Monday, 31 October 2011
Clean Energy Bill 2011, Clean Energy (Consequential Amendments) Bill 2011, Clean Energy (Income Tax Rates Amendments) Bill 2011, Clean Energy (Household Assistance Amendments) Bill 2011, Clean Energy (Tax Laws Amendments) Bill 2011, Clean Energy (Fuel Tax Legislation Amendment) Bill 2011, Clean Energy (Customs Tariff Amendment) Bill 2011, Clean Energy (Excise Tariff Legislation Amendment) Bill 2011, Ozone Protection and Synthetic Greenhouse Gas (Import Levy) Amendment Bill 2011, Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Amendment Bill 2011, Clean Energy (Unit Shortfall Charge — General) Bill 2011, Clean Energy (Unit Issue Charge — Fixed Charge) Bill 2011, Clean Energy (Unit Issue Charge — Auctions) Bill 2011, Clean Energy (International Unit Surrender Charge) Bill 2011, Clean Energy (Charges — Customs) Bill 2011, Clean Energy (Charges — Excise) Bill 2011, Clean Energy Regulator Bill 2011, Climate Change Authority Bill 2011; Second Reading
Debate resumed on the motion:
That these bills be now read a second time.
Before my speech on the Clean Energy Bill 2011 and the related bills was interrupted by question time, I was noting the fact that we will have to live with the inevitable impacts of climate change in this country and indeed globally. The window for action that would have prevented these impacts has, sadly, closed. But we must act now to prevent catastrophe. I say to those opposite: if you accept that climate change is real and that human activity is causing it, then we must act now. If we do not act now, the consequences for our environment, our economy and our way of life will be very severe. The reality is that everyone bar climate change deniers in this chamber and indeed in this parliament know that passing this legislation is the right thing to do. As Mr Malcolm Turnbull has said:
You won’t find an economist anywhere that will tell you anything other than that the most efficient and effective way to cut emissions is by putting a price on carbon.
Coalition member after coalition member is on record supporting a price on carbon. If you accept the science, which is that our carbon emissions contribute to climate change and that the most efficient way of cutting emissions is by pricing carbon, then you should support this legislation. To not do so condemns you to being on the wrong side of this debate.
In this chamber we have witnessed, day after day, the attempts by those opposite to find grounds on which to oppose this legislation. It has been a struggle for those opposite and a struggle for us to watch. At the end of the day, it comes down to the political capital that those opposite have sought from scaremongering rather than from doing the right thing by the planet, by the economy and by all Australians. There is still time for those opposite to do the right thing and vote for this legislation. I commend the bills to the Senate.
I note that the previous speaker on behalf of the government still had four minutes to go in extolling the virtues of the Clean Energy Bill 2011 and the related bills.
Much has been made in this chamber about the infamous broken promise: 'There will be no carbon tax under a government I lead.' I recently met a 20-year-old woman who quite obviously knew very little of politics. She lived at home with her mother and father and she worked in a nine-to-five job. I began talking to her and asked what she knew about our Prime Minister. She said, 'Well, not a lot, but I know she broke a promise.' I said, 'What do you mean, a promise?' She said, 'She said that there would be no carbon tax, and she is introducing one.' This is a common theme out there in the public amongst people who are not as immersed in politics as you or I might be, Mr Acting Deputy President.
The Prime Minister has absolutely trashed the prime ministerial imprimatur. Let's look at what she actually said: 'There will be no carbon tax under a government I lead.' That is: 'I'm leading, and it is my choice to have no carbon tax. My good name—my integrity, my reputation—is in the line that I have just given you, and that is: if I am the leader, there will be no carbon tax.' Why did she say it in those terms, putting her own integrity on the line? The answer is very simply found in the words of her finance minister, Senator Wong. In 2009, Senator Wong said:
The introduction of a carbon price ahead of effective international action can lead to perverse incentives for such industries to relocate or source production offshore … There is no point in imposing a carbon price domestically which results in emissions and production transferring internationally for no environmental gain.
There it is: the cat is out of the bag through their own words. Why would they say before a federal poll, 'We don't want a carbon tax'? Why would the Prime Minister put her integrity on the line by saying that no government that she led would ever have a carbon tax? Because they well know that this is a poison pill for our economy. They well know that $9 billion will be ripped out of our economy every year. Every day—rain, hail or shine—pensioners, new home buyers and students will have a 10 per cent hike in their two-monthly electricity bill. Why did she say it? Because everyone knows that there will be a nine per cent hike in everybody's gas bills. Billions of dollars will go offshore in these crazy carbon credit schemes that really only have the approval of bankers and spivs. This is from a senator who had a formative period in Kalgoorlie, where an ounce of gold was something of value and it got that way over generations and centuries.
The people in this government, as incompetent as they have proved to be day in, day out, seek to put a price of $23 onto a tonne of carbon. This is the craziest, nuttiest thing that any government has undertaken and there is no-one else in the world doing it. In fact, the truth is that every one of our major credible trading partners is reversing out of this at a thousand miles an hour. But it is a lot worse than just the Prime Minister trashing her own imprimatur and integrity. Every single government senator adopted her stance before the last election. And yet listen to them now. You would think that this carbon tax was some sort of magic, a device that is going to protect the future of humanity. This is just a crass revenue-raising device that achieves absolutely nothing for the environment. Indeed, Senator Wong has belled the cat: all that it is going to do is send jobs, revenue and resources offshore. That is what we have come to with this crazy scheme.
At the end of the day, the only real explanation as to why the Prime Minister and her finance minister would identify the problems with a carbon tax and yet suddenly embrace it is this outrageous and immoral deal with the Greens that they made in seeking their support for putting Labor in power—this faustian deal to hang on to the keys to the Lodge. It fits perfectly with the longstanding perception of the psyche of the Labor Party. A famous former Labor senator expressed this very well. He said, 'Whatever it takes is what they'd do.' This is whatever it takes.
Here we have over a thousand pages of legislation with just one week allowed for the public to make submissions on them. This is all about power and no responsibility, perfectly in line with what we have seen before. There was a drunken sailor approach to school halls. Then there was the pink batts scheme. It is costing us more than $1 billion to repair the damage of a scheme that was outrageously administered. Then we saw the live animal exports issue. Senator Ludwig and this crazy government extinguished the livelihoods of many Australians at the stroke of a pen without understanding anything about it. This highly complex legislation has over 1,000 pages. It is legislation that carries with it severe criminal penalties.
