Richard Colbeck (Tasmania, Liberal Party, Shadow Parliamentary Secretary for Fisheries and Forestry) Share this | Link to this | Hansard source

I move:

That the Senate take note of the answer given by the Minister for Finance and Deregulation (Senator Wong) to a question without notice asked by Senator Cormann today relating to the carbon tax.

I rise to take note of the answer given by Senator Wong to the question asked today by Senator Cormann. Today, in response to the question asked by Senator Cormann, the process of misleading the Australian community on the carbon tax continues. We know that this whole process began with the lie perpetrated by the Prime Minister that 'there will be no carbon tax under a government I lead'. Now we know that the modelling contained assumptions that a large number of our competitors around the globe would also have similar forms of process in place to deal with their CO2 emissions by 2016. So that assumption is put into the modelling much like the assumptions that were in the modelling under the CPRS that there would be no impact on employment. We know that that particular outcome turned out to be an input to the modelling, not an output. But in this circumstance, the input is that other countries will have similar methodologies in place to deal with their carbon dioxide emissions by 2016. But we now know, courtesy of the visit to this country last week by President Obama, that this will not be the case. The US will not be taking such action by 2016. President Obama described the move by Prime Minister Gillard and the Labor Party as a 'bold move'. Many of us have recollections of Sir Humphrey talking to Prime Minister Hacker undertaking a 'bold move' and the look on Prime Minister Hacker's face when that description was made to him about taking such a 'bold move'. We know that this carbon tax will take up to $9 billion a year out of this economy. We know that that is many times more than is being taken out of, say, the European Union on an annual basis by their current provisions.

The government through this debate tried to convince the Australian people that Australia needed to do something to be part of the carbon reduction debate. But we know because of the Productivity Commission review that we are already about midfield without the carbon tax that the government promised not to put into place prior to the last election. We were already part of the process to reduce our carbon emissions; we had already taken action. Some of that action had been supported by the opposition, such as the Renewable Energy Target Scheme. So to imply that we are doing nothing is again part of the act of misleading the Australian community that this government has perpetrated since the election when Prime Minister Gillard, six days before the election, said to the Australian community, 'There will be no carbon tax under a government I lead.' She repeated that statement the day before the election when votes were vital. That was the promise that Prime Minister Gillard made to the Australian people and yet, as soon as she was in a position of needing to negotiate with the Greens, she flipped. She was prepared to put aside her promise to the Australian people for power. She was not prepared to say to the Australian Greens: 'Let's just hang on a minute. I made a promise to the Australian people; I would like to keep it.' No, she was prepared to walk away from the promise she made to the Australian people and legislate—as we did last week—for this carbon tax which she said, six days before the election, would not happen under a government she led. But also, as we now have had revealed through the admission by President Obama, the United States will not be going down the same track we have—they will not be introducing a carbon tax. The Canadians said they will not be introducing a carbon tax.

What we would like to see is the modelling reworked to demonstrate the reality of the current worldwide situation. We have seen the complete debacle around the modelling as it stands. In the first instance the modelling was conducted on a carbon price of $20 a tonne, and yet the government then announced a price of $23. The complete mess that this government has been through in putting this tax into place, driven by their political masters in the Greens, needs to be condemned. The government should be condemned for taking us to a place where we now know that the rest of the world is not going to go.

Louise Pratt (WA, Australian Labor Party) Share this | Link to this | Hansard source

We have been over the issue of modelling in this chamber again and again and again—sigh. We have well and truly flogged the life out of this issue, and yet the coalition really had nothing to show for itself in this question time. We have been through the modelling again and again with Meghan Quinn in our Senate committees, and she has done an absolutely wonderful job of demonstrating the depth of that modelling. It is modelling that shows the economy will grow with a carbon price. It is modelling that shows jobs will grow.

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | Link to this | Hansard source

Why did Julia promise not to bring it in if it's so good?

