been refused. They want the modelling, peak bodies want the modelling and business groups want the modelling, but it is the tightest secret in Canberra. This is a trillion-dollar carbon tax without any checks or balances and no scrutiny. 'I'm here from the government and I wouldn't lie,' is all they have on offer.

It is not the government's money, Senator Wong; it is the people's money. Senator Wong, if you are ever in business and it is a public company and on 30 June the books have to be audited and you do not comply, then you are in very serious trouble under the companies act. The government does not want the modelling to be scrutinised because it is frightening. There is absolutely no reason why this modelling should not be made available. The government is costing Australia $1 trillion but will not let anyone look at the modelling. The press should be demanding that there be a check on the modelling. The government has got away with highway robbery on this. Over $1 trillion loss in economic output in 2050 equates to $40,000 for every man, woman and child. These are the government's own figures, Treasury's Strong growth, low pollution chart.

On top of the loss of revenue, the Department of Climate Change and Energy Efficiency is supporting the old adage that if you give a public servant a piece of paper and a pencil then they will build an empire. Already 1,027 people are employed in the climate change department at a cost of $48.9 million and we have got a year to run. Goodness knows what it is going to cost.

Both Senator Cormann and I have been in relentless pursuit to obtain the modelling so that the cost of this expensive tax can be audited. The government asked us to accept a loss of $1 billion on the word of Treasury without intervention by third parties. I do not believe we will ever see the modelling. I do not believe the modelling will ever be available, certainly not until the legislation goes through. If the government were so sure that the modelling would support their arguments, they would have released it months ago. In fact, they would probably have sent it out to householders in the form of a letterbox drop. If they were convinced that the modelling was sound, why won't they release it now? That is the question that should be asked.

Senator Wong, why won't you release the modelling? Why won't Greg Combet release the modelling? Because they know the modelling is based on the assumption that all countries will be on board by 2016. This is an official explanation given to us by climate change officers, that all countries will have some form of carbon restriction by 2016. I asked the climate change officials to give me the restrictions and the commitments made by the other countries to reduce carbon emissions, but what I was given was misleading. We were told Brazil would have a target—and Canada, China, Indonesia, India, Mexico, the Republic of Korea and the United States. These countries do not have anything like a carbon tax. The statement I was given is misleading and wrong. None of our trading partners have proposed the level of action Australia is proposing with the carbon tax. Just a couple of days ago the Canadian foreign minister, Mr Baird, said Canada would never introduce a carbon price. He described it as pyramid selling. Mr Baird is in a government that just won a massive election campaigning against a carbon tax. New Zealand is backing away from a carbon tax.

By 2020 carbon emissions will have risen in China by 496 per cent and in India by 350 per cent. Third World countries will never impose a carbon tax on their already depressed economies, and why should they? Why should they penalise their own people that are living in poverty? It is just impossible for a Third World government to impose a carbon tax. Unless there is world involvement, carbon tax just cannot fly. There are many countries walking away from this, and yet we are told by zealots in the climate change department that the world will have the equivalent of a carbon tax by 2016. The government's own modelling shows that emissions will not decrease in Australia. Emissions will increase from 2012 to 2020, from 587 million tonnes to 621 million tonnes, yet we are going to spend $71 billion to get an increase in carbon emissions.

The government knows that, if the model is released and independent modellers put the facts—that the rest of the world will not have a carbon tax by 2016—into the equations, the modelling will show that the Australian financial exposure will be far worse than what the government is stating at the moment. Genuine modelling will show that the cost will be higher, damage to our industries will be more severe, unemployment will rise and falls in incomes will be higher. Loss of GDP will be greater, even more than $1 trillion. In fact, if the GTEM modelling were released, the modelling the carbon tax was based on, it would show a much worse set of figures. If the model were not loaded with assumptions that we would all be there by 2016, an independent modeller could place a more realistic scenario and come out with a totally worse set of figures. The government wants to avoid that like the plague. There is also loaded into that model the assumption that there would be no unemployment. It is loaded into the computer. Unemployment would be picked up by people getting less money. The world is running away from a carbon tax. No-one in their right mind would enter into a carbon tax comparable to Australia's by 2016, and that is what we are being asked to accept.

So the real facts have been hidden from the Australian people. This is a most serious situation which places government officials in a terrible position where they must defend their government's hiding of the modelling. The business community, the mining community, food processing, heavy industry like cement, steel and aluminium, farmers and graziers and working families deserve to have an honest independent assessment done on this modelling of the carbon tax. But the government are protecting that modelling as though their life depended on it. They know what will happen if the real cost of the carbon tax comes out. It will make them even more unpopular, if that is possible. I do not make unsubstantiated claims in the Senate but I will say this: the deliberate, continuing refusal of the government to allow their modelling to be scrutinised by independent modellers misleads and is very close to fraud. Where else in the world would a government spend $1 trillion and not open its model to scrutiny?

ABARES always released the full model when we were in power.

After July next year, when the first carbon tax bill comes in, there is going to be an unbelievable backlash from the business community. As the government has said, the carbon tax will cause prices to rise by around 10 per cent for householders. It will cause the price of power to rise by 30 per cent for industry. Last night I was talking to a guy from Queensland who has a lot of generators up there, and he said, 'When this hits it is going to hit like a rocket.' My advice to industries that use a significant amount of electricity is to go and get some advice from the electricity consultants, because your electricity bills are going to be a lot higher than most people think. Business needs to be prepared for this. People should be forewarned that their household bills will go up by 10 per cent and business costs will rise by 30 per cent—and going north.

This is the world's biggest carbon tax. In fact, apart from the EU, it is the world's only carbon tax. In the six-year period between 2005 and 2011, carbon tax in the EU collected $4.96 billion. Over a six-year period in Australia the carbon tax will collect $71 billion. The carbon tax will hit Australia at $391 per person per year. Less than nine per cent of Australia's 105 million manufacturing workers will receive compensation for the carbon tax. Where is Paul Howes when you need him? He was going to pull the plug if the carbon tax cost one job, but it is going to cost thousands and thousands of jobs, and the few miserable bucks that they have thrown into the steel industry and in paying Peter Beattie a thousand bucks a week, or whatever he gets, is not going to fill that gap.

The modelling assumes a miner loses a high-paying job—say around $100,000 a year—and he may get a lesser paying job of $50,000 a year. Ipso facto, there will be no unemployment. These are the assumptions made in the modelling. What a nonsense! If you load into the modelling no unemployment, that is the answer you are going to get back: there will be no unemployment.

There is another reason the model should be tested. All Australian industries are going to be under the pump. The high Australian dollar is making it easy to import and hard to export. The aluminium industry, the cement industry, the steel industry—all of these industries are going to lose their competitive advantage. Australia has a high standard of living. People in factories have generally had good working conditions. Australia's competitive advantage has been cheap electricity, but the carbon tax is going to take care of that. It will bring us right back to the field. This is already driving businesses overseas.

Is anyone aware that Rio Tinto have put their aluminium smelters up for sale at Gove, Bell Bay in Tasmania and Tomago in Newcastle? Then there is the Kandos cement plant—that has gone. When factories are not maintained and become run-down, they will be replaced, and they will be replaced by overseas industries. Most of the big industry players are international and it does not matter to them whether the manufacturing plant is in South Africa or New Zealand or Australia. It is just as cheap, probably a lot cheaper, to manufacture overseas. Heinz are reducing food processing in Australia. Food processing has been threatened by this carbon tax. We are already starting to see the rot set in and we have got 12 months to go until it even takes effect.

A couple of years ago the Yabulu nickel-processing plant was going to be closed by BHP. One thousand jobs were going to go, were going to be lost. A friend of mine, Clive Palmer, went in and spent a huge amount of money and turned that business around and made it profitable again. Last year you may have seen in the papers that he shared his wealth at Christmas time. He bought a number of Mercedes Benzes for his workers. The Yabulu mine will now be up for a $28 million carbon tax. It will rob the refinery of its entire profit. You can pick abattoirs, you can pick any industry: they are going to get hit. The proposed compensation to householders will not be much good. If you do not have a job, compensation does not help you a great deal.

People are going to shift to those places where there is no carbon tax. Industries will be dirtier and carbon emissions will grow higher. The carbon tax has not an ice-cream's chance in hell of working. Canada's foreign minister called it pyramid selling. But I believe it is closer to a Ponzi scheme. It is the closest thing I have ever seen to a Ponzi scheme. This is going to hurt everyone. (Time expired)

Trish Crossin (NT, Australian Labor Party) Share this | Link to this | Hansard source

It is with great pleasure that I rise this evening to provide my contribution to this debate on what is known as our clean energy future package of bills. Some time ago in the Northern Territory I conducted a survey of constituents under the age of 25. I asked them to highlight for me what their three top issues were. Overwhelmingly—it will not come as any surprise to people—more than 80 per cent of the responses indicated that the environment and climate change were what most concerned the young Territorians that I represent in this chamber. It is certainly that element of my constituency that has been congratulating and urging this government to continue to take these steps—and that is exactly what these bills are all about. These bills are a plan to cut carbon pollution and to drive investment in clean energy technologies—technologies and infrastructure like solar, gas and wind. These bills will actually help build the clean energy future that the young generation—the young people that I represent in the Northern Territory—is expecting us to do now as a federal government. They are expecting us, wanting us and encouraging us to take this lead. They want us to show some leadership, to start taking some action on climate change and to deal with it. These bills will assist in ensuring that we do grab hold of a future that is a clean energy future. These bills will ensure that the big polluters will pay—not the people. This is a price that will be paid by around 500 of our biggest polluters and not ordinary Australians. Contrary to what those opposite want us to believe, this is about making the polluters pay, and so millions of Australians will actually pay less tax. What people need to appreciate is that these bills not only deal with climate change but also invest a lot of money in renewable energies and future energy technologies. And they have wrapped up massive tax reform for this country.

I want to spend a few minutes highlighting why it is so necessary for us to move on climate change and to put a few of those points down on the record for the sceptics opposite. The Northern Territory is the least populous of Australia's states and territories. We are home to only a mere one per cent of the population. But, even though it is so small, the Northern Territory produces 3.3 per cent of Australia's total greenhouse gas emissions. Unlike most other jurisdictions, we have emissions that derive predominantly from bushfires, savannah burning, not from industry or power generation. Our power generation is gas rather than coal-fired, which in the context of this legislation gives the Northern Territory a significant advantage in terms of emissions per capita. Despite the apparent insignificance in its contribution to greenhouse emissions and global climate change, the Northern Territory is far from immune to the adverse impacts of climate change. I think that is why so many young people in the Territory are tuned in to wanting to see action on climate change. We might be a small player when it comes to what is happening nationally but we are a big player when it comes to the impact of what is happening to the Northern Territory with the changing climate.

As most people would be aware, the Northern Territory has two very distinct climate zones: the Top End of the Territory and Central Australia; they are at least 1,400 to 1,500 kilometres apart. The Top End has a tropical climate, high humidity and two seasons—the wet and dry seasons. By contrast, the Centre, which includes Alice Springs and places like Uluru, is semi-arid. Predicted changes in climate conditions may affect natural systems and human settlements in the Northern Territory. There are also potential impacts and costs to the Northern Territory's industries, environments and people. In the coastal zone, for example, climate change will lead to rising sea levels and potentially greater storm surges, which will impact our coastal communities, infrastructure and ecosystems.