The government senators in their new found wisdom on climate change—having gone to the people saying, 'No, we're not touching a carbon tax; we're not doing that'—are suddenly all jumping up and advocating it. They keep saying that it is like the GST. This is nothing like the GST. John Howard had the courage of his convictions and went to the people and said, 'If you like it and believe in tax reform, believe in me; if you don't, vote for the other side.' That is what he said. He had the courage of his convictions. This government lacks all courage and all integrity. They—all of them, all of these senators—said: 'We're not having a carbon tax. Vote for us. That is not a political issue.' Now look at them. They are pushing 1,000 pages of the most complex legislation, legislation that will seek to wring the lifeblood out of our economy. And to what end?
I have heard the Greens say today that there will no more cyclones, that it will cure encephalitis, that it will stop floods and that there will be no more drought. Give me a break. This is absolutely the craziest and stupidest thing that the Labor Party has ever got sucked into in all of its life and I for one will not let them forget it. 'There will be no carbon tax under a government I lead,' is what she said and she will be hoist on that petard between now and the day that she makes that huge concessional speech after the next election, because it is going to be a beaut.
John Howard took his GST legislation to the people. He took the time to explain it and advocate for it, because he had the courage of his convictions, as did his ministers, backbench members and senators. He won a mandate. He then had committees spend five months considering the legislation and there were submissions made over those five months by the public. How long have we had with this legislation? One week. And we have had one week in the face of the famous promise: 'We're not going to have it.' Then we get a week to look at it. This is just an absolute con job on the Australian public, with criminal sanctions to boot—they sound like absolute offences. This is the most outrageous conduct of a democratically elected government in our history.
And all the while the Labor senators on the other side, having told us they would not touch this with a barge pole prior to the election, tell us this is now in the national interest. They wouldn't know the national interest if it sat on their lap and started to wiggle! This is an absolute assault, particularly on my home state of Western Australia. This is just absolutely outrageous. There we have a state that is 1.8 million square kilometres. We depend on airlines and heavy-haulage trucks. Kalgoorlie gets its fuel by trucks and train. Meekatharra, Leonora, Laverton, Newman, Tom Price and Broome all get their fuel and groceries by trucks that are heavier than 4.5 tonnes—and after 2015 you will be paying a carbon tax if you are driving a truck heavier than 4.5 tonnes. This carbon tax is a classic assault on Western Australia, and I for one am not going to lie down and let it roll through like the government expects us to.
The carbon tax also plunders the livelihoods of small business. These people who are living in regional Australia, who are producing the export wealth of the country, have to pay this carbon price because it will be pushed onto the price like sales tax was. This is going to be an absolute nightmare for people trying to do business in regional and remote Australia, particularly Western Australia. But what does the government say about that? Absolutely nothing, because it is hanging on by its toenails to three seats out of our 15 in Western Australia. It does not give a fig about the politics of Western Australia. In fact, the ALP secretary has a big file on WA and it is entitled, 'Why Bother? We're going to get slaughtered no matter what happens.' And the two obvious reasons for that slaughter are that they are introducing a carbon tax that absolutely chops Western Australians fair in the neck, and on top of that they are attacking our mining industry with the craziest, most inept and undeveloped mining tax anybody in Canberra, in Treasury, could dream up. And I tell you what: it is going to blow up fairly in their faces. You can say goodbye to Stephen Smith—the seat of Perth will waltz out the window to the tune of Waltzing Matilda. You can say goodbye to Gary Gray. And I tell you what: Glenn Sterle, if he is sitting at the bottom of the Senate ticket, in the No. 2 spot, will be very nervous.
The last poll had the government with a primary vote of 31 per cent. With this promise—'no carbon tax under a government I lead'—they are plumbing the depths of about 21 or 22 per cent. These guys stand to be beaten by the Greens, particularly in the seat of Fremantle. That is how well the Labor Party is tracking in Western Australia. They are an absolute class political force. They are so classy that the state Labor opposition is actually attacking them. A more incompetent bunch you could not wish to meet—but they are actually taking the high moral ground with this crazy, incompetent bunch of ne'er-do-wells here in Canberra. It is something to behold.
So in Western Australia, the cash cow of the nation, where unemployment is down below four per cent, we are working our guts out to pay for this huge bureaucratic nirvana here in Canberra—and what does this Prime Minister do? She introduces two taxes that are going to rip the rug out and chop us off at the knees—absolutely disgraceful. Two out of every three Western Australians vote other than for the Labor Party. I tell you what: it will very shortly be five out of six voting other than for the Labor Party. These guys do not have a clue about a tonne of value.
This is the joke that is permeating anybody who has a modicum of scientific or commercial understanding. In terms of the imposition of a value on a tonne of carbon, there is no better example than what happened in Europe. It went up to €30 a tonne, and all the mums and dads got involved, and there was an emissions trading scheme—and guess where the price went? Down to less than €1. This is the sort of thing that this Labor Party produces, with its crazy NBN, done off the balance sheet with no cost-benefit analysis, the pink batts, the live exports and the Qantas saga we had last weekend. Every turn of every corner has an aroma of extreme incompetence: ministers who cannot answer questions in the Senate, who do not have a clue about their portfolios. They are too busy playing political games, knifing someone here, promoting someone there. The rock star Rudd has to be promoted. This is the sort of thing that leads us to looking for money and then tacking on an excuse for it, like a carbon tax—'Let's call it a carbon tax: it has a good environmental feel to it, we can sell it to the plebs, it is money rolling in and then we can fritter that money away and no-one will be any wiser.'
The mining tax is very similar: 'Let's go to the next budget with these two taxes passed before Christmas so that we can say there'll be a high revenue yield. We won't get a high revenue yield, but at least we can put it in the budget as if there is going to be one, so that our 'surplus' budget has a modicum of credibility. We've been in power for four years as the Labor Party, we haven't come within a bull's roar of a surplus and we're not going to—but we'll get the figures, project them forward and pretend we're going to have a surplus. We'll do the biggest con job and fraud on the Australian electorate in our history, and they'll get suckered by it, just like they did when the Prime Minister said, "There will be no carbon tax under a government that I lead"—oh no, it's me. I'm the Prime Minister. You can trust us because, if I lead the government, there will be no carbon tax.' Absolutely pathetic.
