Senate debates

Wednesday, 13 November 2013


Environment and Communications References Committee; Reference

6:08 pm

Photo of Christine MilneChristine Milne (Tasmania, Australian Greens) Share this | | Hansard source

by leave—I move:


(a) the following matter be referred to the Environment and Communications References Committee for inquiry and report by the first sitting day in March 2014:

     An inquiry into the Abbott Government's 'Direct Action Plan', including:

(i) its capacity to deliver greenhouse gas emissions reductions consistent with Australia's fair share of the estimated global emissions budget that would constrain global warming to Australia's agreed goal of less than 2 degrees,

(ii) its capacity to reduce greenhouse gas emissions adequately and cost effectively,

(iii) the technical issues that arise for measuring abatement under 'Direct Action', including additionality and establishing emissions baselines for emitting entities,

(iv) the absence of policy certainty in 'Direct Action' to encourage long term business investment in the clean, low carbon economy,

(v) its impact on, and interaction with, the Carbon Farming Initiative, and

(vi) any other related matters; and

(b) in undertaking this inquiry the committee must have regard to the Climate Change Authority's Reducing Australia's Greenhouse Gas Emissions—Targets and Progress Review: Draft Report, dated October 2013.

This is a critical inquiry for the Australian parliament, and it is critical that it is agreed to right now because the whole world is meeting in Poland and talking about the challenge that faces the world in trying to constrain global warming to less than two degrees.

By any way that you look at it, what is happening is that emissions are such that we are actually way off track to achieving that. We are actually on track for more than four degrees. The executive officer of the United Nations Framework Convention on Climate Change, Christiana Figueres, who our Prime Minister has referred to as 'speaking through her hat', made it quite clear at the opening plenary that the world is seriously challenged by this. We are on track to reach that two degrees and send ourselves into unknown territory in terms of the climate. That is effectively a climate emergency.

You do not have to look very far to see what is already happening with less than one degree of warming. Less than one degree of warming and we are having extreme weather events here and around the world. We have just been through horrendous bushfires in New South Wales. Those, of course, are beyond the floods that we have had in Queensland. We had Cyclone Yasi as well, we had the Black Saturday fires in Victoria, we had the heatwave that cost lives in South Australia and we had the fires in Tasmania. Australia is one of the continents most vulnerable to climate change and extreme weather events, and that means loss of life and loss of infrastructure.

That is why, when we hear talk of cost of living it is actually the cost of staying alive that we are talking about when you talk about climate change. It is a huge cost to the planet and it is a huge cost to countries—developing countries—that for the most part have had very little to do with the level of greenhouse gases in the atmosphere to date. So it becomes a global social justice issue.

That is why we have to talk about Direct Action, because the overwhelming failure of Direct Action—before you even get to the technicalities—is that it cannot be geared up beyond five per cent. I do not think that it can even achieve five per cent. The Prime Minister himself acknowledged that by saying during the election campaign that if they spend the money they have allocated, well, too bad—they have spent the money and they are not going to do any more. That indicates that even they know that they have not set aside enough money to actually achieve five per cent.

The Climate Change Authority brought out its report recently and said quite clearly that the minimum unconditional 2020 target of five per cent reduction from 2000 levels is inadequate on a number of grounds. They have recommended two scenarios: a 15- or a 25-per cent reduction as being the sort of thing that Australia should consider if we are to recognise that we play a fair share in the global emissions task. There is a limited global emissions carbon budget and we have already used up a fair percentage of that budget already. That is all we have out to 2050, and that is the fundamental problem with Direct Action. It is a competitive grants scheme that cannot achieve emissions reduction to the level that is required.

If you want to talk about climate change you have to accept the science. Secondly, you have to accept it is a global problem and Australia has responsibilities in that context. Thirdly, you have to have a scheme that is capable—a legislative framework that is capable—of being scaled up to a level that will achieve the ambition you want to achieve. Direct Action cannot do that and will not do that.

