House debates

Wednesday, 10 October 2012


Clean Energy Amendment (International Emissions Trading and Other Measures) Bill 2012, Clean Energy (Charges — Excise) Amendment Bill 2012, Clean Energy (Charges — Customs) Amendment Bill 2012, Excise Tariff Amendment (Per-tonne Carbon Price Equivalent) Bill 2012, Ozone Protection and Synthetic Greenhouse Gas (Import Levy) Amendment (Per-tonne Carbon Price Equivalent) Bill 2012, Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Amendment (Per-tonne Carbon Price Equivalent) Bill 2012, Clean Energy (Unit Issue Charge — Auctions) Amendment Bill 2012; Second Reading

6:51 pm

Photo of Mike KellyMike Kelly (Eden-Monaro, Australian Labor Party, Parliamentary Secretary for Defence) Share this | | Hansard source

I add my public congratulations to you on your election, Mr Deputy Speaker. I know no more decent man, and you are deeply schooled in this role.

I begin my comments on this legislation by reading the following passage:

The Government will introduce an emissions trading scheme, no later than 2012, as the primary mechanism for achieving the long term emissions reduction goal. A well-designed emissions trading scheme will help to reduce emissions at least economic cost. As a mechanism to establish and appropriately manage a forward price for greenhouse gas emissions, trading will reduce uncertainty, improve the investment environment, and strengthen the incentives for low emissions technology development and deployment. It will also encourage new economic opportunities in low emissions technologies, energy efficiency and through carbon offsets such as forest plantations.

The document that I am reading from is Howard government policy from 2007. That policy, seeking to operate on the recommendations of the Shergold study, was an initiative going forward in what was that current international environment, not conditional upon the sealing of the Copenhagen arrangements or any other emissions trading scheme being established in any other part of the world. It was government policy and it was to be implemented. It had a target date of 2012, the current year, with our scheme now in operation. The logic of the scheme was well understood by the Howard government, and of course that logic was indisputable. The logic was based on expert advice not only from Professor Shergold but also from many other sources, such as the OECD and the Productivity Commission; we have recently had Mr Garnaut's detailed studies, and of course the living example of many of these schemes around the world, which I will come back to.

Specifically, this package of legislation is aimed at preparing us to move into that international space and to align and engage with those international trading schemes which the Leader of the Opposition seems to deny exist—once again an indication of his struggle with reality in this respect. Certainly it will enable us to engage immediately with the European Union's emissions trading system by removing the price floor that was to operate in the first three years of the flexible price period, establishing the flexible registry arrangements to ensure linking arrangements can be entered into; it introduces provisions regulating carbon unit auctions. The current arrangements applying to the equivalent carbon price settings for synthetic greenhouse gases and some liquid fuels will be altered to ensure they remain equivalent to the effective carbon price faced by liable entities. And it allows the minister also to determine methods to measure potential greenhouse gas emissions embodied in the amount of designated fuel and to adjust liabilities between financial years, providing additional flexibility in the regulations for how liability is imposed on potential greenhouse gas emissions and extending the eligibility test for JVPs, joint venture participants, to participate in the opt-in scheme.

I mentioned that it enables us to move forward in this evolutionary process of the growing international regime relating to carbon trading. There was a lot of scepticism about the Copenhagen and Durban processes but COP17 in Durban was a major breakthrough. It has taken the world forward to the position where all the major emitters, most of the world's countries—almost all of them—will be pushing forward to establish by 2020 an international global regulation regime. In the meantime, having that peg in the sand in front of us, countries all around the world are now furiously moving towards establishing reductions in their emissions, positioning themselves to be able to participate in trading regimes so that their transition in 2020 will be smooth. That is exactly why we need to move forward now, because doing this now puts us ahead of the game in many respects but also keeps us at pace with other nations who are moving forward in this area.

We know that, apart from those 90 countries, we have seen movement towards emissions trading schemes beginning in South Korea, much influenced by what we have done in Australia. We have seen moves beginning in California and the four major provinces of Canada. We have seen initiatives in Japan. The process is well and truly underway in China. Of course, the European-wide scheme has been in operation for some time. So most of our major trading partners, most of the key dynamic elements of the world economy, are already moving down this road and it will now be possible for us to position ourselves in engagement with them.

Establishing an international trading regime will also enable many of our businesses operating in the limits which we establish to offset some of their costs. As the member for Flinders acknowledged, carbon knows no international boundaries. So any carbon emissions abated anywhere in the world bring us further forward in our global effort to prevent further deterioration of the climate change circumstance. We know that 94 per cent of OECD members have legislated or are developing an emissions trading scheme at the national or subnational level, 88 per cent of all advanced economies have legislated or are developing an ETS at the national or subnational level and over 70 per cent of the richest economies in the world have legislated an ETS at the national or subnational level.

This is not just a scheme that is going to benefit many of the industries that are associated with renewable energy and the like; of course, many opportunities are available from this Australian landscape to take advantage of an international trading regime. The Carbon Farming Initiative will very much advance that cause. Already, this is happening. There was an article in the Australian on 12 October 2011 which reported on the circumstances of two Tasmanian farmers. One was Mr Roderic O'Connor, who, participating in the international trading regime at that time and having achieved the verification of carbon credits, was prospectively earning $400,000 from the vegetation on his property that was not to be logged or harvested. In addition was the example of Peter Downie from Bothwell in Tasmania, who became the first farmer in Australia to bank hard cash for selling his registered carbon credits. He was paid more than $200,000 when he sold his first 15,000 carbon credits. Of the 70,000 units he had had assessed, they were registered and verified to a German property developer and a Japanese wool processor. So already we can see the shape of the international regime developing and our own farmers—these two farmers in Tasmania as an example—taking advantage of that.

We are also talking about supercharging the development of a green industry and green jobs in this country. My own region is a prime example of that. We are experiencing that dynamic change happening right now. The New South Wales Department of Premier and Cabinet itself rejected that there would be 2,300 new jobs generated in my region alone from this scheme and from the carbon pricing package. We are seeing immediately, right now, over a billion dollars in renewable energy projects in Eden-Monaro.

We already have the Capital Wind Farm, just out here at Bungendore, with 60 turbines. A $700 million project is about to get underway in Boco Rock, in the high country here, which will also potentially generate up to 22 ship movements and 1,600 truck movements through the Port of Eden, generating stevedoring jobs and support industries that will enable that transport and logistics operation to occur. This will have a major economic impact in my region. It will not only be confined to those major wind power operations. The Capital Wind Farm, near Bungendore, is developing a 50-megawatt solar farm and we will be engaging with our tertiary institutions here in the ACT to develop better storage techniques for solar generated energy.

This hive of activity is also driving research in my region. Just nearby the Capital Wind Farm is the Woodlawn Bioreactor, which is taking advantage of a major ex-copper mine and taking putrescible waste from Sydney through the train and truck system, filling that hole and generating electricity through the harvesting of methane through the bioreactor facility.

We are also seeing the development of the Carnegie Wave Energy Corporation's potential facility off the Port of Eden, which has reliable average wave movements that will make the project highly profitable and could power up to 55,000 homes. Already, Carnegie Wave Energy Corporation is doing a job for us with HMAS Stirling, generating power for that major naval base. This is a very exciting technology, which is tethered to the bottom of the ocean, so it is completely invisible. Not only will it generate electricity but potentially these facilities can generate desalinated water, based on their pumping actions. Carnegie Wave Energy Corporation will be sinking its first test buoy next year.

We are also seeing Algae Tec in Shoalhaven, just across the border from my electorate, moving forward with this magnificent algae technology generating biodiesel fuel. They have already entered into a contract with Lufthansa and will be entering into production with them. The refinery is in operation. It also offers us the potential to significantly abate emissions from our coal fired power stations because this technology actually harvests the carbon component of waste generated from coal fired power stations. You could abate up to 80 per cent of the emissions of a coal fired power station by utilising this algae technology. Our power-generating companies should already be reaching out to position themselves well, to keep themselves going for a much longer period and to defray costs. The technology is there for them to take advantage of.

Beyond these projects we also have industries being generated locally in many exciting directions—for example, the solar store company in Cooma, which is exploring the storage of solar energy in its graphite block system and which is now moving forward into deployment. Dyesol, in my hometown of Queanbeyan, is developing world-leading technology in solar photovoltaic systems using film technology, with very flexible industrial application. That is now moving forward.

In addition, we have a very exciting company down in Pambula, Pambula Engineering. A headline in the Merimbula News said 'Carbon tax produces new interest in business'. This company is taking advantage of the carbon-pricing regime because of the issues associated with putrescible waste going into landfill and has created an organic waste dehydrator technology, invented by Jose Ruiz-Avila, from Cobargo in my electorate. This technology has been implemented by Pambula Engineering. It is creating jobs and is now exporting this technology to Mexico and Iceland and is developing it for major projects within Australia. This exciting new industry is just one example of many that are starting to spring up around my region. We were certainly indicated as one of the top four in the country by the Access Economics study because of every available renewable energy source being available to us and being close to the grid. Certainly, what we are now seeing is growing proportions of renewable energy developing at a much more accelerated rate. In South Australia, where so much devastation had been predicted by the Leader of the Opposition, we recently saw renewable energy peak at 60 per cent of the state's power resources. How could you take any advice or comment from the Leader of the Opposition on this subject? The guy cannot even read an electricity bill, as we saw well demonstrated today.

He has been waging a fraudulent campaign against the interests of this country. He is a one-man sovereign risk, because business wants certainty in relation to an international and domestic trading regime. He is the one who is generating the uncertainty that is affecting investment. In spite of that, we have seen those who have faith in the industry moving forward because they are seeing immediate results being demonstrated. But an attempt to try to dismantle the clean energy future package, as this man proposes to do, not only would set us back but would cripple the growing green energy industry that is developing and these spawning industries in my electorate. He would be setting us back behind the international pack that is developing internationally, as I have explained. Those are the real facts, the real statistics.

We have been trying to recover from the 12 Rip Van Winkle years, when the former government failed to invest in innovation, infrastructure and skills. All of that period was wasted during the years of the mining boom, when our country slid backwards, when we saw 10 interest rate rises in a row because of the poor-quality spend of that government.

The current government has managed to completely turn that situation around with a regime that will not only generate this investment and new industries but support that with huge investment in the new skills that will be required, creating prosperous jobs and a great future for our kids.

7:06 pm

Photo of Tony AbbottTony Abbott (Warringah, Liberal Party, Leader of the Opposition) Share this | | Hansard source

There is really not much which is worth responding to in the contribution that we have just heard from the parliamentary secretary. But if the carbon tax were such a good idea, why wasn't the government prepared to be honest about it before the last election? Why wasn't the government prepared to say, with its hand on its heart, five days before the last election: 'There will be a carbon tax under the government I lead.' The fact that none of this was done, the fact that the Prime Minister was desperate to hide pre election what she has done post election gives the lie to the protestations that we have just seen from the member for Eden-Monaro.

The legislation before the House tonight, the Clean Energy Amendment (International Emissions Trading and Other Measures) Bill 2012 and cognate bills, is yet another breach of promise from a government that is chronically incapable of keeping its commitments.

We know, notoriously, that the Prime Minister said five days before the last election: 'There will be no carbon tax under the government I lead.' And she notoriously gave us a carbon tax in order to stay in the Lodge after that election. But that was only the beginning of a whole series of deceptions that this government has foisted on the Australian public. Most notably, for the purposes of this legislation, was the insistence that a floor price was absolutely necessary to produce an effective carbon tax emissions-reduction scheme.

Let us be absolutely crystal clear: this government was adamant that we could not have an effective carbon pricing scheme without a floor price. The government was, if anything, far more adamant about this post election than it was pre election—'There would be no carbon tax under the government I lead.' Time and time and time again ministers and prime ministers have stood up in this parliament and elsewhere to insist upon the absolute necessity of a floor price if this scheme is to work.

From its own material released on 10 July last year, the government said: 'The floor is designed to reduce the risk of sharp downward movements in the price, which could undermine long-term investment in clean energies.' The Prime Minister said in this parliament on 13 September last year: 'The bill', that is to say the government's carbon pricing legislation 'also provides for a price cap at a price floor. This will limit market volatility and reduce risk for businesses'. Parliamentary secretary Mr Dreyfus said in November last year: 'For those investing in abatement technologies whose value is sensitive to the level of the carbon price, a price floor helps reduce down-side risk.'