Louise Pratt (WA, Australian Labor Party) Share this | Link to this | Hansard source

It is modelling that shows—sigh—that Western Australia will continue to grow. In fact, it will grow at a pace that outstrips that of other states.

Senator Cormann also seems to think that we should not do anything if the rest of the world is doing nothing. Well, the rest of the world is not doing nothing. Yes, there are diverse policies based on the assumption, but what we are basing our modelling on is the assumption that countries will meet their pledges. The most efficient thing for us to do is to price carbon. Every credible economic commentator has said that pricing carbon is the right way to go. In fact, there are many in the opposition who have made public statements over and over again to that effect.

This nation has let out a huge sigh of relief that we can now move on this issue, but those opposite fail to recognise this and are again flogging this dead horse. The modelling on this legislation, which has already been passed, has been done and it has been exhaustively debated. The Treasury modelling does not depend on the United States putting a price on carbon by 2010. It is a desperate response from those opposite. They cannot accept that their arguments simply do not stack up. Our assumptions are based on other nations honouring their pledges to manage their emissions as planned. We know that costs will be passed on through our economy. Indeed, it does not really matter how you manage your carbon; there are costs that will be passed on through the economy and that is what our modelling assumes.

This is real-world modelling, not simply a made-up policy from the coalition, who seem to want to deliver higher taxes to us. Those opposite argue that they do want to meet our climate obligations but they have no economically efficient plan to do so. They are also driving uncertainty into the economy, but we need certainty for our investments in renewable energy and for investments in terms of electricity prices. Those opposite seem determined to have a vision for higher taxes for this nation—that is all. It would be economically irresponsible to overturn this policy.

This government has a clean energy plan that is comprehensive. It is a good plan for reducing Australia's carbon pollution and for promoting the clean energy technologies of the future. The coalition has no plan to price carbon and to do so in an economically efficient manner. A failure to price carbon is a big problem for our economy because it introduces uncertainty into our economic investments. If you assume that climate change is real, as I do and as those opposite seem not to, then you know that the sooner we act to price carbon the more economically efficient it is. It will give our economy time to adjust. So I have great confidence in this nation's future when it comes to the issue of pricing carbon.

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

I rise to take note of the answer of Minister Wong. Her answer was dreadful. She said that, just because the legislation has been passed, this Senate should not take note and be aware of the flaws in the logic in the modelling that led to it. When Senator Wong was a student at one of Adelaide's best colleges, Scotch College, I am sure they would have covered in her English classes Arthur Miller's book All My Sons, where Joe Keller was rightly condemned by people because he allowed faulty components to go into wartime service. That killed people and he was rightly condemned, and the whole book is based around his guilt and how he dealt with that. This government should hang its head in shame that it has forced faulty legislation based on faulty modelling based upon faulty logic upon the communities, the industries, the families and the individuals of Australia.

The fundamental questions—is it needed, will it work and what are the unintended consequences?—have not been addressed by this government. Individuals will be worse off. The carbon emissions of Australia will still go up. Electricity prices will increase by a certain amount, depending on who you believe—and I will cover the range of modelling, because there are many models that the government relies on for its facts and figures, although it does not acknowledge that there are a range of opinions out there. But the best case scenario, under its own modelling, is that there will be a 10 per cent increase in the price of electricity. The New South Wales Treasury says 15 per cent, the Electricity Supply Association of Australia says 20 per cent and the Centre for International Economics says 30 per cent by 2020. Take your pick: left or right, smallest or biggest. That is a huge impost on individuals, families and, most importantly, on business and on manufacturing.

