Monday, 3 March 2014
Clean Energy Legislation (Carbon Tax Repeal) Bill 2013, Ozone Protection and Synthetic Greenhouse Gas (Import Levy) Amendment (Carbon Tax Repeal) Bill 2013, Ozone Protection and Synthetic Greenhouse Gas (Import Levy) (Transitional Provisions) Bill 2013, Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Amendment (Carbon Tax Repeal) Bill 2013, True-up Shortfall Levy (General) (Carbon Tax Repeal) Bill 2013, True-up Shortfall Levy (Excise) (Carbon Tax Repeal) Bill 2013, Customs Tariff Amendment (Carbon Tax Repeal) Bill 2013, Excise Tariff Amendment (Carbon Tax Repeal) Bill 2013, Clean Energy (Income Tax Rates and Other Amendments) Bill 2013; Second Reading
The Labor Party and Labor senators oppose the Clean Energy Legislation (Carbon Tax Repeal) Bill and related bills. Why? Because Labor's position on climate change is very clear. It is a clear position based on scientific evidence and sound economic principles. We on this side of the chamber understand the need to reduce the risk of dangerous climate change by cutting dangerous greenhouse gas emissions. We on this side of the chamber understand that the best way to do this is to recognise the real cost of pollution in the bottom line of our nation's polluters, and this is best achieved through a market based mechanism. Labor established such a mechanism and in the short time of operation this mechanism has delivered cuts to emissions with no negative effect on inflation and continued employment and economic growth.
The so-called 'carbon tax' or 'fixed price period', in Labor's view, can be removed leaving an already legislated emissions trading scheme which puts in place a legal cap on carbon pollution. We know that industry is quite capable of finding its best method of operating efficiently within that cap. We need the caps to comply with our international obligations to meet emissions reduction targets.
The bills before the chamber today remove Australia's ability to meet its binding international obligations to reduce the risk of dangerous climate change to our planet. Those opposite are ignoring the science, they are ignoring the future and they are ignoring the environment. They will create higher costs for our economy to adapt in the future and to manage the greenhouse pollution in our nation.
The coalition seeks, with no effective replacement mechanism for emissions reduction, to abandon the efficiency of a market based mechanism. Direct Action is a slogan, not a policy. Direct Action nationalises the carbon pollution problem, asking taxpayers to pay rather than the polluters themselves. Direct Action is flawed and cannot achieve our globally binding targets. Direct Action does not have legislated emissions reduction targets. If we pass these bills, there will be, in effect, no emissions reduction strategy in place for our nation. Direct Action will not exist when its predecessor is eliminated.
The collateral damage from these bills, which was noted in earlier debates, is the abolition of the Clean Energy Finance Corporation and the Climate Change Authority and the cuts to the funding of the Australian Renewable Energy Agency. This collateral damage is being driven by political ideology rather than by sensible climate change policy.
We know that the coalition are not at all serious about addressing climate change; it is not in their 'knitting'. John Howard calls those of us who accept climate change 'religious zealots'. As we all know, our Prime Minister, Tony Abbott, once said 'climate change is crap'. I know there are many on the other side who do not accept climate change, despite the scientific evidence. These bills demonstrate that they are winning the day; they are winning these debates within the coalition. There is a plethora of scientific and economic experts who back Australia's existing climate change strategy.
What I have found extraordinary during the hearings we have held on the Direct Action policy is that the coalition has been unable to put forward a single advocate for its discredited policy who is prepared to front up to the Senate committees and defend this policy as a good idea. Where are the recognised experts who say Direct Action is a good strategy? Where are the credible experts who say Direct Action will work? They are nowhere to be found, because there are none. We do not hear the cries for backing an expensive scheme to pay companies to pollute. Why would anyone support such a proposition? But we do hear that countries will achieve higher levels of emissions reductions at much lower cost because of the use of a market based policy.
While this government dismantles our functioning emissions reduction program and sits on its hands over climate change, the CO2 in the atmosphere is at a record high and Australia is on track for its warmest year ever. I have been dismayed this week to hear the Bureau of Meteorology warning West Australians that they face decades of rising temperatures, with hotter, drier and more extreme summers. This summer in Western Australia was the driest on record, with just 2 millimetres of rain for Perth; it was also the driest on record for Mandurah. Perth had only three days when rain fell, and not one drop fell last month—the first dry since February 2000. A Perth news report states:
The weather bureau is normally conservative—
as we all know—
but Bureau of Meteorology climate expert Neil Bennett said the data was staring climate change sceptics “in the face”.
It’s climate change. It’s warming. It’s staring you in the face …
As we said in the report of the Senate Environment and Communications Legislation Committee inquiry:
Removing this policy suite for the sake of a slight reduction in utilities costs in one financial year is reckless and irresponsible.
It is reckless and irresponsible to allow Australia to fall behind in our contribution to the global emissions reduction effort. It is reckless and irresponsible to expose us to future costs and potential international retribution for our contribution to global warming on this planet.
Late last year, in its Climate and carbon: aligning prices and policies report, we know that the OECD highlighted the need for countries to price carbon. It said:
If governments are serious in their fight against climate change, the core message of this reform must be that the cost of CO2 emissions will gradually increase, creating a strong economic incentive to reduce the carbon entanglement and to shift towards a zero carbon trajectory.
A central feature of such an approach is placing a price on carbon.
On a per capita basis, Australia punches above its weight in its contribution to global CO2 emissions. This is a well-known fact and it places a high moral obligation on us as a nation to keep pace with the world's efforts to tackle climate change; otherwise, we as a country are effectively a significant drag on the efforts of other nations. Why would they act when we as a country with a high standard of living are emitting above the per capita average—way, way above the per capita average. There is a profound moral obligation on our country to act. We had a credible policy that encouraged global action. That is what these bills are repealing. From being at the leading edge of this effort, we will be behind the rest of the world. Australia will become—and we are already because of these bills before us—a pariah in the international community because of the negative political will of a government that is putting the future of our planet last in its priorities.
Expert submissions to the Senate Environment and Communications Legislation Committee inquiry supported a carbon price as the most effective emissions mitigation strategy. One of those credible experts, whom I had the pleasure of seeing give evidence, is Dr Frank Jotzo. He said:
The carbon pricing mechanism currently in place is an economically sound basis for climate change mitigation policy in Australia. Repealing Australia's Clean Energy Legislation and related bills is undesirable if a lasting policy framework for greenhouse gas emissions reductions is to be established, and if emissions reductions are to be achieved cost effectively.
If emissions reductions are to be achieved without carbon pricing, then regulatory and subsidy approaches will need to play a larger role. These are generally more costly and less effective in creating incentives for long-term investment in low-carbon options by Australia's businesses. Repeal will exacerbate policy uncertainty, with adverse effects on investment.
And that is exactly the path that the government is taking us down. Mr Nathan Fabian, CEO of the Investor Group on Climate Change, said that a scheme cap that reflects an emissions reduction objective; broad coverage of sources of emissions in the economy; transitional assistance arrangements for trade exposed sectors; the ability to access international permits to achieve least cost abatement; and the capacity to respond to deeper reduction targets as necessary over time are the essential elements of good climate policy. The Wentworth Group of Concerned Scientists noted that the Productivity Commission considers:
… an emissions trading scheme is by far the most cost effective way for Australia to contribute to global efforts to mitigate climate change.
So what we have here is the coalition government's repeal bills and direct action policy creating a significant level of uncertainty in industry. Even worse, what we have here are these bills creating a dearth of climate change mitigation, and no-one really knows what the coalition will put in its place.
We know, from the evidence that our committees have received and from the lack of intellectual basis on which direct action is based, that the coalition's heart is not in place in any decent strategy to tackle climate change. It has no emphasis on a decent policy strategy. Worse still, these repeal bills mean we no longer have the economic tools we need for the future. This is not just about tackling climate change; this is about providing the capacity for our economy to transition to the economic future which we know is inevitably coming and in which carbon will be constrained. We in the Labor Party take tackling climate change very seriously—not just from an environmental point of view but also, very importantly, from an economic point of view. Having a long-term framework would mean we had stability and certainty for investors, industry and the wider community. Direct action, it is patently obvious, cannot deliver a long-term commitment. It is bound by the term of the forward estimates.
Personally, I think direct action is a policy the coalition have put forward so that they can be seen to be doing something on climate change when they do not mean it. It cannot set a cap. It cannot have a legislated binding target. It cannot be an effective policy. It creates uncertainty. It restricts innovation and investment in clean energy in our country. It is completely counter to any rational thinking. The coalition is stuck in short-term political thinking, more interested in political slogans about the carbon tax. The coalition government are here for today without regard for future generations. They are here exploiting the situation for maximum political profit, and they are leaving a policy wasteland in their path.
I am pleased to say that we do not think like that on this side of the chamber. We are about the future: we are about opening the door for our society to develop and thrive into this century and the next. We know that the short-term thinking the coalition is putting forward will make our local industry less competitive, not more competitive. The Prime Minister's claim of an average reduction of $550 a year for households is completely flawed. He said household electricity costs will be $200 less and gas $70 less, but there is no evidence that substantiates this. The Grattan Institute, ACOSS and other significant stakeholders that I do not have time to quote directly have all refuted these claims.
Labor's clean energy package included the Jobs and Competitiveness Program, which smoothed the transition for emissions-intensive and trade-exposed industries. These industries have no clear path forward under the coalition's direct action policy; instead, uncertainty is being locked in. These industries will need to change for the future at some point, but you are removing the tools and the capacity for them to do that. What we have in our existing policy, with legally binding caps, gives certainty and the capacity to meet future targets and to allow industry to transition. It gives flexibility for companies to choose how best to meet their emissions obligations within the targets set.
Our existing policy is achieving carbon mitigation outcomes, and we have a government that is trying to throw that all away. Future generations will ask, 'Why did they throw it all away?' History will show that we have a Prime Minister who was stuck in the past, who chose to abandon rational, functioning policy for short-term political gain. As we heard in the hearings: Direct Action is a policy that is not based on any scientific evidence or on any credible economic framework.
To conclude my remarks on these bills, the reality is that the world, with or without us, will be moving to an energy revolution—a revolution in the way that we generate and use energy for domestic, commercial, industrial and transport purposes. If you accept—and I certainly do—that climate change is real and is caused by carbon emissions then you have to recognise that having the tools to reduce the carbon in our atmosphere is a basic economic necessity. Failing to provide these tools, as the coalition is doing, will leave our households and businesses without the capacity to adapt, and the rest of the world will benefit from changes. Australians will be left in the dead-end jobs of yesterday, while other countries will have a competitive advantage; they will be way ahead of us. This is the path which the coalition is leading us down. We do not want to see our great technologies go offshore, without the investment being made in that technology here in Australia.