On 9 November last year, the Prime Minister said: 'Well, we have set a floor so that there can be stability in pricing, because people are making very long-term investments.' The Minister for Finance and Deregulation, Senator Wong, in February this year, said: 'Our policy does include a price floor, which acts as a safety valve for investors in low-emission technology by establishing a minimum price for the first few years.' In May this year Christine Milne, the leader of the Greens—who are, in some ways, the coarchitects of the carbon tax—said: 'Establishing a floor price is critical to certainty.'

Later in May this year, the leader of the Greens said, 'Getting rid of it' that is to say, getting rid of the floor price, 'would not only be a blow to business certainty but also would potentially blow a hole in the budget'. In July this year, the leader of the Greens said: 'If you allow the volatility that has occurred in Europe, you get chaos in the system.'

We have the Prime Minister, we have the coarchitect of this scheme, the leader of the Greens, we have Senator Wong, the original climate change minister in this government and we have the relevant parliamentary secretary all repeatedly on the record as saying that the carbon tax, to be effective, needed to have a floor price. But what do we have now? We have legislation to scrap that. What was absolutely essential to the operation of this scheme is now utterly dispensable. That is so typical of this government. No commitment that this government ever makes outlasts its political necessity or political convenience. Every commitment that this government makes is changeable at the political convenience or necessity of this Prime Minister.

This legislation before the parliament makes a bad tax worse. What this legislation does is link our economy to Europe —of all places! You would not put the Australian dollar into the eurozone but what this government wants to do is to put our carbon pricing scheme into the European system. Why have a carbon tax that is effectively set by eurocrats? Why have our environmental policy effectively determined in Europe? I have nothing against Europe. I love the culture of Europe. I love the European peoples. I love the contribution that Europe has made to western civilization, but they are hardly economic or environmental models for anyone—except, it seems, for the current government and the current Prime Minister.

Why have they linked our carbon scheme to the European scheme? It is pretty easy: with the carbon tax here at $23 a tonne and the carbon tax in Europe under $10 a tonne they are trying to hold out to the Australian people the mirage of a much lower carbon tax in the years to come. That is what this is all about. It is yet another attempt by this government to say to the Australian people that the carbon tax will not really hurt. Madam Speaker, you know—I know; we all know in this place—that if the carbon tax does not hurt it does not work. It has to hurt. It has to make your power more expensive in order to reduce usage.

There is so much that is wrong with this legislation. If the price ever did really drop to current European levels, obviously the revenue would be utterly inadequate to meet the commitments that the government is funding out of the carbon tax. The other point that is highlighted by this legislation is that this is a government that keeps changing its scheme. Hardly a week goes by without it changing. The scheme is barely two months old and yet already we have had eight major changes to this scheme. The one thing they never change is the modelling, which they say provides certainty on everything. This is a bad tax. It hurts households and it damages businesses but, above all else, it does not help the environment.

Let me repeat this for the benefit of the House: in 2020, on the government's own modelling figures, our carbon emissions will not go down thanks to a carbon tax of $37 a tonne in that year; they will actually go up by eight per cent. They will go up by eight per cent from 578 million tonnes now to 621 million tonnes in 2020. We will only achieve the legendary five per cent reduction if we purchase almost 100 million tonnes of carbon credits from abroad. That is $3½ billion dollars in that year that Australian consumers will have to find extra in order to meet the targets.

By 2050, when our domestic emissions will be microscopically reduced from their current level, despite a carbon tax the government's own modelling shows will be an astronomical $350 a tonne, we will only achieve the 80 per cent reduction in emissions by purchasing 400 million tonnes of carbon credits from abroad at a cost of $58 billion. In 2050, under this government's scheme, we will spend more purchasing carbon credits from abroad than we spend on defence. We will spend 1½ per cent of our GDP purchasing carbon credits from abroad.

It just gets worse. On the government's own figures, Australia's gross national income per person will be $5,000 less with a carbon tax in 2050 than without one. Our gross domestic product, on the government's own figures, will be a cumulative $1 trillion less by 2050 with a carbon tax than without one. So it impoverishes us as a nation. It is economic vandalism in the name of environmentalism. But, still, we have minister after minister, with the Prime Minister leading the charge, standing up in this parliament day in and day out saying, 'The carbon tax has not hurt anyone. No-one has noticed a thing.'

With any government that thinks you can whack up taxes and not hurt anyone, you know what they are going to do. It means more taxes are coming, whether it be the GST that suddenly gets fiddled with, the super profits tax that the ACTU is now urging upon the government, increases to superannuation taxes or the mining tax jacked up and extended. If this government wins the next election, the one thing that the Australian people can absolutely count on is more taxes. Every time the Prime Minister denies that between now and the next election, what will people hear in their heads this Prime Minister saying? 'There will be no carbon tax under the government I lead.' This is a Prime Minister utterly lacking in credibility when it comes to the most solemn commitments given to the Australian people.

The coalition's position is absolutely crystal clear: this is a bad tax. This is a bad tax based on a fundamental deception and it must go. On day one of an election campaign I will write to the Public Service requesting that during the caretaker period no further payments and no further decisions be made associated with the carbon tax and bodies set up in association with the carbon tax. On day one of a new government, as its first act, the Public Service will be instructed to prepare the carbon tax repeal legislation. On day one of a new parliament, as almost the first act, the carbon tax repeal legislation will be introduced. This carbon tax will be gone. This is why it is so important that there be a change of government—to restore political honesty and integrity to this country. Alas, notwithstanding all the sound and fury of yesterday, a Speaker might be gone but we still have a government in denial about the harm it is doing to Australian households, Australian families and Australian businesses. I say that this carbon tax must go and, when I say there will be no carbon tax under a government I lead, I am telling the truth. It is a matter of integrity.

I move:


"the House declines to give this bill a second reading and calls on the Government to immediately abolish all liability and scrap the carbon tax."

Photo of Ms Anna BurkeMs Anna Burke (Chisholm, Deputy-Speaker) Share this | | Hansard source

Is the amendment seconded?

7:20 pm

Photo of Warren TrussWarren Truss (Wide Bay, National Party, Leader of the Nationals) Share this | | Hansard source

I second the amendment. This amendment changes the fundamental direction of this nation's approach to addressing climate change and to ensuring that we deal with this issue in the most effective possible way. The very fact that we are here today talking about amendments to Labor's carbon tax is a testament to the fact that this tax is a mess, and it is getting worse. It is costing jobs already. The manufacturing sector is becoming increasingly uncompetitive. Food production and food processing in this country is in decline. What is worst of all, this tax and everything surrounding it is environmentally useless. It achieves absolutely nothing for our environment.

The scheme is just over 100 days old. The government has spent tens of millions of dollars of taxpayers' money advertising on television and in our media to explain to everybody how this tax is perfect, how this is exactly what we have to have to save the world and how this is going to make a real difference to our environment. They have been spending all this money telling the Australian public what a great tax it is. Now, after just 100 days, they are proposing no fewer than eight major changes to the carbon tax.

Today we are considering changes to link the Australian economy to the faltering and crumbling economies of Europe—yesterday's world. If we want to link our economy to other parts of the world, as it inevitably is in a global trading environment, we should be linking it to the areas where our future is. We should be looking at areas like Asia, where we do most of our trade. Why isn't our government linking the Australian emissions trading scheme, their carbon tax, with the carbon taxes of China or India, the places in our region where we are actually trading, or, if they are looking for a similar type of country, maybe New Zealand? We could link our carbon trading scheme with that of New Zealand.

But there is none of that, fundamentally because none of those countries have a carbon tax like this. There is nothing there for them to link it to. There are certainly no carbon trading exchanges where we could be buying and selling carbon credits for this country. So our government have searched around the world to find a place that has something of a trading scheme in place, and they had to look pretty hard. The United States exchange closed years ago because of a lack of business. Nobody is interested. When you look at other parts of the world, there is simply no stampede towards emission trading schemes or carbon taxes like the scheme that the government have put in place.

So we are to be linked to the faltering and crumbling economies of Europe. Our government might be comfortable with being compared with Greece, Spain and Ireland. Those are the sorts of countries that our government seems to want to link our economy to. We actually went ahead of Spain, I am told, in the ranking of global economies this month. Is that because Australia is doing well or is it because Spain is rather easy to overtake at the present time? But these are the sorts of economies that our government wants to link our carbon trading scheme to. The government itself is in chaos and getting shakier day by day, and now it wants to link our carbon trading scheme with the economies of Europe, which themselves are decidedly shaky.

Each new backflip from this Prime Minister proves how chaotic and untrustworthy the government that she leads is. Remember, this is the government that was not going to deliver a carbon tax. There was to be no carbon tax under this Prime Minister. Then we were told each element of it was entrenched and there would be no changes. But when Christine Milne comes out to greet the media with a grin on her face you know there is more bad news for Australian business and Australian families, and she was grinning from ear to ear about the idea that is included in this legislation—that we would remove the $15 per tonne carbon tax floor price.

The Greens have only agreed to it because they think the price is always going to be much higher than that—$15, $20, $30, $40 or $50. Whatever number it is, it is not high enough for the Greens. They believe it will go up and up, and of course that inevitably means that Australian businesses and Australian families will pay more and more. It will never go down, according to the Greens, and that is what makes them happy.

But of course Labor is already shuffling the deckchairs, compounding the uncertainty in this country and shattering the confidence of businesses and families alike by changing the policy, by altering the tax. Acknowledging some of its many, many flaws, they are in fact undermining any confidence there might be in the scheme itself. Remember that the government have put a lot of time and effort into arguing that we needed to have a floor price to give business confidence. They repeated that many, many times. On at least 11 occasions ministers, including the Prime Minister, have been on the record saying that Australia needed to have a floor price to give business confidence.

But I was curious when the government decided to get rid of this floor price which was necessary to give business confidence, when they said the reason they had to get rid of the floor price was to give business confidence. So business needed a $15 a tonne floor price to have confidence; now they need to get rid of it to have confidence! This is clearly the level and the standard of logic that has underpinned the government's argument on this right from the beginning.

Dumping the $15 per tonne floor price and hitching its wagon to the European scheme is simply nonsense. Labor and the Greens have shifted the goalposts to impose a more expensive carbon credit scheme on Australians. Until now Australian companies could buy 50 per cent of their carbon liabilities under the EU's Kyoto based certified emissions reduction units. Currently they are worth about $3.50 or so a tonne. Now that door is going to be slammed shut. There will be no cheap permits for Australian industry—we couldn't have that! We could not have Australian industries paying the world price.

Our companies are locked into the world's highest carbon tax. But, on top of that, now Australian companies are blocked from gaining access to the cheapest option. They are restricted to just one-eighth of their permits, or 12½ per cent, coming from the EU CER. The government are determined to lock Australian industry into the highest priced carbon credits in the world. They are locked in at a fixed price of $23, rising to $29. But, just in case there is any risk that Australian businesses might get any relief through engagement in the European trading scheme, they put in place a maximum number of permits that can be purchased. In tying Australia to the European scheme, we are saddling our economy to the failed and faltering old economies of Europe.

Once more we are locking ourselves into a scheme that has no comparison with the scheme the government has put in place in Australia. For instance, in our first 100 days of having a carbon tax in this country, our carbon tax raised the equivalent amount of money that the Europeans have collected in the entire time that their scheme has been running—over six years. It has only taken these first 100 days for the Australian scheme to raise the same amount of money as the Europeans have collected over six years. That is because the European scheme exempts large portions of the economy. Why aren't the sections of the Australian economy that are excluded from the European scheme going to be excluded now that Australia is to be linked to the European scheme? It makes no sense.

The government is linking us to only a part of the European scheme and we will not see any of the advantages that might happen to flow from exempting significant sections of the Australian economy from carbon trading. For instance, the exemptions that the Europeans have for agriculture and food processing are not going to be made available to Australian producers. They tax overseas airlines in Europe, whereas we tax only Australian airlines in Australia. That privilege is not going to be extended, obviously, to the Australian aviation industry.

On top of being dishonest, this carbon tax is disproportionate and destructive. Why does this government dislike Australian industry so much? Why do they want to hurt Australian families so much? Why do they want to export Australian jobs to other parts of the world? Why do they want to make our manufacturing uncompetitive? Why do they want to make life in this country more difficult for Australians struggling in a difficult economic environment as it is? What families in Australia do not want is a raft of new taxes. That would do nothing to improve their lot. The government have a $120 billion black hole in future expenditure and they are grasping for new taxes to help fund their operations. The reality is that the government have lost their way.