I should say, Mr Acting Deputy President, no-one is factoring in that in Western Australia, and probably Victoria and New South Wales, the biggest on-grid users of electricity are the water corporations, the water utilities. Gigalitres of water are moved around cities and moved around regional areas using electrical pumps. Sewage is being pumped out and moved to sewage plants. All of this is chewing up electricity. Are the states going to wear increased carbon tax prices added into the cost structure of these utilities? Not on your nelly! They are going to pass these costs on. Your electricity bill is going to go through the roof—up 10 per cent per annum, year in and year out. The Labor Party say, 'You're going to get tax cuts,' as though that were some sort of Christmas present.
They advocate how good Spain is doing on renewable energy. Well, have a look at Spain: it is on its knees, broke and begging for mercy from the central European banks because it is paying more cents per kilowatt hour that anybody else with renewable energy. And those opposite are advocating the same path. That is where they want to take us. That is where they want us to go. They want us to be sucked into this high-cost renewable energy when we have cheaper energy coming out of the Gippsland in Victoria than do any of our trading partners. The manufacturing industries of Victoria depend upon the low cents per kilowatt hour of Gippsland. These guys have got it completely wrong. This carbon tax is the biggest con job that Australia has ever seen. It is a rip-off. States like Queensland and Western Australia are paying through the nose for this, with their remote distances and mining operations.
Magnetite requires energy to take the 30 per cent iron ore grade up to 70 per cent before export. That is all about energy. So the carbon tax and the mining tax kill what is potentially another coal industry for us. Magnetite is throughout Western Australia, Queensland and South Australia, but it is only viable if you can then beneficiate it at a reasonable cost. These two taxes go a long way toward extinguishing what is potentially a fabulous industry for all of us. But, no, these guys have got it absolutely wrong. They have as much commercial understanding as the ministers that sit opposite me in this Senate have—zero. They are union hacks and former members of staff of members of parliament . They have never, ever understood a net present value calculation, and they come in here saying, 'This is going to save the planet.' The best thing that could happen for all of us is that someone wakes up and says: 'Let's save the Australian people. Let's give them a vote.' Thank you.
I rise to support the Clean Energy Future package. I am deeply convinced that Australia needs to play a strong role in taking global action on climate change. Our country faces many threats to our coastal cities and towns. Much of our agricultural and water resources are already vulnerable. There are unprecedented levels of species extinction. Our responsibility to reduce greenhouse gas emissions is clear. In New South Wales there are tremendous opportunities to become economic leaders in the low-carbon economy and to be manufacturers of solutions to climate change such as with renewable energy technologies and public transport. We owe it to our children to act responsibly, to be world leaders in climate action and to invest now in the move to 100 per cent renewable energy, to give them a safer, cleaner future.
The biggest failure of successive coalition and Labor governments over the past year, when the need for urgent action on climate change has been so apparent, has been their lack of willingness to place the public interest ahead of the greed of the coal industry and rein in the runaway expansion of new coalmines and extensions to existing coalmines across the state's major coal regions. The current New South Wales government, like its predecessor, has a blind determination to continue to rely on coal-fired power at the expense of the sunrise renewable energy alternatives. The Labor and coalition parties pay lip-service to protecting the environment and reducing the state's carbon emissions and then, in the next breath, they announced an expansion to the Newcastle coal loader to feed the burgeoning export market for coal. Other failures in New South Wales, which highlight the need for extensive government action to reduce greenhouse gas emissions, include the years of underinvestment in public transport, while billions were pumped into building motorways. Regional rail services have been bled dry and rural rail branch lines, which are the real heart and should be the heart of so much of the movement of freight and grain across New South Wales, have been allowed to fall into disrepair.
I am very mindful that although climate change is now firmly on the national agenda, the phenomenon of peak oil and the threat of future oil scarcity is still unfortunately a side issue in this parliament. Measures in these bills will make a very practical difference to people's lives. Assistance that will be provided to households provides a fairer distribution of wealth and will assist people to manage the increases in costs that will flow from some of these changes. From the many meetings I have had on these bills across New South Wales, I can tell you that many people will welcome these changes. Nine out of 10 households in New South Wales will receive some level of compensation, with the most generous support going to the most disadvantaged. The $250 million Low Carbon Communities fund is a huge achievement. I do congratulate Uniting Care, the Brotherhood of St Lawrence and the other groups that made this proposal so low income households would be able to handle rising energy costs through energy efficiency upgrades. The change in personal income tax with a tripling of the tax-free threshold, which allows working people to retain at least the first $18,000 they earn each year, is a most significant development that I do applaud.
As I mentioned, I have spoken about the clean energy package at a number of events across New South Wales. One issue that I often get a questioned about—not just in country areas—is the carbon farming initiative and what we are doing around biodiversity. The Carbon Farming Initiative certainly has got a lot of interest in farming areas and people are very keen to know how the projects will work. It will provide a way for farmers to create offset credits which they can sell to polluters. That will be through a range of projects and it will be very useful when this fund is actually working. I am looking forward to gaining more information about it so I can more thoroughly answer the questions of the farming communities that we work with on the Liverpool Plains, in the upper Hunter, in Gloucester and in other areas. The biodiversity fund is a real credit to those who worked on bringing these bills forward. Already there are so many people working on some very significant projects that bring stewardship to our land, and the fact that they can be rewarded for that work in our wetlands and restoring waterways and riparian areas will be very significant.
In New South Wales, government energy and economic policy has been heavily influenced by the powerful coal industry lobby. The New South Wales Minerals Council and some of the multinational corporate mining giants like BHP Billiton, Rio Tinto, Gujarat, China Shenhua and Peabody have worked so hard to maintain the New South Wales government's tunnel vision for coal. This has been to the great detriment of a sustainable future for New South Wales, our planet's climate and the health of local communities. In the next decade Australia faces a tripling of coal exports nationally from around 300 million tonnes last year to over a billion tonnes. I find that figure deeply troubling. New mines across Australia account for 800 million tonnes of coal. About one-third of the mines are in New South Wales. In our state there are currently over 50 new coalmines or expansions of existing coalmines currently on the books, either proposed or underway. This equates to around 240 million tonnes of coal every year, which in turn will result in the emission of over 550 million tonnes of carbon dioxide equivalent each year. I emphasise that that is New South Wales alone. There is another 150 million tonnes of new coal handling capacity coming online at Newcastle Harbour to ship much of this coal overseas. Many of these new mines have a life of 30 years. These are wrong decisions about our energy future and they will remain a burden for the next generation.