Not only will climate change impact on the Northern Territory; it will have a very significant impact on the people that I represent on Cocos island, which is less than one metre above sea level. Picture that: less than one metre above sea level. I take no more than about 10 steps away from the airstrip at Cocos island and I am in the water at the beach there. The research that has been undertaken tells us that climate change will have a significant impact on that little island community.

Across the Northern Territory, between 260 and 370 residential buildings have been identified as being at risk of inundation from a sea level rise of 1.1 metres. A rise such as that will put over 2,000 kilometres of road at risk as well. Darwin is especially vulnerable to riverine flooding and more intense cyclonic activity. The impact on infrastructure is expected to be extreme under a business-as-usual climate scenario, including major threats to vital port infrastructure. In Darwin alone, we know that the number of days over 35 degrees is expected to increase from 11 a year, which is what we currently get, to over 69 days by 2030 and nearly 300 days by 2070, unless we do something to reduce the emissions and be part of global action to address climate change.

Coupled with the extremely high humidity that Darwin experiences during the wet season, the higher temperatures are expected to adversely affect levels of human comfort—that goes without saying. We will see increased mosquito borne diseases such as Dengue fever. Also, we know that there are a number of deaths in the Territory related to heat—10 last year. We are expecting that to rise to at least 126 a year by 2050. These are really stark statistics and they are telling us that we have to take action now and do something about this. We know that the number of cyclones is expected to decrease, but the proportion and intensity and, therefore, the more destructive categories of cyclones are expected to increase.

I want to highlight that earlier this year we released a report entitled Kakadu: vulnerability to climate change impacts. It identified some of the likely impacts if, in fact, we do not take action to address climate change. The freshwater environments of Kakadu are likely to experience increased salinity as a result of rising sea levels, which are predicted to go from eight centimetres up to around 30 centimetres by 2030. The scientific research, which we have embraced on this side of the chamber, is validated and accredited. As a result, we believe that it is time that we as a government take action to turn this figure around or prevent it from happening. We know that in a place like Kakadu those sorts of statistics will result in fundamental ecosystem changes, placing severe pressure on many species of plants and animals. Huge tracts of melaleuca swamp are likely to be destroyed and, along with those, the critical habitats that they provide for many waterbirds and aquatic species.

A recent symposium in the Northern Territory saw experts from around Australia meet in Darwin to discuss climate change and the necessary adaptations to be made in the Northern Territory. Charles Darwin University's Research Institute for the Environment and Livelihoods says that the NT is already feeling the impact of climate change. It is already seeing quite rapid rates of sea level rise off the northern coastline, averaging about seven millimetres per year over the last 18 years. So the statistics are there, the report is there and the scientific evidence is there. What we need to do now is to take responsibility, to take action and to do it now. We cannot deny the evidence that most of the warming observed globally over the past 50 years is attributable to human activities and that climate change has already affected many of our systems. This snapshot of the challenges the Northern Territory is facing from climate change provides ample reason to support this clean energy package.

We know that, of the approximately 500 businesses across Australia that these bills will target, fewer than 10 operate solely in the Northern Territory. What I want to highlight, though, is that this package of bills aims to do a number of things. It will cut pollution by 160 million tonnes per year by the end of the decade. It will see 1.6 million new jobs created and it will keep the economy growing. It will fund billions of dollars of tax cuts and extra payments for households. We have always been clear that the carbon price will have some price impacts—on average, 0.7 per cent. That is less than one cent in every dollar. This government has always been upfront and honest about the price impacts of this legislation, but we have also been very honest about the fact that this package is targeted so that at least nine out of 10 households will get assistance.

Let me very quickly put this on the record so that people in the Northern Territory know what that means. More than 50,700 people in the Northern Territory will receive household assistance through the transfer system. More than 19,000 pensioners will receive an extra $338 per year if they are single and up to $510 for couples in their pension payments. More than 19,400 families will receive household assistance through their family assistance payments. More than 800 self-funded retirees in the Northern Territory will receive extra assistance, $338 per year for singles and $510 for couples. We know that more than 11,200 job seekers will get $218 per year for singles and $390 per year for couples. More than 4,000 single parents will get an extra $289 per year. More than 3,600 students in the Northern Territory will get up to $117 extra per year for singles, depending on their rate and the type of payment—Austudy, Abstudy or youth allowance.

On top of all of that assistance that we are going to provide to households in the Northern Territory as we implement this package, taxpayers in the Northern Territory with an annual income of around $80,000 will get a tax cut, with most receiving at least $3,000 per year. For a dual income family with one child and a joint income of $75,000 per year—which is a typical income in the seat of Solomon, I might say—the average expected costs due to a carbon price will be around $504 a year. They will receive $1,087 in household assistance, so they will be more than $500 per year better off.

So what we need to do is embrace this legislation. We are going to do two things here. We are going to tackle climate change, get on board and be leaders in addressing what is happening to our climate. We are going to be leaders when it comes to ensuring that we inject money into clean energy technologies and infrastructure and we are going to become leaders in reforming the tax system in this country and assisting households. We will support them with funding so that they will actually benefit from this clean energy package.

I would urge everyone to focus on the positives of this government's actions on climate change. For example, the carbon price will have no direct impact on the fuel bills of many small and large businesses—couriers, taxi drivers, car hire companies. Businesses that use vehicles of less than 4.5 tonnes—cars, utes and light commercial vehicles—will be permanently excluded from paying the carbon price. The family car is also excluded.

In the case of heavy vehicle operations, the Bureau of Infrastructure, Transport and Regional Economics has calculated that the extra cost of driving a B-double from Sydney to Melbourne under the carbon price at today's diesel prices will be around $35, or about 7c a litre. We hear many critics talk about the impact of these bills on transport costs in the Northern Territory but, as I said, we are looking at 7c a litre—0.7 per cent per item, less than 10c per item. In relation to air travel, which I know some people in this place have spoken about in their contributions to this debate, the carbon price will have a very small impact on domestic air travel. For example, we know that it will add around $2 to the cost of a seat on a flight between Sydney and Melbourne.

We have always been upfront about the impact and the costs of these changes for households. We have been more than upfront about the very generous assistance that we will be providing to households. Households will be better off under this plan. Once fully implemented in 2014, the carbon price will have little impact on the cost of the daily commute. The expected rise is only half of one per cent, significantly under the eight per cent that was added when the GST was introduced by John Howard and the Liberal government. So I am very pleased to be standing here supporting this package of clean energy bills. I am pleased because the rest of the world is acting and our economy and our environment will be badly damaged unless Australia acts too. We know that families will be better off under this plan. We will address climate change. We will be assisting households as we move through this transition.

The Prime Minister said a few months ago that history will determine the outcome of this government and she wants to be on the right side of history. I think in five or 10 years time, when we turn around and have a look at what we have done in tackling climate change, we will be very proud that we as a federal government have stumped up to the hard task, taken on massive reform and taken the opportunity to ensure that we tackle climate change, that we do make a difference to what is happening to our environment and to the climate around us. We have done it in such a way that families can benefit from this, can be part of this and can be pleased to be part of it. I have had hardly anybody come to my office complaining about these bills or complaining that they will not be effective. I have had more than enough people come to my office to congratulate us. I have done massive mail-outs around the Northern Territory and we have been overwhelmed by people who have come through the door and overwhelmed by people who have telephoned us to say: 'I am pleased to see that you are part of a government that is starting to tackle climate change. I am really pleased to see that you have also included us in your package so that we will benefit from this as well.' Overwhelmingly people in the Northern Territory have supported and embraced this package, particularly young people. They want us to get on with this job and make a difference, not only to their lives, their climate and their environment, but to the lives of the people who will come after them.

Sue Boyce (Queensland, Liberal Party) Share this | Link to this | Hansard source

I would not want to comment on the content of Senator Crossin's speech, but I would at least like to congratulate her on the length of her speech and the fact that she appears to have made a real effort to contribute to this debate on the clean energy bills, unlike many of her colleagues from the Labor government and their close allies the Greens. We have had short speech after short speech from both the government and the Greens, who apparently could not even be bothered, despite Senator Crossin's comments around Ms Gillard's interest in this historic moment, to put together substantive contributions to this debate on what is alleged to be a great and historic change. I think it will be historic, but it will not be because we are on the right side of history. It will be remembered as another black Labor day.

In the political and public debate, many climate change issues are treated as black and white, for or against, when the truth is far less exciting and much greyer. The world and its climate are very complex, but I have faith that we can deal with most of the issues and maintain a liveable world. However, I think it is understandable that we will argue about the solutions to the very real threat of climate change and I would like to give you my take on that.

A clean environment has to be a natural cost of doing business. I remember the days when the environment protection authorities were formed in the states and many businesses complained that they could not stay in business with those restraints on their ability to emit into the air, yet they did. They changed, they innovated and they survived. What may seem to be costs now will in the future be seen as ways of turning a dollar. Solutions will be found by the integration of scientific and business ingenuity, although I hasten to add not under the current funding regimes that this government has for those sectors. It is private enterprise that will drive our solutions, or at least should drive our solutions, with government simply developing supportive programs and getting out of the way. Government's role is to establish national policy settings that are clear, transparent, affordable and centred on a rigorous consultation with business and the host of brilliant minds that we do have available to us, although they are not much used right now.

The Gillard 'not in a government I lead' carbon tax does not pass any of the above tests. It is a huge shambolic bureaucratic monolith driven by a blind person in a green uniform who does not believe in sat nav but instead has absolute faith that they know where they are going. It is absolutely pointless to undertake environmental climate change initiatives that are not economically viable or do not regard economic viability as being crucial to their success. Although, why would we be surprised that this government has not quite got its act together on economic viability yet?

In a recent submission on the government's clean energy legislative package, the Business Council of Australia said:

The BCA is not contesting the bi-partisan emissions reduction target of -5% and the need for Australia to contribute its part to a binding international agreement.

There is no contest on those points, but the BCA also made a number of important observations that question the Gillard government's headlong rush to add environmental mismanagement to their long list of policy misadventures and policy mis-implementations. The BCA argues that the Gillard-Bob Brown clean energy future package, as it is currently designed, presents considerable risks to Australia's long-term future. For example, their clean energy future legislation is based on overly optimistic assumptions in the Treasury modelling that have already been called into question. Those assumptions, and the models on which they rest, have not been stress tested. In fact, as Senator Boswell so clearly pointed out to us earlier, no-one had even been allowed to see or analyse the models that were used. The Gillard government has no plan B. If this modelling is wrong, they have no backup plan at all. The BCA also points out that much of the operational detail of the proposed legislation will be contained in regulations that we have not seen. We do not have a clue about their workability in the real world. Given the government's current track record on practical solutions, I do not think we have any reason to be anything other than very, very worried about what this will mean for Australia and its future. In business, as in life, if you make a crucial decision on the basis of assumptions you must either be very confident about those assumptions—and we have proof that the government is not confident about these assumptions, or they would have released them—or you must have a backup plan if some or all of the assumptions are shown to be wrong. So what are the basic assumptions of the government's carbon tax plan? Firstly, that all other countries will implement pledges made at the Cancun United Nations Framework Convention on Climate Change, and that coordinated global action will emerge by 2016. At present there is no binding international agreement in sight.