We cannot afford to miss the boat on this. It is our opportunity to have the leading-edge industries of the future. We cannot afford to be left behind on that front. Labor's Clean Energy Future package gives Australia the framework to keep up with the rest of the world—the framework that those opposite are repealing. The coalition want to destroy that framework and, along with it, the associated investment, business and jobs. We oppose the bills for the sake of our environment and for the sake of the jobs of the future.
I rise today to oppose the Abbott government's attempt, through the Clean Energy Legislation (Carbon Tax Repeal) Bill 2013 and related bills, to remove and destroy the emissions trading scheme that is currently law in Australia.
We are living in a climate emergency. You would not know that if you looked around the Senate chamber at this time, when there are about seven people here. But we are living in a climate emergency and we are at this point even unsure as to whether we have already gone beyond the tipping points of many of the major indicators, from which there will be no return.
Let me just start with the situation as it is, as I stand here. Just last week, 10 million scallops died off Vancouver Island because of ocean acidification. In low-PH water, scallops cannot form shells. This is consistent with research from the Antarctic Climate and Ecosystems CRC in Hobart, where they have said exactly the same thing: you get to certain point of ocean acidification and those creatures which need shells cannot form them, and so you have wipe-out. That goes to the microscopic creatures and down to krill. Imagine what will happen if krill cannot reproduce. You are going to see a collapse in the marine food chain. This is already happening, and the 10 million scallops off Vancouver Island is just one example.
We are seeing extreme weather events around the world. There has been horrendous flooding in the United Kingdom and the big freeze in North America, described as the 'Arctic vortex'. We are seeing droughts, fires and heatwaves here in Australia such that there is a recognition that, to be able to continue to grow food, you are going to have to move where you grow some sorts of food and you are going to have to change the manner in which you grow it. But you have to take into account the significant shifts in the climate and you are going to have to take into account what the scientists and the Bureau of Meteorology are already saying, whether it is in Perth, in Tasmania or even in south-eastern Australia generally: we are going to see higher levels of extremely hot days, fire-danger days; we have to recognise that more people are going to die because of heatwaves; and not only do we now have to militate against things getting worse but also there will be huge costs in adapting to it.
In terms of food production, right around the world we are seeing the impacts of global warming. In 2008, we had, essentially, a food scarcity crisis because of climate change. Because of drought around the world and because of fire, the price of grain went up and so we had huge price rises, particularly in the Middle East, an importer of grain, and as a result the Arab Spring. The first riots in the Arab Spring were food riots. That is the reality for us.
In news just this weekend, coffee prices out of Brazil have reached a 16-month high because of drought, and the assumption is that they are going to have to shift where they grow coffee, that it is no longer going to be viable in the future. Countries like Brazil are recognising that, whereas here in Australia we have a government which rejects the science of global warming and says to farmers, 'We'll just give you the money. You don't have to change what you're doing; you just do that and it'll all come back to normal.' We are actually beyond normal. We are living in a hotter, wetter world, and things have permanently changed everywhere.
I come back to ocean acidification and what it is already doing to coral reefs. Warmer temperatures are bleaching coral reefs. We have ocean acidification weakening those reefs in the front of extreme weather events which smash them. We are seeing deterioration in our coral reefs right around the world. A survey out just last week said we have lost most of the big fish from our reefs around Australia partly, of course, because of overfishing but also partly because of climate change impacts. We are seeing species extinction. We are seeing invasive species spreading into areas where they never before were able to survive, destroying ecosystems. The east coast of Tasmania is a classic case, where the sea urchin is destroying the kelp beds, for example. We are losing, in Queensland, the white lemuroid ringtail possum; it is probably heading for extinction because it cannot survive extreme hot weather events. In Tasmania, the cider gum on the central plateau cannot go any higher. We are going to see the extinction of a third of all species we know because of global warming. That is the terrifying assessment from the world's leading biologists.
That is the extent of the challenge before us. That is why we have to have an emissions trading scheme—because this task has to be scaled up. Five per cent is patent nonsense in terms of what needs to happen. Australia needs to start paying its fair share now in the global climate task. I am glad that the Climate Change Authority has brought out its report saying that Australia, at a minimum, needs to reduce emissions by 15 per cent plus four per cent, 19 per cent, by 2020. I would have liked to see it much higher than that; nevertheless, that is where the authority has come out. But it also said we have to get on a trajectory for 40 to 60 per cent by 2030 and get ourselves carbon neutral by 2050. We are not going to do that unless we have a market mechanism which enables us to scale up the response to the challenge. And that is why what the Abbott government is doing is so reprehensible. It is the first responsibility of government to protect its people. The Abbott government is actually making Australians more vulnerable—and the economy extremely vulnerable—and setting us back decades because of its refusal to accept the science of global warming.
As for where we are in a global sense, the world is recognising that we are losing the battle. The scientists said we had to have global emissions peak and start coming down by 2015. The world failed us in Copenhagen; there is no doubt about that. We should have come to a treaty there which recognised the task of getting those emissions turned around and coming down by 2015, but it has not happened. That is why I say we risk having already gone beyond tipping points. But now the world is starting to get serious. We have the United Nations Secretary-General, Ban Ki-moon, calling a summit in September this year and saying he wants nations to put on the table their 2020 target but also their post-2020 target. We have the world coming into the Lima talks later this year, framing up the move towards a 2015 global treaty. People are recognising that there is a limited carbon budget that the world has to address, and Australia only has a very limited share of that global carbon budget, because it takes into account heritage and legacy issues and it also takes into account the maximum of what is expendable. That is the context in which Australia needs to be considering the task.
Around the world, emissions trading has been recognised as the way that we are going to be able to address this most efficiently. There are broad-based emissions trading schemes in the European Union and in California. China is trialling emissions trading in seven large cities and provinces and has made clear its intention to introduce national emissions pricing in the form of emissions trading. South Korea is preparing a national emissions trading scheme. All around the world, countries are working together and separately to develop emissions trading schemes, because they are scalable. They are able to give the incentives, if you like, or the clear policy direction to companies and to the community to say that our task is to reduce emissions.
When you have a task to reduce emissions, if you go with an emissions trading scheme then you have something that is legislated and participation is compulsory, whereas Direct Action is voluntary. With an emissions trading scheme, you have an incentive to find more abatement options, because the polluters are paying and the polluters will work hard to find other options to reduce their emissions, whereas if it is voluntary there is no incentive. With an emissions trading scheme, you do not have to go through the complex and difficult task of setting baselines or benchmarks; you just tell the market what the cap is and they go and find a way of meeting that cap. Abatement costs can pass through, so you can have more abatement reduction. Around Australia at the moment, there is a reduction in electricity demand, and that has come from a growing awareness that coal fired power is a big polluter. The price of pollution is what the polluters have to pay. At the moment the community is being subsidised, if you like, or assisted to be able to deal with that, with the tax-free threshold and other assistance packages, but it has drawn people's awareness to how to reduce their emissions, and more abatement options open up. In terms of funding, the policy can be made cost-neutral to industry and the government. In fact, you can get a situation where future policy certainty is guaranteed because budgets can be set into the future on the back of what is expected.
But instead of that we have a government in Australia saying that they do not want a market-based mechanism, they are only going to go with five per cent and they are only putting $1½ billion into it. We are out of step internationally in terms of our responsibility and in terms of the level of the task. Frankly, driving expansion of coalmines and coal seam gas at a time when we need to reduce emissions is madness and should stop. There is no way the Bowen or Galilee basins should be opened up to coal. The biggest increase in emissions at the moment is through fugitive emissions, and that is coal and coal seam gas. We are also not counting the emissions that occur from burning our coal in other countries. We need to take responsibility in Australia—and do not bother telling us that Australia is not a major problem. We are a major problem. We are one of 12 countries who make up 70 per cent of global emissions.
Fifty per cent of Australia's emissions domestically come from 12 polluters only, and they are overwhelmingly in the coal fired generation sector. The carbon price is working to reduce emissions in that sector. It is a lie for people to get up and say that the carbon price is not working; the carbon price does not cover all sectors at the moment, but it does cover electricity and it does cover coal fired generation. That is why it is working, because a price on coal fired pollution works. We need to get out of coal fired pollution as quickly as possible and into 100 per cent renewable energy. The government is determined to get rid of emissions trading and attack the renewable energy target. The only conclusion that you can draw from that is its intention to prop up coal fired power generators against the competition that is coming in from renewables and against the future. It is a ridiculous policy which is totally irresponsible in the long term.
When you look at how we got to the position we are at in our emissions trading scheme, I just want to put on the record that the Greens right back from 2007 on supported the Bali road map, which said that Australia as developed economy had to reduce its emissions between 25 and 40 per cent by 2020. That was in 2007. The Labor government at that time determined on a five per cent emission reduction target. It was not even in the ballpark. The scheme that was developed at that time had a cap at 25 per cent, instead of a foundation, a base, at 25 per cent. That political argument meant that there could not be a resolution of what the appropriate emissions reduction target should be in the face of the climate crisis. As a result we came up with a clean energy package which legislated an emissions trading scheme. So let us stop pretending it is a tax. What is legislated is an emissions trading scheme. It was determined that there would be a fixed-price period during which time the new institution, the Climate Change Authority, would determine an appropriate target. The target would then be recommended to the parliament and the parliament would absorb that target into the legislation and it would go to flexible pricing in 2015 with a link to the European Union.
If you are serious about addressing climate change, you do not want to abandon a carbon price that drives change. A price of $23 or $24 is not high enough to drive the kind of change into renewables you need, which is why the Greens secured the $10 billion with the Clean Energy Finance Corporation to supplement the carbon price to drive the investment into renewable energy. That is why the Greens will not be supporting Labor's amendment to try to go to emissions trading on 1 July 2014. Apart from anything else, if you are interested in actually driving change then you would want to wait until the European Union's attempt to fix their scheme started to kick in. I am pleased to say that the European Union has dealt one blow at least to the low price in the European Union by agreeing to backloading. They have agreed to take 400 million units out of their emissions trading scheme and backload it and they want to make that 900 million by 2016 to drive up the price.
The test for the Labor Party here would be if the European price was now $60, would they be keen to go to flexible pricing in 2014? Probably not. The issue for the Greens is: we have to behave with integrity in terms of the challenge of the task ahead. It is critical we stick with what we have got. We have policy certainty. We have got a very good policy framework, recognised by the International Energy Agency as template legislation for the rest of the world. No-one can understand why Australia would abandon a polluter-pays principle for a government corporate welfare principle—a payout of taxpayer dollars to the polluters as opposed to raising from the polluters to be able to make the changes we need to be able to mitigate against increased emissions and to move to the low-carbon economy.