Since taking office as a senator in July I have been contacted by many community and environment groups who have grave concerns about these mining projects. There are community groups in Gunnedah, Narrabri and the Hunter and Illawarra regions who are opposing the rapid expansion of coalmines. When it comes to coal seam gas, the opposition is going up exponentially. Just yesterday I was at a 100-strong public meeting in the electorate of the New South Wales Premier, Barry O'Farrell, Ku-ring-gai. People were deeply troubled by the idea of coal seam gas spreading across this country. The presentations were very clear about how coal seam gas can affect local communities with such a quick move from the exploration stage to full mining, to the point where they really cannot be separated, because the infrastructure that is used in the so-called exploration is the exact same infrastructure that allows coal seam gas operators to go into full operation.
One coalmine that stands out is a massive open cut coalmine proposed for the Leard Forest near Boggabri, the Maules Creek coalmine owned by Aston Resources. The scale of the mine is extreme. The mine pit will be so deep it will be below sea level. The damage it will cause the local environment will be irreversible, clearing one of the remaining quality stands of an endangered ecosystem—all to send 13 million tonnes of coal per year to Newcastle Harbour for export. The Hunter Community Network has formed to tackle their ongoing health problems from coal dust, focusing on uncovered coal wagons moving through their towns.
When it comes to the coal industry the New South Wales state government have a massive conflict of interest. They have an enormous financial stake in these projects going ahead and earn hundreds of millions in royalties from mining, yet they also need to take action to reduce the state's emissions, protect threatened wetlands, safeguard communities from the ill effects of mining pollution and secure prime agricultural land and water resources from the encroachment of new mines. To date they have not come close to getting the balance right.
But there is another way. The New South Wales Greens took a policy on solar thermal energy to the last state election, to show what needs to be done to kick-start the transition to renewable energy in New South Wales. The proposal is to build three baseload solar thermal power stations with heat storage in Central Western New South Wales, financed by green infrastructure bonds that raise revenue from the sale of the electricity, renewable energy certificates and other green energy products. These publicly owned clean power plants would harness the energy of the sun to power steam turbines, providing reliable zero-emission baseload electricity 24 hours a day. It is achievable, and how fantastic that would be. Future modelling shows that coal prices in the next decade are expected to double. Building solar thermal power plants will protect people and businesses from electricity increases and create new jobs. The model proposed by the Greens would create about 4,500 jobs at its peak, with the potential for further manufacturing jobs if components for solar thermal are created in Australia. One power plant would cost approximately $2.1 billion to build, or around $525 million for each of the four years of construction. The second and third plants would cost significantly less as the technology matures and state experience is accumulated. The operation of these plants would create another 1,900 ongoing jobs.
A 2009 report by the Centre of Full Employment and Equity, based at the University of Newcastle, clearly dispelled the myth that transiting to renewable energy would lead to job losses. The CofFEE report found that if New South Wales were to shift to renewable energy, including some local manufacturing of generators, up to 73,800 jobs would be generated. For the Hunter and Central Coast alone, the report predicts that shifting to renewable energy would create up to 14,300 new jobs. The Greens have a deep commitment to ensuring local communities benefit in this transition period and when it comes to job creation that is where the benefits kick in, and they will be benefits that will last for many years.
This is an exciting vision for New South Wales that could start today. It needs to be replicated across the country. The challenge lies before us. Government investment in renewable energy and energy efficiency will be critical to take Australian down the path to clean energy and a jobs-rich economy. In New South Wales the government should build those solar-thermal power plants so we can phase out our oldest and most polluting coal-fired power stations, such as Lake Munmorah, on the New South Wales Central Coast, and Liddell, near Muswellbrook.
The time for a new way of thinking has arrived. These bills are a most significant step towards a safer climate. I do warmly congratulate the members of the Multi-Party Climate Change Committee for what they have achieved. It is historic and far-reaching. I give particular thanks and credit to Senators Christine Milne and Bob Brown, Adam Bandt, the Greens member for the seat of Melbourne, and their staff. Their insight and leadership have been critical to the achievement that these bills represent.
Passing this package of reforms that is before us today is our opportunity to secure a clean energy future for our children and for generations of Australians yet to come. We in this place are required to make decisions today that ensure a better tomorrow. And that is exactly what the package of clean energy bills we are debating today will do. We cannot ignore the overwhelming and compelling scientific evidence that human induced climate change is happening. The CSIRO, the Bureau of Meteorology, the Australian Academy of Science and science academies around the world have all concluded that human activity is almost certainly causing climate change. The evidence also shows that the only way to curb the impact of human induced climate change into the future is to reduce global greenhouse gas emissions and cut carbon pollution.
As well as the scientific imperative, we also have an economic imperative to pursue these reforms. We know that 34 countries and 27 cities, states or provinces around the world have an emissions trading scheme operating or under development. Nine countries have implemented a carbon tax and at least two more are considering it, 86 countries have legislated or planned for renewable energy targets and 89 countries, representing 80 per cent of global emissions and 90 per cent of the world's economy, have also pledged to take action on climate change.
It is therefore incumbent upon us to act to curb the impact of human activity on our environment—and the time to act is now. We have the opportunity to enact legislation that will guarantee that generations still to come will have a cleaner, brighter future. We must implement the legislative package before us and introduce a carbon price now to ensure Australia remains competitive in an emerging global clean energy economy. If we do not act now, we risk being left behind and we also risk further irreversible damage to our environment and the probability of more extreme weather events.
The Productivity Commission, the Garnaut report and a Grattan Institute study all conclude that price is by far the most effective change mechanism when it comes to cutting carbon pollution. Our own Treasury modelling shows this is the best way forward for Australia's economy. The clean energy future package guarantees generous compensation to pensioners and families, assistance to industries to protect and grow jobs, and extensive tax reforms whilst we cut carbon pollution. The package provides that nine in 10 households will receive a combination of tax cuts and increased payments that will assist with cost-of-living impacts caused by a carbon price and that over one million extra Australians will no longer need to lodge a tax return. Broadly, this package means that everyone earning up to $80,000 per annum gets a tax cut. That means most people will benefit from tax cuts of up to $300. The tax-free threshold will effectively triple and no-one will pay tax on the first $20,000 that they earn. Almost six million households will be assisted to meet their average price impact. And over four million households will be assisted to at least 20 per cent of their average price impact. Moreover, these tax cuts and payments will increase over time.