I was musing earlier that it was interesting that Senator Wong and the then Prime Minister, Mr Rudd, spent so much time telling us how they needed a solution before they went to Copenhagen so that they could prove to the world that Australia was a leader in this field. We have Durban coming up at the end of November, and I do not see too much enthusiasm here for the government to be able to brag about its achievements quite as loudly. Perhaps this is Ms Gillard being a bit concerned about what happened to Mr Rudd after the complete debacle of Copenhagen. Certainly, part of the reason that he ceased to be Prime Minister was the fact that Copenhagen, as a conference, achieved nothing, and Mr Rudd achieved nothing. Perhaps Ms Gillard is hoping to sneak out of the country to Durban, because we certainly will not have an international binding agreement, or even the outline of an international binding agreement, decided at the end of this month in South Africa, despite the fact that the Kyoto protocol is rapidly drawing to a close.

We should also recognise that the major developing economy pledges that form part of the Copenhagen agreement are subject to overriding economic growth and poverty reduction requirements. These pledges do not include an indication of when each country will reach its emissions peak. The pledges are actually best endeavours, not promises, and I suppose that is something this government should be well aware of. It is still unclear what legal instrument will be put in place and what binding actions major emitting nations as diverse as the USA, China, India, Russia and Brazil will take. The United States, Japan and, most recently, Canada have all either rejected or postponed their programs to price greenhouse gas emissions. Our Treasury modelling is predicated on all countries that have made pledges actually implementing these pledges and a global price on greenhouse gas emissions emerging. That will be interesting to watch, but once again we have nothing about what lies behind that Treasury modelling.

The first question that should be asked is: what is the likelihood of actual international consensus and activity eventuating? The Treasury modelling does not help us to assess the risks of different outcomes in the international negotiations. In fact, there has been no sensitivity analysis whatsoever. Similarly, Treasury has not modelled what may well be a more likely scenario; that is, fragmented and differentiated actions by only some advanced economies and some major emitters. The level and robustness of international commitments obviously has great importance for Australia, both from an environmental and from an economic perspective. Internationally, the levels of investment in low-carbon technology are substantially lower than the $500 billion required to keep temperature rises to less than two degrees Celsius. Let us make no mistake: it is the international environment in which Labor's big new carbon tax will operate, and it is that environment which will destroy Australian businesses, Australian jobs and, eventually, Australian households.

The Greens and their Labor finger puppets are so proud that Australia will be first and that it will lead the world to some sort of environmental nirvana. But let us look at what those nations are doing in the real world. Take China. Contrary to what the Prime Minister would have us believe, China is going through the fastest growth in emissions in history. Between 2005 and 2020 Chinese emissions will increase from about five billion tonnes of carbon dioxide equivalent per annum to over 12 billion tonnes per annum. This is approximately 100 times the reductions that would be achieved by the government's many bills. The Prime Minister has claimed that China is closing some of its coal fired power stations. For once, she has spoken the truth: they are closing some small ones and replacing them with some much bigger ones. Once again we have a version of the truth from this government.

Indian emissions are estimated to rise by 74 per cent by 2020. Similarly, India will not have a systemic carbon tax and, in fact, is completely and utterly uninterested in having one. Again Prime Minister Julia Gillard demonstrates her vague relationship with the truth when she claims that India was taking national action on pricing carbon by putting a clean energy tax on coal. The Indian coal tax is $1 per tonne, and it is just on coal. By comparison, even ignoring the government's clean energy bills, the state royalty on Queensland coking coal is already $20 per tonne. In the United States, a cap and trade system, their equivalent of a carbon tax, has been cremated and buried. The modelling upon which the Prime Minister relies includes the assumption that the United States will have a system that will be a full part of an international trading system by 2016. That is a completely false and unsustainable assumption. No member of the Labor government in Australia has been able to point to any evidence in the United States, from any legislator, which justifies that assumption. It is not even an assumption; it is another fabrication.

Europe does have an emissions trading scheme, but it is radically different from what is proposed here. The European system on a per capita basis is little more than $1 per person per annum across the economy. The Australian system will be approximately $400 per person per annum. Of course, I am sure the government can explain to us how we have the ability to pay 400 times what the very developed economies of Europe do.

Will this magnificent sacrifice being made in our names by the Gillard Labor government save the world? No, it will not. It will just mean that our emissions, our investment and our jobs will be sent offshore. Australian industry will have paid for platinum seats at a show that never happens—and there are no refunds. So there go business, jobs and growth. And what would happen to our budget and our debt if these untested, pie-in-the-sky assumptions proved to be bogus? Should the carbon permit price in the Australian scheme fall to $15 a tonne after the fixed-price period, the extra cost to the federal budget would be about $3 billion annually. A low permit price would turn a projected cumulative surplus of $9.6 billion into a cumulative deficit of $9 billion over the same period.

The Treasury modelling suggests 40 per cent of the cumulative abatement to 2020 will be through a reduction in the growth of electricity demand. The thing is, of course, that that relies on dramatic change in consumption both by households and by business. We already know that electricity usage is quite inelastic. There is very little opportunity for households to change and, given that they are allegedly going to be compensated by this government for those increases, why would they change their usage? As well, we have retail price regulation in some areas that means domestic users will not even be paying the real retail price for electricity.

I suspect that in fact the savings are going to be made by the number of manufacturers in Australia that will close and go on closing their doors. We had the very unattractive sight of the financial services minister, Mr Shorten, today suggesting that because he went to supermarkets he knew people were doing it tough out there. Apparently he has just worked that out. The coalition has been saying for three years that if you take the effects of the mining industry away you have an economy that has been failing over the past three years. Businesses—service businesses and manufacturers—are closing their doors, builders are without houses to build. Yet this has all been masked by the attempts of this government to pretend that things are going well.

What should we be doing about this? The coalition has a direct action plan, which has been spelt out in the past by shadow minister Greg Hunt. If you look at the figures in it you will see it covers very successfully the need for change. What is more, our promises are real promises. A coalition government will support direct action on climate change to reduce Australia's carbon dioxide emissions by five per cent by 2020 while at the same time delivering real environmental benefits. This will be achieved without new or increased taxes on Australian industries or increased costs to Australian households and families. We are committed to incentives rather than penalties, to rewarding positive action rather than punishing Australian families, households and businesses in the way that this government will.

Our direct action plan outlines soil carbon sequestration, the electricity generation industry, forestry measures, waste coalmine gas, transport, green buildings, energy efficiency, landfill compost and recycling initiatives as areas that will genuinely save real money for this country and not leave us with this utter misrecognition of global reality. (Time expired)

Sean Edwards (SA, Liberal Party) Share this | Link to this | Hansard source

Just over a month ago I attended the Paskeville field days on the Yorke Peninsula in my home state of South Australia. I attended the third and final day of this successful event. The field days have a major focus on agriculture and, by implication, its profitable future. The event features extensive displays of the latest agricultural machinery and equipment, technology, information and services. It is reputed to be the largest field days event in the Southern Hemisphere.

I surveyed as many participants as I could on the proposed carbon tax. Over nine hours I spoke to a plethora of farmers and manufacturers from all over Australia. I spoke with grain growers, dairy farmers, grape growers, fodder producers, trailer builders and animal husbandry supplement suppliers, and there is definitely renewed optimism in the sector. After nearly a decade of drought, poor crops and reduced water allocations, we have had good winter rains. A solid harvest last year looks like being backed up with an excellent cereal harvest, which has just commenced across the country. But there are serious economic storm clouds on the horizon for these people. This cruel carbon tax has now come to the Senate to be debated by those opposite, who promised not to implement it, and by those on this side, who promise to repeal it. On 12 October 2011 the House of Representatives passed this carbon tax legislation. Amid the high fives, back slaps, hugs and kisses, Labor delivered these 18 bills into this place in a desperate betrayal of Australians to appease their partners in government—the Greens—in an audacious attempt to socially re-engineer this country's economy.

Each South Australian Labor member of parliament—and now I am focusing on those who represent the agricultural electorates—has betrayed their constituents. They should have stood up for their electorates, honoured their 2010 election commitment and stopped this tax, which will place a huge additional burden on farmers and the entire agricultural sector. This comes at a time when the export farming sector faces significant pressures from the surging Australian dollar, high labour costs and labour shortages as a result of competition with the mining industry, as well as the rising cost of key farming inputs through global demand as we race to feed the seven billion people now living on this planet.

The problems facing agriculture have been compounded by poor government decisions. The live cattle export ban last June put enormous pressure on the Top End pastoralists, exporters and associated industries in Northern Australia. We know that the Gillard Labor government has recently terminated the exit grants for farmers wanting to leave the land along the Murray-Darling Basin. This has left hundreds of exiting farmers part way through the sale process but without the grant that was their motivation to leave. These policy decisions from this government go from bad to worse. These are bad decisions for the bush—indeed, for all Australians—from a government that said, now infamously, that it would not introduce a carbon tax. If this tax passes, it represents a betrayal by Labor of the Australian people.

On 12 October in the other place we witnessed Labor's South Australian representatives betraying the South Australian people who elected them to parliament by voting to support the Labor-Greens job-destroying carbon tax. Those Labor MPs who represent the electorates of Wakefield and Kingston have forgotten their agricultural and farming constituencies. Whether they are croppers, grape growers, graziers or market gardeners from Mallala, Virginia or the Clare Valley, the Labor member for Wakefield has betrayed them. Grape growers, dairy farmers and horticulturalists in the McLaren Vale and Willunga Basin region in the electorate of Kingston have been betrayed by their Labor representative. Every single Labor member from South Australia was elected on a promise of no carbon tax. Today, country South Australians and their city cousins are quite rightly asking why it is that we are debating this carbon tax at all. Every time South Australian farmers, growers and producers are forced to pay more for electricity, fuel, fertilisers and other farming inputs, they can thank those members for Wakefield and Kingston.

Labor Senators from South Australia—Senator Wong, Senator Gallacher, Senator Farrell and Senator McEwen—will get their chance to show their true colours very soon: either stand up for the people who grow and breed the food and fibre that is so essential to our lives and send this legislation down, or roll over in a final gutless act of betrayal. Labor's complete and utter contempt for the people in rural and regional Australia is deeply disappointing. Labor has no idea about the bush.

It is unavoidable that all Australians will feel the impact of the carbon tax. But the agricultural industry, along with rural and regional areas, will be unfairly some of the hardest hit. A carbon tax on the agricultural sector will push up input costs and pit these producers against lower cost producers in other countries, potentially rendering farmers uncompetitive in the global market. This can only lead to a reduction in the overall profitability of farm businesses and will potentially crush an industry that is 65 per cent dependent on export—this at a time when every other country in the world is scrambling to secure the economical supply of food for its people domestically.