There are media releases in South Australia today about OneSteel and the fact that their Whyalla plant may need to close because of the pressures on them. So what does this government do? It releases a policy that is not going to impact our climate beneficially, that will put OneSteel's operations and all those people who rely on it for employment that much more at risk. And there is the defence industry in South Australia. This government have gone on the public record time and time again boasting the fact that they are trying to position Australia's defence industry to be part of the global supply chain. They say that it needs to be competitive to be part of that global supply chain and that if it is not competitive it will not survive because the Australian market is not big enough. So what do the government do? They impose a carbon tax which means the industry will not be competitive. Using the government's own logic, this measure, which will not help the environment but will penalise people in Australia, is going to make our defence industry non-competitive. The defence industry is not just about jobs in Labor marginal seats; the defence industry is part of our national defence capability.

This government should hang its head in shame that it is not prepared to revisit faulty modelling, faulty logic and faulty proof that has led to legislation that is going to deliver very negative, unintended consequences. The minister should hang her head in shame that she was not prepared to revisit this rather than just saying: 'The horse has bolted. Let's close the door.' Has she learnt nothing from the English studies I am sure she did about Joe Keller?

Even this week the draft IPCC report from Kampala in Uganda suggests very clearly that the evidence base used by this government had many political massages to arrive at the point where it believes that the tax is necessary. Look at things like renewable energy and comments that it can provide something like an 80 per cent reduction. It turns out that that is reliant upon a 40 per cent reduction in energy demand—the most optimistic of over 164 different submissions. Yet which one did they pick? They picked the one that makes their case the strongest. One of the most telling things to come out of this Kampala report from the IPCC is the fact that they are saying the very people whom we are trying to help—those who are poor and marginalised—are impacted by their poverty and by the standards of building and not so much by climate change. So this government stands condemned for continuing with this tax when the modelling is flawed and the reasoning is flawed, and the unintended consequences will damage Australians, families and businesses.

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

It is amazing how those on the other side will not let go of the issue of carbon pricing. We saw it again today in question time. Yet again, Senator Cormann asked the same questions of the minister which he has asked time and time again. He asked the same questions along the same lines through the estimates process, asserting that the modelling that we have adopted is reliant upon the US having a price on carbon by 2016. He knows that that is not correct. He knows what the facts are. But he thinks that if he comes into this chamber and is repetitive with this line of questioning somehow he will pull the wool over the eyes of the Australian public. But they are not that silly.

Let us put on the record what President Obama has made very clear about climate change. He says it is real and the US is committed to playing its part in cutting emissions. President Obama has acknowledged that climate change is a long-term issue and the US will be looking for further ways to reduce emissions in the coming years. The Gillard Labor government's carbon price will drive real, long-term change and will allow the market to find the best ways to reduce carbon pollution at the least cost. In contrast, Mr Abbott's direct action plan is a short-term, fig-leaf policy that will be incapable of meeting Australia's five per cent target by 2020 let alone more ambitious targets into the future.

Let us talk about some of the places that have already acted on climate change. Let us talk about the 32 carbon trading schemes around the world. Let us list some of them. I know some of those on the other side do not like to hear the facts so that the record can be corrected. Let us talk about what is happening in the European Union. Let us talk about what has been happening in Norway since 2008. Let us talk about Switzerland and the action that they took in 2008. Let us talk about New Zealand. If I recall correctly, we had the New Zealand Prime Minister in the other place not so long ago. I think you will find that the New Zealand government is a conservative government.

Senator McEwen interjecting—

Yes, I think you are right, Madam Whip. They are a conservative government and they have acknowledged climate change, unlike those on the other side who are still trying to deny that there has been any change at all in the climate. Some of those on the other side do not accept that there has been a change in the climate and the effects that that is having on the economy.

Let us also talk about the USA and the Regional Greenhouse Gas Initiative. Let us talk about the seven eastern states that have adopted it and taken action. Let us talk about California and the Western Climate Initiative. Seven western states and four Canadian provinces have taken action. In China, five provinces are undertaking a trial towards a national program. And there is South Korea, Japan, Taiwan and India. Shall I go on? I do not think I need to. I think the point has been made.