Five hundred million Europeans have been paying, on average, $1 each under their token carbon scheme. Australia's carbon tax is reaping $400 per head. Perhaps Australians would not mind being linked into the European scheme if the cost was going to be $1 per person per year. Maybe we could manage that. It may not be a good use of a dollar, but nonetheless we might be able to afford that. In Australia, under this government, we are keeping a scheme that imposes a tax of $400 a year per person on the Australian people—and that number keeps getting higher and higher. There is no logic whatsoever in the government's reasoning that we should link ourselves to the European scheme, especially when it is done only in pieces.

Since the implementation of the carbon tax the government has made eight major changes, and some of those are in this legislation. The government and the Prime Minister are in deep denial about its impact. The Reserve Bank is warning this government that there will be more price hits yet to come. And yet Australian families are already bearing massive increases in their electricity costs, much of which is due to the carbon tax—50 per cent of price rises this year are associated with the carbon tax. That climbs to two-thirds in Victoria and 70 per cent in Western Australia, and it is responsible for 80 per cent of the increases in the power bills of the people of Western Sydney and almost 100 per cent of the power price hikes in Queensland. Indeed, the Queensland price regulator said that if it were not for the carbon tax, electricity prices would have gone down in Queensland this year.

This is a government that is imposing a burden on all Australians—and for what? The scheme is clearly doing nothing to improve the environment. It is a $9 billion slug every year on Australians, paying through our electricity bills and our gas bills. While the carbon tax is going on, Australia's emissions are going to increase, from 578 million tonnes in 2010 to 621 million tonnes by 2020. That is because of the reality that electricity and gas are essential services, fundamental to the daily lives of all Australians. People are not able to change their lives in such a way that they can substantially reduce their bill. Is the government really asking families to turn off their heaters in the middle of winter or their air conditioners on a hot summer's day?

We are told so much about the compensation that is being provided—$4 or $5 a week for families that are often out of pocket to the tune of hundreds and hundreds of dollars a year. This is a cost that they have to bear. As the Leader of the Opposition rightly said, if this tax does not hurt so much that people are prepared to change their behaviour, then it simply will not work at all—it will not achieve anything for the environment. So the government need to have a scheme that is actually going to hurt people—hurt pensioners, hurt families—otherwise they are not going to change anyone's behaviour, and if no-one changes their behaviour there is no environmental gain. There is only pain—pain for all Australians.

There is hope on the horizon, as the Leader of the Opposition just outlined. If there is a change of government, this tax will go. It will go as a first priority. We will bring relief to Australian families. The coalition oppose this ill-considered and faulty bill. We join with many people in industry and in commerce, and with those who care about Australian families, in condemning this tax as ill thought through and poorly designed, and it has had to come back to the parliament for substantial amendment. We do not want a carbon tax at all. This legislation will just make the situation worse. It will do nothing to change the environment, and we will repeal it all, lock stock and barrel—and we will do that just as soon as we are given the opportunity.

7:36 pm

Photo of Melissa ParkeMelissa Parke (Fremantle, Australian Labor Party) Share this | | Hansard source

The Clean Energy Amendment (International Emissions Trading and Other Measures) Bill 2012 and related bills which form this clean energy legislative package continue the government's steady and responsive policy progression towards a low-carbon Australian economy and a clean energy future. Unlike the opposition leadership's shallow politicking, flip-flopping and antiscience position—which flies in the face of the reality of dangerous climate change accepted by countries, including those led by conservative governments, all over the world—this government accepts the science of climate change and the natural consequences of that.

We have, since coming to government, moved through robust and exhaustive green and white paper processes to design, in consultation with the community and industry, an Australian form of the recognised best practice model for tackling climate change—namely, an emissions trading scheme. We then moved to legislate and implement that system, a system which guarantees carbon emission reductions and does so while engaging the market to determine the least cost path to shaping how those reductions are to be achieved. It is a system which, prior to 2007 and up until December 2009, had bipartisan support.

These bills take that progress further by formally linking our emissions trading scheme to the scheme that already operates in Europe, which involves an annual turnover of some 90 billion euros. This will mean that, from 1 July 2015, Australia's carbon price will be set by the global market and will be the equivalent of the price paid in 30 other countries, including the 4th, 5th and 7th largest economies in the world—those of Germany, France, and the United Kingdom. This meets the fundamental rationale of our policy approach, which is that Australia should be a proactive participant in coordinated and integrated global action—precisely because climate change is a problem we all share and, beyond that, because the economic, social and environmental impacts of climate change will be inflicted upon the Australian continent to a greater degree than upon many other parts of the world.

It does no credit to the leadership of the opposition to mock the European Union and to refer to actions taken by this nation and by other nations as 'economic vandalism'. This attitude, from those who purport to be the alternative government, is in fact incredibly damaging to Australia's international reputation and to business confidence. It is incredibly irresponsible, in contrast to the responsible position, based on good science and economics, which has been taken by this government.

At the release of the final Garnaut report in September 2008, Professor Garnaut identified five policy themes to guide Australia's approach to addressing climate change and he noted, with respect to the third theme—practicality—that a successful policy approach would only occur 'where the domestic framework is consistent with the international framework'. He also observed that 'the final report advocates judicious linking with international schemes'. That is exactly what is being achieved with this legislation. In essence, it provides for the removal of the floor price that was to operate in the first three years of the flexible price period under our emissions trading scheme, while limiting the quantity of eligible Kyoto units that liable entities can make use of to 12.5 per cent of their total carbon price liability—down from 50 per cent.

The agreement the government has struck to link the Australian and EU emissions trading schemes is part of ensuring that we are able to reduce carbon pollution at the lowest possible cost while retaining appropriate control over the incentives for reduction that exist under our scheme. Creating stronger links and greater integration between our scheme and those operating in other international markets has always been part of the plan—for obvious reasons. By linking our ETS to Europe, we provide a broader and more diverse range of abatement opportunities for liable entities in Australia, we increase the diversity and liquidity of the carbon market itself and we take a clear step in advancing the cause of global cooperation on climate change.

On this last point, EU Commissioner for Climate Action, Connie Hedegaard, has said that the decision to connect the schemes:

… is further evidence of strong international cooperation on climate change and will build further momentum towards establishing a robust international carbon market.

In assessing the significance of this achievement, we should remember that the European Union's emissions trading scheme is far and away the largest in operation. It involves all 27 European member states, as well as Norway, Iceland and Liechtenstein, and it applies to approximately 11,000 emitting facilities.

Our move to link the Australian system with the largest existing ETS is a step that is likely to be repeated by others as the emissions trading schemes being developed in China, Korea, California, Canada and South America come to fruition and seek integration with the growing international quilt of emissions reduction and trading schemes. As the Minister for Climate Change and Energy Efficiency said:

The fact of the matter is that every major economy tackling climate change and every major emitter has agreed to negotiate new arrangements, introducing binding obligations from 2020 to cut emissions. And Australia won't get a free ride in this.

We have to ensure that we are tackling climate change in the most economically efficient way and in partnership with our trading partners. A fully flexible internationally linked emissions trading scheme will enable Australia to do its fair share in this regard, its fair share of emission reductions, and in partnership with other important countries taking action. This is a good move for our economy and a very good move for our environment.

The Australian contribution to both the national and global effort to address carbon pollution and its serious climate change effects and consequences has come a long way in five years. The substantial progress we have made has occurred for a number of reasons but the most important is that the Australian people understand very well, and also accept, the common-sense proposition that carbon pollution, which has a cost, must have a price.

The opposition has been peddling an untruth in relation to electricity prices in Western Australia. The claim is that electricity prices have gone up 60 per cent as a result of the carbon price. In fact, the carbon price is responsible for around nine per cent of the price increase—and households have been more than compensated for that impact. More than 60 per cent of the electricity price rises in Western Australia are attributable to the actions of the WA state government. I think that needs to be on the record and I hope the Leader of the Opposition has the decency to stop telling untruths on this matter.

We have addressed, in the Australian context, one of human history's great economic blind spots: the failure to price carbon pollution into the market despite its grave and avoidable costs. Having done so, as one proactive nation among many, we can go forward with some measured confidence that the human capacity for innovation and problem solving will manifest within the framework we have established to reduce, on the one hand, carbon pollution, and to increase, on the other hand, the array of new energy and production methods and waste management technologies already flourishing in my electorate and right across this country.

I want to commend the minister for negotiating this important advance in how Australia's carefully calibrated emissions trading scheme will operate, allowing it now to dovetail into the world's largest existing scheme, with all the benefits this will deliver in both directions. We always said that, once established, Australia's emissions trading scheme would join and contribute to a much wider regulatory and functional shift in global markets—and so it is proving. In future, these shifts and linkages, these moments of connection and harmonisation, will become part of the story of cascading, necessary change.

7:44 pm

Photo of Sharman StoneSharman Stone (Murray, Liberal Party) Share this | | Hansard source

Even the Prime Minister knew the carbon tax would cripple the Australian economy, and so she said loud and clear before the last election, 'There will be no carbon tax under any government that I lead.' That was resoundingly put out on the public airwaves. But the cost of the keys to the Lodge was a deal with the Greens, hence we had a carbon tax imposed on this economy. That was bad enough. That was a horrific backflip that will go on costing this country until we have a change of government. Tonight, we heard from our coalition leader, the Leader of the Opposition, that one of the first acts of the coalition in government will be to abolish the carbon tax, but we still have perhaps 14 months until the next election. Right now, the economy, particularly the rural and regional economy, is in absolute disarray due to the costs of energy and the extraordinary shackling of their capacity to compete, particularly with offshore exports.

Before us tonight we have another example of how shambolic this carbon tax—ill-conceived in the first instance; just a political ploy to get the numbers to form government—is, with this legislation doing a complete backflip on the notion of having a floor price. We were told repeatedly—on 11 separate occasions, in fact—that the floor price would be crucial, vital, to the success of the carbon tax. Well, we are only a few months into having the new carbon tax in play, and tonight one of the key objects of these seven bills is to remove the legislated floor price for the carbon tax and then, extraordinarily, to link the carbon pricing as soon as possible to parts of the European system. This is just breathtaking in its absurdity. You can imagine what the business sector in Australia is thinking.

First of all, the carbon tax is the biggest carbon tax in terms of cost that has been imposed on any economy in the world—the biggest, the most comprehensive and the most absurd, with the greatest amount of red tape and the least transparency. Here we are tonight with these seven bills, with a whole new set of balls in the air. Who knows what we are going to be asked to amend next sitting period? It is just too awful to contemplate. The only hope held out to our business sector and our pensioners and low-income families is what they would have heard tonight from the opposition leader when he restated that one of his first acts in government will be to abolish this carbon tax. So why is he so critical?

In the biggest town in my electorate of Murray, in northern Victoria, there are about 180 empty shops now. They represent an enormous number of lost jobs, as well as a sense of having lost a future for what are mostly family owned enterprises. Of course, there are many other shops that have shut right across the rest of regional Australia, but we have suffered in particular in northern Victoria. That is because we are food manufacturers. We are energy intensive and export exposed. We grow magnificent fruit, dairy products, cereals and oil seeds and we have been the food bowl of Australia. We converted that raw material into what became icon brands and exported manufactured food. As I said, food manufacturing depends on energy, reasonably priced energy inputs. My food manufacturers are now labouring under the burden of, for example, as in the case of my dairy companies, the additional cost of energy. Not a cent can they pass on to the domestic market, which is dominated of course by Coles and Woolworths. They cannot pass on a single cent of those extra costs of having to convert, in the case of Murray-Goulburn at Cobram, briquette boilers to gas or some other substance. They cannot pass on those prices, so very early on in the piece they had to tell their dairy suppliers, 'We know you're struggling, we know you're coming out of seven years of drought and a year of flood, and you're heavily indebted as a consequence of struggling through that period. But, sorry, you're going to have to fork out at least another $5,000 or $6,000 per year to pay for the extra energy costs that we've got in manufacturing your raw milk.' You can imagine what my dairy farmers think about that. It is speeding up the numbers who are exiting the business altogether.

Of course, where you have food manufacturing as well as domestic fresh fruit sales, you have enormous cool stores. It goes with the business. You have enormous cool stores with the capacity to store fruit, or cheese as it ages over a year or two or three. We also have a number of wineries. Now, part of this obscene new carbon tax is the carbon equivalent tax, which hits all of the refrigerant and other gases that you find in cool stores.