Its capacity to do it cost effectively is the next thing. Of course, we have had all kinds of claims from the coalition government as to what Direct Action can do at what price. But we have also had Treasury look at that, and everybody is in agreement that you are likely to have beyond $50 a tonne as being what it will actually cost to reduce emissions. What is more, with the way the legislation is structured currently, the polluters pay for their pollution. Interestingly, today you heard from the coalition: they say that they support the market mechanisms and they say they support the free market, but when it comes to this they do not. They want to take the money out of the taxpayer's pocket and pay the big polluters. What sort of sense does that make? That is why we need an inquiry to expose the incredible hypocrisy of institutions like the Business Council of Australia or the Chamber of Commerce and Industry, who come out and say that they want effective policy, efficient policy, and then turn around and say they will back direct action, which they know is inefficient, is not a market based mechanism and is going to cost a fortune. I suspect the only reason that they support it is they think that the taxpayer will pay for it and that their constituency, big business in Australia, will get off scot-free and it will proceed with its competitive grants scheme.

On the technical issues of additionality and establishing emissions baselines, let's go to additionality first. You get to the point of an industry saying, 'I'm putting up my hand, I want to grant.' Okay, you want to grant, but how do we know that you wouldn't have taken that action anyway? How do you prove that it is additional to what would have occurred previously? The Grattan Institute looked at the coalition's plan in a study that it has done and said that grant tendering programs show that they cannot reduce emissions at the necessary scale or speed and that, based on experience, government would need to announce an abatement purchasing fund of $100 billion to meet the 2020 emissions reduction target. Treasury, as I indicated, looked at the costs previously and pointed out that it was huge expense to the taxpayer. But, of course, those people who want to support big business in its capacity to pollute for free do not see that as a problem.

In terms of establishing emissions baselines, how do you establish the baseline and will there be penalties above the baseline? Or are we going to go for offset mechanisms? For example, if you establish an emissions baseline, and people exceed the baseline, are they going to be charged a penalty? You could argue that a penalty is therefore a carbon tax, a carbon price. Is a penalty above the baseline a carbon tax or price, or are we establishing a baseline and saying, 'Actually, there will be no penalty for exceeding the baseline'? No, in fact, we are going to say, 'Providing you go off and buy a certain amount of renewable energy, or whatever else, that will be achieved'?

What we have here is a situation where the coalition has failed to make the case for direct action. Let's face it, direct action was always a slogan to take into the 2010 election. It has no modelling behind it. It has no detail. It is only a green paper, white paper process. It is a bandaid that the coalition has put up in order to persuade some people that it has a policy on global warming, which it does not. It is the climate deniers policy of choice. That is the fact of the matter.

Why we need an inquiry into it, and need that inquiry right now, is because the community needs to see that when under pressure, when asked to explain themselves, the coalition will not be able to do it. They will not be able to put any detail behind this policy position. People will see that it is incapable of achieving even five per cent, let alone, in my view, the more than 25 per cent emissions reduction that is necessary by 2020 and then to go beyond 2020, when you get even steeper requirements in terms of emissions reductions in meeting that global budget. Direct action will not cut it, and that is why you need an inquiry into direct action.

In this context, I want to say that the reason the Greens want this inquiry is because we want the focus to be on why the coalition's policy is a failure. We know that the existing framework that was worked on and developed by Labor and the Greens under former Prime Minister Gillard is working. Emissions are coming down, particularly in the energy sector, in the electricity sector, as was designed. In the covered sectors, emissions are coming down. Where you have the emissions now scaling up is in areas that are not covered—deforestation, for example. Land clearing is a major emitting industry and it is not covered currently under the scheme. There are sectors like that. How is direct action going to deal with this and how is it going to link with the carbon farming initiative? Nobody actually knows that.

That is why we need to expose just how hollow any kinds of claims that the coalition make about direct action actually are. Nobody who is serious about global warming, not an economist anywhere, not a scientist, nobody who has any credibility is saying anything other than that the only way you are going to get the kind of emission reductions we need at the cheapest price is a market based mechanism. That is what is required.

There are to be two debates here. One is about why you would want this inquiry into direct action, and it is pretty clear why you would want to do that. The other question is: why would you not?

Honourable Senators:

Honourable senators interjecting

Photo of David FawcettDavid Fawcett (SA, Liberal Party) Share this | | Hansard source

Order! Senator Milne, could you resume your seat. I remind senators on my right and across the chamber that senators have the right to be heard in silence. Senator Milne.