We already know from Labor's own modelling that three million Australian families will be worse off under Labor's carbon tax, with increased fuel, energy, electricity and food costs. Agriculture may be exempt from a carbon price, yet, insidiously, farm businesses will be slugged with an increase in indirect costs from the commencement of the carbon tax scheme—energy and energy related inputs, such as fertiliser and freight, to name a few. Hollowly, even though agriculture may currently be exempt from the scheme, a question mark remains over how long the exemption will last. Given the Gillard government's form on breaking promises, how can the agricultural sector trust the Gillard government?

ABARES, along with the Australian Farm Institute, projects that the economic value of farm production would decline by eight to 13 per cent just from the indirect impacts of a carbon price. Imagine what the economic destruction would be if the sector were directly included in the scheme. Independent research by the Australian Farm Institute has highlighted additional costs from electricity and other indirect energy related sources. These include the additional costs of Avgas, food and fibre processing and other embedded energy costs in the manufacture of farm inputs. This research shows that even with fuel excluded the average Australian farmer will still incur an additional cost of $1,500 a year under a carbon price of $23 a tonne, eroding their average net farm income by 2.4 per cent—and that is without fuel.

These costs will erode the competitiveness of the agricultural industry in the domestic and international markets on which we depend. As the recent Productivity Commission review highlighted, across the world countries are developing climate policies that recognise the importance of agriculture and deliberately preventing any additional cost being added into their farmers' businesses. Australian farmers are at the end of the food chain and, as a result, they will be footing the bill, again unable to avoid what this government has dished up to them.

As the carbon tax legislation is introduced, I urge those opposite to consider the cost to the nation's invaluable food and fibre producers. Let us look more specifically at the dairy industry. Dairy farmers—and there are a few in the electorate of Kingston—face an average hike in energy costs of $7,000 and the loss of up to 7.8 per cent of annual income because of the carbon tax, according to research by the Australian Farm Institute. Australia's third largest rural industry, the dairy sector, has stated that the carbon tax will 'impose significant costs' and 'likely trigger job losses'. Dairy farmers will be stung with higher electricity and gas costs, causing major concerns across an industry employing around 40,000 people. A significant part of the increased costs reflects the flow-on costs to dairy farmers of the carbon tax impact on food processing, which is not eligible for support. Dairy Australia is predicting the national average for dairy farms would be about $10,000 of additional costs for energy and fuel, but in South Australia, where herd sizes are almost double the national average, each would be likely to be paying between $15,000 and $20,000 a year extra for this new carbon tax. The South Australian Dairyfarmers Association says the region's farmers will also have to deal with the prospect of decreased farm gate prices because raw milk buyers are not exempt from the tax.

In the horticulture sector—an important industry in the Kingston and Wakefield electorates—growers are price takers. The industry have no ability to pass on the extra costs incurred from the carbon tax. They already operate under very tight margins, and further cost increases may make many producers unviable. Any increase in production costs results in a direct negative impact on farm profitability and viability. This kicks open the door for cheaper fruit and vegetables from overseas, a fact that is manifestly unpopular here in this country.

What is in the Carbon Farming Initiative for horticulturalists? The opportunities for them are limited. Most horticulturalists are reliant on the use of electricity to run irrigation and packing sheds which contain large refrigeration units to store produce—food essential for our survival. Power costs have risen sharply in recent years in order for the energy industry to comply with the ongoing commitment to 20 per cent renewables. This cost contributes a significant percentage of growers' input to get produce to market. The carbon tax will further increase electricity prices to further erode the profitability of growers without any form of assistance from the government.

According to Citrus Australia:

… the Federal Government’s new carbon tax will significantly raise freight costs, which the farming industry will have to bear. In addition, farmers won’t get carbon credits for their trees because they use fertilizer on them.

Growers have really had it stacked against them and it’s not getting any better unfortunately.

According to South Australian Horticultural Services:

The new Carbon Tax is a prime example of a new tax that is giving the current Australian Government a 'pool of funds' to give tax relief to the voters but actually achieving little or nothing in relation to carbon emission reduction. A bad tax based on a bad policy.

On top of this, from 2014, growers will also have to cope with the increased costs from heavy road freight being included in the scheme, all of which is unavoidable. The carbon tax is supposed to force change. I ask: how else can you get your produce to market? This is unchangeable.

Like the horticultural sector, the meat-processing industry is facing increased costs that it will not be able to pass on, nor will it receive any government assistance. Business does not want government assistance—and it does not want a new tax. Let us look at one meat processor, JBS Australia, which employs about 2,000 people and processes about 1,600 head of cattle a week at its Dinmore facility in Queensland. It will be slugged about $3.3 million a year extra from the combined costs of the carbon tax and higher electricity prices when the scheme comes into play next year. It has warned that the carbon tax will create a two-tiered meat-processing industry—of big abattoirs that are forced to pay the carbon tax without compensation and smaller ones that do not pay it—and will add costs to an industry that is one of the biggest employers around the country in rural and regional areas. But the industry, despite the bulk of its output being produced for export, is unlikely to receive trade-exposed industry assistance.

Similarly, South Australia's Eyre Peninsula's aquaculture and fishing industries claim the new carbon tax will hit them hard. The Australian Southern Bluefin Tuna Aquaculture Industry Association has concerns that the increases in energy charges, coupled with general transport costs, may make it impossible to compete with other major seafood-producing countries. The association stated:

It's based on the assumption that any business can pass on that extra cost to the consumer. Now, if you're competing with a country like Japan or China or whoever it may be who don't have a carbon tax then you can't pass on the cost to the consumer. It's going to be a major blow—there's no question about that.

What we can see here is that major agricultural industries—the industries that create wealth in the South Australian regions and employ thousands of people in South Australia—do not want this carbon tax. It will further undermine the industries based in the bush, which in some sectors are really struggling. This is why industry groups, including the National Farmers Federation and, in my state, the South Australian Farmers Federation, have already stated they oppose the introduction of the Labor-Greens carbon tax. Peak industry groups across Australia have sent a clear message to the Labor government: this tax is unwanted and will have a detrimental impact on agriculture and rural communities. The coalition opposes a carbon tax and will not support a tax that does not provide any benefit to the agricultural sector and that has the potential to completely destroy our nation's agricultural industry by causing it to lack global competitiveness. Families will be rightly angry about the impact that it will have on the cost of living, but they will have a lot more to gripe about when they are eating imported foods and the Australian economy suffers as a result of our farmers being taxed out of existence as they succumb to countries with more considered environmental tax regimes.

According to the National Farmers Federation, the Australian agricultural sector has led the way in reducing its carbon footprint for many years, with its emissions having been reduced by more than 40 per cent in the past 20 years—a fact well known to Senator Nash. Those in the sector have been making changes to their businesses in order to make the sector more productive and more efficient so that they can continue to meet the growing food and fibre needs of the global population. Clearly, you do not need a carbon tax to drive emissions down. Farmers are already onto it. Again the Gillard government lays the dead hand of bureaucracy over another important Australian industry.

Not only are there the impacts on farmers from the rising costs of their inputs—the flow-on effect from the carbon tax—but there is pressure on the food processors who buy farmers' produce. Food processors are facing millions of dollars in higher costs as a result of the carbon tax, particularly through increased electricity prices, and many have said that the only way they will be able to recoup this cost is not to pass it on to their customers but to reduce the money paid to their suppliers—yes, you guessed it: the farmers, who are always the ultimate price takers.

Perhaps these costs might be justified if this was the only way to tackle climate change, but there is another way, a better way: the coalition's direct action plan. The coalition's direct action plan is a strong and effective policy that will reduce carbon emissions by five per cent by 2020 without a new tax that will place undue burden on Australian households and, particularly, our farmers. Our direct action plan is costed, capped and fully funded from savings in the budget. We will use an emissions reduction fund to directly support CO2 emissions reduction activities by business and industry. We will drive emissions reductions through soil carbon, the electricity sector, forestry, energy efficiency, boosting renewable energy and planting 20 million trees.

Of particular importance to the agricultural sector are the opportunities that soil carbon presents. Increased soil carbon can help improve soil quality, farm productivity and water efficiency. Through the emissions reduction fund we would invest in a once-in-a-generation replenishment of our national soils and farmlands. The coalition's direct action plan will assist farmers, not further marginalise them like the sly big new tax from Labor and the Greens. Direct action means no costs to households, no new taxes and no increase in electricity prices as a result of the policy. The Abbott coalition will steadfastly oppose Labor's toxic carbon tax in opposition and will rescind it in government.

Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

The Labor-Greens carbon tax will impose significant economic pain on millions of Australians without generating any environmental gain for the world. This Labor-Greens carbon tax is a con; it is a fraud. It is a bad tax based on a lie and the Senate should not pass it. There can be no more emphatic promise than the promise made by the Prime Minister before the last election: 'There will be no carbon tax under the government I lead.' Given that we are now debating this carbon tax legislation, there are really only two conclusions one can draw: either the Prime Minister deliberately lied to and misled the Australian people or she is too weak to do what she knows in her heart of hearts is the right thing to do by the Australian people.

This government has argued that we have had many parliamentary inquiries—35 parliamentary inquiries since 1990, we are told—into this. And, yes, there has been a lot of debate across Australia about the merits or otherwise of putting a price on carbon when significant trade competitors of ours are not prepared to go down this path. It is fair to say that after all those inquiries and reports over the last four years—after the Garnaut review, the green paper, the white paper and all those parliamentary inquiries—the argument was settled. People understand that this carbon tax will not work to reduce emissions. People understand that it will push up the cost of everything, make us less competitive internationally, cost jobs, lead to lower real wages and shift emissions into parts of the world where emissions will be higher than they would have been in Australia. People across Australia understand that. And people across Australia were entitled to believe that the Prime Minister of Australia understood this with them. After all of the inquiries and all of the debates that we have had, the question was settled before the last election. The Prime Minister went to the last election making the most emphatic promise that any Prime Minister could make: 'There will be no carbon tax under the government I lead.'

What she said was that she would work on building a community consensus before doing anything to impose a price on carbon. She was going to go to the community and build consensus. Now there is a community consensus, and the community consensus is against this tax. This government is either too arrogant to take note of the considered view of the Australian people or it is too weak to do what it knows is right because it remains a captive of the Greens in order to cling on to power. This is a government that is prepared to do anything, including hurting the Australian economy, including imposing increased costs of living on people across Australia, for something that is completely futile—for something that arguably might result in increased global greenhouse gas emissions, not reduced global greenhouse gas emissions. Various Labor speakers, and speakers on behalf of the Greens political party, have argued that the situation is dire—we have all these floods, all these droughts; the Great Barrier Reef is in terrible shape; and there are all these terrible things happening out there—and we have to have this tax to fix all of these problems. Well, let me make one prediction: if this tax passes the parliament, if this tax is implemented, there will still be droughts, there will still be floods and we will still face various other challenges that come with climate change. Yes, the climate is changing—of course it is; the climate has always changed—and yes, we should do things that will actually help to reduce global greenhouse gas emissions, effective things. This government is saying we need to have effective action on climate change; we have to do something. No, we don't have to do something; we have to do something that is actually going to make things better rather than make things worse. And the Labor-Greens carbon tax will not only impose significant economic pain on people across Australia; it will arguably make things worse when it comes to the objective of reducing global greenhouse gas emissions.