So, first of all, imagine what businesses like Geoffrey Thompson Holdings in Shepparton thought when they got their new carbon charge, a line in their electricity bill; it pushed up their electricity costs by more than 15 per cent. In the month of July, the carbon charges itemised on their account bill—and flourished by me in this House of Parliament; the Leader of the House refused to allow me to table it—were an additional $23,000. Over the year, that company alone will have to pay an extra $260,000 just for their electricity. Geoffrey Thompson Holdings, which operates enormous cool stores, employs literally hundreds of people. They are now thinking very hard about what they can do to survive this impost. Again, they cannot pass on a cent of those costs to the Coles-Woolworths duopoly; if anything, they are being squeezed further on their wholesale prices. They can do nothing about the extra $260,000 a year, which is for nothing because neither their emissions nor the nation's emissions will go down one iota with these additional costs.

But then it get worse for someone like Geoffrey Thompson Holdings. As cool store operators, besides those carbon tax costs, they have the horrific additional costs of their refrigerant gases.

They just do not know where to turn with those because they have no alternative if they need to re-gas, and we are talking about hundreds of thousands of dollars extra for re-gassing their cool stores with refrigerant gases.

We also know about imposts on our dairy farmers. Some time ago in question time I flourished in this House the bill for Michael and Melissa Farrant. They had carbon charges listed on their electricity bill which raised their electricity account by 15 per cent. We hear again and again the Prime Minister say, 'That's a lie. That's not true. These additional carbon charges are about 10 per cent.' Even 10 per cent is too much for many of these family farms or businesses to survive. The Farrant's carbon charges put their bill up more than 15 per cent and the tragedy for this couple is that, like so many farmers, they are environmentalists. They have planted 14,000 native trees on their property in order to reduce their emissions, for carbon sequestration. Do you think this new carbon tax regime in Australia recognises their efforts and their attempts with carbon sequestration with the 14,000 native trees planted on their property? Sorry, no way. These new bills tonight make it clear that carbon farming credits will be even further disadvantage our farming population, given they are going to be further locked out for many more years from perhaps accessing the trading of carbon credits with Europe.

You have to wonder: what is this government on about? What has it got against the good, honest worker who is out there doing their best, employing others, growing their business, passing it on to the next generation? The government is shackling these enterprises in a way so that they cannot recover.

Let me talk about Baking Dough Bakery in Shepparton. They had the carbon tax on their power bill of between 10 and 14 per cent in the months when the carbon tax was itemised. The interesting thing is that, through my various business enterprises giving me their bills, I could see that for the first two bills the carbon tax was itemised very clearly in black and white. I presented those bills to parliament. Of course, as they say, the government refused to allow me to table them in question time.

Radevski Cool Stores in Shepparton is in a similar situation. They have this matter itemised on their bill. Also Mulcahy Dairy, one of the biggest dairies in Australia, had the carbon tax itemised on their bill for the first two months. They are no longer getting those carbon tax costs itemised. Speaking to Mr Mulcahy tonight, who employs hundreds of workers on his dairy property—he milks literally thousands of cows—I said, 'Can you ask your energy company to resupply your latest bill with the carbon tax itemised, as they were doing for the first two months, so that I can make it clear to the government just what these costs are for you?' He phoned his energy company who said,' We're not allowed to anymore. We're not allowed to itemised the carbon tax. It's embedded in your bill. Sorry.' What is that about? I strongly suggest it is about trying to hide the reason for his energy bill escalating to a point where he now is seriously wondering how he will make ends meet. I find that absolutely extraordinary. I would like this government to now tell us why it is that the carbon tax component is no longer evident on electricity bills? It has vanished in the last month. It was there for the first two months. I think this is an interesting situation.

Talking about hydrofluorocarbons which come under the new carbon equivalent tax, the Radevskis, another big cool store in northern Victoria, were paying $25 a kilogram for the gas R22 in January. They are now being charged $228.80 a kilogram. So the same substance has gone from $25 a kilogram to $228.80 a kilogram. It would have cost them $45,000 in June to re-gas with 1,800 kilograms of R22. Now in October it is going to cost them $411,840, nearly half a million. There is not one cent of that money they can pass on. They are a cool store which manages fruit on the domestic and export markets. They cannot ring their export buyers or Coles and Woolworths—they know not to waste their breath there—and say, 'Sorry. We've just had to re-gas at a cost of half a million due to the new carbon equivalent gas. Will you give us a break and pay us a bit more for our fruit?' We all know what Coles and Woolworths are like. They simply laugh and say, 'Next? There's another six in the queue after you mate to supply fruit,' and besides they are already paying $4 below the cost of production per carton for the fruit. They are not going to come good anytime soon.

We have a serious problem: the costs to industry of this new carbon tax regime imposed by this government on our nation because it wanted the keys to the Lodge. The tragedy for us is that it does not even make us a better global citizen in the sense of reducing global greenhouse gas emissions; all it does is destroy jobs. It destroys people's livelihoods and drives people out of industries which might have recovered if they had given them a bit of time. There is no compensation for my food manufacturers, for my cool store operators or for my pensioners who have electricity bills way above their pittance of compensation. They are just going cold in winter and getting too hot in summer. I think this is a disgraceful situation. The only hope we now have is for an election to come on very soon and for the alternative government, the coalition, from day one to get the bureaucrats amending this legislation to the point of abolishing it, so that we do not continue to be the laughing stock of the world having a carbon tax which is the biggest and most punitive, making us the least competitive, for no purpose whatsoever but to keep Labor in government.

7:59 pm

Photo of Craig KellyCraig Kelly (Hughes, Liberal Party) Share this | | Hansard source

I rise tonight to speak on the Clean Energy Amendment (International Emissions Trading and Other Measures) Bill 2012 and the raft of associated bills. These bills seek to link the complete insanity of Australia's carbon tax with the even greater insanity of the EU's ETS and abandon the current floor price. With this legislation, is it any wonder that the public think that this government speaks with a forked tongue and they simply cannot believe a word that it says?

Let us go back to the start. We all remember a week before the last election when the Prime Minister stared down the lens of a camera and said words that she will always be remembered for:

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

Let us not forget the Treasurer's promise before the last election, when he said:

No, it's not possible that we're bringing in a carbon tax. That is a hysterically inaccurate claim being made by the coalition.

We know and the public know that the only 'hysterically inaccurate claims' are those made by the Treasurer about his budget forecasts. But here we are today debating amendments to a tax that we were told was not possible. Here we are debating legislation that seeks to abolish the floor price on the carbon tax, when this government has said over and over again that the floor price is absolutely critical to the carbon tax legislation. Just look at what the Prime Minister said on 13 September last year:

The bill also provides for a price cap and a price floor to apply for the first three years of the floating price period.

This will limit market volatility and reduce risk for businesses as they gain experience in having the market set the carbon price.

The Minister for Climate Change and Energy Efficiency said on ABC radio on 12 July last year:

Well we've put in a floor price and a price cap to provide some confidence over the first few years about the potential variability of the price.

Then, on 28 September last year, the climate change minister said, referring to the carbon price:


Let us not forget the Minister for Finance and Deregulation, Senator Wong, who said on 28 February this year:


The list goes on. The member for Isaacs, on 1 August last year, said:

For the first three years of the flexible price stage, safety valves … will be built into the system to avoid price spikes or plunges. This will reduce risk for businesses as they gain experience operating in a carbon-constrained environment. This is particularly important in the early years when price uncertainty will be at its highest.

And let us not forget the Leader of the Greens, Senator Milne, who has said:

Establishing a floor price is critical to certainty, as is sticking by an agreement …

She has also said:

Getting rid of it—

the floor price—

would not only be a blow to business certainty but … blow a hole in the budget.

Senator Milne has also said:

If you allow the volatility that has occurred in Europe, you get … chaos in the system.

Chaos! We have seen complete chaos from this government from day one.

There are three possibilities with these statements: (1) the government do not have a clue about what they are doing, (2) they have been completely deceptive and misleading the public or (3) a combination of both. My money is on the last. It is no wonder that the Australian public thinks the government speak with a forked tongue, when you look at these examples. It is no wonder that the Australian public no longer trusts the government. It is no wonder that the Australian public does not believe a word that comes out of the mouths of the government. It is no wonder that the government are in complete chaos.

The entire carbon tax is built on an edifice of lies to deceive the public. One of those lies—

Photo of Andrew LeighAndrew Leigh (Fraser, Australian Labor Party) Share this | | Hansard source

Order! The honourable member will withdraw.


I withdraw. One of those misleading statements is that citizens elsewhere in the world are being subjected to and punished by a carbon tax like the one here in Australia. But the facts are, as the Productivity Commission research report noted:

… no country currently imposes an economy-wide tax on greenhouse emissions or has in place an economy-wide ETS.

We have heard another absurd statement tonight: that this carbon tax somehow creates jobs. It is a very dangerous assumption for members of the government to think that you create jobs by taxing. Taxes do not create jobs; they destroy them.

Let us look at the things that many of us on both sides of this parliament want to do in the next coming years. We want to fund things like the National Disability Insurance Scheme. We want to provide more resources for our schools. We want to pay for more hospital beds, to fund medical research and to clean up our environment. Doing those things depends on our ability to lift our national productivity and both sustain and develop our national competitive advantage. But this carbon tax is like firing a laser-guided missile to destroy our national competitive advantage. It seeks to promote the use of hopelessly inefficient methods of electricity production that will only lower our national productivity and lower our living standards.

Just have a look at what our competitors are really doing—not the spin that we hear from the other side. If you listened to this Labor government, you would believe that China is acting to reduce its carbon emissions. But the facts are that China's emissions are forecast to rise by no less than 500 per cent between 1990 and 2020. In fact, between 2005 and 2020, Chinese emissions will increase from approximately five billion tonnes of CO2 per annum to over 12 billion tonnes. The Prime Minister has tried to highlight in this parliament that China is closing some of its coal fired power stations, but she neglects that the ones they are closing are their small, inefficient ones and they are replacing them with much larger ones. Data from the World Resources Institute says that China has plans to build over 300 new coal fired power stations to produce electricity.

Let us look at India. Again this government has come into this parliament and made the claim that India is taking national action on carbon pricing with a clean energy tax on coal. But what the government failed to mention is that that tax is $1—one single dollar—a tonne. A recent article from Scientific American titled 'India has big plans for burning coal' details how India, as it lifts its population out of poverty, is poised to become the world's top consumer of coal and has plans to build no less than 455 new coal fired power stations.

In the USA we know that there is virtually no prospect of a cap-and-trade system being adopted. We know that Korea have deferred the introduction of their ETS until after 2015, and even then 95 per cent of the permits will be free. Our nearest neighbour, Indonesia, has no plans for a carbon tax. Canada has an economy that is probably closest to ours in design, shape, population and industry. Yesterday I had the opportunity to put three questions to the Canadian ambassador. The first question was, 'How much is the carbon tax in Canada?' The second question was, 'How much will it increase over the next three years?' The third question was, 'How are you planning to link it to Europe?' The answers were, 'No,' 'Nothing,' and, 'You must be joking.'

Tonight we heard the member for Throsby talk about New Zealand. What he failed or neglected to say is that Australia's carbon tax is 15 times higher than the New Zealand equivalent. The Australian carbon tax is $23 a tonne. In New Zealand, the carbon tax is—wait for it—$1.85. And New Zealand's business, community and parliamentary leaders have made it very clear that they are not going to impose a further increase and a further electricity tax on their people.

Our global competitors are laughing at us. We are becoming the laughing stock of the world. That brings us to Europe. Firstly, the European emissions trading scheme does not even cover the whole economy. It provides many industries with free permits. And the European ETS only raises about 500 million a year, while Labor's carbon tax here in Australia will raise more in the first three months than the entire European scheme has done in five years. In fact, the European scheme works out at about A$1 per person per year, but in Australia the equivalent is $400 per person per year.

Linking our carbon tax to that of Europe—the economic basket case of Europe—illustrates the complete insanity of this proposal. Just look at what is happening in Europe at the moment. In Spain, the unemployment rate is over 25 per cent. There are riots on the streets. In Madrid, people have resorted to stealing from trash cans. The supermarkets in Spain are having to put locks on their rubbish bins to stop people scavenging for leftover food. The government health system is collapsing. We have read in recent days of police throughout Europe firing tear gas and stun grenades to break up protests, all because of failed socialist government policies. And yet this is what the Australian government want us to copy. They want us to head down that disastrous track that has destroyed the European economy.