This government have taken the action that is needed. The Australian community appreciate the action that has been taken and they know that they are going to be compensated. Yes, there will be some costs involved. But this program is also about ensuring that the 500-odd biggest polluters are going to have to pay. But what those opposite are about is continuing, as I said, their scare campaign. The business community wants certainty. It wants to know that it is going to be able to operate in the best interests of not only their shareholders but also the Australian community. It wants some certainty for the future. Those opposite have been caught very short. It does not matter whether you are talking about a carbon price, the mining resource tax or even offshore processing of asylum seekers. We know from the record that Mr Abbott and those people opposite will dismiss any expert who does not fit in with their mantra. We know that the Australian community wants more detail about their policies, not just the $70 billion black hole that they made— (Time expired)

Fiona Nash (NSW, National Party, Shadow Parliamentary Secretary for Regional Education) Share this | Link to this | Hansard source

Colleagues, if ever we needed further evidence that this government is indeed completely hopeless, today we have the living proof. Yet again, we have the government today trying to defend its carbon tax—very thinly, by those on the other side. It is extraordinary stuff. What we are talking about here now in taking note of answers is the fact that the United States President has said that the United States will not have a carbon tax or equivalent by 2016. Are you on the other side not listening? The United States is not going to have one.

Let us have a look at what we have here. As a nation, we produce 1.4 per cent of the world's emissions. That is not 14, not 24, not 64—it is 1.4 per cent only of the world's emissions. Guess how many countries other than Australia are moving to impose a carbon tax, as this government is moving to do, by the middle of next year? Some, several, dozens?

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

None.

Fiona Nash (NSW, National Party, Shadow Parliamentary Secretary for Regional Education) Share this | Link to this | Hansard source

None. Not one other country in the entire world is moving to do what this Labor government is about to do with a carbon tax. To me, it seems curious that we are the only country that is going to do this. We now have confirmation from the President of the United States that they definitely are not going to do it. Let us have a look at what that actually means. The modelling is based on the fact that the US will join with Canada, Japan, India, Korea and China in an international carbon trading system by 2016. Gosh, colleagues, that is not going to happen. The entire modelling system that the government is using to base this on is flawed. Does it not just show, yet again, how hopeless this government is? It simply cannot apply any detail, any logic, any rational thought processes to policy development. It just comes up with these ideas on the run: 'This sounds like a pretty good idea.' Remember BER, pink batts, cash for clunkers, GroceryWatch, Fuelwatch? It is no surprise that the government simply cannot get this right. It gets worse and worse, day by day, for this government.

As we have seen now, with the confirmation by the President of the United States, they are not going to do it either. So there is just us. We are out there leading the world, according to the Prime Minister. Why? Why are we doing this when not one other country is moving to do what we are about to do with a carbon tax? That is just wrong.

This carbon tax is going to create a huge financial impost for families, businesses and—my particular area of interest—farmers. It is going to create a huge financial burden for those families, farmers and businesses across this country. What is going to happen? Nothing. There is not going to be a reduction in emissions. In actuality, it gets worse. Emissions are going to increase from 578 million tonnes now to 621 million tonnes in 2020. It is just stupid. The government is clearly clueless. For whatever reason, it cannot get off this carbon tax train wreck it has put us on, and it is simply wrong. We have heard the United States say they are not going to do anything. So much of what this government has done over previous years with its talk about reducing emissions has hung off the United States doing something—and they are not going to do it.

This government's modelling is completely flawed. We know it has not even modelled properly the increase in electricity costs from a carbon tax. Despite Minister Ludwig's pathetic answer in question time today, we are still none the wiser about the real impact that is going to have. This government will have to answer to the Australian people. The Prime Minister lied to the Australian people before the last election when she said there would be no carbon tax. She is now giving the Australian people a carbon tax, one that no other country in the world is going to implement in the way that this Labor government is foisting its carbon tax on this country. (Time expired)

Question agreed to.