Photo of Christine MilneChristine Milne (Tasmania, Australian Greens) Share this | | Hansard source

Thank you, Mr Acting Deputy President. We passed the legislation for carbon pricing for making the polluters pay. There was a compensation program worked out and delivered. This is a working strategy, it is a working framework of legislation, and it gives certainty. I want to say to the Chamber of Commerce and Industry, the Business Council of Australia and the like: you are not going to get certainty with direct action because how can you have certainty with a policy that supposedly only goes to 2020—a grants scheme to 2020? Let me tell you: if you succeed in repealing this package it will be back again—only next time that the market mechanism will be back again the cap will have to be so much more severe. The dislocation in the economy will be huge because you failed to act early and appropriately, and the longer you leave it the more expensive and the more dislocating it is going to be. To the likes of Peter Anderson and others, and BHP, who are now trying to weasel out of actually paying a price on pollution, let me tell you: when the market mechanisms return, in the event this was ever repealed, it will be a more severe regime. You have got certainty right now. You have certainty with this legislation, you have a price curb, and that is what you need to be considering.

The reason the Greens will not be supporting an inquiry into the current legislation is that we do not want to avoid a vote on this. It is time to take it straight up to the coalition government. It is time to say: this legislation is working. We are not going to cast doubt; there is going to be no equivocation on this. If the coalition says they want to tear down the only thing that is working to bring down greenhouse gas emissions, we are going to say: no, on the contrary, you are not. We are going to protect the Climate Change Authority. We are going to protect the legislation we have and we are not going to stand by and let you vandalise action on climate change at a time when the globe is considering how to actually respond to this global challenge. That is why we want the action on Direct Action now. We will focus on that over the summer with no equivocation and take it straight up to the Abbott government, saying, 'No, you bring it on. We will not stand by and have it repealed. We are going to stand by the thing that is working and we are going to send that message to Warsaw, to every government there, that the Australian Senate will not stand by and watch you tear down an effective market mechanism which the world recognises is working.'

6:23 pm

Photo of Mathias CormannMathias Cormann (WA, Liberal Party, Minister for Finance) Share this | | Hansard source

Let me just say upfront that the coalition government will not be supporting either this motion by the Greens or the subsequent motion by the opposition. What we have just heard from Senator Milne was an attempt to re-litigate the last two elections. Direct Action has been widely canvassed in the lead-up to two elections. It has been widely canvassed across the Australian community and the Australian people passed judgement on what they thought the Australian Senate should do when it comes to the Labor-Green carbon tax and to Direct Action. The Australian people voted for the Senate to scrap the carbon tax and for the parliament to support the coalition government's approach, which is to reduce emissions through Direct Action.

In the interests of time and just very quickly, again the Greens' leader quite inappropriately, quite outrageously, sought to politicise tragic events that have happened in Australia in recent times by establishing a link which scientists say cannot be made between climate change and individual events. Senator Milne would be well aware that across Australia since time immemorial there have been floods, there have been droughts and there have been bushfires, and to make the link for political purposes to scare people across Australia in the way she did again today is quite outrageous. She knows it is inaccurate and she is just doing it for political purposes.

As for an inquiry into Direct Action, Senator Milne would be quite aware that the coalition government right now is undertaking an extensive consultation process on our Direct Action policy. We have released terms of reference for the Emissions Reduction Fund on 16 October. The government is encouraging business, community groups and organisations to make submissions in response to those terms of reference. Those submissions will be considered as part of the development of a green paper, which will be released in December. So we are acting quite swiftly in implementing this very strong and very sound policy to reduce emissions by five per cent by 2020. The white paper outlining the final design of the Emissions Reduction Fund will be released early in 2014. If the Greens were genuine in wanting to have an inquiry into what the government is actually doing, they would await the outcome of that consultation before pressing ahead with this particular inquiry which is a political exercise. The Emissions Reduction Fund will provide incentives for companies to reduce their emissions to achieve that five per cent reduction in emissions by 2020. It will be market based by its mechanisms designed to simply and efficiently source the lowest cost abatement.