If it is such a brilliant idea to link Australia—to hogtie us—to the carbon tax at the same rate as Europe, why wait? Why not do it straightaway? We know the reason for that: it is complete insanity when our carbon tax is $23 and the equivalent carbon tax in Europe at the moment is less than $10. This puts our entire industrial base at a competitive disadvantage and makes us all poorer as a nation.

Photo of Bob BaldwinBob Baldwin (Paterson, Liberal Party, Shadow Minister for Tourism) Share this | | Hansard source

Reverse tariffing.


A reverse tariff is exactly what it is. We need to look at what will happen unless this carbon tax in Europe rises. We know it is $10 at the moment. What will this do to the budget, because our budget forecasts are based on the carbon price, that European price, rising to $29 a tonne by 2015-16? Nine point four billion dollars of revenue is written into the forward estimates in the budget based on that $29 price. So what happens if we do not get to that, if it does not rise, if it stays where it is? Henry Ergas has done the sums, and he has worked out that, if that carbon tax stays at $10 by 2015 and rises at four per cent per annum for the next five years, it is going to create a $25 billion black hole in the budget forecasts.

But the government tells us: 'Don't worry. We predict that the EU carbon price will recover. It's three years away. We stand by the Treasury modelling.' This is from the same government that stuffed up the budget so much in the last financial year. It originally predicted the 2011-12 budget. When the Treasurer came in here, he forecast that it would be $22 billion in deficit. The sums have come in: $43 billion. He is only $21 billion out—and that is a year. Now the public is expected to believe that this government can forecast, that it has a crystal ball to see, in three years time, what the EU carbon price will be. It is just a sham.

The complete lunacy of this scheme goes on the fact that we are contracting out our taxation policy to bureaucrats in Brussels, but the real lunacy of this is that we actually will be sending Australian money, money raised in this country, to foreign carbon traders. Words cannot describe the insanity of this scheme. By 2050, we are going to have to send $58 billion that will be raised from Australian consumers, families, pensioners, aged people and children—$58 billion will be raised, and that will be packed up and sent off to overseas carbon traders. In return, we will get glossy pieces of paper that say, 'You are permitted to emit a unit of carbon dioxide.' This is insanity. If the Nigerian scamsters came up with this, you would think that only the most stupid and gullible people would send their money overseas and get in return a glossy piece of paper, but that is what this government plans to do.

The next election will be a referendum on the carbon tax. The public will finally have their say. The coalition will get rid of this carbon tax. The floor price will be zero. It will be gone after the next election.

8:14 pm

Photo of John MurphyJohn Murphy (Reid, Australian Labor Party) Share this | | Hansard source

With great respect to the member for Hughes, the real legacy of this debate will be its failure to address climate change, which is what these clean energy bills seek to do tonight. Nothing demonstrates the harmful effects of global warming on this country better than the large-scale drying out of the Murray-Darling basin. The opposition is continuing to deny the reality of the damaging effects of carbon dioxide emissions on the climate and to deny the need for any action such as the clean energy legislation before us tonight. Meanwhile, scientists report that at least two climate tipping points have been crossed. What is the importance of a climate tipping point?

Recently, in the Proceedings of the National Academy of Sciences of the United States, Professor Tim Lenton, Chair in Climate Change/Earth Systems Science at the University of Exeter, and other prominent scientists defined a tipping point as:

… a critical threshold at which a tiny perturbation can qualitatively alter the state or development of a system.'

In this case, the system in question is the earth's climate. The scientists further stated:

Human activities may have the potential to push components of the Earth system past critical states into qualitatively different modes of operation, implying large-scale impacts on human and ecological systems.

Recent examples include dieback of the Amazon rainforest, decay of the Greenland ice sheet and the potential collapse of the Atlantic thermohaline circulation. Such phenomena have been described as tipping points, following the popular notion that, at a particular moment in time, a small change can have large, irreversible consequences for a system such as the climate. The significance of climate tipping points cannot be understated; yet, if you listen to the Leader of the Opposition or the shadow minister for science, you will hear that such concerns are of no consequence and Australia should not be participating with other nations in introducing a price on carbon dioxide pollution.

The government has a different view and hence has introduced this raft of bills aimed at incorporating clean energy initiatives into the Australian economy. Research by the South Eastern Australian Climate Initiative—the SEACI—which is partnership between CSIRO, the Department of Climate Change and Energy Efficiency, the Murray-Darling Basin Authority, the Bureau of Meteorology and the Victorian Department of Sustainability and Environment, provides evidence pointing to long-term reductions occurring in cool season rainfall across south-eastern Australia and attributes these changes at least partly to global warming.

Amongst the key atmospheric processes directly affected by global warming and most likely to be responsible for the observed reduction in cool season rainfall in southern parts of Australia is the Hadley circulation, a large-scale convection of the atmosphere that carries heat from the tropics to the subtropics. In this well-understood mechanism, the ascending part of the circulation produces abundant rainfall in the tropics while the resulting dry air descends in the subtropics at around 30 degrees latitude, where most of the earth's driest regions, including large parts of Australia, are located. Research by SEACI shows that the Hadley cells are expanding with increasing global mean temperature by about 0.5 degrees of latitude per decade, thus pushing mid-latitude storm tracks further south and leading to reduced cool-season rainfall across southern Australia. That is a fact.

If nothing is done to reduce warming, the Hadley cells will expand by around 400 kilometres by the year 2100 with large reductions in rainfall at the edges of the cells—a devastating prospect for the future of Australia's most productive agricultural land, which is in the Murray-Darling Basin. I would have thought that the opposition would understand that a healthy Murray-Darling Basin is absolutely essential for feeding Australia and that they would be supporting these clean energy bills in this place tonight. SEACI program director Dr David Post has warned that, if areas south of Sydney experience a one-degree Celsius warming, the average annual rainfall is expected to decline by up to nine per cent and average annual run-off by up to 22 per cent. Dr Post also said that these reductions could double with a two-degree warming.

According to the United States Environmental Protection Agency, we are heading for a global average temperature rise of one to eight degrees by the year 2100, and the temperature rise is currently tracking at the upper limit. Even now, with only half a degree rise in average global temperatures since the 1950s, we are in trouble, yet the coalition's business-as-usual approach to climate change and mindless opposition to these clean energy bills is falsely signalling to farmers that it is currently all right to waste half of the Murray-Darling Basin's water on growing cotton and rice. This is an appalling betrayal of responsible management of our most precious resource.

I will now review the operation of the carbon price. It has been in place for over three months, and the sky has not fallen; the economy is still growing, inflation is low, jobs are being created and, as the independent climate commission noted, from next year 850 million people will live in countries or states with emissions trading schemes.

The opposition's latest deception is to bring electricity bills into question time and exaggerate the impact of the carbon price. The opposition bizarrely blames increases in network costs on the carbon price. The opposition exaggerates the impact carbon of the carbon by calculating it as a percentage of just one part of the bill rather than the whole bill.

That is dishonest. The dollar figures for electricity prices are actually very small as a proportion of the business's total costs. The fact is that, for the vast majority of businesses, electricity costs are two per cent or less of turnover, and that makes the carbon price impact around 0.2 per cent of their total costs.

The carbon price will have a small impact on inflation. Treasury modelling has found the impact would be an increase in the consumer price index of only 0.7 per cent. That is much less than the GST's 2.5 per cent net impact. Overall, inflation was just 0.2 per cent for the first month under carbon pricing. And now we have seen an analysis of inflation expectations on financial markets—and this confirms Treasury estimates of a one-off increase of 0.6 to 0.7 per cent. Investors are saying that the impact of carbon pricing on inflation will be no more than 0.7 per cent. That is fact.

The Treasury's modelling was one of the most extensive and robust economic modelling exercises ever done in Australia. This modelling confirms that, with a carbon price, strong economic growth will continue, in which gross national income will grow at 1.1 per cent per year to the middle of the century. Real income per person will increase by $9,000 per year from today's levels by 2020. There will be 1.6 million new jobs by 2020. By the middle of the century, carbon pricing will reduce Australia's domestic emissions by nearly half what they would be without a carbon price, a reduction of 485 megatonnes of carbon dioxide equivalent.

The price impacts on households are modest, and tax cuts and pension and other benefit increases will help nine out of 10 households to meet these modest impacts. The New South Wales Independent Pricing and Regulatory Tribunal has determined that the carbon price will add less than $3.30 per week, or around 8.9 per cent, to the average household electricity bill. That is a fact. This is even lower than the 10 per cent impact predicted by the Treasury. IPART's view of the impact of the carbon price is consistent with those of electricity price regulators around the country. Furthermore, the Treasury's analysis shows that the economic cost of the opposition's policy is at least double that of the carbon price. Last month, the government secured an agreement to link Australia's carbon price with the European Union emissions trading system.

From 1 July 2015, Australia's carbon price will reflect the carbon price paid by at least 30 other countries, including Britain, France and Germany. From that time, Australia will enter an internationally linked ETS, where the global market sets the price on pollution, and this means we can reduce carbon pollution at the lowest cost. It is also an important step forward to tackle climate change. And, with emissions trading schemes being developed in China, Korea, the state of California, Canada and South America, it is likely to be the first of many international links that will form a global carbon market. That is another reason why we need to support these clean energy bills tonight. But the Leader of the Opposition likes to distort the facts about international action on climate change. Last year he said, wrongly:

… there is no sign, no sign whatsoever, that the rest of the world is going to do things like introduce carbon taxes or emissions trading schemes.

Wong. The world is introducing carbon taxes and emissions trading schemes, and this number will increase, as another 17 countries, across all continents, are currently developing emissions trading policies. These countries believe they must reduce emissions and they understand that the cheapest way to do this is to put a price on carbon. It shows that the Leader of the Opposition is wrong to claim that no other countries are acting. In reality, by linking with the EU, Australia will have the same carbon price as 30 other countries with a combined population of 530 million people.

Last month the opposition leader said, 'There are no developing carbon markets in the Asia-Pacific.' But the fact is that Korea, China, Japan, New Zealand, Thailand, Indonesia and Vietnam have developed or are developing emissions trading schemes as I speak. The opposition leader said hundreds of thousands of jobs would be lost, but last month's labour force figures showed the opposite, as unemployment fell. He said millions of dollars in investment would go offshore, but this too is wrong, as there is more than half a trillion dollars in the pipeline. The Leader of the Opposition predicted massive price increases, but the inflation figures show only tiny price rises in the last quarter. He says countries are not acting, yet every major economy has established policies to tackle climate change. Why does the Leader of the opposition continue to misrepresent and distort the truth?

More and more, the facts will show how deceptive and hollow the opposition's scare campaign has been in relation to our decision to put a price on carbon. Those opposite are either ignorant of the modelling assumptions or are being deceitful again. Given that the government has been pointing out the errors in their claims for over a year now, one can only conclude it is deliberate campaign of deception.


Mr Deputy Speaker, on a point of order, did the member breach the boundary when he claimed that we were being deceitful? Previous Speakers have ruled as such.


The member for Paterson will resume his seat. Only the word 'lie' has been determined to be unparliamentary; that is the only word that I am going to pick up on. I call the member for Reid.


The Treasury modelling assumes that there will be an international market that Australia can link into by 2016. This market already exists. There is the European Union ETS and there is the UN Clean Development Mechanism market. In the next few years, as the Korean, Californian and regional Chinese carbon trading markets begin to operate, the prospect for internationally linked carbon markets will keep improving.

The Leader of the Opposition has reiterated that all of the increases in electricity prices were due to the price on carbon. That is false. Unfortunately for the Leader of the Opposition, he was, as everybody knows, immediately— (Time expired)

8:29 pm


The contribution by the member for Reid fits in perfectly with the mantra chant from all of those from the government benches. They like to use the word 'fact' regularly. Mr Deputy Speaker Leigh, I would say to you that there are facts, statistics and more mendacious statements coming from this government each and every day in relation to this carbon tax. This carbon tax is a $9 billion a year tax from which there is no escape. In the first four years some $36 billion will be collected. Contrary to what the member for Reid and others have said, despite this carbon tax, Australia's emissions will actually increase from 578 million tonnes in 2010 to 621 million tonnes by 2020. That is because electricity and gas are essential services. Instead of reducing Australia's emissions, firms will have to purchase 94 million tonnes of carbon permits overseas by 2020. A great deal of effect that is going to have for our local environment!