The fact that those opposite continue to argue against these historic reforms on the basis that families will be worse off is just absurd. In fact, families in Australia would be $1,300 worse off under the policy of those opposite. All the revenue generated from Mr Abbott's $1,300 tax also goes straight to big polluters from households. It really is time to stop the talking and proceed with the clean energy future plan before us. The carbon price mechanism will cut carbon pollution and drive investment in clean energy technologies including solar, gas and wind. The package before us contains a Jobs and Competitiveness Program that will support jobs in those high-polluting industries with competitors in countries where those industries are not yet subject to comparable carbon constraints. We have outlined an $800 million clean technology investment program that will provide grants to manufacturers to support investments in energy-efficient capital equipment and low-pollution technologies, processes and products. Provision has been made to ensure that households, tradies, farmers and small businesses do not experience an increase in fuel costs under the carbon price. Small business will not have to count or monitor the carbon pollution or electricity they use and will not be burdened by any bureaucratic red tape. Moreover, we have excluded agricultural and land sectors from the carbon price whilst ensuring that these sectors still have opportunities to secure economic rewards under the Carbon Farming Initiative. In effect the package of 18 bills before us today will ensure that, by the end of the decade, Australia will have cut 160 million tonnes of pollution from the atmosphere each year, which is the equivalent of taking 45 million cars off the road. By 2050, we will have taken over 17 billion tonnes of carbon pollution from the atmosphere and will be saving nine out of every 10 tonnes of pollution that would otherwise be emitted if this plan were not introduced.
As of July next year, the biggest polluters in Australia will pay for every tonne of carbon pollution they put into the atmosphere. As we have said time and time again, all the money raised out of the carbon pricing mechanism will flow directly to jobs, clean energy and households. The Treasury modelling clearly indicates that by 2050, with a carbon price, we will have $100 billion invested in renewable energy and that over 40 per cent of Australia's electricity generation will come from renewable sources. The estimates also project that Australia's renewables sector will have grown by up to 17 times.
Australia already has some of the best renewable energy sources in the world, including hydro, wind, solar, bioenergy, geothermal, wave and tide. In my home state of Tasmania we already generate around 86 per cent of our energy from renewable sources. We also have significant renewable energy research, industry and government knowledge and capabilities. The honourable Peter Rae AO, Chairman of the International Renewable Energy Alliance and Chairman of the Renewable Energy Development Board in Tasmania, has articulated the opportunities for Tasmania and for Australia to realise these renewable energy targets as we work towards a clean energy future. Mr Rae has suggested that Tasmania's wind resource could provide half of Australia's present demand for electricity and he has identified major growth opportunities for Tasmania to transfer renewable energy into the national grid. It is clear that this legislation gives us the opportunity in Tasmania, and across Australia, to better utilise the renewable sources we already have, to make use of cleaner technologies and to secure a more sustainable future.
Looking at the big picture, introducing a carbon pricing mechanism ensures not only that Australians will benefit from a clean energy future but also that we will meet our international obligations on addressing climate change under the climate change convention and the Kyoto protocol. Introducing a carbon price in Australia will ensure that we support and participate in the development of an effective global response to climate change.
We need to take action at home and internationally. It is in Australia's national interest to play our role to ensure that the average global temperatures increase by not more than two degrees Celsius above pre-industrial levels.
Achieving these measures is exactly what this package is designed to do. Unfortunately, those opposite have taken every opportunity to try to thwart this essential move to securing a clean energy future for Australia. They have launched a massive and deceptive scare campaign. Their own policy seems to be one of direct inaction and overt obstruction of any measure to secure a clean energy future rather than any credible alternative to the package before us today.
The debate about pricing carbon and climate change policy is not new. In fact, these policies have been widely debated in Australia for more than a decade, including through no less than 35 parliamentary committee inquiries. The first review of emissions trading by an Australian government was in 1999, some 12 years ago. This was an extensive policy work undertaken by the former Howard government, most notably by Mr Peter Shergold, which concluded that pricing carbon was the best approach to securing a clean energy future. We have had extensive and major reviews on Australia's best policy options for tackling climate change by Professor Ross Garnaut, which have shown that a carbon price mechanism is the best way forward.
It is frustrating to hear those opposite continue to claim that this is a policy that has been rushed or that needs further consideration and consultation. The reality is that the government's clean energy future package was developed through a parliamentary committee process, and the committee met for nine months before completing its work in July this year. Whilst the rest of us are determined to push forward with fundamental reforms for a sustainable future, those opposite seem determined to just sit back and wait. We must seize the opportunity before us to transition to a low-carbon future and prepare Australia for the economic and environmental challenges ahead. The only way forward is to embrace the clean energy package before us today. I commend the bills to the Senate.
The debate we are having today in this chamber has its foundation in two unequivocal promises made by the now Prime Minister of Australia to the Australian people. On 16 August 2010, just five days before the federal election, Ms Gillard made the following promise, and a very solemn promise it was, to the Australian people. She said, 'There will be no carbon tax under a government I lead.' This promise was clear. It was unequivocal and it was unambiguous. More than that, it was intended to influence the voting intentions of the Australian people and designed to encourage them to believe that if they voted for the Australian Labor Party they would be voting for a party whose platform would be that there would be no carbon tax in the event they were elected.
But it did not stop there. Ms Gillard followed up this unequivocal promise again. Just one day before the 2010 federal election Ms Gillard confirmed to the media and to Australian voters that her promise that 'there will be no carbon tax under a government I lead' was clearly the Australian Labor Party's policy position going into the 2010 federal election. Nothing could have been more clear in the minds of the Australian people who were about to cast their votes to determine who would be leading Australia the following day. The Australian Labor Party said that 'there will be no carbon tax' under their government.
Sitting suspended from 18:30 to 19:32
Just like Prime Minister Gillard, the Treasurer of Australia, Mr Swan, also sought to influence the voters of Australia prior to the 2010 election by again telling them that the Labor Party's platform was that there would be no carbon tax in the event that they were elected. What did Mr Swan say just days before the 2010 federal election? He said, and it is very explicit:
We have made our position very clear. We have ruled it out.
He ruled out a carbon tax. The explicit promise was made not once, not twice but on several occasions by the Prime Minister of Australia, Julia Gillard, and also by the Treasurer of Australia, Wayne Swan, and of course by every Labor member and senator across Australia who went to the 2010 election. They went to that election on the explicit platform that, if elected, they would not impose a carbon tax on the Australian people. It is a great shame that the Senate is here today debating the carbon tax legislation—debating legislation that the Labor Party of Australia said to the Australian people they would never introduce. This legislation is a complete, total and utter betrayal of the Australian people.