Of course, we have asked the government the question: what will be the net effect of this carbon tax on global emissions? In this chamber I have asked Minister Wong, who is working very hard not to be engaged in this debate and is talking to her colleagues, ignoring what is being said during the debate in this chamber, the question: what will be the net effect of this carbon tax on global emissions? She gave us her usual political rhetoric, and her attack on the opposition, but there was no answer. In fact, I thought I would try my luck with the head of the Department of Climate Change and Energy Efficiency. Do you think he was able to tell us what the net effect of this tax is going to be on global emissions? No, because they do not know. They know that Australia imposing this carbon tax when our trade competitors in other parts of the world are not going down this path is not going to be effective action on climate change. In their heart of hearts, Labor members and senators know that this is just a reckless act of economic self-harm. The only reason the Labor government are going ahead with it, having promised the Australian people that they would not, is that they are dependent on the support of the Greens in order to hold onto government.

Then the government do some economic modelling. They tell Treasury the assumptions that they have to use; they give very clear directions, a very clear framework as to how Treasury is allowed to conduct this modelling—and of course the political objective of the government is to come up with some modelling where they can present a report to the Australian people that makes it look as if this tax is hardly going to have any impact at all on their standards of living. The name of the game was to come up with a report that was going to make it look as if this could be snuck in without much of an impact at all. People are going to better off, we are told. People are going to be better off because they are going to pay more tax! But, of course, when we started asking questions about the Treasury modelling, when we asked whether we could have a look at the way the model operated, whether we could have a look at the underlying information, whether we could have a look at the databases that had been used—the model codes that had been used—the answer was: 'Oh, no, you can't have that! That would enable you to scrutinise the reports that we have provided to the Australian people about the impact of this carbon tax on household budgets, on jobs, on real wages. That would enable people to scrutinise whether what we are saying to them is actually right! We can't have that—we can't have people scrutinising what we have put out there—because then people might realise that this carbon tax is actually going to have a much more significant impact on the economy than we have let on.'

I know for a fact that senior Treasury officials are embarrassed by the government's refusal to make that information available, because it is standard practice in economic circles that, when you publish reports that make assertions about certain conclusions, you release the models, you release the underlying information, you release the databases, you release the model codes and so on, so that independent third parties can scrutinise the work that was done and the reports that have been put forward. If you want to publish an article in any major economic journal that is based on modelling, you have to make the modelling and all the underlying information available so that people can properly scrutinise it. Not this government! Not this secretive government that has something to hide when it comes to the impact of the carbon tax on household budgets and on the economy.

This government used to talk about openness and transparency in government, but of course we are not getting this in relation to the carbon tax. Under the Howard government the Australian Bureau of Agricultural and Resource Economics and Sciences used to publish the models, and all the relevant underlying information, that the government is now trying to hide, as a matter of course. In fact, they were preparing for the full commercial release of the GTEM model back in 2007, before this secretive Labor government got into office. And, whenever the Productivity Commission do economic modelling to assess the impact of various policy changes or initiatives, they not only have peer review every step of the way; they make available all of the modelling information, all of the databases, all of the relevant information that is necessary to scrutinise the conclusions they have reached, to third parties for proper scrutiny. Not this secretive government, because clearly it has something to hide.

But let's have a look at what the government claims the economic impact is going to be of this carbon tax. We know that even the government's modelling, which clearly underestimates the impact of the carbon tax—because it is based on an assumption, for example, that the US will be part of a global trading scheme by 2016, which it will not, and on an assumption that there will be comprehensive global trading by 2016, which there will not be—says that electricity prices are going to go up by 10 per cent, on top of any other regular increase, which of course we know has been happening in recent years. And it is completely self-inflicted. It is not as if it is necessary in order to guarantee the ongoing generation of electricity; it is self-inflicted. It is as a result of a tax imposed by the government. We also know that, even according to the government's own modelling, real wages will be nearly six per cent lower by 2050 as a result of the carbon tax. That is against a background of rising prices and lower real wages. Of course, we would like to be able to share with the Australian people what the impact is going to be on jobs but we cannot—why?—because this government never, ever assessed the impact of the carbon tax on jobs. Again, dishonestly, the Prime Minister and the Treasurer are trying to make people believe that the carbon tax will not have an impact on jobs, that the economy will continue to grow—so we are told—and that jobs will continue to grow. But the government dishonestly included in its modelling an assumption that full employment would be maintained. If you impose an assumption that full employment will be maintained in the context of an economy that of course is going to continue to grow—by much less, but it will continue to grow—then it is a necessary outcome of such a model that jobs will continue to grow. Not that that is the most likely scenario to play out, mind you; it is not.

But here is the absolute cracker. According to the government's own modelling—according to its own figures—the carbon tax will cost the Australian economy $1 trillion in today's dollars between now and 2050. One trillion dollars is nearly the whole GDP for the whole of Australia for a whole year. That is $40,000 for every single Australian. It means that every single Australian will have to work effectively for nothing between now and 2050 to pay the price for the Labor-Greens carbon tax.

I made that assertion after a very comprehensive Senate inquiry. Senator Williams was a very active contributor on that inquiry. We had evidence from Treasury and various other experts. I made the assertion that this carbon tax was going to cost the economy $1 trillion between now and 2050. 'Not true,' said the Minister for Climate Change and Energy Efficiency, Mr Combet. He said that the economy would continue to grow, that the size of the economy would double and that it would grow by $2.3 trillion.

These statements are not actually contradictory. The economy can still continue to grow and it can still cost us $1 trillion because the economy will grow by significantly less. If you look at the government's own modelling, by 2050 the government tells us that GDP will be $100 billion lower in 2050 that it would be without a carbon tax. If you calculate the cumulative effect between now and 2050 on a year-by-year basis, the cost between now and 2050—according to the government's own modelling—is $1 trillion to our economy. It is extraordinary. It is mind blowing. Will the economy continue to grow? Of course it will, but it will grow by $1 trillion less than it otherwise would.

Anyone with a superannuation fund and anyone with investment knows that if something grows more slowly over a 40-year period you are going to end up with less money. You are going to end up with less wealth. This carbon tax will mean that Australians will end up with $1 trillion less by 2050 than they otherwise would have, and that is in today's dollars. The reality is that if this was going to make a difference we might have an argument, but this is a $1 trillion cost to the economy just so we can make higher emitting businesses in other parts of the world more competitive than even the most environmentally efficient equivalent business in Australia. This is so we can help manufacturing businesses in China take market share away from manufacturing businesses in Australia. Every common-sense Australian knows that, if you help a higher emitting business in China—which does not face this carbon tax—take market share away from a lower emitting business in Australia, all you are doing is increasing emissions in the world because you are shifting emissions from Australia to a part of the world where, for the same economic activity and the same economic output, you will end up with higher emissions.

This carbon tax, this emissions trading scheme—what Labor likes to call a market based system but I would call government intervention through a big bureaucracy and a big tax—might work in an economic theory where you work on the assumption that the whole world is going to do the same as Australia. But of course they will not. Let me draw senators' attention to the Senate Select Committee on the Scrutiny of New Taxes interim report The carbon tax: economic pain for no environmental gain, which pretty well sums up what the central issue is for the Senate as we are considering this legislation:

The central issue … is not whether a carbon tax is good or bad in economic theory. The question before this committee and before the Parliament is whether Australia should implement such a tax, followed by an Emissions Trading Scheme, at a time of great uncertainty both about the economic outlook and even more so about the nature and extent of the international abatement effort.

These questions are particularly acute for Australia because our prosperity is based on a resource endowment that is highly carbon-intensive. Moreover and importantly, much of that carbon-intensity is not amenable to simple or obvious technological solutions – for instance, there is little that can be done to reduce fugitive emissions in mining.

It is against that backdrop that we need to assess whether it is desirable for us to impose a carbon tax if many other countries, including the world’s largest emitters and our major resource competitors, do not.

That is really the crux of it. The government initially proposed to reduce emissions in Australia in a way that would lead to increases in emissions in other parts of the world. Now they are not even trying to reduce emissions in Australia anymore, because, if you look at the government's modelling, you will see that despite the carbon tax emissions in Australia will continue to grow.

Here is the next argument. The government says: 'We need to be early adopters. There are benefits from early action. We have to get in early because that's going to make it cheaper.' That does not seem to be the case because, if you compare the Treasury modelling that was done at the time of the CPRS and the Treasury modelling that is being done now, three years later, the cost has actually gone down, if we are to believe the government's own Treasury modelling. Given that the cost of the implementing a price on carbon to achieve a five per cent domestic emissions reduction by 2020 has gone down since 2008 according to the government's own modelling, maybe we should wait another three or four years—it might be cheaper again!

Of course, the way the Secretary to the Treasury has explained it is that you get technology improvements which mean that you might be able to do it cheaper. I asked the question: given that we are now starting later, is it going to be more expensive; will we have to have a higher price? 'No, not necessarily, because we've got better technology now.' There is no evidence for this argument by the government that the cost of acting is going to be lower by going early. Just look at the Treasury modelling. The Treasury modelling is there in black and white. It is actually cheaper, by the looks of it, to wait for a bit longer.

This is a bad tax. It is a tax that is based on a lie. It is a tax that is a fraud. It is a con. It is something that should not be supported by the Australian Senate. If we pass this tax, all we are doing is forcing up the cost of living, putting jobs at risk, causing lower real wages, and all of that without doing anything to help reduce global greenhouse gas emissions. It would be irresponsible and reckless and it is not something that the coalition will be a party to.

John Williams (NSW, National Party) Share this | Link to this | Hansard source

I commence by saying that this tax is about the great betrayal, the great betrayal of our Prime Minister, our Deputy Prime Minister and Treasurer, Mr Swan, and those others who have supported this government into power. I refer to Mr Windsor, the member for New England. Just prior to the 21 August election, ABC radio in Tamworth, hosted by Kelly Fuller, on the morning show, was interviewing the candidates for the seat of New England. She put the question to Mr Windsor: 'Mr Windsor, you put a private member's bill into the House of Representatives when the emissions trading scheme, the Carbon Pollution Reduction Scheme, was the saviour of the world. Your private member's bill wants a 30 per cent reduction by 2020 on 1990 levels and a massive 80 per cent reduction by 2050 on 1990 levels.' Mr Windsor said: 'No, Kelly, that wasn't my bill. I just put that into parliament of behalf of some of my constituents.' He shirked the question. He misled his people of New England. Then he comes out afterwards and says, 'I have always wanted a price on carbon.' No, he has not. He misled the people of New England, and if they had known beforehand that he wanted to drive this whole carbon tax emissions trading scheme debate they would not have voted for him.

Mr Windsor is a great one to survey his electorate. He did a survey in his electorate on tax reform, euthanasia and same-sex marriage. But when he came into the Multi-Party Climate Change Committee that he insisted, in his deal with Ms Gillard to put her into government, that she form, he drove it as much as or even more than the Greens. But he would not answer an honest question from Kelly Fuller just prior to the election.