I quite often hear members opposite saying that there is no impact or only marginal impact on businesses. I am going to give some real life examples from businesses in and around my region and my portfolio. On 2 October Tony Abbott and I made a visit to the Weathertex plant at Tomago to inspect one of the oldest continuous employers in the region. It used to be called the Masonite factory but now produces Weathertex boards for both the domestic and international markets. Paul Michael, the Managing Director and CEO, has grasped an old business and reinvented it through putting in massive investment. Today it employs around 100 locals and generates $23 million in domestic sales and $2 million in exports. Paul Michael indicated that, even though the business has a negative carbon footprint, they are being slugged with a half a million dollar carbon tax bill across their coal, gas and electricity. He said:

We were a reasonably profitable business and now we are not quite so profitable, which is not going to help us expand and develop new products because of the carbon tax.

What Labor does not understand is that many businesses like Weathertex are competing in price sensitive markets. Any increases in production costs will make them less competitive which will mean fewer sales and therefore cost Australian jobs. What was it that Greg Combet, the Minister for Climate Change and Energy Efficiency, who is the real master of mendaciousness, replied? He said:

Businesses in the Hunter are generally doing quite well. They are able to pass on the modest cost increases from the carbon price in their prices.

I say this to the master of mendaciousness: if he thinks that half a million dollars for a business that employs 100 people is a modest cost increase for a small business, then I would ask what he considers to be a large increase. I would suggest that the minister starts talking to local businesses and families, because I can tell you that many of them are doing it tough. As for Weathertex's export business, this government has put a reverse tariff on with their carbon tax.

The story goes from bad to worse. In my electorate the largest dairy is owned by Dallas Clarke and is based at Wallalong. This week he announced to all his staff that he is closing his 700-head dairy at the end of November as he cannot afford to continue to operate. There were two factors: No. 1 was the low cost of milk in the supermarkets, and the straw that broke the camel's back was the increase in electricity costs. Dallas took advantage of dairy deregulation knowing that he had to increase his herd size to get critical mass and ability to amortise his costs. He invested millions of dollars to make sure that he survived. As I said, the carbon tax is the straw that broke the camel's back. Just the carbon tax increases alone in his electricity bill were $609 in July and $600 in August, and that is not to mention the increases in the off-peak rates that have risen out of all proportion. Those that know something about the dairy industry know that they milk during the off-peak rate period. His power bills have gone up from $4,850 a month to $6,000 a month making his business unsustainable. His milk prices have dropped to around 45c per litre yet his electricity prices have increased out of sight.

I am led to believe by the dairy industry that others in the industry are in the same position and are looking at closure. Yet, again, what has the master for mendaciousness said to these business operators? He said:


I say this to the minister: how can Dallas pass on the price when he is a price taker and not a price setter? He is a price taker and that is what the dairy industry is. So, Minister, because of your actions we in the electorate of Paterson lose our biggest dairy, we lose jobs, we lose investment, and sadly and worst of all, Dallas loses out.

There is no escaping this insidious tax. My community is affected. Stroud Community Lodge has seen their electricity bills increase for the July-September quarter from $13,700 in 2011 to $16,840 this year, yet they are using five less billing days and 652 kilowatt-hours less for the same period. So I ask: how does a community-run nursing home pass on its costs to the people in its care? Well, they just have to absorb it. It means either cuts in services or cuts on jobs. Again, the master for mendaciousness would say that people just need to increase their prices. I have to say that in a low-economic community like Stroud, which is made up predominantly of farmers and ex timber workers, where do they get the money to pay increased prices? What we are going to see is, yet again, another business, a community-run business, massively affected.

It does not end there. Long-term food security is a massive issue for this nation. I have always supported aquaculture as a way of guaranteeing partial supply. I was contacted by Nick Arena of Tailor Made Fish Farms at Bobs Farm on 30 August after concerns were raised that the carbon tax is undermining their business. I visited the facility. Tailor Made Fish Farms is a successful local business involved in innovative aquaculture and hydroponic technology producing fish and vegetables for the domestic market and proven technologies for the international market.

Tailor Made Fish Farms is the largest producer of barramundi in New South Wales and is internationally considered an industry leader in its field, consulting with companies in Australia and abroad. Affordable electricity is crucial for the ongoing viability of businesses like Tailor Made Fish Farms, due to the very competitive and price-sensitive market.

Managing Director, Nick Arena, said he is suffering from bill shock after receiving his monthly electricity bill. It has risen dramatically from $7,149 in June to $9,535 in July. I have the bill here. Over $1,000 of this increase has been itemised in the bill as 'carbon charge'. The average electricity charge for the business has risen from 15 cents a kilowatt hour to 19.4 cents a kilowatt hour since the carbon tax was imposed. The fishing industry is an extremely price-point-sensitive market, largely being a price taker rather than a price setter. Nick's business will be forced to either absorb the additional carbon tax cost, reducing profit margins, or pass on the cost to consumers, whereby reducing competitiveness and jeopardising jobs.

When I asked Nick what the new carbon tax costs will mean for his business, he said: 'This is going to impact on our profitability, it is going to push up our cost of production and it is going to make us less competitive.' He went on to say, 'We will seriously think about not doing any more expansion.' Wonderful. This carbon tax is going to be great for our communities, jobs, business and investment. Here are people with their own skin in the game who understand the impact. Most politicians on the government's side have never worked a real job. They have gone from university to union movement to parliament. They have no real life experience. They have nothing out of the hip pocket invested in business.

We see business stymied in its growth. We will see job losses. I say, 'Well done' to the Prime Minister and to the master of mendaciousness, Greg Combet, because if businesses like Tailor Made Fish Farms—


Order! The member for Paterson will refer to people by their parliamentary titles.


I did. I will change the title from master of mendaciousness, but you did say to me that the only word that is precluded is the word 'lie'. The minister uses mendaciousness—


The member for Paterson will refer to him as minister rather than by his given name.


Okay. Businesses like Tailor Made Fish Farms should be rewarded not penalised for their innovation and hard work. It does not matter whether you are a dairy or chicken producer, nursing home or tourist operator, or a manufacturer—or indeed any industry. You have been slugged by this mendacious, deceptive government whose current leader, prior to the last election, said: 'There will be no carbon tax under a government I lead.' Whilst the carbon tax is charged at $23 a tonne—it does apply equally across all energy tariffs—reduced off-peak energy pro rata has gone up by around 30 per cent because of the carbon tax. Yes, peak energy may have gone up 10 per cent but other tariffs have gone up exponentially, because it is a tonne rate not related to the tariff. This government does not seem to get it.

This Labor carbon tax, that was based on a mendacious, deceptive statement to the Australian people, is a dead weight around Australian businesses when they can least afford it. The maths is simple: the carbon tax will increase costs to businesses and households, reduce competitiveness, erode investment confidence and cost jobs. Tourism is extremely important to me, both in my electorate of Paterson and in the portfolio I represent on this side of the House.

The tourism sector comprises some 350,000 tourism connected businesses, many of which are sole traders or classic small businesses, and when combined with hospitality they employ around one million Australians. Everyone in the tourism industry will pay more under this carbon tax. Airfares will increase, bus fares will increase, train and ferry fares will increase, restaurant meals and drinks will increase. All businesses will face a minimum 10 per cent rise and up to 30 per cent rise in off-peak electricity costs. This will mean higher rates for hotel rooms, higher entry fees for park attractions and higher operating costs for tourist operators. This means that tourists will have to pay more. They will have to pay more for a cruise to the reef, more to go on a whale-watching trip to Port Stephens, on boats like Moonshadow, and more to use Brisbane's ferries. They will have to pay more to travel from Tasmania to Melbourne on the Spirit of Tasmania. The costs just keep going up.

Minister, what do you say to the 150 exhibitors at today's Penrith Caravan, Camping and Holiday Expo? They have seen excessive hikes in their electricity bills. Richard Emerson from the South West Rocks Tourist Park, has seen his three most recent electricity bills include a carbon charge. He has seen his price for electricity go up $570 in August, $600 in September and $550 in October. I hasten to add that this is also the off-season—I shudder to think what the bill will be during the summer months, during Christmas holidays, when people are using air conditioning and other such electrical appliances. Our tourism industry is a price-point-sensitive market that can ill afford these increases.

I have heard the mendacious claims, from the minister, of how this carbon tax will save the Great Barrier Reef. I have been to the Great Barrier Reef on a number of occasions and have worked with people like Col McKenzie, head of the Association of Marine Park Operators. He advised me that Quicksilver was going to pay $250,000 in carbon tax in the six cents-per-litre fuel increases. Now, under the environmental management charge rebate, they will be rebated $400,000. So they are going to profit $150,000. Good luck to them. By way of contrast, Big Cat cruises—which goes out to Green Island and transports over 100,000 people—has no rebate fees, yet has a fuel bill increase of $100, 000 per annum. Where is the level playing field? It is not there. This carbon tax applies to tourism operations in Australia but not if you go to Bali or Fiji.

We are already suffering the impact of a high dollar. What we do not need is a carbon tax that will further disadvantage Australian industry and make us less competitive. What this government does by its actions is support a reverse tariff. Straight after the election I will line up with our leader, Tony Abbott, to get rid of this insidious tax.

I seek leave to table electricity bills, seeing that the Leader of the House asked for them today, and two electricity bills from Tailor Made Fish Farms showing the increase from $7,149. 23 to $9,535.38, and the electricity bills from Stroud Community Lodge showing their electricity bill going up in a 12-month period from $13,736 to $16,840.

Leave not granted.

8:45 pm


Make no mistake, it is the Australian economy, our Australian businesses, industries and every family and individual who is paying Labor's $9 billion a year carbon tax cost. It is $36 billion in the first four years alone. We are all getting those power bills now and we are all seeing this cost. Whether you are in business or whether you are a family you are seeing these costs.

Our economy has been largely built on trade. We know that within OECD countries Australia has one of the highest trade to GDP ratios. This has been largely made possible by access to internationally competitive, domestically affordable power—reliable, secure access to power. Yet this government is sacrificing this competitive advantage with the world's largest and only economywide carbon tax—the world's largest and only economywide carbon tax—while at the same time putting business and industry at risk. We also know that the carbon tax is not an environmental solution at all. We know that carbon emissions will continue to rise—the government documents say so.

What we do see today with this legislation is that Labor's carbon tax is a shambles. The government has made eight structural changes in just the first few weeks since its introduction—so around the world in eight days—


And there is more to come!


changes that have added another layer of uncertainty and cost. With this legislation, the government is linking the Australian carbon market to the European Union's Emissions Trading Scheme. The explanatory memorandum which the government presented with the bill proudly states that the 'global market is growing year by year with markets emerging across the globe', but it conveniently forgets to mention that emissions are growing at the same rate. No wonder then that the price attached to the European scheme allowances has been in a constant state of devaluation.

I want to have a look at this Rolls-Royce scheme that the Labor government is leading Australia's economy to. It is currently trading at around A$10 a tonne. It is predicted in some circles to drop as low as three or four Australian dollars. Prices for December in 2012 showed that delivery of EU allowances fell by 50 per cent throughout 2011 and volatility has beset the EU ETS since its inception. In the first phase in 2005 to 2007, prices started around 30 euros a tonne, but by May 2006 they had fallen to 10 euros. This is a Rolls-Royce system. By March 2007 they had plummeted to 1.2 euros, and by the end of the first phase they were worth a mighty 10 eurocents.

Phase 2 of the EU ETS from 2008 to 2012 saw prices start at 20 euros optimistically, down to 13 euros in 2009, and they have spent most of this year under 10 euros. This is because the European ETS is not efficient or effective—it is corrupted and impotent—and this is the volatile market that the Labor government is linking Australian business, industry and our economy to.

The initial caps and free permits agreed to by member countries were really status quo for emissions not emissions reductions, and countries just shifted their operations outside the eurozone to countries with no ETS or carbon price. Massive offsets were available to countries that hid emissions growth in member nations. All these underlying problems just show you that the EU ETS is fundamentally flawed. And yet this is what Labor is seeking to tie Australia's economy and our carbon tax to.

Do not take our word for it. Last year the Union Bank of Switzerland, the second largest Swiss bank and one of the world's most respected banks, released a damning report into the European carbon market. The UBS report was titled Carbon price to collapse, 210 billion euros wasted, and says of the carbon price that there had been 'limited benefits and embarrassing consequences, including euro-billions of windfall profits and fraud'. The report states that the European carbon market has had 'almost zero' impact on emissions. I thought this was an environmental measure.


It hasn't worked at all!


It has not worked. The report states that the European carbon price is in the midst of a collapse—40 per cent since June—and will continue until there was a 'crash' in the carbon price. During a time of economic instability in Europe—that is a way of putting it—a carbon crash will only add to the turmoil.