This is a government that, when it comes to the issue of trust and particularly the carbon tax, is devoid of any moral compass. As Australians are now learning in so many policy areas, there is a litany of broken promises, and they expect nothing less from the Gillard Labor government. Why? The answer is very simple. The Gillard Labor government will always take the cheap, easy political option instead of taking decisions that are in the national interest and, on top of that, consistent with the promises that they made to the people of Australia in the lead-up to the 2010 federal election. Without a doubt, the next election will be a referendum on the carbon tax. Why? Because every Labor member and senator went to the last election on the basis of what we now know was a blatant lie. They betrayed the Australian people. This betrayal occurred despite what the Australian Labor Party unequivocally said to the Australian people. We should not be standing in this place today debating this legislation.
So what do we have? We have Labor MPs and Labor senators who went to an election on the promise of no carbon tax, who have now voted in the other place and who will possibly vote in this place to impose on the mums and dads of Australia the most toxic tax that they have ever seen. The price of the Australian Labor Party's betrayal is going to be felt by every mum and dad in Australia every time they pay their electricity bill and every time they go to the shops. Everything they touch will have a price increase on it because of Labor's toxic tax. If you look at the modelling, you will see that it is estimated that a carbon tax will add at least $300 a year to a family's power bill. Families in Australia are already struggling under the rising cost of living. Every time a mum or dad in Australia turns on the lights they will be paying for the Australian Labor Party's carbon tax. Despite these facts, on Q&A on Monday, 14 March, when Prime Minister Gillard was challenged about her betrayal of the Australian people, she admitted that she had walked away from her commitment to Australians that 'there will be no carbon tax under a government I lead'. Her explanation was merely 'I did not intend to mislead the voters.' What a weak, pathetic and contrived response. How can the Prime Minister stand before the Australian people and argue that she did not intend to mislead them when by her very actions, her calculated actions, that is exactly what she set out to do? The Prime Minister of Australia not only misled the voters but has now deceived them as well by introducing the carbon tax legislation. If the Australian Labor Party led by Ms Julia Gillard had any moral compass at all, they would have supported the Leader of the Opposition's motion to take this legislation to a plebiscite and give Australians a say. Let the Australian people have a say on whether or not they want to see a carbon tax introduced.
Senator Nash is correct to ask the question: why not? Senator Nash, we all know the answer. If the Prime Minister of Australia and the Australian Labor Party actually took this legislation to the people and said, 'Do you want a carbon tax?' the Australian people would resoundingly vote no. The Australian Labor Party know that. They have fooled Australians once and the Australian people have made it very clear they will not be fooled again by the members and senators of the Australian Labor Party. They know that the imposition of a carbon tax in Australia is nothing more and nothing less than a political choice because the Labor Party have gone into an unholy alliance with the Greens; it is not an environmental necessity.
When Australians are promised something as fundamental as 'there will be no carbon tax under a government I lead' hours before they go to cast their vote in relation to who will ultimately lead them and they vote on the basis of that promise, and then the Australian Labor Party led by Ms Gillard is unable to go through with that promise, there is only one thing that the government can do—that is, exactly what Mr Howard did in relation to the GST: take the major policy change to an election. You were elected on the basis of a mandate and that mandate was that you would not introduce a carbon tax. You do not have a mandate to stand here in this place today and debate this legislation. Do what Mr Howard did and take it to the Australian people. If you are so sure that this is the right thing for Australians, take it to an election and show us on this side of the chamber that we are wrong. You will not, because each one of you, in particular those in marginal seats in the other place, knows that as each day goes by and we creep towards the next federal election it is one day less that you are going to be in this place because you betrayed your constituents. You betrayed the people of Australia. If there is one thing that Australians do not like, it is being called stupid. That is exactly what the Labor Party has said to the people of Australia.
The coalition, on the other hand, has made if very clear what its position is in relation to the carbon tax. We will continue until the final vote is taken in this place to oppose this toxic tax whilst in opposition. If we are not successful in opposing it, when we are elected the very first order of business for a coalition government will be to rescind this toxic legislation. We have also made it very clear to the people of Australia that, if we are elected, we will have a mandate to repeal this toxic legislation. If the Australian Labor Party do not want to listen to that mandate, we will have the guts to go to a double dissolution. That is how sure the coalition is of its position in relation to the carbon tax. Why? Because Labor's toxic tax means this for Australians: a $9 billion hit a year. For the mums and dads of Australia it means a 10 per cent hike in their electricity bills. For the mums and dads of Australia it means a nine per cent hike in their gas bills. This is in the first year alone. After the first year, all of those prices just keep going up. It means a higher marginal tax rate for many low- and middle-income earners. It also means a $4.3 billion hit for the Australian budget bottom line. Translate that into the cost per year for mums and dads and you are looking at potentially in excess of $515 per year, and that is just for starters.
These are the mums and dads of Australia who do not have a lot. They work hard to pay their taxes because they are proud. They work hard to put their children through school because they believe in giving them a good education. Occasionally they might have a little bit of discretionary income left over at the end of the week, which they might able to take their kids out to dinner with. Once this toxic carbon tax goes through, it is all over. There will be no discretionary income left for the mums and dads of Australia because any income that they may have had left over at the end of the week will be going to pay for Labor's toxic carbon tax. The carbon tax will be a trillion-dollar cost to the Australian economy over the coming decades. But when you talk about trillions under the current government it really does not mean a lot. It was millions and then it was billions, and now, when we look at the Australian Labor Party's economic incompetence, we are now talking about trillions of dollars. Who would ever have thought we would be standing in this place and talking about hits to the economy in terms of trillions? These trillions of dollars can be put down solely to economic mismanagement by the Australian Labor Party.
What is worse is that not only will the mums and dads of Australia be paying more under this toxic carbon tax but the only people who are going to be getting rich are foreign carbon traders. How is that for hypocrisy? In order to convince itself that this policy actually does mean something—that it is not all economic pain for no environmental gain—what will the Australian Labor Party do? It will spend in excess of $3.5 billion each year on purchasing foreign carbon credits. Good grief! By 2050, that will rise to $57 billion. In economic terms that is the equivalent of 1.5 per cent of GDP—not that those types of figures mean anything to anybody on the other side. So while the mums and dads of Australia are losing their jobs, their ability to pay their bills and their ability to take the kids out to dinner, foreign carbon traders will be making billions of dollars under a toxic scheme put forward by the Australian Labor Party. If that is not policy that is not in the national interest, I do not know what is.