People might say this is all being driven by the Greens. No, the Independents have driven it. I will get on to the other Independent, the other betrayer of his electorate, Mr Oakeshott. A freedom of information inquiry by MP Jamie Briggs shows that months before the announcement of this Mr Oakeshott was working in conjunction with Ms Gillard to set up this whole carbon tax.

We have not heard a solid argument from the government. Perhaps when Senator Conroy addresses the chamber on his attitude to the carbon tax we might hear the real facts and might even give some argument for it. But I doubt it very much. I doubt that will happen. I just do not think Senator Conroy will give a convincing speech in this parliament about why he thinks we should have a carbon tax. We will wait and see. I notice he is not on the speakers list yet. That will come later, I am sure.

Let us look at Australia's emissions: 578 million tonnes this year. That will go, by Treasury's figures, to 621 million tonnes come 2020.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

Is that weightless?

John Williams (NSW, National Party) Share this | Link to this | Hansard source

No, it does weigh. That is why when you drive along the road at 100 kilometres an hour and you put your arm out the window it actually affects your arm. It does have weight. Let us go back to one of the big issues, the Black Saturday bushfires in Victoria, that terrible day when we lost so many lives and there was so much destruction. It was estimated that 90 million tonnes of CO2 went into the atmosphere. Half of that came from national parks. Let us go back to national parks. Who drives the national parks? It is the Greens: lock up country and leave it. You are not allowed to graze it; you are not allowed to reduce fuel levels. Then when you get the 42-degree hot day with a howling wind it is out of control and you have got 50, 100 or 150 tonnes of fuel per hectare on the ground. So the lack of management is what is driving these increased emissions. When I put the question to the department, 'What about bushfires?' they said, 'No, we don't count them because after a bushfire it rains and the grass grows, so that abates what the fire put into the atmosphere.' How crazy is that?

Let us move on to the emissions. As I said, we are going up 43 million tonnes. It is interesting to see the Treasury figures on China. This year China will produce 10.3 billion tonnes. That will go up to 17.9 billion tonnes, an increase of 7,600 million tonnes a year by China alone, by 2020. And what we are going to do is going to change the planet? No, it is not. It is not going to change anything. It is going to change the cost of doing business and the cost of living. That is what it will change.

It is interesting that the Greens want to stop the burning of fossil fuels, of coal, and shut down all the coalmines. Let us have a look at what China burnt last year. China burnt 3.2 billion tonnes of coal. They increased their consumption of coal in that one year by a massive 435 million tonnes. How much is 435 million tonnes of coal, just as the increase? Last year Australia produced in total 420 million tonnes. So China's increased consumption of coal in 12 months was more than the whole of production of coal in Australia for 12 months. They are now actually producing 51 per cent of the world's coal themselves. China produces a lot of coal. We know that China went up 435 million tonnes to 3.2 billion tonnes of coal. In 2010 coal consumption increased by 5.7 per cent in the United States. It increased by 4.8 per cent in the European Union. It increased by 15.1 per cent in China, by 4.2 per cent in the United Kingdom and by 5.5 per cent in Germany. And what about in Australia? It fell by 3.6 per cent through direct action, through having gas-fired power stations. We actually reduced our consumption of coal by 3.6 per cent. We did not have a carbon tax to do it. You do not need a tax if you want to change the way you carry out your business. Those statistics are from an International Energy Agency document on coal information, dated August 2011. By 2020 we are going to see China's CO2 emissions go up by 7,600,000,000 tonnes a year and Australia's by 43 million tonnes a year. That is not including the bushfires. Come January or February next year, with all the fuel from the good seasons we have had, thankfully, for the last 12 or 18 months, it will be another scary time.

If the government is serious about reducing emissions, why is it putting a tax on liquid petroleum gas? LPG is the cleanest fuel you can burn in your motor vehicle. It has 13 per cent less emissions than petrol or diesel. And it is Australian produced; it is not imported. This December the government is going to put a tax of 2.5c a litre on the cleanest fuel we have on the planet. Of course, by 2015 that will go to 12½c. I have been around long enough, and I am sure others in the chamber have been too, to know that if you want to lose an election, you should upset the taxidrivers. They get 90 million taxi fares a year and 95 per cent of the cabbies' vehicles run on gas—and you are going to tax the cleanest fuel, which causes the least pollution. That is the way to get the taxidrivers talking to those 90 million people they cart around every year. If you want to lose an election, get the cabbies on the wrong side of you. It is just amazing.

The biggest loser from this tax will be regional Australia. Already regional Australia has the highest electricity costs. The 10 or 15 per cent added to our electricity bills is on a higher base for regional Australia. The government says agriculture is not included. What about the increases in the price of electricity used for running farms and workshops, for piggeries or irrigation pumps? What about the fertiliser? What about the fuel? Those in regional Australia are the ones that are going to pay the most.

It is interesting that New South Wales Treasury figures show that the carbon tax will lead to 31,000 jobs being lost in that state alone, 26,000 of which will be in regional Australia. The Hunter will be the hardest hit, with over 18,000 people likely to lose employment. But that does not seem to worry the member for Hunter, Joel Fitzgibbon. Maybe he does worry but is too frightened to speak out on this very issue. That is what is going to happen to jobs, according to the New South Wales government's Treasury figures.

The Senate Select Committee on the Scrutiny of New Taxes held a hearing in Tamworth. I often talk in this place about the Bindaree Beef abattoir, based in Inverell, which employs 630 people. They are competing on a world market, trying to export beef into places like Korea, Japan, and even Europe, the home of subsidies—which hopefully will stop soon now that those governments are all broke. And it is time that America dumped their subsidies on their farmers as well. This tax is going to cost Bindaree Beef $1.74 million in its first year.

Just a couple of weeks ago the abattoir in Grafton fell over. A lot of jobs were lost. It is a tough industry; I know it is a tough industry. I could take you to many places where the abattoirs have shut down. I could take you to Coonamble or across to Byron Bay or to Gunnedah or to Mudgee. I could take you down to Forbes. We have had troubles at Wagga Wagga. We are going to put this cost on Australian meat processors, but their competitors overseas are not going to face it. JBS Swift is a Brazilian company that has invested in many abattoirs here in Australia. This is going to cost their largest abattoir at Ipswich $3.3 million a year.

Let us look at our regional councils. The Tamworth council have announced that they will need $300,000 extra just for electricity. There will be extra road-building costs. For what? What is it going to achieve? I have already given you the figures for the increase in China's CO2 emissions. This very tax is an attack on regional Australia.

The Australian Dairy Industry Council estimates that dairy-farming families may be up for an additional $5,000 to $10,000 a year because of the carbon tax. This is after what the dairy industry is going through with its price war, led by Coles, of $1 a litre milk. As Woolworths has said, it is unsustainable. We have a situation now where Coles sells two litres of milk for $2 and two litres of water for $2.75. At least the milk is transported refrigerated. Now water, free from the sky, is 35 per cent more expensive than milk. This is how crazy this situation is. Yes, the dairy farmers will cop it. Rice farmers will see their costs increase by $10,000, sheep farmers by an average of $1,000 and cotton farmers by $10,500.

I want to go to the issue of agricultural aircraft. They have had tax on their fuel tripled. In a submission to the Senate inquiry, David Boundy of Superair, Armidale, who employs 20 people and operates 10 aircraft, said the carbon tax is going to cost his business $30,000 to $40,000 extra in fuel costs alone. When graziers in the New England want to spread some fertiliser to keep the quality nutrition in their grasses, they might say, 'I am going to spend $50,000 this year on top-spreading fertiliser.' Under this scheme, they will spend the same amount—$50,000—but they will be able to put out less fertiliser. Therefore their productivity is on a slide. Isn't the government aware of what productivity is?

We are talking about increasing our food supply for the expected nine-plus billion people in the world by 2035 or 2050, whenever it is. We tipped over to seven billion this week. What is this tax going to do to increase food production? It is not going to do anything at all. In fact, there are incentives for farmers to sow their country down to trees. When we are going to take up so much of our good farming country to grow trees, we will be looking at a situation where we will have to turn into termites and eat trees! It is simply outrageous.

I want to talk about the cement industry. About 18 months ago at Rockhampton a cement factory closed. Only a couple of months ago Kandos closed. There would hardly be a farm or a town around Australia that has not had a bag of cement from Kandos. I think about 97 direct jobs were lost, plus those of the truckies and everyone else who rely on the factory. They are closing because they are facing cheap imports, with a high Australian dollar brought about by high interest rates, brought about by excessive government spending. That is what these businesses are facing. I have mentioned the dairy industry and now I want to talk about the housing industry. The Master Builders Association estimates that a carbon price of $23 a tonne will add $5,000 to the cost of a modest home. The move from a five-star to a six-star energy efficiency rating will add around $9,200 to price of the same home. This means an overall additional cost of $4,000 to build a house. Let us look at the brick industry. In evidence to a Senate inquiry, Namoi Valley Bricks at Gunnedah said that it uses $120,000 worth of electricity; $400,000 worth of coal; and $120,000 worth of diesel. Namoi Valley Bricks runs on a profit of two to three per cent and their cost of production will go up by five per cent. AUSVEG said that the cost of food will increase for its 9,000 vegetable and potato growers, and it will only get worse when the diesel tax comes in. Electricity for irrigation and refrigeration will be the killer for these industries. And to achieve what? To achieve nothing. Our emissions are going up by 43 million tonnes.

Let us go to the transport industry. I am sure Senator Conroy would be very interested to hear again the words of Mr Sheldon, the boss of the Transport Workers Union, when I asked him about the 1 July 2014 extra tax of 6.85c a litre on our truckies. Our truckies use eight billion litres of fuel a year. There will be $510 million of extra tax on the truckies who carry our nation. Mr Sheldon said that this was a 'death tax'—a tax that will stress the truck drivers and the trucks and more people will be killed on the road. The Transport Workers Union is saying that, Senator Conroy. I hope you are listening to this. This is clear evidence of the absolute craziness of this whole tax scheme, which will achieve absolutely nothing.

We now come to the issue of the Emissions Trading Scheme. In 2020, Australia will purchase around $3½ billion of carbon credit permits from overseas. This is where it will be opened up to all the fraud in the world, literally. We are going to have the carbon cops here, in Australia, saying to businesses: 'Show us your books. If you don't keep them for five years, you have got two years jail. That's what you'll face. If you don't give proper information, you'll face up to 10 years jail.' Who is going to police these carbon credits from overseas? I believe there is already an inquiry in Europe into carbon credits and the fraudulent activities involving them. And this is going to save the planet? It is simply outrageous.

The climate has been changing for thousands upon thousands of years. As I said recently, during the July break I took a week off. I headed up to Queensland to the Whitsunday Islands. I spent four days driving on the road and three days on the islands. I read the history of the Whitsunday Islands. Eighteen thousand years ago they were not islands; they were joined to the mainland of Australia. Ten thousand years ago the globe warmed. The ice over the mainland melted and now we have the islands. What caused the globe to warm 10,000 years ago? Perhaps it was coal fired generators? But they did not exist then. Was it the truckies carting stock and all sorts of other supplies around the nation? No, they did not exist. Climate change has been happening for thousands of years and it will continue to change, no matter what you do with this tax. This is a deceitful tax, and you can be guaranteed that if the coalition win the next election it will be buried. Whether or not it takes a double dissolution, it will be buried.