The report says that it is households in Europe that are paying for the waste and fraud. It says:

… the introduction of carbon pricing has "led to a double-digit surge in power prices across most of Europe."

The European carbon price, instead of reducing emissions, has become an exercise in paper shuffling, a Ponzi scheme that has enriched market participants at the expense of consumers—it is sounding awfully familiar—advising that the CO2 price just provides a windfall to market participants paid by electricity customers through higher bills.

Worse still, fraud is rampant through the carbon market with fraudsters, shysters and organised crime rorting the system and lining their pockets at the expense of households. This is the very scheme that the Labor government is linking Australian business, Australian industry and the Australian economy to.

As the UBS report says:

Europol estimated that VAT fraud in the carbon market has cost European tax payers 5 billion euros and it also estimated that up to 90% of all trading in 2009 could have been such carousel trading to generate the VAT-fraud profits.

This is the Rolls-Royce European scheme that this Labor government is tying Australian businesses and industries to.

We know that Australia is the only nation in the world with an economy-wide carbon tax, which is going to be linked to a chronic failure of a carbon trading scheme that is not going to make any significant impact on carbon emissions at all. You have just heard me explain what UBS thinks of this European scheme, but the Labor government refers to it the explanatory memorandum as a 'credible overseas emissions trading scheme'. The government is tying our economy to this scheme, as I keep saying. We are tying our economy to those of Portugal, Italy, Iceland, Spain and Greece—the European system, the beacons of economic management.

The government is making a major structural change to the carbon tax by removing the legislated floor price. I look back at the comments made by the Prime Minister, the Minister for Climate Change and Energy Efficiency, and others. The floor price was needed, it was vital, to 'limit market volatility'—what I just described in the EU scheme—and it was necessary to reduce the risk for business. It was necessary for 'stability in pricing' and the 'price cap provides confidence' and removed 'uncertainty'. Do we remember those words? Conversely now, after just a few weeks—just five minutes after the introduction of this tax—with the latest policy mess and linking to the European ETS and no floor price, the government unfortunately appears, very knowingly, to be increasing market volatility. What respect is there for Australian business and industry when the government, after making those statements in introducing the floor price and cap, is saying: 'We are knowingly increasing market volatility, increasing the risk for business. We know we said we needed to do this to reduce that, but now we are saying we are going to increase the risk for business and we are going to increase the market volatility.' So Australian businesses and industry are going to be subjected to sharp price spikes and plunges and reducing confidence, and we know all about the volatility of the European ETS and what UBS said about it. All the reasons the government said made it critical to support the floor price are now part of the government's carbon tax package.

We also know that through the Carbon Farming Initiative the government has excluded farmers from selling carbon credits to Europe until 2018. What is this government doing to Australian farmers yet again? We heard the previous speaker talk about the costs associated with a carbon tax for farmers who cannot pass on the tax because they are price takers. This comes on the back of the trade-exposed dairy and food processors that do not qualify for free permits like their European competitors do, the ones that now have to try to compete with both hands tied behind their backs, not just one. They have had to compete for years against subsidies, tariffs, or a combination of the two. They have had to compete against the free permits issued to European manufacturers. They have to pay the carbon tax on their production chains, they compete here in the domestic market with companies and products that do not have the world's biggest economy-wide carbon tax costs and they compete with manufacturers in Europe that get 93 per cent free permits. Our government is knowingly exposing our food manufacturers and food processors to this. The government is doing this knowing the volatility of the markets in Europe. It is just—

Photo of Wyatt RoyWyatt Roy (Longman, Liberal Party) Share this | | Hansard source

A mess.


It is a mess. There are no words for such stupidity. We know that the world's CO2 emissions are projected to rise by around 32 per cent to 45 billion tonnes by 2020. That is a compounding rate of three per cent a year. We know that the experts have said that these increases will not change this decade. This is supposed to be an environmental measure. Ross Garnaut said in his 2011 emissions update that there would be a 2.8 per cent annual rise. So Australia's five per cent reduction will reduce that rise by 0.03 billion tonnes. In fact, under Labor's carbon plan, Australia's emissions will increase in the period 2012 to 2020 from 578 million tonnes to 621 million tonnes. We know the government's adviser and chief climate commissioner, Professor Tim Flannery, said:

If the world as a whole cut all the emissions tomorrow … the average temperature of the planet's not going to drop for several hundred years, perhaps over 1000 years.

We should be having a practical adaptation debate, like we do in our policy, instead of what is a load of hot air but a tragedy and a travesty for Australian business, Australian industry, Australian families and Australian competitiveness.

This whole carbon tax debacle—and it is a debacle—is best summed up by Alan Moran, from the Institute of Public Affairs, who said:

… it must be unique for a nation to deliberately sabotage its own competitiveness by shackling the industries that represent the highest value in terms of productivity: coal and electricity.

That is exactly what this government is doing. We know that Treasury estimates that with Labor's carbon tax Australian companies will be paying $57 billion a year, every year, by 2050. And the economic cost, on Treasury's own figures—I am not making this up, these are Treasury's own figures—will be $1 trillion by 2050. That is what it is going to cost.

This is sheer, unmitigated madness. Here we have come from being one of the most competitive trading nations in the world and yet—two hands tied behind the back—

Mr Entsch interjecting

The member has just mentioned the dairy industry. Let me tell you that dairy farmers are price takers, as the member for Paterson said. There are at least nine billion litres of milk cooled on-farm by the farmers who have to pay the carbon tax on that extra cooling, and I would suggest that not one of them is going to be able to pass that cost on and that they will not be paid one cent extra for their product. Yet those things do not seem to matter to this government. What a tragedy and a travesty for every small business person and every farmer in this country.

9:00 pm


I rise tonight to speak in opposition to the Clean Energy Amendment (International Emissions Trading and Other Measures) Bill 2012 and related bills. It is an honour to follow the member for Forrest and her eloquent contribution to this House tonight.

In just three short months we have seen this Labor government move from one policy failure to the next cruel carbon tax failure. This is a tax that was desperately thrown together in a political arrangement with the Greens. It is a tax that, at its heart, is designed to change behaviour by hurting Australians in the hip pocket and, in the process, making small business uncompetitive. The carbon tax is indicative of the failure of the administration that taints this federal Labor government. After a dismal record in administering programs—be it the $900 cheques, pink batts, school halls or set-top boxes—the carbon tax is off to a very poor start. In just three short months we have seen eight major structural changes to the way this tax will work.

First we saw a government bailout of companies using taxpayer funds. Then we saw Labor cut the share of Clean Technology Investment Program grants funding available for small businesses—while simultaneously increasing the funding available for big business. Then, just weeks later, we saw the entire program halted. Along the way we have watched the list of big polluters ebb and flow at the whim of the government, with more businesses added and taken off, and then added again. And we know that currently the list of big polluters is sitting around a total of 315 businesses. Later we witnessed Labor change the regulations around the carbon tax, which had what we can imagine must be the unexpected result of actually increasing real emissions from pipelines and landfill by one million tonnes.

Again we saw another change, with Labor abandoning the Contract for Closure program. Additionally, we have seen this Labor government boast that their floor price for the carbon price was absolutely essential. And now this is one of the raft of changes we are debating tonight. We are in the process of seeing the government completely scrap their 'essential' floor price—a floor price that the Prime Minister called 'wise', and government ministers repeatedly defended labelling a floor price as a 'safety valve' and a 'tool to provide participants with greater certainty'. Tonight we are also seeing those opposite try to jump on the EU bandwagon, attempting to hitch the carbon tax to the European emissions trading scheme—putting Australian businesses at a distinct disadvantage to overseas businesses.

As the Leader of the Opposition pointed out tonight in this chamber, while we all love our European cousins—their culture, their history and their contribution to Western society—we do not necessarily want to be hitching ourselves to their economic policies. It is something akin to putting the Australian dollar into the eurozone currency. These many changes have been mooted since the carbon tax was brought in on 1 July this year. With so much unclear about the carbon tax, there is only one thing that is clear. It is clear that this Labor government has lost control of its own policy and there is no direction from this Labor government. The carbon tax has taken on a life of its own, and this Labor government cannot seem to predict where it is taking them.

The raft of structural changes in these seven bills make it abundantly clear that this is a Labor government once again making decisions on the run. This is a government that has continually failed to recognise implications of the carbon tax and is attempting to apply band-aid solutions to the injury that the carbon tax is causing Australian businesses and families. In the government's regulatory impact statement, it is revealed that 'for some small businesses the potential change in treatment of international units may create additional administrative costs.' Small businesses are already being hit hard by the carbon tax—with absolutely no assistance from this federal Labor government—and now those opposite are trying to make changes to put even more pressure on small business. Small business is the engine room of our economy, the great creator of wealth and the great employer in our nation. It would seem to me that it is a reality that this Labor government is determined to deny and that it is set on making it more difficult for small businesses to get ahead.

In light of all we know about the failure of this Labor government, when it comes to the carbon tax, the government still arrogantly refuses to change the modelling for the carbon tax. Despite making a raft of changes to the way the carbon tax operates, this Labor government is standing by its modelling. This government is relying on flawed modelling to sell its failed tax to the Australian people. Based on this government's track record, it is highly unlikely that the outcome of this tax will look anything like the spin the Labor party is trying to sell to the Australian people.

One of the serious structural changes in these bills is the idea of linking the carbon tax with the European scheme. I have serious concerns about these intentions. Clearly this is a desperate political move by government to introduce this legislation before having a formal agreement with the European Union. Such a move would effectively link Australia's economy with the highly risky and unstable European economy at a time when Europe's economic judgement is under intense scrutiny.

Additionally, the European scheme is well known to be have been rorted. This Labor government wants to marry our own carbon tax with this failing system. This move could have huge implications for our economy and there is no guarantee that the carbon tax and therefore the Australian economy will not be taken advantage of by fraudsters. After only three months of this carbon tax, the real implications are becoming clear.

In my electorate, I have been speaking with many local businesses who are expressing very sincere concerns about the future of their business due to the impact of the carbon tax. They are starting to find out the hard way exactly what it means for them. Two weeks ago I visited Allied Timber Products, a manufacturing business in my electorate, with the Deputy Leader of the Opposition. I spoke with Richard, the Managing Director of Allied Timber Products, extensively about his business and the concerns he had about the carbon tax. In electricity alone, Richard is facing a $40,000 carbon tax charge this year. This does not include haulage costs or any of the other numerous costs that Richard is facing from a carbon tax charge.

Richard looks at this carbon tax cost in terms of the ability of his business to grow. He told me that the carbon tax he is paying is directly negating his ability to employ one more person in his business. For a region such as mine, which is already experiencing a significant unemployment rate, Richard's news is nothing short of disappointing. I do not want to see government get in the way of Richard's ability to run his business, and I do not want to see government hinder Richard's ability to grow his business. It is clear from what Richard said that the carbon tax is doing just that. The carbon tax is already costing jobs in my region. I have said it many times in this place before: new and increased taxes do not create jobs and do not create wealth. And as much as the modern Labor Party might like to deny it, you cannot tax a nation into greater prosperity.

During my visit to Allied Timber Products, I sat down with Richard to look at his electricity bills from both before and after the carbon tax. What surprised me was that, although Allied Timber Products have done the right thing and taken efficiency measures and reduced their electricity consumption, they are still paying a massive carbon tax bill. Let me just make this point very clear: this local business is using less electricity but paying a higher electricity bill because of the carbon tax. And due to current market pressures facing the timber industry, this carbon tax cannot be passed on. Allied Timber Products is forced to try to absorb this cost, making this family owned business less viable.

Earlier this week, another local business relayed its concerns to me about the carbon tax. Local car dealership owner, John Page, shared with me information about the carbon tax and the effect that it is having on his car dealership. The cost is quite sizeable. On John's electricity bill, he is paying increases of up to 30 per cent on electricity charges due to the carbon tax. John describes the carbon tax as 'a hit on small businesses that have absolutely no right of redress'. John is absolutely right. Unlike some of the big polluters, small businesses cannot pass on their carbon tax costs and they do not get compensated for it.

Recently, I spoke with another business owner who was in the process of closing her fish and chip shop and convenience store. Sadly, she had become yet another victim of this federal Labor government's carbon tax. After receiving a couple of post-July electricity bills and seeing just how much the carbon tax had increased her costs, she told me that she had been forced to make the difficult decision to close her business. Her business was no longer viable. With electricity as her greatest overhead, she had to watch as her profits had been completely absorbed. It is a sad day when the carbon tax is the final straw for local small businesses.