I want to go to the low-carbon economy for a moment, because abandoning carbon pricing is abandoning the very things the government says it wants. It says it wants to have increased productivity. It says it wants increased jobs. But the government, by abandoning emissions trading, is turning Australia into a rust bucket economy. A rust bucket economy is what will happen if you abandon carbon pricing, because everywhere else in the world gets the signal and knows what has to happen. Where are the research and development dollars going? Where is the innovation going? Where are the incentives going? All into the new technologies. Frankly, if you want to drive the manufacturing industry out of Australia, as was put to us in the Senate inquiry last week, the best thing you can do is get rid of carbon pricing, because those companies will go elsewhere in the world where they can pick up the research and development dollars and incentives to upgrade their equipment and their products that they are selling into the market.
So what we are going to do is prop up coal fired power and old and inefficient technologies. We have already seen the end of the Clean Technology Food and Foundries Investment Program, where more than $470 million was not spent. We have food processors around Australia crying out for higher levels of efficiency. Those programs were putting that efficiency in there. If you wanted to actually see Australia in the longer term be competitive, the best thing you could do is get ahead of the curve. You would embrace carbon pricing, you would increase the level of ambition and you would drive Australian community, industry and business generally to get with it and find ways of reducing emissions, leading the world and selling the intellectual property as well as the product. Instead of that, we are going to be so far behind the eight ball. We are not going to slow down the momentum of the rest of the world, but the rest of the world will pass us by. People will look back and say they cannot believe it. We had it happen once with solar, where our best brains left the country. We do not want it to happen again when it comes to addressing the shift to a low-carbon economy in the face of a climate emergency.
I say again, the Abbott government is acting against the best interests of Australians. We are a continent most vulnerable to global warming, but we are an economy and a society which is already suffering and will suffer a lot more by a short-sighted, silly policy of paying the polluters—corporate welfare to coal fired generation—when our whole framework should be innovative and futuristic.
It is disappointing that I have to rise this morning and talk about this, because it is obviously a political ploy by the other side to extend this debate; in other words, it is a filibuster. I thought that, given that everybody bar one currently in this chamber is facing an election in two weeks—Senator Collins will be facing an election in November in her home state of Victoria—I might get up and speak to this silliness which is going on. In our home state of South Australia we are facing some tough times. I have just listened to Senator Milne's contribution, where she seeks 100 per cent renewables. I guess that, when you are a minority party, you never have to worry about balancing the books or how many jobs have been modelled to be lost while you move through a transition economy into a utopian existence where we have 100 per cent renewables. When you have the responsibility, and the majority of Australians on 7 September last year voted for change and a change in policy—there could not have been a clearer policy position than that we would abolish the carbon tax, and they voted overwhelmingly for that change—there cannot be a stronger proposition for the people on the other side to stop this, this week. Stop it and vote this legislation through.
In my home state of South Australia, we face an election in two weeks, and my Tasmanian colleagues in the chamber are in the same predicament. The two states under Labor reign have the unenviable position on the economic tables of being the two least economically viable states in this country. As we all know, in recent weeks Holden announced that they will be withdrawing from Elizabeth, in Adelaide's north. In the weeks leading up to the 2013 federal election, the member for Wakefield tried to con voters by sending a letter to the entire electorate stating that he had personally 'secured guaranteed support for GM Holden, ensuring production at Elizabeth until 2022'. What a cruel hoax that letter turned out to be. That is just one part of the mismanagement and waste that is Labor, under not only the member for Wakefield's former government but also under that of Premier Jay Weatherill. Their ambivalence about the drivers of business is the real reason why these businesses have failed. Labor certainly had no vision for the car industry, as we saw when Mitsubishi and Ford went under on Labor's watch. So, really, who is responsible for the slaying of Holden's line? As I said, in two weeks time, Tasmania and South Australia will go to the polls, and I guess we will have an idea of who the voters believe is responsible for the inattention and the ambivalence that is the carbon tax.
Now Toyota have announced that they will be leaving Australia in 2017. This will have a huge impact not only on Victoria but also on South Australia, where hundreds of jobs in the auto components sector rely on selling their product directly to Toyota. Both Holden and Toyota cited the high cost of doing business in Australia as the reason for closing down their manufacturing operations. That is the common denominator. Just at a time when they were least competitive, the government gave them a carbon tax—a tax of which their leader had said, 'There will be no carbon tax under a government I lead.'
The carbon tax is one of many tax increases and regulations that the previous, Labor government burdened industry with. This coalition government has committed to removing that carbon tax and putting Australia in a much better and more competitive policy setting so that the private sector can flourish. That is what we were elected to do and that is what we are doing here today. The carbon tax has hurt families, hurt businesses and hurt our economy. Not only does the carbon tax make it more difficult for Australian businesses to compete abroad, because other countries do not have the level of carbon tax that we in this country have; it also makes it more difficult for domestic businesses to compete at home because there is no carbon tax on imports coming into this country.
In the last 24 hours, a very respected and prominent industry participant, Mr John Borghetti, the CEO of Virgin airlines in this country, provided some commentary which everybody on the other side should listen to. Despite all the noise that is going on about Qantas and Virgin, both he and the CEO of Qantas airways, Mr Alan Joyce, have stated that the carbon tax is a massive impost on their business. In fact, Mr Borghetti said it was not up to governments or oppositions to 'pick winners'. He stressed:
… the best assistance the government and the opposition—
that is you lot over there—
can provide is the removal of the carbon tax, which has cost this industry hundreds of millions of dollars.
I know that you do not necessarily study the business pages of any of our financial dailies here, but, if you had not noticed, airline and aviation is at a crisis level.
Senator Whish-Wilson interjecting—
Thank you, Senator Whish-Wilson, because I know you have a background in equities and you understand how financial markets work. I would be pleased to hear, in your contribution to this chamber, how you see that cruelling the aviation industry with this tax, when there is no other aviation competitor to Virgin and Qantas, helps the aviation industry in this country. So I accept your interjection, and I will listen quite intently as to how you solve this problem.
Senator Whish-Wilson interjecting—
Oh, 'A dollar extra for every person,' I hear you say. John Borghetti, another South Australian who is very concerned about the way in which you are filibustering this whole process of carbon tax, knows that when we go to the polls in South Australia and Tasmania in the next few weeks you will be judged for this level of incoherent political activity that you approached us with. He continued:
To that end, I just say we applaud the government's position on this.
Virgin Australia has reported a half-year loss of $84 million; $27 million of that is Labor's carbon tax. That is on top of the $106 million hit to Qantas from its tax charges last year. So while Senator Whish-Wilson says, 'It's just another dollar per passenger,' it is actually all those shareholders' costs. They are not competitive. When Singapore Airlines, Emirates, Etihad and Air New Zealand—all of those—fly into this country, how much do they charge their passengers from their countries of origin for their carbon taxes? Labor, you must face up to the clearest possible mandate that was given by the Australian people to this coalition government on 7 September. The carbon tax is a hit on jobs. And it is not just on the aviation sector; you must know that. It is across the board—including Western Australia, where its impact is aggravated by Labor's failed mining tax.
Anyway, back to South Australia. South Australia had the worst economic growth performance of all mainland states for each of the last two years—and that is not my data; that is ABS data. South Australia's domestic economy, excluding exports, contracted last year—also the worst performance on the mainland. Alarmingly, South Australia was the only state to record a drop in exports, with South Australia's goods exports contracting by 1.7 per cent last year. There are many things governments can do to help ease cost pressures on businesses, and repealing this carbon tax is an essential legislative step we must take.
The peak business group in South Australia, Business SA, surveyed its members when the carbon tax was initially announced back in February 2011. An overwhelming 69 per cent opposed its introduction—another example of the former Labor government's inability to listen to the needs of businesses. In its submission to the carbon tax repeal consultation, Business SA stated:
While the Carbon Tax has only been in effect for just over 15 months, it has impacted business and in particular small business. The South Australian economy has, according to preliminary estimates, contracted over the past 12 months and the Carbon Tax is putting further constraints on an already struggling economy which has a significant manufacturing component. South Australian small business has also faced the most rapid increases in energy prices across Australia in recent years and the Carbon Tax is an avoidable component of these costs.
So businesses are doing it tough. Are you listening? No, you are not. Scrapping the carbon tax is the first of many ways this coalition government intends to help make doing business in Australia easier and more competitive. Through removing over $1 billion of red tape out of the economy each year, we plan to help businesses get back on track.
'But what about reducing greenhouse emissions?' I hear you ask. With regard to renewable energy, South Australia has certainly punched above its weight. Again, I quote from Business SA's submission:
That is not to say South Australia shouldn't do its fair share to reduce greenhouse gas emissions. In fact, South Australia reached its 20% renewable energy target back in June 2011, well before the introduction of the Carbon Tax. This furthers the argument that Australia can and will meet its obligations to reduce its greenhouse gas emissions without a Carbon Tax.
That is what they have said. But we have all paid the price for this renewable energy, and the carbon tax has been an added cost to our already expensive electricity prices.
Finally from Business SA:
South Australian business and in particular small businesses have had to absorb significant energy price rises since 2008 with electricity costs alone rising approximately 80% of this period. Repealing the Carbon Tax is one step towards easing the rise in the cost of electricity to reduce the cost pressures on our businesses.
But do you listen? Do you listen to the peak industry business bodies? No. We are in this chamber, beating it out, slugging it out, while you talk it out.
So it is not just businesses that will be delighted to see the repealed carbon tax. Scrapping the carbon tax will save households an average of $550 a year. That is real cabbage; that is a lot of money. So, on average, household electricity bills will fall by $200 a year and gas bills will fall by $70 a year. The government have a plan to provide relief on electricity prices and we are keeping our election promise to repeal the carbon tax. Our promise was to repeal the carbon tax and we were elected on that promise.
South Australians have been particularly affected by electricity prices, and we see that in our travels around our state. Bill shocks from the electricity price hikes in South Australia are a major cause of electricity disconnections, according to a report by the South Australian Council of Social Service. That is real pain out in the households. Electricity prices in South Australia are already among the highest in the world and urgent action is required to ease the pressure, with a growing number of South Australians having their power cut off following massive electricity price hikes.
The future for farmers, families and small businesses under this carbon tax is not bright. I am concerned about the impacts for many small businesses in my home state, whose overheads are already high and whose margins are low. The horticulture industry is suffering greatly, out through the northern areas of Bolivar, the Wakefield Plains and those areas—the food bowl of South Australia. And, indeed, all of those areas in Tasmania with high-production horticulture industries are suffering, without doubt, and feeling the effects of rising power bills as a result of a carbon tax.
