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

My question is addressed to the Prime Minister. Is the Prime Minister concerned that under his flawed emissions trading scheme the price of Australian food will increase by about five per cent even before agriculture is included, while food imported from countries like China and Brazil will face no cost increases?

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

I thank the honourable member for his question. In terms of the projected impact on food and other prices of the Carbon Pollution Reduction Scheme, these matters were canvassed extensively in the government’s white paper. We have said throughout this, as those opposite have said from time to time in the occasional outburst of candour, that when you introduce a carbon pollution reduction scheme or any other form of emissions trading scheme it will have an effect on the price of carbon and that will flow through into general prices in the economy. That was elementary to the position taken by the former Prime Minister, Mr Howard, when he spoke in this place on an emissions trading scheme prior to the last election. That is the first point.

The second point goes to how you therefore deal with the impacts which then flow to pensioners, carers, seniors and other low-income households, and to middle-income households as well. I would draw the honourable members’ attention to the provisions which have been put forward by the government. Firstly, in the case of pensioners, seniors, carers and veterans, they will receive additional support above indexation to fully meet the expected overall cost of living flowing from the scheme. Furthermore, other low-income households will receive additional support above indexation to fully meet the expected overall increase in the cost of living flowing from the scheme. Furthermore, as for middle-income households, they will receive additional support above indexation to help meet the expected overall increase in the cost of living flowing from the scheme. Also, for middle-income earners receiving family tax benefit part A, the government will provide assistance to meet at least half of these costs.

We were clear about these matters at the time when the government put forward its policy. If you are having an emissions trading scheme, you are bringing about as a result of that a higher price of carbon and that therefore flows through to the general economy. The responsible course of action then, both for households and for industry, is to create the adjustment mechanisms for them to soften the blow. I would ask those opposite to reflect on this further, given that they do not have a policy on emissions trading. When the Frontier Economics document was released only a couple of days ago, those opposite were asked whether this constituted their policy. They said no, it did not. But I would ask those opposite to tell us where their household compensation scheme is. I may have missed it in terms of the contents of that document. Or are those opposite in fact arguing that if their model which they put forward, but which they do not own, is implemented, it would have no consequences in terms of the price of carbon? I would have thought that if you looked at the proposition being put forward by those opposite, it flows through to the price of carbon and therefore to the price of food and to the price across the general economy as well. So here is the critical question: where is the alternative compensation scheme for households being put forward by those opposite? I cannot find it.