Yet another of my local small businesses, FoodWorks Burpengary, approached me with examples of the carbon tax that they were paying and a direct and itemised carbon tax charge of $1,300 for just one month alone. When I directly raised this with the Prime Minister during question time in this place, the Prime Minister's response was simply to deny that small businesses pay the carbon tax. I had to go back and somehow try to explain to Craig from this local business that, although he could see in black and white an itemised carbon tax bill, the Prime Minister was telling him that he was not paying the carbon tax.

I would challenge every Labor member in this place to walk into the small businesses in their electorate and explain to their constituents this alternative reality which the Labor party finds itself in, whereby a business has an electricity bill with an itemised carbon tax component and yet somehow the Labor Party thinks that they actually do not pay the carbon tax. For a carbon tax that, according to the Labor Party, was not supposed to have a real impact on the costs for individuals, I have been receiving an overwhelming amount of feedback from local residents that it is having an impact. Residents are only now starting to realise just how much carbon tax they are paying for Labor's new tax.

Just in the last fortnight, I have heard from residents of a retirement living park in my electorate. The Island Breeze Home Owners Committee contacted me to share their concerns about rising electricity costs. Neville from the committee shared that residents from Island Breeze Resort have already noticed a jump in costs due to the carbon tax and that they are very concerned to have been informed that their electricity charges will continue to rise because of the carbon tax. Neville and other independent retirees of my electorate, who are already facing an uphill battle with low interest rates and the high cost of living, are extremely concerned about their future. They are finding themselves in a difficult circumstance where they are considering how they will manage to pay their bills and live within their limited budgets. At the recent Longman seniors forum that I held, the very first question put to me was about the carbon tax. People are concerned because the only certainty with the carbon tax is that they are going to be paying more for their electricity and their groceries.

Even this week, we have seen that Telstra is considering increasing its customer fee to cover its own carbon tax costs. The wide-spread ramifications of the carbon tax are only beginning to be known. People are only just beginning to feel the pain that this tax is going to bring. New taxes are not going to help small businesses; they are not going help them get ahead. The carbon tax is not going to help; it is going to hurt. As Sir Robert Menzies, in his wisdom, identified: real tax reductions are the best of all incentives to increase effort, earning and production.

They are the best incentive to encourage a reduction in emissions. A carbon tax will not have any environmental impact whatsoever.

The more I hear stories from people and businesses in my community, the more determined I am to ensure that my electorate is free of this carbon tax. I remain absolutely committed to abolishing the carbon tax. Abolishing the carbon tax will be the first order of business of a coalition government. On the first day of parliament under a coalition government we will introduce legislation to get rid of the carbon tax. The people of Australia deserve better than the lies and the uncertainty that they are getting from this Labor government. The people of Australia deserve hope, reward and opportunity, which is why I cannot support these bills.

As the Leader of the Opposition said in this place tonight: he can be believed when he says there will be no carbon tax under a government he leads.

9:15 pm

Photo of Luke SimpkinsLuke Simpkins (Cowan, Liberal Party) Share this | | Hansard source

I take this opportunity tonight to make a contribution to the debate on the Clean Energy Amendment Bill 2012 and related bills. Climate change and Labor's carbon tax are both matters that I have spoken about in this parliament on numerous times, so it will come as no surprise that I am going to use this opportunity to reinforce the point that the government has lost control of its carbon tax, a carbon tax that will result in economic pain on families, individuals and business, all without any environmental benefit. The Australian people are very clear about what happened before the 2010 election: there was a cast iron guarantee that there would be no carbon tax under a government she led. That has really set the scene for where we are now and for the Prime Minister's credibility.

Every Australian has the right to be concerned by the Labor-Green carbon tax that was introduced by the government. I can tell you that this is certainly the case in my electorate of Cowan. When I am travelling through the electorate and talk to people, whether it be in shopping centres, at front doors or in businesses, about their top issues and concerns, the most commonly raised issues are the carbon tax and stopping the boats. They are two examples of how the government has lost its way and has failed.

To give an example on the carbon tax, I recently visited a local business, New West Foods. New West Foods, in Malaga, processes fresh seafood and distributes fresh, frozen and ambient foods throughout the Perth area. It is a great company—a family company—that has been established through the hard work of the family and a core group of employees. As you would imagine, New West Foods runs a number of large freezers which utilise gas. In 2010 New West Foods had to get one of their freezers re-gassed with R404A gas. The cost of the gas was $55 a kilogram—they showed me one of their bills. Last month New West Food had to get another freezer of a similar size re-gassed. On this occasion the cost was $200 a kilogram for exactly the same R404A gas. When the company questioned the 360 per cent increase in the cost of gas they were told it had only recently occurred and was almost entirely an effect of increased prices due to the carbon tax. The owner of this business asked me: 'What is the Prime Minister going to do to assist us with the increased costs due to her carbon tax?' I repeat this question and ask the Prime Minister: what assistance are you going to provide businesses in my electorate and can you explain why you are making it harder for businesses in Cowan with your tax?

As I mentioned earlier, the carbon tax is an economy-wide tax that is hurting Australian people and businesses. It is a $9 billion a year tax, which every Australian will pay through their electricity and gas bills, that will have no positive effect on the environment. On the contrary, even with Labor's solve everything carbon tax, Australia's emissions will increase from 578 million tonnes in 2010 to 621 million tonnes by 2020.

This tax was introduced just over 100 days ago. At that time the government spent millions of dollars of taxpayer funds to advertise how fantastic the carbon tax was going to be. Just over 100 days later, they are proposing a major structural change, on top of the eight changes already undergone, to their fantastic carbon tax. I would like to take this opportunity to discuss these eight changes, a number of which will make the tax even more useless and residents and businesses hurt even more. For example, the decrease in the share of funding for small businesses so as to further increase funding for big businesses via the Clean Technology Investment grants that assist those directly hit by the carbon tax. Labor simply does not understand small business and is constantly making life more burdensome for small-business owners.

The coalition was deeply disturbed by a national survey published in News Limited papers on 20 August 2012, which reported that two-thirds of small businesses feel they are not able to pass on the world's largest carbon tax. Small business is Australia's biggest private sector employer and is carrying the cost of the carbon tax. The carbon tax will make margins for small business even lower, particularly if the Prime Minister's plan to decrease the share of funding for small businesses via the Clean Technology Investment grants occurs. It seems the government is out to hurt small and medium businesses in particular.

Another of the amendments in this bill scraps the floor price, which was to have been $15 from 2015 and which the government said was needed for business confidence. Furthermore, they have halted support for industry via the Clean Technology Investment grants as the government attempts to save money, leaving businesses exposed.

It has also allowed the Clean Energy Regulator to add more businesses to the big-polluters list, taking it to a total now of 315, while on the eve of the carbon tax being introduced they also bailed out major companies, with funding to companies including Alcoa and Energy Brix

One of the changes in this legislation that truly disturb me is linking Australia's carbon trading scheme to Europe. There are a number of issues associated with this. Firstly, the European system does not allow a two-way trade on carbon credits, which puts Australian businesses at a disadvantage and results in Australia's carbon tax being set by the EU price. Secondly, the European system works out to around $1 per person per year, compared to Australia's system, which is equivalent to $400 per person per year, and this figure will continue to rise. The third point is probably the most obvious: the European economy is not known for being overly strong at present, and I cannot understand why the government would want to link their scheme to an increasingly challenged set of economies in Europe. As has been said earlier, a common-sense action might be to link our carbon trading scheme with that of one of our global competitors like China or India. But the government cannot do this, because none of these countries have a scheme like Australia's. Even the US have closed down their ETS plans due to a lack of interest in that country.

I would also like to take this opportunity to touch on the science behind the claims of climate change. I am not afraid to say, and I have said in this place before, that I am no adherent to the theory of anthropogenic global warming. Another non-adherent to the theory, Dianne Bourke, recently sent me two energy and environment issue articles by James Taylor from Forbes which bring new findings which are extremely important to the debate. I think it is important to read the science and make myself better informed rather than just accept what the government always says.

The first article discussed a new study in the peer-reviewed science journal Remote Sensing, which examines data captured by NASA satellites between 2000 and 2011. This new data shows that the Earth's atmosphere is allowing far more heat to be released into space than the UN computer models have predicted. It is indicated in this study that far less future global warming will occur than the UN computer models have predicted, and it also supports prior studies concluding that increases in atmospheric carbon dioxide trap far less heat than has been claimed. In his article, Mr Taylor makes a good judgement by saying:


When objective NASA satellite data, reported in a peer-reviewed scientific journal, show a "huge discrepancy" between … climate models and real-world facts, climate scientists, the media and our elected officials would be wise to take notice.

I endorse these comments and think that members on the other side should look closely at all sides of research rather than trying to sell a highly flawed carbon tax scheme. It is worth commenting that this Labor government runs out its political playbook lines all the time on this issue and on all issues. They denigrate the opposition leader and our side for what they allege are extreme comments about the effects of their carbon tax, yet on every occasion they ask themselves a question at question time the prefix 'dangerous' is added before mentioning climate change.

So this is a pathetic government defined by its political lines and it finds criticism of itself unparliamentary, as was evidenced today in question time. The alarmist rhetoric in this debate belongs to this government, the falsity of whose apocalyptic predictions will be realised all too soon—although I think the majority of this nation no longer believes this government with their dire predictions or in fact anything they say. It was bad enough that the Prime Minister misled the Australian public just days before the last election by stating, 'There will be no carbon tax under a government I lead,' but now the Prime Minister is continuing to hurt Australia families and businesses despite frequently being told the negative impact that her and the Greens' carbon tax is having in this country.

However, going back to Mr Taylor's reporting of science, I would like to mention another article he published regarding Antarctic ice, which looks at an article recently mentioned on National Public Radio. In the article a meteorologist, Anthony Watts, explains that new data shows ice mass is accumulating on the Antarctic continent as well as in the ocean surrounding the Antarctic. This clearly contradicts claims by global warming alarmists that the expanding Antarctic sea ice is coming at the expense of a decline in Antarctic continental ice. I find the manner in which a large majority of mainstream media like to publish articles on ice loss in West Antarctica and the Antarctic Peninsula astounding. They must forget to mention that ice is accumulating over the area of East Antarctica and that the continent as a whole is gaining snow and ice mass. The article also covers a new NASA and university study which found evidence that Antarctica once supported vegetation similar to that of present-day Iceland. The article concluded with a quote that I would like to share:


A very important aspect which should be considered in the global warming debate when those on the government side claim that what is happening now in the world is unprecedented is that over history the world and its climate have changed and will continue to change. There are cold days and there are hot days. There are rainy days and there are dry days. I find it both concerning and amusing when people complain about unseasonal weather or discuss the lack of rain or the latest downpour and then end the conversation with the phrase, 'But it's okay; the carbon tax will fix it,' followed by laughter. It is a reality that the Australian public have seen through this government and know that the carbon tax is no more than another broken promise and an example of a further ineffective Labor policy that was made, and is now trying to be changed, on the run.

In conclusion, these amendment bills to make major structural change comes about inside three months of the operation of the carbon tax and, as we have heard from previous speakers, will remove the legislated floor price from the carbon tax and link the Australian carbon tax with the European ETS, not to mention the proposed amendments that will seek to increase the carbon unit auction limit from 15 million to 40 million for 2015-16. It will also alter the arrangements applying an equivalent carbon price for liquid fuels and synthetic greenhouse gases, as well as making amendments about the measurement of potential greenhouse gas emissions and natural gas liabilities. What I and the Australian public see in this move is a government that has lost its way and has implemented a carbon tax which is in such disarray that since being implemented it has made eight major changes to it. These amendment bills is further evidence that the government has lost control of its carbon tax and is making policy and policy changes ad hoc. The carbon tax is imposing a burden on all Australians, and there is no environmental benefit for it. Under a coalition-led government the carbon tax will be repealed and the Australian public will see direct action on the environment.

There is no doubt that I oppose these clean energy amendment bills. The only leader that can be believed with regard to this carbon tax is Tony Abbott, who has said that there will be no carbon tax under a government he leads. When Tony Abbott says it, it is the case. It will happen. I look forward to the next change of government, whereby the carbon tax will be removed and the Australian people and Australian businesses—those people that employ and help drive this country forward—will no longer live under the yoke of this carbon tax.

At 21:30 (Wednesday), the sitting continuing, the full report will be published Thursday, 11 October 2012.

The DEPUTY SPEAKER (Mr KJ Thomson) took the chair at 9:40.