I need to look no further than the effect on a business that I know, as does Senator Whish-Wilson from Tasmania: the wine industry. We are both very concerned about the lack of margins in that industry. If you watched a story on the ABC's Landline yesterday you would have seen a lot of people concerned about the rising costs of production in that sector. Electricity, fuel and mechanical harvest costs are major inputs of wine-grape production affected by the tax. Combined with the sector's exposure to trade and current low profitability the carbon tax is just another impost on the growth and future of the industry at large. Growers have indicated that up to half the increase in power bills is attributable to carbon tax charge. There is no doubt the carbon tax is contributing to the demise of profitability in this important industry sector. The value of the Australian wine industry was $4 billion five years ago; it is now down to $2.8 billion. How do we reverse this trend? We make it more profitable and give people greater money to access markets to grow their businesses and not cruel them.
There was so much uncertainty and such little confidence in government over the years during which Labor, with its flip-flop policy settings, ran this country. We have been very clear: we want to remove this carbon tax and remove the uncertainty that goes with the carbon tax. The only certainty with the carbon tax is more cost, less margin, fewer people employed, less profitability and less growth.
If Labor continue to oppose scrapping the carbon tax then they continue to support higher electricity prices for all Australians. To those people in Tasmania and South Australia who are facing the polls in the next two weeks: I want you to bear in mind the actions that are being carried out in this chamber when you vote. It is another example of those on the other side of this chamber having no regard or interest in supporting industries and issues taking place outside their own sphere of influence.
A clear message has been delivered by Australians: they want to see the carbon tax gone in its entirety. The previous government said the tax would reduce domestic and global emissions yet, pursuant to their own modelling, even with the tax, domestic emissions will rise from around 560 million tonnes in 2010 to 637 million tonnes in 2020. I say to all of those on the other side: listen to the Australian people, get with it, vote with us on this and repeal this hideous tax.
I rise to speak on the debate on Clean Energy Legislation (Carbon Tax Repeal) Bill 2013 and related bills. With my colleagues on this side, I will not be supporting these bills.
This suite of bills sets Australia up to fail on our climate change obligations, to fail our children and our grandchildren and to fail millions of people facing displacement from the effects of climate change. These repeal bills seek to set Australia up to do less to combat climate change. These bills seek to leave the burden and heavy lifting of decarbonising our economy to future generations.
There is a strong foundation of scientific fact underpinning the need to reduce global emissions to reduce the risk of global warming above two degrees. It is so certain, in fact, that doubt has crept in. With 95 per cent certainty that greenhouse gas emissions from humans are the cause of global warming, some cast doubt and ask, 'What about the five per cent?' If you were 95 per cent certain that something bad, something nasty, was going to happen to you or your family, would you sit by and ask, 'What about the five per cent?'—or would you find out what was causing the problem and get about fixing it? It is not too late to fix the problem of climate change, but time is running out—and fast.
Late last year I participated in the Senate Environment and Communications Legislation Committee inquiry into these repeal bills. The new coalition government referred these repeal bills to the committee to examine the costs of pricing carbon for households and businesses, while the opposition referred these bills on the basis of examining how they fitted with Australia's long-term climate change obligations. Put simply, we started from and continue to see this problem through very different lenses.
On one side the new coalition government see climate change in terms of purely the here and now. The arguments from those opposite revolve around immediate costs for business but fail to mention the Jobs and Competitiveness Program that was embraced by so many businesses that saw an opportunity to invest in energy-efficient technology, in renewables or in low-emissions technology to give their business a competitive edge. Their arguments are that the immediate costs for households are too high, but they fail to recognise that the carbon price was offset through tax cuts and increases to welfare payments to nine out of 10 households.
On our side we see the problem in terms of the medium to long term. The need to have in place a price mechanism for emissions reduction beyond 2020, with targets for reductions at 2030 and 2050, is just as important as a 2020 target. It is not just about the here and now. It is about the kind of Australia and world we want to leave to future generations. Just last week the Climate Change Authority reiterated its calls for an increase in the emissions reduction target to 2020, recognising that emissions reductions made now are less costly in the longer term.
Labor's approach to reducing emissions is to repeal the carbon tax and keep in place the already legislated emissions trading scheme, which puts a legal cap on carbon pollution. This lets business work out the cheapest and most effective way to operate within that cap. Cap and trade is overwhelmingly endorsed by economists as the most cost-effective and efficient emissions-reduction method. The OECD recently confirmed that higher levels of emissions reductions can be achieved at much lower cost through a carbon market mechanism. Carbon pricing is cheaper and more efficient than direct subsidies without a pricing signal.
The first 18 months of the carbon price has seen emissions from electricity fall, with coal power generation down and renewable energy generation up. The carbon price is not the sole reason for these changes, nor has it been insignificant. As such, the carbon price has been effective in increasing the competitiveness of renewable energy generation. Meanwhile, Australia's economy grew at trend in 2012-13, while additional government assistance to households has more than offset any price rises caused by the carbon price.
The binding caps will ensure Australia meets its international emissions reduction targets under the second commitment period of the Kyoto protocol—2013 to 2020—and under the United Nations Framework Convention on Climate Change. These are the targets pledged by 99 countries, covering eighty per cent of global emissions and including all of the major emitters, to reduce or limit emissions by 2020.
A flexible price would bring the Australian carbon price into line with the carbon price prevailing under the European Union Emissions Trading System, which is currently expected to be around $6 per tonne of emissions. Moving to flexible-price emissions trading would ensure Australia meets its international emissions reduction commitments while also reducing compliance and transaction costs for businesses, increasing flexibility and improving risk management. Importantly, embedding a carbon price in our economy sets Australia up on a long-term trajectory for emissions reduction. Slow decreases in the cap on pollution over a long period of time give businesses and households certainty and limit the risk of a carbon shock in future years, a carbon shock that will hit households and business far harder than a responsibly introduced carbon price. Direct action subsidies with a finite duration do no such thing, and the new coalition government is fully aware of this.
These bills have left many across the world wondering: is the new Australian government serious about reducing emissions? After all, it was just a few years ago that the new Prime Minister famously dismissed climate change science as 'absolute crap' to a small crowd in rural Victoria. Based on the coalition government's policies, Australia's rating on the Climate Change Performance Index has dropped to 57th out of 61 countries. Embarrassingly, at last year's Warsaw Climate Change Conference, Australia received four of the five 'Fossil of the Day' awards. These awards recognised the coalition government's backward proposal to wind back the carbon price mechanism and abandon support for research and clean energy.
It is clear that this current Senate will not pass this suite of bills as they stand. What of the next Senate? Interestingly, in Tasmania, the Liberal opposition election spokesperson, Vanessa Goodwin, is questioning the Palmer United Party's stance on abolishing the price on carbon. I quote: 'Mr Palmer has refused to pay his $8 million carbon tax bill, including penalties, and now he is aiming to win the balance of power in the Senate so that his senators will vote to backdate the abolition of the tax so Mr Palmer doesn't have to pay it.' Will those opposite cede to Mr Palmer's demands? What is the cost to the Australian budget if those opposite abolish the carbon price and refund all payments made over the past two years? Clearly, they will rely on the Palmer United Party senators to pass this legislation.
This legislation, which has been discussed for months, sets Australia up to fail. In its latest report on climate change policies, the OECD has highlighted that those serious about tackling climate change are implementing a price on carbon. For Australia to have a carbon-pricing mechanism in place and then remove it means we are turning our back on the world.
China, long held up by the coalition as not acting, is implementing seven carbon-pricing trials, and in one its carbon price has surged higher than Europe's. Guangdong province, China's largest, with a population of more than 100 million, introduced a cap on greenhouse gas emissions and issued carbon permits to big polluters from 10 December last year. Emissions trading schemes were also introduced last year in Beijing, Shanghai and Shenzhen provinces. As we participate in this debate to remove Australia's carbon-pricing mechanism, China is getting on with implementing carbon-pricing policies to see its economy through the carbon restraints destined to occur across coming decades. Yes, China's starting price is lower than Australia's, but there were amendments on the table in the House of Representatives to reduce our price and the new coalition government did not even allow them to be debated. As our new coalition government seeks to send Australia backwards, China recognises the impacts of pollution upon its economy and upon its society and is putting in place the long-term policies to deal with it.
The President of the United States of America has outlined his desire for a national market based solution to climate change. He acknowledged that it would not pass the current Congress and has moved anyway to introduce stronger regulations. It is interesting to note the similarities between the Republican Tea Party and the climate deniers in the new coalition government. It is also interesting to see the opportunism of some of those in the coalition in using President Obama's remarks—that emissions trading will not pass Congress and that America will increase its efforts through regulation—to justify their claim that emissions trading is not being implemented across the world. In Australia we already have a carbon-pricing mechanism in place, so the coin is flipped the other way.
In his submission to the Senate inquiry, Dr Frank Jotzo, a leading climate change academic at the Australian National University, highlighted the clear benefits to the Australian economy of using a carbon-pricing mechanism to tackle climate change. The submission said:
The carbon pricing mechanism currently in place is an economically sound basis for climate change mitigation policy in Australia. Repealing Australia’s Clean Energy Legislation and related bills is undesirable if a lasting policy framework for greenhouse gas emissions reductions is to be established, and if emissions reductions are to be achieved cost effectively. If emissions reductions are to be achieved without carbon pricing, then regulatory and subsidy approaches will need to play a larger role. These are generally more costly and less effective in creating incentives for long-term investment in low-carbon options by Australia’s businesses. Repeal will exacerbate policy uncertainty, with adverse effects on investment.
Dr Jotzo was not alone in supporting the current clean energy legislation. The clear majority of submissions to the inquiry opposed the repeal bills. Mr Nathan Fabian, the chief executive officer of the Investor Group on Climate Change, in evidence to the inquiry, said that the world is acting to reduce carbon. Mr Fabian said:
Nations are implementing emissions reductions policies that make sense for their circumstances.
… … …
It is our view that an emissions trading scheme with a cap makes sense for Australia's circumstances. That is because it is in the interest of Australian companies to be able to contribute to emissions reductions at least cost while reducing their own emissions from domestic plant and equipment over time, and in a time frame that makes sense to them.
It is simply not good enough for the new Australian government to throw out this well-thought-out policy, a policy that is designed to lower uncertainty for businesses and households and that seeks to meet our international emissions reduction obligations at the least cost to jobs and our economy.
The coalition government's repeal bills and Direct Action policy undermine investment certainty in renewable energy and energy efficiency measures. If there is bipartisan recognition that climate change is a serious concern, we must limit Australia's emissions. We need a long-term framework to provide some certainty to investors, business, the community and other nations.
The coalition claims its Direct Action Plan will reduce emissions by five per cent from 2000 levels by 2020. But this legislation before us does not specify a five per cent reduction. The target is purely that—just a target. It is not binding. The government has insisted there will be no further expenditure across the four-year budget. Everything is unknown until the government's review processes are finalised sometime this year.