Unlike those on this side of the chamber, Labor senators and, more so, members in the other place, are going to have to answer to their electorates when we face the next election. They are going to have to go to their constituents and say: 'We are deliberately inflicting this pain on you. We told you one thing before the 2010 election, you voted on the basis of a lie and, now that we are in government, we have taken the deliberate decision to inflict pain on you. We are deliberately introducing a policy which we know will increase your electricity bills, which we know will increase your gas bills, which we know will increase your cost of living and which we also know will have no effect on emissions reductions at all.' In fact, the government's own modelling, which it has released, actually confirms that as of 1 July next year when it introduces the carbon tax—which is allegedly going to solve all of the environmental problems in the world—the domestic emissions in Australia will actually increase. That is right—the Labor Party's own modelling shows that domestic emissions will in fact increase in the period 2012-20 from 578 million tonnes to—lo and behold!—621 million tonnes.
So not only were the people of Australia told the day before the 2010 election that if the Australian Labor Party were elected it would not impose this tax; they are now having a tax imposed on them, allegedly for environmental gain, while the government's own modelling shows domestic emissions in Australia will actually rise. Do you know how we offset that, Mr Acting Deputy President? It is a very devious form of policy making. If the government purchases with billions of dollars those carbon credits from foreign traders, somehow that assuages all of our guilt and suddenly we are doing the right thing. Mums and dads of Australia, guess what? You pay while the foreign carbon traders earn billions of dollars off the Australian Labor Party.
Hypocrisy, duplicity, disloyalty and betrayal—these are the words that the people of Australia are now using to describe the Australian Labor Party. Given the Labor government's betrayal of the people of Australia, it is patently true that Labor's continual claims that it alone is the party that looks after the workers is just more Labor rhetoric. Labor members know that the new Labor has turned its back on Australians and it has turned its back on traditional Labor values, and they are waiting to punish new Labor at the next election. (Time expired)
I am extremely proud to be standing here today in the Australian parliament to speak about this clean energy package. These 18 related bills combine to establish a framework to finally start to tackle the serious challenge of climate change in a comprehensive and coordinated way. This legislation has been a very long time coming.
This is not a new issue. Two hundred years of increasingly intensive industrialisation, fuelled by the burning of fossil fuels and coupled with an exponential increase in the earth's population, has led us to the situation that we now face. Australian politicians have been talking about the dangers posed by climate change since at least 1989. At that time the science was already suggesting that we were facing serious consequences from increasing greenhouse gases in the atmosphere, especially carbon dioxide and methane. Both the ALP government at the time and the coalition opposition were discussing strategies to reduce greenhouse gases for the 1990 election. Already, back in 1989, there were predictions of extreme weather in the 21st century, events like uncontrollable wildfires, unprecedented storms, increasing desertification and melting glaciers. At that time we were glimpsing the frightening face of 'the future'. Since then, through cowardice, inaction and a false debate about the science—fuelled by those who have a vested interest in things not changing—we have lost 20 years. We are now in the future. There is no more time to be lost. In its report The critical decade, the Climate Commission sets out how this is the critical decade. Having squandered two decades, the decisions we make between now and 2020 will determine the severity of the climate change that our children and our grandchildren will experience.
So I am particularly proud to be standing here as a representative of the Australian Greens, the party which went to the last election with a clear commitment to introduce a price on carbon and the party whose leadership and innovation encouraged the establishment of the Multi-Party Climate Change Committee. At this stage I pay particular tribute to my colleague Senator Christine Milne and her committed staff. Senator Milne has long understood the implications of climate change. She has championed creative solutions to the crisis and had the courage and tenacity to see them through.
It was Senator Milne who proposed the Multi-Party Climate Change Committee. What a constructive idea, at a time of increasing polarisation and petty negativity in Australian political life: a committee composed of representatives from various sides of politics who were willing to allow themselves to be informed by the most up-to-date and credible scientific knowledge in order to make decisions in the best interests of our nation. It was this constructive process, combining information, strong negotiation and good faith, which enabled the government, Independent members of parliament and the Greens to be leaders in bringing about this legislative reform, which is so long overdue.
Let me now turn my eyes to home. As a senator from South Australia, I am acutely aware that climate change will pose some wicked challenges for my state. It is, after all, the driest state in the driest continent on the earth. This legislation is critical for South Australia. In its South Australian chapter, the report The critical decade details some major impacts for my state, including the effect of rising temperatures on population health.
In South Australia we already have our share of hot weather. The average yearly temperature in South Australia has risen by almost one degree Celsius over the past century, and the last decade was the warmest on record. Due to climate change we can expect that temperatures will continue to rise. Adelaide currently experiences an average of 17 days in a year where the temperature is above 35 degrees. By 2030 the number of extremely hot days is predicted to rise to about 23; and by 2070 to further increase to as many as 36 days, or one-twelfth of the year. More record hot days and associated heatwaves will increase the risk of heat related illness and death, particularly in the elderly.
In January to February 2009, south-eastern Australia experienced record-breaking prolonged temperatures, and Adelaide reached its third highest temperature ever at 45.7 degrees. During that heatwave, direct heat related hospital admissions increased fourteenfold, and there was a 16 per cent increase in ambulance call-outs. There were an additional 32.4 deaths. In just a decade, without effective adaptation, heat related deaths are projected to double. This will have implications for hospitals, ambulance services and morgues.
Another major consequence of climate change in South Australia will be due to the combination of changing rainfall patterns and higher temperatures. Since 1970 we have seen a clear decline in rainfall in southern South Australia, and there is evidence that this is linked to climate change and will continue. Increasingly severe droughts will occur, together with drying soils, and these will have significant impacts on South Australia's agricultural areas and the availability of drinking water in Adelaide and other parts of South Australia. While much uncertainty remains about specific details of rainfall changes in the future, we can say with considerable certainty that rainfall patterns will change as a result of climate change and often in unpredictable ways, creating large risks for water availability.
The impact of climate change on agriculture will not only take its toll on the ability of South Australian farmers to grow food but also place increasing stresses on their mental health. A report from the Climate Institute earlier this year acknowledged that mental health has been a concern for rural people for the past few decades, but it predicted that climate change will only add more stress to the lives of rural people. The suicide rate in rural Australia is already alarming, with some reports as high as one suicide per week. Mental health is a complex problem for farmers, even without the added factor of climate change.