I have just a quick newsflash for the Greens: a tax imposed by the government is not a market based mechanism. The Labor-Green carbon tax is a tax which comes with massive government red tape to boot—or should I say, red and green tape to boot. Whether it is a fixed price tax or a floating price tax, to describe it as a market based mechanism is just ridiculous and we completely reject that characterisation. Unlike the carbon tax, the Emissions Reduction Fund will actually reduce our domestic emissions by five per cent by 2020 and, unlike the Labor-Green $9 billion a year carbon tax, the cost of the Emissions Reduction Fund will be capped at $300 million in 2014-15, $500 million in 2015-16 and $750 million in 2016-17 over the forward estimates.

6:26 pm

Photo of Penny WongPenny Wong (SA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | | Hansard source

I will speak very briefly because I intend to make most of my remarks in relation to the motion I also have on this matter. I will make just a few points in response to Senator Cormann and to Senator Milne. Direct Action is a slogan, but it is a slogan that as yet has not been exposed as the fraud it is, and we need to ensure that it is exposed as the fraud that it is in the context of the proposed repeal of this legislation.

The second point I make is that in order to do that we are going to have to do more than lecture people and we are going to have to do more than talk to people who already agree with us. We are going to have to methodically go through what the alternative policy is that the government is putting forward. It was interesting that when Senator Milne was making her contribution she said why she opposed the opposition's motion. I was interested to hear over on this side all of the coalition members saying, 'Good on you.' On the issue of whether or not the bill should actually be the subject of a proper inquiry, it appears that the government is at one with the Australian Greens, and that is probably indicative of what the government's view is of the strategy. But I will leave most of my remarks to the motion that I have before the chair subsequently.

Photo of David FawcettDavid Fawcett (SA, Liberal Party) Share this | | Hansard source

The question is that the motion moved by Senator Milne be agreed to.

6:37 pm

Photo of Penny WongPenny Wong (SA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | | Hansard source

by leave—I move:

(a) the following matter be referred to the Environment and Communications References Committee for inquiry and report by the first sitting day in March 2014:

The Government’s approach to addressing carbon pollution including the provisions of any bills introduced into the House of Representatives in the remaining sittings of 2013 which repeal the carbon tax, with particular reference to:

(i) the impact of the Carbon Tax Repeal Bills on Australia’s ability to systemically address climate change,

(ii) the impact of the bills on Australia’s carbon pollution cap,

(iii) the ability of the Government and the Australian people to receive expert independent advice following the abolition of the Climate Change Authority,

(iv) the fiscal and economic impact of the Government’s ‘direct action’ policy,

(v) the capacity of the Government’s approach to meet the carbon pollution reduction target of 5 per cent,

(vi) the impact of the Government’s approach on any consideration of the full target range of 5 to 25 per cent,

(vii) the effectiveness of the Government’s approach to deliver carbon pollution reductions consistent with Australia’s international commitments,

(viii) the capacity of the Government’s approach to reduce carbon pollution adequately and cost effectively,

(ix) the technical issues that arise for measuring abatement under the Government’s approach, including additionality, establishing emissions baselines for emitting entities and long-term monitoring and reporting arrangements,

(x) the ability of the Government’s approach to encourage long-term business investment in renewable energy,

(xi) the impact on, and interaction with, the Carbon Farming Initiative, and

(xii) any other related matters; and

(b) in undertaking the inquiry the committee must have regard to the Climate Change Authority’s ‘Reducing Australia’s Greenhouse Gas Emissions – Targets and Progress review: final report’, due in February 2014.

I make the following points in relation to that. We have an important opportunity in this motion to do what the Senate has traditionally done, which is to ensure proper scrutiny of legislation. The reason we are moving this as the opposition is twofold. Firstly, we do want to expose direct action for the fraud that it is. It is a fraud. It is a slogan and, whilst Senator Cormann might say that it has been canvassed thoroughly at the election, it has been a slogan and a pamphlet and even then you still cannot be consistent on it. Already you are changing what you say it will do and how it will work.