On top of that, the government has announced a review of the renewable energy target—to be conducted by an individual who does not even believe that human induced climate change is an issue. Despite claims to the contrary, the renewable energy target, currently set at 20 per cent of generation by 2020, actually acts to lower energy prices. This is because the variable cost of wind power is virtually zero and increased use of wind generation reduces the nation's reliance on expensive gas generation. Despite this basic economics, there are fears in the community that the coalition will abolish or reduce the renewable energy target. If they do, this will increase energy prices and reduce our nation's capacity to generate renewable energy.
The delays, the poor legislation and the RET review are clear impediments to long-term investment in the Australian renewable energy sector. The Investor Group on Climate Change suggests that, because of the relative policy certainty in countries like Ireland, the UK and USA, it is easier and more secure to invest in those countries than it is to invest in Australia. Investors like long-term certainty. They like reasonable returns combined with the lowest possible level of risk.
It is not just big institutional investors that are being hit by the investment uncertainty created by the coalition government's delays and poor policy. The 2,000 investors in the Hepburn Community Wind Co-operative in Victoria have had their projected returns slashed. The families who invested in the cooperative made their investment decisions in the years 2008 and 2009, a time when there was bipartisan support for a carbon-pricing mechanism. Their earnings are expected to fall from 4.1c per share in 2012-13 to 1.1c per share without a carbon price. So much for the Prime Minister's declaration that we are 'open for business'. The new coalition government are, in fact, 'eyes wide shut' in their approach to providing certainty to business.
The new coalition government have sought to frame this debate as being about the utility bills paid by households and businesses. In seeking to repeal the carbon price, their main purpose seems to be to achieve a miraculous reduction in utility bills and overall costs on households and businesses. Never mind that the rise in electricity costs has overwhelmingly been the fault of infrastructure upgrades to our distribution networks and never mind that there are different prices and usages in every state—the Prime Minister has been unambiguous in stating the reductions Australians can expect if these repeal bills pass. He said:
Thanks to this bill, household electricity bills will be $200 lower next financial year without the carbon tax. Household gas bills will be $70 lower next financial year without the carbon tax.
There is evidence to suggest the coalition government has overestimated the impact of removing the carbon price on household expenses. The committee heard that households in some states could expect a greater-than-quoted reduction, while in others, where rates or usage are not so high, the reduction would be less. Mr Tony Wood, the energy director at the Grattan Institute, said to the committee that the savings generated from removing the carbon price will be less than they would have been when it was first imposed. Other prices have risen over time. The carbon price has been internalised by business and unpicking it in exact terms is nigh on impossible.
All of this would be fine in normal debate. People would understand that the Prime Minister is debating prices in average terms and would expect some reduction. However, given this Prime Minister's penchant for absolute honesty in debate, if the repeal bills do one day pass this place, I will be watching eagerly for the results of any research into changes in electricity and gas costs and I will hold him to account if his absolute guarantees are not met. If he is off even by a few dollars, it will be another promise broken by this new coalition government. Their record of broken promises is getting longer and longer by the day.
What of promises? What of commitments?
The coalition has, on numerous occasions, both in opposition and in government, said it is committed to our internationally declared target of a five per cent reduction on 2000 levels by 2020; however, its Direct Action Plan is still in the draft stage, even though it has been policy since 2010.
Direct Action does not appear to be adequately funded through to 2020 and the Prime Minister has said that there will be no further funding. Either a promise will be broken on the level of abatement through to 2020 or the promise of no further funding will be broken. If the new coalition government is to find more funding for Direct Action there is a real concern in the community that it will reallocate funding from existing environment programs or from social welfare. The Australian Council of Social Services highlighted in its submission to the inquiry that there is no real benefit for low-income Australians from one year of reduced power prices if Direct Action is funded by reducing programs on which these people rely.
Programs that low-income Australians rely upon are right in the coalition's sights for termination. The schoolkids bonus and low-income superannuation contribution are set to be abolished. A $6 GP tax is all but certain to be included in this budget. We have the new coalition government saying that things will be better, prices will be less, cost of living will be easier and there will be more opportunity, and yet these repeal bills do not provide guaranteed funding or guaranteed emissions and they will carve a huge hole in our nation's budget, resulting in large cuts in funding to education, health and public services. There are no guarantees for long-term price reductions or increases in opportunity over the long term.
These repeal bills are a backward step, leaving households and businesses vulnerable to a shock in future years. The necessity to act on climate change only grows stronger each year. The immediate and long-term costs of allowing warming greater than two degrees are the core reason for acting now with a policy suite that is designed to scale-up over time. Removing this policy suite for the sake of a reduction in utility costs in one financial year, which may not actually eventuate, is not only reckless but also irresponsible.
Despite the shallow rhetoric of the new coalition government that they believe in climate change and support action, it is clear from these repeal bills that nothing could be further from the truth. If these repeal bills pass, we the parliament will leave Australia with no credible emissions reduction policy. We will leave the 46th and 47th Parliaments of Australia with much harder decisions in the future. I urge senators to vote no on this bill.
I am proud to stand here today in defence of the Clean Energy Act, the best set of tools we presently have to drive the clean energy transition in Australia. I have wondered, as I suspect many people have, what is driving Prime Minister Tony Abbott in the senseless and aggressive attempt to bankrupt the clean energy industry in Australia. This is uppermost in my mind, as Western Australia goes back to the polls on 5 April.
The Australian Greens have ambitions for Western Australia to be the solar state, and so the desperate and unhinged way in which Prime Minister Abbott has led his team in the face of overwhelming evidence would be bewildering but for one thing. Sometimes you hear people suggest that Mr Abbott has an ideological hatred for renewable energy. Why else would you hire someone like Maurice Newman, an outright climate change denier, to review the renewable energy target? In truth, I do not think it has anything to do with ideology. It is a hard-nosed and very systematic attempt to crash the clean energy industry, not because it is not succeeding in competing with coal and gas but because it is competing too well.
The coal and gas industries, the bankroll of the election campaigns of the Liberal and National parties, are driving Mr Abbott in this direction, and it makes a dire kind of sense. What could possibly threaten the incumbency of the coal and gas industries—technologies with decades of incumbency, decades of influence and powerful lobby groups with direct access into the cabinet room? I can think of something that would be a direct threat: an energy source where the capital investment is upfront, and then the fuel costs are eliminated. Gone. It is an energy source as powerful and limitless as the sun itself and as perpetual as the winds and the tides, or the practically infinite energy of the planet's interior.
Imagine, if you will, a solar power station a mile across running only on sunlight, able to generate electricity day and night. Now imagine the cost of this technology falling so rapidly that even the Commonwealth government's economic assessments are obsolete on the day that they are printed. This is what is driving the coalition's unforgivable attack on solar and wind energy. It is a hardline, last-ditch defence. It is absolutely essential then that we protect this legislation now, and after new senators take their seats in July. More than any other single issue, this is the one that is driving the Australian Greens' campaign in the West.
The fact is we know that the Clean Energy Act is working. Australia's carbon emissions from the sectors that are covered by the carbon price scheme are down more than seven per cent since 1 July last year. This is a structural and historic change, a shift in the energy mix away from coal towards gas and renewables. There has also been a decline in demand for grid energy. It is largely, although not entirely, being driven by the carbon price. We have the IMF, the World Bank, the United Nations and the OECD—not exactly likely members of this vast socialist conspiracy that appears to have infected the minds of those who oppose bills such as these—urging Prime Minister Tony Abbott not to abandon the price on carbon.
It is not only working but also making us more globally competitive. If you look at countries like Germany, Denmark, the UK, Korea and Switzerland, they have ensured that their competitiveness—if that is your primary metric and the thing you care most about—is driven and linked to low-carbon growth.
Clean energy investment has stalled since the announcement of the renewable energy target hatchet job on top of the climate repeal bills we are debating today, and there is no question that the practical impact of abolishing the renewable energy target will be to destroy jobs. In 2014, the solar photovoltaic industry employs 12,300 Australians across 4,300 businesses—the vast majority, as you would expect, being small businesses. If the renewable energy target is abolished, up to 6,750 solar PV jobs will be lost by 2018; about 2,000 of them will be lost in the short term.
When in opposition, the government ran on an election promise of an employment plan which would create one million jobs. How is that working out for you? Having accidentally presided over the destruction of thousands of skilled manufacturing jobs, you are now setting out to deliberately destroy thousands more. The Greens know that the clean energy future is a job-rich future. The following are the number of jobs which are created per $1 million invested. Five jobs are created in natural gas. This is because the industry is not particularly labour-intensive but is extremely capital-intensive. In the coal industry, seven jobs are created. In smart-grid installation, 12 jobs are created. In solar energy, 14 jobs are created. In building retrofits, 17 jobs are created. In mass transit and freight rail installation, which this government has also turned its back on, 22 jobs are created.
As a Western Australian, I am keenly aware that the debate on renewable energy risks turning into a caricature with the mining industry on one side and everyone else on the other side. But I know from experience that such an opposition of interests is not valid. In fact, I strongly believe that regional, Western Australian miners will be the first adopters of large-scale solar. They are not necessarily driven by the same motivation as we are, but that does not matter. They will act on the basis of the business case alone, because their survival depends in part on driving down the cost of energy against predicted steep increases in the price of gas and distillate which will blow the marginal impact of the carbon price out of the water.
Imagine if we had created an investment arm of the Commonwealth to help de-risk large-scale renewable energy projects. Imagine if we had created a grants body which had substantial expertise in the clean energy sector and which could help mining companies and other intensive users of electricity to transition out of gas and diesel and into the solar industry. Imagine if such entities existed. Then imagine that the government came into this place and attempted to wreck all of them.
Last year on 4 November, ARENA, which is one of the government entities I refer to, held a resources and renewable energy forum in Perth. The forum was hosted by the Chamber of Minerals and Energy of Western Australia and showcased the opportunities for developing renewable energy projects to hedge against predicted skyrocketing increases in gas prices and serious uncertainty about future increases in the price of diesel and distillate. A piece by Jonathan Gifford on 2 December last year in RenewEconomy notes:
Off-grid mining operations in Australia tend to have electricity supplied either through diesel generation or through gas pipelines. At the diesel-supplied sites, ARENA estimates costs of around $200/MWh to $500/MWh, while at the pipeline-supplied sites around $100/MWh.
A friend, colleague and sometime mentor of mine Professor Ray Wills, who is the former head of the WA Sustainable Energy Association, has pointed out that the diesel market alone presents a billion-dollar opportunity for renewable energy. He says:
"With over one hundred mine sites chewing 700 MW diesel a year, that’s a potential $2 billion market in WA alone,"
… … …
"The metric is that every 1 MW of solar would save almost 500 000 litres of diesel."
The companies who run these mines will be adopting the grants that are dispersed by ARENA and then stepping up to the large-scale renewable energy targets which are being supported by the Clean Energy Finance Corporation. But the government proposes to wreck the Clean Energy Finance Corporation. It is unforgivable.