I want it to add one other thing. Many around here would be aware that in New South Wales, Queensland and Western Australia the coal fired generators are owned by the states. Macquarie Generation, located in the areas of Singleton and Muswellbrook, New South Wales, produces 40 per cent of the state's electricity. It is owned by the state of New South Wales. I suggest that some of the government senators have a look at the Australian Constitution and particularly at the second part of section 114, where it clearly states, 'nor shall a Commonwealth impose any tax on property of any kind belonging to a state'. Where does this tax stand in relation to the Constitution? Doesn't it overrule this place? Doesn't it clearly state that the government cannot put a tax on coal fired generators that are owned by a state? They are the property of the states of Queensland, Western Australia and New South Wales. I think it is something that should be looked at. The next thing we know is some constitutional lawyer will come in and say: 'This whole carbon tax on the coal fired generators owned by the states is against the Constitution. Tear it up and throw it in the bin and start again.' This is what we are facing. This is one of the craziest schemes ever put forward.

The government should come up with a good environmental policy to look after our farmlands, our rivers and our countryside. We have already had the truckies get onto the Euro 5 motors, which produce far less pollution than the motors we had in the old times. However, the Euro 5 motors do use 10 per cent more fuel, and the more fuel they use the more CO2 they produce. But they do not produce the sulfur, the carbon monoxide and the other toxic emissions that were produced by the old 400 Cummins and GMs et cetera that we used to drive some years back. We can do our bit for pollution. We do not want to see smog over the cities of Australia or anywhere else around the world. We do not want to see the country burning in a blaze of bushfires. But with the Greens policies we will continue to see plenty of bushfires while our national parks are unmanaged and they will not allow grazing to reduce the fuel levels in them. If the government had a good environmental policy, there would be support for it all around this chamber. This is a bad policy. It is bad for our nation, bad for our economy, bad for our environment, and it will not be supported on this side of the chamber. (Time expired)

Michael Ronaldson (Victoria, Liberal Party, Shadow Minister for Veterans' Affairs) Share this | Link to this | Hansard source

What a great pleasure it is to follow a fantastic speech such as that. It is very, very good.

Senator Conroy interjecting—

Minister, with you in charge of the NBN, I am not surprised that you are a bit critical of policy debates. If you keep on doing what you are doing with the NBN, we will not need a carbon tax after you are finished with us, my friend. After you have broken the country with your NBN, we will have a talk about policy. Nothing coming from you in relation to this legislation is going to convince anyone that it is anything other than an abject failure. Thank you for the interjection. I appreciate it. I am happy for you to contribute again during the debate.

In relation to the clean energy bills, I would like to say the following. We need to put this debate in the context of our contribution to global emissions. It is 1.3 per cent. Even though we are going it alone, effectively, in a global sense, we are—

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

We're a long way behind.

Michael Ronaldson (Victoria, Liberal Party, Shadow Minister for Veterans' Affairs) Share this | Link to this | Hansard source

I will take that interjection as well. That is blatantly and patently wrong. What are the Americans doing, Senator Polley? What are the Canadians doing, Senator Polley? What are the Chinese doing, Senator Polley? What are the Indians doing, Senator Polley? The bottom line is that you and your better half, the Greens—your partners in economic and political crime—are going to destroy this country. You know and I know that it will have a negligible effect on emissions. But what you and the Greens want to do is to turn this country and this economy upside down on the back of a so-called moral obligation. I can tell you that, if I need a moral obligation lecture from anyone, it will not be from the Australian Greens. I would be more inclined to take one from the Labor Party; I certainly will not be taking one from the Australian Greens.

I thought the most interesting comment of the week was the comment from the Canadian foreign minister, John Baird, who told the Australian on 31 October:

The people of Canada spoke unequivocally about that at the last election …

I think there's only one member of parliament who advocates it, and that's the lone Greens member.

What a marvellous chamber it would be if that were the case in this country—to have one lone Greens member. I think it is also interesting to look at what President Obama has done in the States. He is not proceeding with it. These massive countries are not doing to their economies what we are doing to ours, so there will be very little prevention of climate damage.

There was also an interesting comment from Tim Flannery, who said in an interview with Andrew Bolt on MTR:

If we cut emissions today, global temperatures are not likely to drop for about a thousand years.

That was on 25 March this year. I will read it again:

If we cut emissions today, global temperatures are not likely to drop for about a thousand years.

This is from Tim Flannery himself. But leave that to one side because, as Senator Cormann said, our emissions will actually continue to increase. So let's put to bed this debate about cutting emissions.

Let's get down to the nuts and bolts of this issue, and that is the extraordinary damage it will do to our economy. It will provide a $9 billion slush fund for the Gillard government in its first year alone. Let's have a look at the impact on my own home state of Victoria. It is quite horrifying. Independent modelling commissioned by the Baillieu government, conducted by Deloitte Access Economics, shows the true impact of the Gillard government's carbon tax on Victoria. For starters, there will be 35,000 fewer jobs than there would be without the carbon tax. Investment will be down almost $6.3 billion, or 6.6 per cent. Per capita income will be more than $1,050 lower and the Victorian state budget is predicted to be almost $660 million worse off. I want to turn to the fine regional seats of Ballarat, Bendigo and Geelong—one of which I live in, as honourable senators know, and that is Ballarat. By 2015, according to this independent modelling, 663 fewer jobs will have been created in the City of Ballarat than would have been if the carbon tax was not introduced. The local economy will suffer, with business output being reduced by $75 million. In Bendigo the figures are 705 fewer jobs and business output being reduced by $79 million. There will be 1,296 fewer jobs created in the City of Greater Geelong than there would have been if a carbon tax were not introduced and the damage to that economy will be $152 million. These are regional centres and there will be $75 million, $79 million and $152 million of economic damage—and for what, I ask.

In Geelong manufacturing is worth $13.8 billion. It accounts for half of all revenue generated in the Geelong region. This is what the acting mayor said when this toxic tax was announced:

Geelong does have a large percentage of trade exposed and emissions intensive industries—whilst we accept the need for Australia to contribute to a global reduction of carbon emissions it's vital that the Geelong region is not unfairly disadvantaged.

…   …   …

Local industries must be supported so they can remain competitive and that local jobs are not put in jeopardy.

If products that are currently manufactured in Geelong are forced off-shore the effect will be self defeating in terms of global carbon emissions.

Mr Acting Deputy President, if you were one of the local members in Geelong and this package of bills was put into the lower house and you knew what would potentially happen to your region, would you not think it appropriate to stand up and at least explain yourself? The member for Corangamite did not have the intestinal fortitude to stand up in the chamber and explain himself. Why was that? Because he knows, as I know and his constituents know, that he was elected on the back of a lie. There are some other members in marginal seats. The members for Bendigo and Ballarat are now in marginals as a result of this toxic tax. At least they had the guts to stand up in the other place and explain their actions. The member for Corangamite did not have the intestinal fortitude to do so, and for that he stands utterly condemned. I just wonder whether it might be related to the following economic damage that this toxic tax will do in his electorate. Around Colac in his electorate there is a very big and intensive dairy farming industry. Dairy farmers, according to independent modelling, will pay between $5,000 and $7,000 a year more for electricity and other costs. According to the National Farmers Federation, the average cost to farmers will rise by $1,500 a year and this will erode net farm income by 2.4 per cent. Research from the Australian Farm Institute shows that the costs of an average sheep farm will go up by $1,000 per year on average, while for the average cotton farm the costs will go up $10,500 per year on average. According to AUSVEG, the national peak body for vegetable and potato growers, the carbon tax will increase the cost of running irrigation systems and this will again increase the costs of fresh vegetables and potatoes. According to the Australian Coal Association, 4,700 mining jobs will be lost. In my home state the coal-dependent Latrobe Valley will be hit particularly hard. The Minerals Council of Australia has made it quite clear that mines that are marginal will close down.

The other thing about Mr Cheeseman's electorate is that it is rapidly growing with very substantial housing development. This toxic tax will add $5,000 to the cost of building a new home, according to the Master Builders Association. For a $350,000 home, this is effectively a 1.5 per cent interest rate impost. We have had the government boasting about a 25-basis-point reduction today, but their own policy will make sure that those young families in Darren Cheeseman's electorate are potentially going to pay a tax impost that is effectively a 1.5 per cent increase in interest rates.

We have all heard about the cost of electricity prices, but what people living in metropolitan Melbourne, Sydney and Canberra do not realise is that the impost of electricity prices in regional areas is substantially more, upwards of 30 per cent more. I would not expect the Greens to understand that. I would not expect the Greens, who spend the great majority of their time swanning around metropolitan areas, to understand it. Go out into those regional centres. See what the cost-of-living imposts are for those living outside metropolitan areas and then come back in here and debate whether this is or is not a good tax. Schools will pay nearly $200 million more in electricity prices over four years. This is a very, very bad tax.

I am pleased that the Minister for Finance and Deregulation is here tonight. I want to ask the minister about some of the comments that she has made previously. I will just give some quotes, Minister. This is an interview you did with Marius Benson on ABC NewsRadio on 16 April 2010. I will sit down immediately if you stand up and say that you have been misquoted. As soon as you move, I will sit down. I suspect that I will not be sitting down. I quote:

A carbon tax is a less efficient way in the Australian government's view of dealing with this issue.

In a speech to CEDA at the State of the Nation conference on 23 June 2010 you said:

Unfortunately, a carbon tax is not the silver bullet some people would think.

Misquoted, Minister? I do not think so. The doozy of the lot is this from Sky News on 30 April 2009:

You know you cannot have any environmental certainty with a carbon tax.

If that is the quote then what are we doing here? It is not a silver bullet, as you have said. The people who think it is a silver bullet are indeed your own party, Minister, and your group of acolytes who sit down the other end of this place.

David Fawcett (SA, Liberal Party) Share this | Link to this | Hansard source

Order! Address your remarks through the chair, Senator Ronaldson.

Michael Ronaldson (Victoria, Liberal Party, Shadow Minister for Veterans' Affairs) Share this | Link to this | Hansard source

My apologies, Mr Acting Deputy President. Through you, to the minister, the group that the minister is now in coalition with thinks it is a silver bullet. The group that the minister is now in cahoots with in this coalition government thinks that this tax is going to be good for this country. This Labor-Greens alliance, run by Senator Bob Brown not by Ms Gillard, is going to bring this country to its knees.

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

Mr Acting Deputy President, a point of order: I am very happy if Senator Ronaldson wants to give me leave to read out the full quote that he just gave to the chamber, which he selectively quoted from. I am also happy to respond in the committee stage. But I do not want him, as is his wont, to make a whole range of inaccurate assertions based on me giving him the courtesy of holding the floor in the second reading debate.

David Fawcett (SA, Liberal Party) Share this | Link to this | Hansard source

There is no point of order.

Michael Ronaldson (Victoria, Liberal Party, Shadow Minister for Veterans' Affairs) Share this | Link to this | Hansard source

There certainly is not any point of order because, as I said, these quotes are all in context: 'Unfortunately, a carbon tax is not the silver bullet some people would think'!