It is ridiculous to suggest that the Australian people have been provided with full and frank details of what direct action would be. In fact out of Senator Cormann's own mouth we heard that because he read out of his little brief the process of a discussion paper and a green and a white paper in relation to direct action that the government was proposing. That is actually where they will demonstrate the detail of what their policy will mean. But they want the Senate to vote on the legislation that removes all of the architecture around an effective response to climate change before they tell Australians what the alternative is. We think that is a fraud. That is an utter fraud not only on the Australian people but also on the processes of this place.

I have been here for a number of years now and I have participated in committees both in opposition and, as minister, had to deal with committee whilst in government and can I say this: we have had a number of bills only introduced yesterday—eight or nine—and magically we have the government saying they want it passed before Christmas. It is I think incumbent upon the Senate to ensure that there is proper consideration of this very large and complex package of legislation and the alternative that is proposed to replace it before the Senate is asked to vote on it.

It is patently clear from the contribution of Senator Milne that on this issue the opposition and the Greens do not agree, and I want to put on record why it is we would like our motion supported and the bills and direct action referred to a committee. It is because they deal with the same issue. It is because the issue that the Senate has to consider is what is the appropriate and effective response to climate change for the nation. The Senate should not be asked to consider one side of the coin, one side of the equation—that is, the passage of the legislation on the government's timetable—without knowing what the alternative policy is that the government propose to put in place and that the government have not even issued detail on.

They have not even been prepared to put forward the detail of their policy. They are still going through a process of developing it. It is frankly ridiculous, inappropriate and undemocratic for the Senate to be asked to vote on legislation before the government is prepared to be transparent and up-front with the Australian people about what they will replace it with.

I also note that the Australian Labor Party's position is consistent with the position of a number of the environmental groups and I note, for example, the WWF has said how important it is for the government to present its alternative climate policy to Australians, how important it is for the alternative to be repealed. I note, for example, that the Climate Institute calls on the parliament to put the repeal legislation as well as the government's alternative through full and rigorous parliamentary scrutiny, including Senate committee investigation, before making any changes.

The motion before the chair moved by me on behalf of the opposition is consistent with the views expressed by many environmental stakeholders, but I make a more important point: it is absolutely consistent with the approach this Senate has taken time and time again. We have not in this Senate—

Photo of Mathias CormannMathias Cormann (WA, Liberal Party, Minister for Finance) Share this | | Hansard source

You want to send it to the references committee.

Photo of Penny WongPenny Wong (SA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | | Hansard source

Senator Cormann wants to interject—how many inquiries did Senator Cormann have on the carbon pollution reduction scheme? How many inquiries did he have? And now he wants to ensure that there is no inquiry in relation to this legislation and its alternative and he wants a vote before Christmas after having—was it two years of inquiries? Two years of inquiries, they had, in relation to a price on carbon. The hypocrisy is dripping off the walls of this chamber.

But I come back to the salient point: this Senate has never allowed a government to put legislation through without the Senate having proper opportunity to consider it. Everyone in this chamber knows that if this motion is not passed, what the government will seek to do is have a quick and dirty inquiry, if one at all.

I urge senators, including the crossbench, to consider that precedent. It is an important principle that the Senate for many years has adhered to and that is we apply proper scrutiny to legislation. These bills and direct action being the flip side of the legislation being absolutely germane to the decision to repeal or not repeal should be referred for proper scrutiny to this committee in accordance with my motion.

6:42 pm

Photo of Mathias CormannMathias Cormann (WA, Liberal Party, Minister for Finance) Share this | | Hansard source

Just very quickly in the interests of time, as Senator Wong just said the Senate has had many, many inquiries into the carbon tax and the Carbon Pollution Reduction Scheme. As such the Senate is very well informed on the flaws of the carbon tax and the Carbon Pollution Reduction Scheme and of course we will have one more inquiry. That inquiry appropriately will be through the Senate legislation committee, which is the usual process to consider government legislation, so it is not right for Senator Wong to say that there will be no inquiry into the legislation the government is putting forward to scrap the carbon tax. That will be an opportunity available to the Senate through the proper way the government will be opposing this particular motion.

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

The question is that the motion moved by Senator Wong be agreed to.

(The President—Senator Hogg)