The Greens understand that an electricity network running 100 per cent on the infinite power of sun, wind and wave is not only necessary but also possible now. Our Energy 2029 proposal takes head on the challenge to do so. What would it cost? What technology mix would be needed? What efficiency improvements would be needed? How many jobs would it create? The Greens did not write the Energy 2029 scenarios; we relied for them on the goodwill and expertise of the talented engineers and technologists at a group called Sustainable Energy Now. The Energy 2029 proposal envisages the creation of 26,000 jobs between now and the year 2029 in order to go fully renewable on the south-west grid. This would be a case of a state quite literally taking its power back. From the actions of a family in Girraween to nickel operations in the goldfields, Western Australians are going to install the next generation of energy technologies in coming decades and eliminate our fuel bill permanently. Energy 2029 demonstrates the profound truth that the clean energy transition will be much cheaper in the long run than the ever-increasing combustion of business as usual.
We know how to do genuine sustainability and prosperity on the scale of the household; but what about on the scale of the city of nearly two million people? The Transforming Perth collaboration, with AUDRC and the Property Council, represents one step towards meeting the large-scale sustainability and prosperity challenge. It is a blueprint for a city centred on fast, zero-emission public transport and built for people. We demonstrated through the collaboration that, by reorienting growth along just seven of the 18 identified public transport corridors, we could create more than 200,000 dwellings and build resilience, diversity and affordability into one of the most car-dependent cities in the world. The work of the collaboration builds on decades of determined and effective advocacy by people such as Professor Peter Newman and his team at CUSP and my former lecturer Allan Johnstone at Murdoch University, who has inspired a whole generation of students as to the sheer human potential of truly sustainable cities.
To bring the vision of a zero-carbon, sustainable city to life we need to build fast, efficient public transport. The Perth light rail project is the centrepiece of this vision. We launched the project on the eve of the 2007 election and found a huge well of public support. Working with people across the city—local government, in particular—and public transport advocates, we succeeded in persuading the state Liberal government to begin serious feasibility work on a light rail network for Perth. In 2013 the Commonwealth committed $500 million towards rail projects in Perth, including Perth light rail, only to see the commitment overturned by incoming Prime Minister Tony Abbott. Investment in public transport is essential both to giving the people the choice of getting out of the traffic jam and to cleaning up transport sector emissions. The good news is that it does not all have to be done on budget. Innovative funding mechanisms such as tax increment financing can get light rail built in Perth at a fraction of the cost proposed by Premier Barnett.
The Transforming Perth proposal imagines diverse, affordable housing clustered along rapid transit arteries and thereby allows us to rethink the whole question of housing affordability. In a city with some of the most unaffordable housing in the world, it is time we took on the tax policies which have deliberately inflated a housing bubble and imperative that we rethink the kind of housing we build—not just in the cities but also across all communities in WA. The Greens have developed a national housing affordability strategy that directly confronts the tragedy of homelessness and the precarious and terrifying place on the edge of homelessness faced by hundreds of thousands of Australians.
For a country increasingly edgy over the future of skilled manufacturing as this government presides helplessly over the destruction of thousands of jobs, look no further than the modular housing industry. This industry has the potential to provide thousands of skilled jobs in sustainable prefab dwellings installed in a fraction of the time taken to build dwellings using regular construction methods. They would be made from local, sustainably-grown plantation timber. There is a massive opportunity here, if we choose to take it.
Consolidating urban growth, as we transform Perth, has the essential benefit of taking the pressure off our urban bushland and peri-urban agricultural and horticultural areas. It allows us to step up in defence of our last remaining islands of urban bushland, and rebuild the links between them. This is the essence of the Perth Greenways project. As the city bakes in its own heat island, we know that shady neighbourhoods are up to four degrees cooler than those where concrete and sand dominate the landscape.
The government is trying to tear down the biodiversity fund—a $1 billion fund the Greens secured as part of the clean energy package. This is essential to buy back areas of high conservation value habitat currently under direct threat, including places close to home like Point Peron and Anstey Keane, Beeliar Wetlands and others. A combination of buybacks, community grants and a moratorium on further clearing of urban bushland is now extremely urgent as we watch ever more habitat going under bulldozers. The centrepiece of the Greenways project is that the whole network should be protected in the National Reserve System.
While we talk about high-technology transport options like light rail, we should also keep in mind the important place of the humble bike. The bicycle is, I think, one of the most elegant inventions of the industrial age. The Perth bike network is, effectively, broken. It looks in places as though it were written in Morse code—dots and dashes that appear on the map in no apparent order. For only three per cent of the state transport budget and a commitment of $80 million nationally by the Commonwealth government, Perth and other Australian cities could become the world's best for bikes. That is the essence of the Bike Vision plan that the Australian Greens launched in WA a little over a year ago.
Western Australia's population is overwhelmingly concentrated in the south-west of the state, but if you want to understand the future of the city look to the regions. Western Australia's rural communities are essential to our food security, economy, and cultural identity. Around 11,000 people worked in agriculture in WA in 2009-10, with Western Australian farm products generating just under $6 billion of revenue, or about 11 per cent of the state's GDP. Many farmers and pastoralists are practising sustainable farming but still face wildly predictable rainfall, poor returns, volatile world markets and extreme weather events as a result of climate change. That is why the Australian Greens developed a regional resilience plan designed to safeguard prime agricultural land from extractive industries; to increase substantially our investment in research and development—with $300 million—to assist farmers to stay on the land; to provide $100 million in grants for farmers to be more energy self-sufficient; to reform competition policy to serve the interests of community not just big businesses; to provide $85 million to help farmers sell locally and get a fair price; to invest in tier 3 grain rail lines, which are very important for the south-west of WA, to help our wheat exporters do the job that we need them to do; and to invest in the enormous potential of oil-mallee cropping—to put an energy crop into the rotation as a way, as well, of offsetting the devastating impact of dryland salinity in the Western Australian wheat belt.
These are the initiatives that the Australian Greens believe are most urgent for Western Australia. We will continue to advocate for them—not because of this government but despite this government, which proposes to do so much damage with these repeal bills and so many others.
Obviously, we could not do this work alone. Our role here, as political advocates, is backed up by a very deep well of support in the community. I want to acknowledge groups like the Australian Solar Council—the national peak solar industry body—which, just today, has asked Western Australians to vote to support solar in the Western Australia Senate election on April 5. I want to acknowledge the Western Australia renewable energy target alliance—an industry led body gearing up to save the renewable energy target from the senseless assault proposed by the Liberal and National Parties. Sustainable Energy Now is a group very close to my heart. They include engineers, technologists, practitioners, economists and those who drove and wrote the Energy 2029 scenarios for Western Australia.
But we know these decisions will not all be made in board rooms. While there are people designing the new platforms—designing the industries of the future—we also need to protect what we have. Farmers in Western Australia are gearing up to lock the gate against the invasion of the gas fracking industry that proposes to do so much extraordinary damage to our groundwater resources and landscapes between the south-west, the mid-west and Kimberly of Western Australia. People like Jon Moylan and others are stepping up to stop the Maules Creek coalmine and protect the Leard State Forest in New South Wales. These are all parts of the same campaign. The Kimberley mob is gearing up to take on the fracking of the entire Canning Basin by Baru Energy. The tunnel picketers in Melbourne are asking for no more than a substantial investment in public transport rather than more road building. And there are those undertaking direct action in Western Australia—those who will camp tonight in the great south-west forests—those of the WA Forest Alliance, including Jess Beckerling and those who are on forest platforms protecting these essential stands of native biodiversity, even as the impacts of climate change worsen across the south-west of WA.
All of us are in this together. These are the campaigns that will determine not just the make-up of the Australian Senate after this July but the kind of world inherited by people who were too young to vote in the poll of last September. Dangerous climate change, in my view, is already with us. The choices that we make in votes like that which we will have today, are about whether we can perhaps avoid catastrophic climate change. I would hope that the Australian government can get past the interests of those key financial backers and get behind this. I thank the chamber.
Standing here today, discussing the Clean Energy Legislation (Carbon Tax Repeal) Bill 2013 and the related legislation, I am really quite amazed that we are debating the abolition of the carbon tax. When listening to the debates that have preceded, you would have thought that we were debating the issue of climate change—and I do not think that is what we are doing. The reality is that climate change is a matter of science, and it has been a matter of debate in a lot of other areas, but what we are actually talking about today is a carbon tax that appears, from all the evidence that has been put in front of me, to have been an absolute failed policy. You have to ask: is this some sort of veiled attempt to disguise what is really going on here—namely, defending the legacy of something that plainly did not work?
I have no issue whatsoever with many of the things that have been said today, particularly by the Greens, about some of the things that are happening around the world, but the fact is that the carbon tax has done absolutely nothing to help the things that you are talking about. The reality is that we are talking about a tax. We can sit here and call it any other thing under the sun that you want, but the cold, hard facts are that the carbon tax is exactly that: it is a tax—it is a tax on business; it is a tax on the people of Australia; it is a tax on our future. What has it achieved in terms of carbon emission reductions? Not a lot. Last week or the week before, I think, the Climate Change Authority came out and said that there has been a 0.1 per cent reduction in emissions and we have spent $7 billion in 12 months. So you would have to suggest that that is a pretty negligible result for the extraordinary amount of trouble, angst and anguish that we have seen and the money that the Australian economy has ploughed into this so-called initiative.
I listened to the comments of Senator Milne about all the environmental changes that are going on in the world at the moment. We talked about scallops, we talked about penguins and we talked about all sorts of things, but the reality is that at no time has anybody said to me, and at no time during her speech did Senator Milne state, what the contribution of the carbon tax had been or was intended to be towards fixing the problems which she was discussing. I think we just need to be very clear about what the particular bill we are debating is actually all about.
Another comment that was made by Senator Milne in her speech was that the government is refusing to accept the science of global warming. I do not think that is necessarily an accurate statement. I certainly accept the science of global warming, as does the government. What we do not accept is that, in the attempt to move the world to a position where we have reduced carbon emissions, we have to destroy every business, every economy, every region and every community in Australia in this hell-bent desire to reduce our carbon emissions by some extraordinary amount in such a short time. We believe that we need to move in a sensible, methodical and planned way to transition Australia's economy so that it can cope with a new world that has lower emissions and a clean energy future. I do not think anybody will argue with that, but making comments that the government does not accept the science of global warming and climate change is, I think, putting false information on the record.
Another comment that was made was that the reduction in energy usage is a result of people becoming more aware of the damage to the environment by large polluters. I put on the record that we have seen a reduction in the amount of energy usage in Australia over the last couple of years as a direct result of the extraordinary increase in the price of energy. Certainly, in my community, a number of times people—particularly our oldies, our vulnerable and those on very low incomes—have told me they are not turning on their air-conditioners on hot days because they cannot afford to pay for the power. I do not think that the reason they are doing it is that they have become more aware of the environmental impact of large polluters. I would suggest it is just a very sad reflection of the fact that they no longer can afford the luxury of being able to keep themselves cool on a hot day or warm on a cold day.