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

Read the rest of it. Go on. I dare you. You won't do it.

Michael Ronaldson (Victoria, Liberal Party, Shadow Minister for Veterans' Affairs) Share this | Link to this | Hansard source

The words speak for themselves.

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

You won't do it!

David Fawcett (SA, Liberal Party) Share this | Link to this | Hansard source

Order! Standing order 197 says that senators have the right to be heard in silence.

Michael Ronaldson (Victoria, Liberal Party, Shadow Minister for Veterans' Affairs) Share this | Link to this | Hansard source

I think the minister protests too much. These quotes come back to haunt people. There is another series of quotes—

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

You just mislead all the time, Rono. That is why they're coming to get you. That is why you're not going to be on the front bench.

David Fawcett (SA, Liberal Party) Share this | Link to this | Hansard source

Order! Senator Wong, I bring to your attention the fact that you are consistently and wilfully disobeying standing order 197.

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

Mr Acting Deputy President, I rise on a point of order. I trust that you will be as quick when Senator Brandis and others on that side persistently interject on government senators.

Michael Ronaldson (Victoria, Liberal Party, Shadow Minister for Veterans' Affairs) Share this | Link to this | Hansard source

I find this touchiness quite fascinating. It is, of course, driven by the polls, which show the minister and every other Labor senator behind the minister what the impact of this toxic tax is. Everyone who is No. 3 on the ticket over there is extraordinarily nervous about what the polling is saying because there is a fair chance they will not be back here. They have got into bed with the Australian Greens and they have been conned into a policy that at least half of those on the other side will tell you in private is a bad policy and a rotten policy, and they simply do not want it. If the minister is concerned about quotes, she might like to listen to this one again. This quote is going to determine the demise of this very bad government—probably the worst government. When people are talking about this government as being worse than the Whitlam government you know it is a diabolical failure.

Senator Wong interjecting—

Every time the minister interjects in a second reading debate like this she diminishes any intellectual rigour that she might attempt to bring to the debate, and she demeans herself. I am a bit surprised, but I understand the enormous pressure that the minister is under.

The statement to the Ten Network on 16 August 2010 was:

There will be no carbon tax under the government I lead.

I am wondering, now the minister is here—she has been very happy to interject for the past 10 minutes—through you, Mr Acting Deputy President: Minister, are they indeed words used by your leader? Yes, they are.

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

Mr Acting Deputy President, I rise on a point of order. I am happy to respond, and perhaps the senator might remind the chamber that he said:

I do accept the need for an emissions trading scheme …

Senator Ronaldson, you said that in this place.

David Fawcett (SA, Liberal Party) Share this | Link to this | Hansard source

That is no point of order.

Michael Ronaldson (Victoria, Liberal Party, Shadow Minister for Veterans' Affairs) Share this | Link to this | Hansard source

What I said in this place is that anyone who is stupid enough to get ahead of the rest of the world and destroy this economy deserves to be politically removed themselves. Indeed, I have some other quotes here. This one is from Wayne Swan, the Treasurer, in relation to the carbon tax just before the 2010 election:

We have made our position very clear. We have ruled it out.

And again:

… what we rejected is this hysterical allegation that somehow we are moving towards a carbon tax from the Liberals in their advertising. We certainly reject that.

That is from the Treasurer just prior to the election. Every one of those on the other side was elected on the back of a lie. The member for Corangamite was elected on the back of a lie, but he did not even have the intestinal fortitude to get in and explain himself. At least those on the other side have stood up to try to justify the unjustifiable with this absolutely toxic tax.

There are two ways of addressing this issue. One is the direct action plan outlined by the Leader of the Opposition. The Greens and the Labor Party can argue at the margins about its effectiveness, but we believe it is going to work and we believe that it is affordable. What is not in dispute, and has not been in dispute since this legislation was introduced, is that all this toxic tax will do is cost our kids jobs. It will cost jobs now and it will cost jobs in the future, and it will do so on the back of absolutely no identifiable environmental outcome. That is the most galling part of this; there is no identifiable environmental outcome for this. The only outcome is the loss of jobs. The only outcome is that every single Labor senator was elected on the back of a lie, every single Labor member of parliament in the other place was elected on the back of a lie, and the Australian community, when given the opportunity, will make absolutely sure that they are— (Time expired)

Marise Payne (NSW, Liberal Party, Shadow Minister for COAG) Share this | Link to this | Hansard source

I am not the first person to say in this place or in Australia that this carbon tax legislation represents an absolute betrayal by this government and by this Prime Minister of the Australian people, and I most certainly will not be the last. The one thing you can say about the Australian electorate is that it has a particularly good memory for deceptions like this one. The promise was:

There will be no carbon tax under the government I lead.

The fact that we stand here in this chamber, and in recent weeks in the House of Representatives, and spend time on this debate and on having this discussion exposes that statement for the absolute blatant lie that it was.

What the next election will represent, therefore, is an opportunity for Australians to pass judgment on that betrayal by 72 Labor members of the House of Representatives of their own communities, their own small businesses, their own families, their own commuters and their own workers in every conceivable corner of their own electorates. That election will ensure, we hope, that Australia is not burdened with an expensive tax that will increase cost-of-living pressures for all Australians, will export jobs overseas and, as we know, will not make any material contribution to slowing the rate of climate change. The next election will be, amongst other things, a judgment by the Australian people of this carbon tax. We will continue to fight it. We will give the community a say on this pervasive tax, something the Labor government was not prepared to do. Frankly, that speaks volumes.

This carbon tax will do nothing to slow the rate of change of the earth's climate. The government's own modelling reveals that Australia's carbon emissions will actually increase, notwithstanding the price Australia will pay for imposing such a tax on itself. Emissions are forecast to go from 578 million tonnes in 2012 to 621 million tonnes in 2020. The legislation we have before us, rather than bringing down our emissions, will require Australia to purchase carbon credits overseas. It is a tax predicated on the deliberate transfer of Australian wealth to other countries at a time when our manufacturing sector is already under pressure. It is in fact designed to export Australian jobs, not even to countries that will improve the efficiency of manufacturing but to countries whose factories produce a higher level of emissions than our own produce does. All it will do is move the problem to other parts of the world.

If it is a global problem, how are we doing our part by paying other nations to produce carbon intensive products that we can actually produce more cleanly? This tax is not designed to help the world; it is designed to give this government an excuse to wash its hands of the issue. It is environmental vanity on so many interpretations, and it is Australians who will pay the price in money and jobs. It is Australians who will bear the brunt of this.

Some in the community have unfortunately been misled into believing that this tax, even though it will export our emissions overseas at great cost to Australia, is at least part of a global system that will work to bring down overall carbon emissions across the planet; that we are playing some part in an international effort to mitigate the effects of climate change. In fact, that is wrong, plain wrong. The Productivity Commission, one of the government's own key economic advisory agencies, has provided quite clear advice about the international linkages that this sort of scheme will have. The government set terms of reference for the Productivity Commission, one imagines, according to the time-honoured principle that one should never commission a report unless one knows what the findings will be. Despite this, the Productivity Commission clearly stated that not one other country has or is bringing in an economy-wide carbon tax or emissions trading scheme.

The much lauded European ETS does not cover the whole economy and it provides so many free emissions permits that it raises a relatively small amount of money a year, about $500 million. We have a much smaller population and a smaller economy and, with that, we will be paying around $9 billion a year into government coffers as part of this scheme. The US, as Senator Ronaldson referred to, has abandoned consideration of a national cap and trade scheme, and China, a country that will continue to industrialise and grow at the most extraordinary speed, a country that the government has pointed to as some shining light of climate change action, will increase emissions by 500 per cent by 2020. Climate change is a global problem, yet alone amongst leaders of the world's major economies our Prime Minister apparently believes it has a local solution.

But this carbon tax is not designed to solve climate change; it is designed to indulge the Labor-Greens alliance to prevent this fragile and incompetent government from falling apart. The Prime Minister is bargaining away Australian people's money in her gamble with the Greens on this package. It is not going to assist the world in tackling climate change.

Some would argue, apparently, that even though we are going it alone at this stage we are taking a moral stand—and in fact I recall the previous Prime Minister calling climate change the greatest moral issue that ever was—that will encourage other, more polluting countries to adopt similar schemes and drive down global emissions. But surely the prospect of other countries following such steps—and one questions that logic anyway, based on the evidence available—has also to be weighed against the cost to the Australian people of taking this particular stand? Not only will this carbon tax fail to fix the environment; it will damage the Australian economy, it will take money out of the wallets of ordinary Australians and it will send Australian jobs overseas. The government will be taxing the Australian economy to the tune of $9 billion a year—resulting in possibly a 10 per cent hike in electricity bills in the first year and a nine per cent hike in gas bills in the first year—and stripping $4½ billion from the Commonwealth budget, all at a time when the average Australian family is struggling with rising costs of living.

The government promises compensation. Even if the modelling is correct—even if we were to accept that—the compensation will be adequate only for the first three years of the carbon tax, because after that time the price the government levies on carbon emissions will be determined by the market, not by the government. Even the government's own modelling predicts that the price will increase from $23 a tonne to $29 a tonne by 2016, rising to $37 a tonne in 2020 and a potentially devastating $350 a tonne in 2050. The Centre for International Economics has forecast a price of $49 a tonne as early as 2016. Of course we know that the Greens, the government's alliance partner, who have insisted on this tax, have said that the price must be at least $40 a tonne to shift electricity generation from coal.

How can Australians take this government at its word—you and I both know, Mr Acting Deputy President, that they cannot—when it promises compensation knowing full well that just three years after the tax is introduced it will increase far beyond the compensation offered, and in a manner over which the government has no control? Why on earth would you take a government that has betrayed its people at its word for that as well? You would not.

Every single Australian will be affected by this large, pointless and increasing new tax, but it will certainly hurt some more than others. As the Senate would be aware, the cost of housing in Australia has been increasing for many years and housing affordability is a very significant challenge. It has now reached a point where the dream of home ownership and even the prospect of renting is far out of reach for many Australians, especially those Australians who were unlucky enough not to be able to buy a house before the turn of the century, especially young Australians. Not only does the government seem to have very little interest in this and other cost-of-living issues; it is introducing a tax that is going to drive house prices up even further.

The Gillard-Greens government wants to force Australians to cut their spending by imposing a carbon tax, apparently, but will not lead by example and live within its own means. What a carbon tax of $23 per tonne will do is add at least $5,000 to the cost of building an average, modest new home, including the cost of construction and developing the land, according to the work of the Housing Industry Association on this issue. The residential building sector, as we all know, is dominated by independent subcontractors—your average, everyday subbie. We all use them for something and you cannot build a house without them. They will receive no compensation under the carbon tax arrangements. What are those small businesses supposed to do? The carbon tax will add $36 a month—that is $432 a year—to the cost of servicing the ABS defined average mortgage on a new owner-occupied dwelling of $340,600 based on the Reserve Bank average standard variable mortgage rate of 7.8 per cent. What of rents? Rents will rise even further as investors in new housing pass on the cost of servicing their large mortgages to their tenants through higher rents.

Debate interrupted.