Let us look at the impact of the carbon tax on some of the more affected sectors. I have to say, coming from regional South Australia, that the most disappointing thing is that much of the serious impact of this tax has happened outside of the capital cities. We are seeing major, major impacts in our rural and regional areas. But, before I go onto the specifics of the rural and regional areas, we only have to look at the impact that this measure has had on our automotive sector—and nobody but nobody can walk away from the fact that the carbon tax had to have had an impact on the very unfortunate decisions that many of our car manufacturers are making—in choosing not to manufacture in Australia anymore. Four hundred dollars per car as a result of the carbon tax is just $400 added to the bottom line of every car that gets sold in Australia.
In more recent times, we have seen the issue with Qantas. If you look at the amount of money that Qantas has paid in carbon tax over the last 12 months and the amount of money it is projected to pay over the next 12 months, it makes a very, very big difference in its losses. If you take $115 million and add it straight back onto Qantas's bottom line last year, and stick $160 million, as is projected, onto its bottom line for the next 12 months, all of a sudden you have a situation where this company has to do a whole heap less housekeeping and look for a whole heap more assistance from government to be profitable again, because it is actually the government that has caused it to be largely unprofitable in the first place. So the best thing we could do for the automotive industry—unfortunately it is too late—and for Qantas, Virgin and Jetstar is to get rid of the carbon tax.
I need to talk about Rex. Rex is the airline that looks after regional South Australia and a lot of regional communities across the whole of Australia. It is absolutely the lifeblood of these communities in their ability to remain connected to their capital cities and the services that many of the people who live in these communities need. You only need to look at the fact that we have seen such an extraordinary centralisation of services in my home state of South Australia to realise that an airline is so important, because people who are receiving medical care or the like or require assistance often have to fly to the capital city. If we end up with a situation where we have caused a regional airline, be it Rex or the other regional airlines around Australia, to be so unprofitable that it will start having, through commercial decisions, to stop flying these routes, all of a sudden you have dealt an absolute blow to our regional and rural communities. Whilst, in another debate at another time, I would like to talk about the decentralisation of services away from the capital cities back into our rural and regional areas, the first thing that we can do here today is get rid of the carbon tax so that we do not put pressure on our regional airlines that would result in there being any chance whatsoever that they no longer find it commercially viable to fly.
Regional communities rely heavily on the movement of freight. Freight does not just come into the wharf on a ship; we have to move it both from the country into the city and from the city back out to the country. Much of the freight that is going from the country into the city is feeding the city. The previous government's suggestion that road transport be caught by the carbon tax was probably one of the most horrific things that anybody in regional and rural Australia had heard. The country's extraordinary reliance on road transport means that we need the most efficient and effective service possible. Once again, the carbon tax makes the cost of doing business in the country more expensive.
Country people rely heavily on energy. Recently there has been a lot of debate in the Riverland, a big wine-grape-growing area, about the very low prices that growers are receiving for their grapes. The growers would probably be able to withstand much of the decrease in prices for their commodities if their costs were not increasing so terribly. Sometimes grapes are grown in areas which do not receive adequate rainfall, requiring significant irrigation, but the costs of pumping have gone through the roof. So a major burden on the cost of doing business is exacerbated by massive increases in energy costs. The people who grow the food and the commodities for us all to enjoy while we are sitting around our dinner tables are the ones who are bearing the brunt of this unfair tax.
Not only do wineries face increased electricity costs, but the processing of grapes into wine also involves a huge refrigeration component. As we know from much of the debate on legislation relating to the carbon tax and from subsequent debates on the direct action policies, which are currently being developed by the government, the refrigeration sector has probably taken the biggest hit from the carbon tax. Supermarket owners have told me that the cost of re-gassing their fridges has had a major impact on their profitability. We are talking about 80 per cent increases in the cost of gassing a fridge since the introduction of the carbon tax. The most significant impost has been on the little guy, on our primary producers, on our rural and regional communities—the people who can least absorb these changes. To a large extent our growers are price takers; they do not have the capacity to pass on increases in prices to consumers. If a fresh produce grower turns up at Coles or Woolworths and says, 'I'm terribly sorry, my costs of production have increased,' the supermarket will say, 'Bad luck, I'll just buy it from your neighbour.' The producers are in a squeeze. I want to put on record the disproportionate impact of the carbon tax on rural and regional areas. We need to accept the fact that it is the people in rural and regional areas who grow the food and who carry this country. Rural and regional areas are where the economy is generated. We need to do a lot more to make sure that we are not just putting burden after burden on people in these areas.
It is not just me who is running around saying that the carbon tax has been a bad thing. Rural and regional Australia relies heavily on tourism. Tourism Accommodation Australia said in a submission: '
This inefficient tax needs to be repealed to put Australia’s accommodation industry back on a more level playing field with international competitors…Profit reductions of up to 12 per cent are attributed to the increased cost related to the carbon tax.
The Australian Retailers Association continues to call on the opposition and the minor parties not to play politics on this issue and to support the removal of the carbon tax. Tasmania has an election is coming up. The Australian Forest Products Association states:
Following the September 13 election the Abbott government was given a clear mandate to remove the carbon tax. We ask that the Senate promptly passes the bills to remove the carbon tax as it is in our national interest that businesses have certainty and policy clarity.
The National Farmers Federation—a group that represents many of our rural and regional producers—states
…agricultural businesses are primarily cost takers and consequently suffer the impost of any cost imposed through the supply chain.
That just reinforces what I was saying a minute ago about the unfortunate situation that our primary producers find themselves in, because they have no capacity to pass on costs to the consumer. We all know that the consumer ended up with rebates and handouts from the previous government. They were compensated for their increased cost of living by an increase in welfare and social payments. But nobody gave any of those rebates and handouts to our farmers, who had no ability at all to absorb the extra costs.
Next weekend the South Australian people go to an election and, after 12 years of Labor, they have a chance to decide on their future and on the government that they want to lead them over the next four years. I think Senator Edwards in his contribution this morning pointed out that the two states that are still under the control of the Labor Party—South Australia and Tasmania—both go to the polls on 15 March, in 12 days time. By all economic indicators, they are the two states that are doing the worst. In some cases I think South Australia is in the unenviable position of being below Tasmania on some of those indicators. That is a very sad reflection on the two remaining Labor governments in Australia. The states that have had the good fortune to elect coalition or Liberal governments have seen that they will have a much better economic future.
It is really disappointing that we are even standing here today, because, as was rightly pointed out by the Australian Forest Products Association, on 7 September the people of Australia went to the polls. Nobody in Australia could have been left in any doubt whatsoever that we were asking the people of Australia whether they thought the abolition of the carbon tax was something that they wanted. From the minute Julia Gillard, the then Prime Minister, introduced the carbon tax—I might say that it was a tax that she said she was never going to introduce—the then Leader of the Opposition and now Prime Minister Tony Abbott said, right the way through, that we would go to the polls in 2013 to abolish the carbon tax.
I cannot for the life of me work out why those 27 or 28 Labor senators and nine Green senators—so that makes up 35 or 36 or so people in Australia—and the 50 odd that sit downstairs—who, combined, number fewer than 100—seem to think that it is okay for them to ignore the will of the Australian people when they actually said on 7 September that they did not want a carbon tax.
Today we have a suite of bills before us. I would like to think that it is an opportunity for us to reflect and act on the wishes of the Australian public today and get this bill passed to abolish the carbon tax. That is because one of the things that we have failed to acknowledge in all this is that the government accepts that we need to do something in the climate area and in this space. The minister has come out with a direct action policy package. I know those opposite do not like it. I am not sure whether they do not like it because they do not like it, they do not like it because it was not their idea or they do not like it because they did not think of it.
But the reality is that the people of Australia said they wanted to get rid of the carbon tax. That is what we want to do. That is what we are asking those opposite to do. We have a suite of policies that we are putting forward to replace the carbon tax package. We are asking those opposite to act in a responsible and reasonable way. Let us look at the development of this particular package of climate initiatives so that we can work towards getting the outcome that everybody wants. I do not think there is anybody in this place who is going to argue against the reduction in carbon emissions, moving towards a clean energy future and ensuring the sustainability of the environment around the whole of the globe. Nobody would argue that is not something that we all want to do.
The difference is that the people of Australia elected an Abbott coalition government. The people of Australia have said to us, 'We are okay with how you are proposing to tackle this issue. We are okay with the fact that you are going to take into account the economic impacts and the social impacts on our regional communities, as you progress towards the goals that have been set.' They are the goals that we all agree on. Nobody disagreed with the five per cent reduction in emissions by 2020—apart from the Greens, who would have liked a 25 per cent reduction. If you can maintain your economy and you can stimulate your economy so that we can afford to make those kinds of changes, then maybe there is an option for those desires and an ability to increase some these targets so that we actually do get faster and better decreases in the emissions that are occurring.
I think what those opposite need to do is accept the fact that they lost election and let us just get on with fixing up the issues that we need to fix up, instead of filibustering and blocking every piece of legislation that the government tries to put through. It is legislation that the people of Australia on 7 September voted us in to deliver.
Today I would like to start with a quote from the Prime Minister, Mr Tony Abbott:
The climate change argument is absolute crap…
It is a short quote and, I will give you, it is a sharp quote. It completely embodies the vicious and distasteful anti-intellectualism of the Abbott government. The expert opinion of tens of thousands of scientists—highly qualified, well-respected and peered reviewed—can be swept away with one short, ignorant, foul-mouthed phrase.
Scientists spend their lives dedicated to finding out how the natural world works: what is happening, how it is caused and occasionally how it can be stopped. Science does not work the way that politics does. Unlike those opposite, scientists can admit when they get things wrong. In fact, a key point of the scientific process is in scientists trying to prove their own hypothesis wrong. Once they have tried to disprove their own hypothesis, their work gets sent to a peer-reviewed journal where a group of highly respected scientists then try to disprove the paper author's results. Only after a panel of experts scientists have tried to find any fault with the submitted paper and have not found one is the paper published. On top of that, when scientists do manage to find fault in the conventional wisdom, they are not stigmatised and they not rebuked; they are congratulated by their peers. If the wisdom you have overturned is large enough, you may even get a Nobel Prize.
The arguments in support of climate change are not 'absolute crap', no matter what Mr Abbott and those opposite believe. The arguments in support of climate change are the result of millions of hours of research by tens of thousands of scientists who critically analyse their own and their peers' works, using the scientific method—the method that has resulted in the current technological marvels of our current day society.
These arguments are the best understanding of how the environment has changed due to human action and they will stay the best understanding of how the environment is changing due to human action whether the current government believes it or not. These arguments will stay the best understanding of how the environment is changing due to human action, even though the government has closed the Climate Commission. These arguments will stay the best understanding of how the environment is changing due to human action, even though the government is getting rid of hundreds of scientists at the CSIRO. It is extremely disappointing that we have reached a stage in our society when scientists are politicised by the government. It is extremely disappointing that government agencies can be closed down because the Prime Minister or government ministers are ideologically opposed to their research. Instead of listening to expert opinion, they act to silence them. We have seen, last year and this year, the attempts by the government to close down for purely ideological reasons the Climate Change Authority, the Clean Energy Finance Corporation and the Land Sector Carbon and Biodiversity Board.
Mr Abbott did not tell the Australian people that Australia would be a nation that no longer cared about science, that no longer had a vision of Australia as a major player in the scientific world. And he did not say he would get rid of the science minister, a ministry that Australia has had since 1931. Just because the previous shadow minister, Sophie Mirabella, did not win a seat does not mean you cannot put someone else in there as science minister. You could have chosen someone else. You could have chosen Senator Macdonald, for instance! Mr Abbott did not say his cuts to public servants would include sacking hundreds of scientists from CSIRO, an organisation whose achievements Australians are rightly proud of, and he did not say he would close the Climate Change Commission. Just one day into the new Abbott government, the commission was razed to the ground—a body designed to make clear the science and economics of climate change.
I would like to take a moment to mention two of the recommendations from the Climate Commission report, The critical decade, that those in government may have found inconvenient:
We are already seeing the social, economic and environmental consequences of a changing climate. Many of the risks scientists warned us about in the past are now happening…Three years into the Critical Decade it is clear: substantial progress is being made globally to reduce emissions.
However, far more will need to be done to stabilise the climate. If you actually allow an independent body to explain the science and economics of climate change to the Australian people, they might decide Tony Abbott's direct action policy is 'absolute crap' as well.
This government is not serious about getting frank and fearless advice from its agencies, only advice that fits their ideological world view. The Abbott government does not want it known that 99 countries, covering 80 per cent of global emissions and including all of the major emitters, have pledged to reduce or limit emissions by 2020. The Abbott government wants to hide that information from the public. It also wants to hide the fact that Australia's rating on the Climate Change Performance Index has dropped to 57th, out of 61 countries, due to the coalition government's policies. I guess it is not surprising from a Prime Minister who believes climate change is 'absolute crap', but it is extremely shameful.
Those opposite should be ashamed that such anti-intellectualism is the hallmark of this new government. They should also be ashamed that they have sold out their own ideological principles. The so-called Liberal Party no longer believes in liberalism. Classical liberal economic theory says that the market is the most efficient mechanism by which to ensure actions occur. This is what they believe—or, at least, that is what they claim to believe. The Liberal Party's direct action policy is a direct intervention into the economy by the government—what they typically decry as Marxism. When even China, the world's most populous nation, a communist nation, is adopting a market based emissions trading scheme, the Australian Liberal national government, the Abbott-Truss government, is introducing Marxist-style direct government intervention into the economy. On this issue the action by the Australian Liberal Party is more Marxist than the actions of the Chinese Communist government. If the Liberal Party's interventionist direct action policy is good, does that mean the 'market is best' philosophy that underpins economic liberalism is flawed and thus the economic ideology that underpins the Liberal Party is inherently wrong? Or does it mean that they are cynically proposing a policy they believe will not work—at a cost of billions of dollars to the taxpayer, not to the polluter?
The carbon price becomes an emissions trading scheme on 1 July 2015—a market based mechanism. The Labor opposition wants to make the transition sooner—1 July 2014—and this is what we took to the election. I would like to remind people that the government also took an emissions trading scheme to the 2007 election—which they reneged upon, rolling Malcolm Turnbull and replacing him with Tony Abbott, rather than keeping their promise to the Australian people. That is what their corporate overlords wanted, and it is what they have received.
But it is not only the expertise of scientists that those on the government side turn their backs upon; they also choose to ignore the advice of their traditional friends the economists. I would like to quote from a recent article in Fairfax. It states:
'Leading economists have overwhelmingly rejected Tony Abbott's direct action on climate change policy and backed carbon pricing.
A Fairfax Media survey of 35 prominent university and business economists found only two believed direct action was the better way to limit Australia's greenhouse gas emissions. Thirty, or 86 per cent, favoured the existing carbon price scheme.
Leading Australian economist Professor Justin Wolfers was quoted in the article as saying he was
…surprised that any economists would opt for direct action, under which the government will pay for emissions cuts by business and farmers from a budget worth $2.88 billion over four years'.
Professor Wolfers would probably be surprised that any economist would support this so-called direct action policy—because it is a complete and utter dud.
Former Treasury secretary Ken Henry called the coalition's direct action policy a 'bizarre' strategy which would involve the government paying big polluters in a scheme that would cost more and reduce productivity. BT Financial's Dr Chris Caton said:
…any economist who did not opt for emissions trading 'should hand his degree back'.
Several of the economists surveyed said the weight of international evidence showed carbon dioxide emissions could be reduced more efficiently through a broad based market mechanism such as a trading scheme. The widely esteemed economist Saul Eslake—who just happens to come from my home state of Tasmania—said back in July 2011:
The recent report by the Productivity Commission which looked at more than 1,000 different carbon policies across nine countries concluded unequivocally that market based interventions achieve reductions in carbon emissions at lower cost than interventions based on direct action.
And the OECD released a report last year confirming that countries could achieve higher levels of emissions reductions at much lower cost if they relied on market based policy.
The Australian people are being sold an economic lemon, and those on the government backbench know it. The truth is that a price on carbon pollution can work and has been working. But the Abbott government is now removing effective action on reducing carbon emissions and replacing it with a plan to pay big polluters to reduce pollution—with the funds coming from, you guessed it, mum and dad taxpayers. This is despicable. They do not want effective action on climate change and they are happy to waste billions of taxpayer dollars and throw away their own professed ideology to ensure no effective action happens.
The Senate Environment and Communications Legislation Committee inquired into the Clean Energy Legislation (Carbon Tax Repeal) Bill and associated bills and reported in December last year. These 11 bills were referred to the committee on 14 November, allowing just 18 days for the bills to be reviewed. Some 37 individuals and organisations managed to make submissions in that short time frame. In their submission to the inquiry, the ACTU made the point:
Repealing the Clean Energy Future package is irresponsible policy making. Repeal:
The Wentworth Group of Concerned Scientists unequivocally rejected the government's direct action policy. With regard to the goal to keep global temperature rises below two degrees above pre-industrial levels, they said:
We can find no evidence that the government’s Direct Action policy is capable of achieving such a target.
Achieving the scale of emissions reductions to avoid dangerous climate change will require a range of institutional responses. All such policy decisions should be informed by the best information from relevant experts, including scientists and economists.
The Wentworth Group accepts the advice of economic experts, including the Australian Productivity Commission, that an emissions trading scheme is by far the most cost effective way for Australia to contribute to global efforts to mitigate climate change.
The coalition government's lack of long-term funding commitments for Direct Action further confirms Labor's view that the coalition government has no long-term commitment to meaningful action to address climate change. Direct action is going to be extremely expensive, even to reach the modest five per cent reduction target by 2020.
To quote the Labor senators' dissenting report on the inquiry into this bill:
The Grattan Institute in evidence before the Committee highlighted how Direct Action can have no longevity as a policy without further significant budget appropriations.
My understanding from every conversation I have had with the senior representatives of the government is that direct action has been targeted directly to achieve the five per cent target by 2020; that is shorthand, obviously. Many have criticised whether it might even do that. But, just focusing on your question, there is fundamentally no reason why the Emissions Reduction Fund, which is the centrepiece of direct action, could not be expanded. But because it is funded on budget, which is by the very nature of the instrument different from an emissions trading scheme or a renewable energy target, it would require additional budget appropriations in future times to be able to achieve that outcome.
I find it ironic that Liberal-National senators in this place voted to scrap the Clean Energy Finance Corporation, which is making the government a profit of $2.40 for every tonne of carbon abated, while supporting an ineffective, inefficient scheme that will cost the Australian taxpayer a significant amount for every tonne of carbon abated. And they claim to be prudent economic managers! The Clean Energy Finance Corporation is returning four per cent above the government bond rate, while supporting over $2 billion of renewable energy and efficiency projects. While those opposite scream that they have a mandate to repeal the clean energy future plan, recent surveys of voters showed that they do not agree. In a Nielsen poll from late last year, only 12 per cent supported the government's direct action policy. Voters are not convinced by this policy.
We on this side of the chamber are not convinced by this policy, either. The claims by the government that repealing the carbon pricing scheme will lower prices for households is false. The introduction of the carbon price caused only a 0.7 per cent increase in the CPI.
I would like to quote, once again, the Labor senators' dissenting report into these bills. It states:
In its submission, ACOSS highlighted the increased network expenditure as a factor that would impact any reductions in electricity bills:
Based on currently available evidence, it remains unclear whether repealing the carbon tax will lead to a significant decrease in household living costs. ACOSS has been advocating for low income energy consumers in energy market reform processes for the past seven years. The drivers of energy price rises are much broader and more complex than the introduction of the carbon price alone including, for example, increased network expenditure.
Industry group COzero noted that some businesses would not see any impact from repeal because of the length of hedging contracts entered into.
Australian voters should be concerned about the lack of transparency that the government have shown on this issue. They have been dishonest about the current effects of carbon pricing, they have been dishonest about international action and they have been dishonest about the cost and efficacy of their own policy. Clearly, they have no interest in addressing climate change. The fact that they have no real interest in reducing electricity costs, just political posturing on the issue, can be summed up in one quote from Tony Abbott, which, funnily enough, has now been removed from his website:
If you want to put a price on carbon, why not just do it with a simple tax …
Why not ask electricity consumers to pay more …
Those opposite do not care and do not want effective action on climate change. This is just another example where they are trying to implement a joke of a policy that no-one on their side ever believed they would have to implement. I call upon the Senate to reject the Clean Energy Legislation (Carbon Tax Repeal) Bill 2013 [Provisions] and related bills. These bills are not good policy and will not result in the desired emissions cuts. The Liberal-National government's direct action policy will waste billions of dollars and will make Australia the laughing stock of the world.
As I said, we have tens of thousands of highly qualified, well-respected and peer-reviewed scientists, but they can all be swept away with one, short, ignorant comment by the Prime Minister. These scientists spend their lives dedicated to finding out how the natural world works, what is happening, how certain events are caused and how they can be stopped. I would remind those opposite that, as I have already said, scientists undergo a very strict process of peer review. So I think it is incumbent on those opposite to actually take some notice. I know they do not think science is a very important issue. We know that, because there is no science minister. But I would encourage those opposite to stop thinking as they have been led and to actually start thinking for themselves in this matter.