An ongoing study by the CSIRO, which surveyed 50 wine growers from southern Australia in March and April this year, found that grape growers are already experiencing the emotional impacts of climate variability and the perceived risks associated with future climate change. Some are anxious about the future or about specific weather events such as drought. Some are depressed about the viability of the industry in the future and some are confused about the facts of climate science and sceptical that we can make a difference. The stress that many farmers are under can turn into more serious mental illnesses or thoughts of suicide, requiring treatment, if the problems are not addressed and the situation continues over a long time. The likely environmental effects of climate change identified by the Climate Commission will clearly exacerbate the risk factors which already exist. A lack of water will not be a problem when it comes to seawater and rising sea levels associated with climate change. Unfortunately, and perhaps surprisingly, South Australia's coastal towns and infrastructure are particularly vulnerable. The report Thecritical decade indicates that sea levels in South Australia have been rising at a rate of approximately 4.6 millimetres per year since the early 1990s. This is higher than the global average of 3.2 millimetres, and with much variability from year to year.
Globally, sea levels have risen by about 20 centimetres since the late 1800s. Another 20-centimetre increase in sea levels by 2050, which is feasible at current projections, would more than double the risk of coastal flooding in Adelaide. A rise of 50 centimetres, which is likely later this century, will lead to very large increases in the frequency of coastal flooding. This is flooding which is currently considered a one-in-100-year event; it would occur every year. The report also states that between 25,200 and 43,000 residential buildings in the state of South Australia, with a value of between $4.4 billion and $7.4 billion, may be at risk of flooding towards the end of this century. We are even more vulnerable than other parts of the country. South Australia has the second highest value of total assets at risk, with over $45 billion worth of houses, buildings and roads at risk of flooding.
We ignore these stark warnings at our peril. The choices we—those who live in towns and those who live in the bush—make this decade, right now, will shape the long-term climate future of our children and our grandchildren. But we have a greater ethical imperative than mere self-interest. When it comes to climate change, we Australians—all of us—are, per head, the highest carbon polluters on the planet. It is somewhat ironic and hypocritical that those who often call for a focus on responsibilities over rights—some political commentators and business leaders come to mind—are the same people who urge that we shirk our fair share, plead impotence because of our small population and dig our heels in until we are forced to act.
This is especially shameful when our Pacific neighbours, like Kiribati and Tuvalu, face their own and far more serious forms of inundation. We have a moral duty to take responsibility for our role in their predicament. It is incumbent on us here in this parliament, as elected leaders and decision makers, to ensure that we take the necessary action to protect our community in this critical decade. This is our trust. The time for action is now, not tomorrow.
Thanks to the collaboration of the government, the Independents and the Greens, we now have a clean energy strategy for Australia, including a price on carbon. This is a historic moment. Through these bills we will provide a vital signal to the market that the costs of carbon pollution can no longer be ignored. Together with a range of initiatives to encourage low-carbon renewable energy, energy efficiency and the protection of biodiversity, this package will prove transformative for the Australian community and economy as well as for the climate.
I am immensely proud of the role the Australian Greens have played in ensuring that climate change has been squarely on the agenda in this term of parliament, led by the science. This is a commitment we clearly made before the election. Through strong negotiation and good faith, it is one that we have honoured. We are now in that future which was predicted so accurately over two decades ago.
The best scientific evidence shows that human-created carbon pollution is affecting the environment in ways that will damage our way of life. In fact, at a hearing of the Joint Select Committee on Australia's Clean Energy Future Legislation I asked the Chief Scientist of Australia, Professor Ian Chubb: 'What is you view of the scientific basis for the claims made by the self-proclaimed climate scientist Lord Monckton, when he recently visited Australia on a national tour entitled "A carbon tax would bankrupt Australia: the science does not justify it"?' Of course, only a simple answer was required. Professor Chubb said, 'There is none.' There is no scientific basis for the preposterous views espoused by the favourite sceptic of those opposite.
While the committee heard that the scientific evidence is well founded and points to humans as the cause of speeded up global warming, it noted that many unfounded and unwarranted attacks have been made on scientists in the course of this debate—a debate that has stretched decades, a debate in which the science is settled. NASA, the CSIRO, the Bureau of Meteorology, the Australian Academy of Science and 97 per cent of climate scientists agree that human-created pollution is changing our climate in harmful ways. Given the potential for disaster, we are not willing to ignore that advice. We are not willing to bet that they are all wrong and a few radio station shock jocks are right.
Reducing carbon pollution is good for our environment and important for our future. With this package we will reduce pollution and create new jobs while supporting households. It is time to act, and to act decisively. It is not time to continue to question the science with one hand, as those opposite do, and propose extremely costly abatement measures with the other. Those opposite say that this package of legislation will cost Australians. They yell and scream all sorts of misinformation about the cost. They pretend that they care for the long-term good of this great nation, and they forget one simple fact: the sooner we act, the cheaper it will be.
Acting now will cost money; no-one is arguing that it will not. We are seeking to make the 500 biggest polluters pay and assist households and industry through the transition. They are seeking to make every Australian pay by using general government revenue to give subsidies to polluters. This legislative package—our plan—sets out a strategy to cut Australia's emissions by 80 per cent on 2000 levels by 2050. Simple examination of the opposition's plan reveals a massive problem. They have a costly plan to cut emissions by the bipartisan target of five per cent of 2000 levels by 2020. But they do not think it is necessary to have a policy to cut emissions beyond that level and that date, as though miraculously in 2020—after having repealed our efficient, effective abatement scheme and having wasted taxpayers' dollars on picking winners that are currently unproven—the problem of climate change will be solved. Somehow they dream that Australia's obligations will be met, that Australia's economy will have transitioned and that they will be able to move on to the things they enjoy best, like stripping workers' entitlements and giving tax cuts to those who need them least.
I want to be on the right side of history. I am proud to stand here today as we debate Labor's plan to cut carbon pollution and drive investment in clean energy technologies and infrastructure. It is a plan that will help build the clean energy that future generations deserve. In my first speech to this place, I spoke of my desire to achieve positive outcomes for future generations while I serve as a senator. This legislative package will achieve positive outcomes for my grandchildren and all of our grandchildren.
I was fortunate enough to be a member of the committee that looked at these bills, the Joint Select Committee on Australia's Clean Energy Future Legislation, which concluded that the bills should pass. At the hearings of this committee, members were able to hear from and question a variety of witnesses from government, industry, non-government organisations and academia. Many of these witnesses acknowledged the benefits that would flow from the range of reforms encompassed by this package, including the recently passed Carbon Farming Initiative, the Jobs and Competitiveness Program and the Household Assistance Package.
At the hearings, it was evident that there still exists a strong level of uncertainty, which is somewhat understandable given the misconceptions about the reforms that have been propagated by opponents to a price on carbon. I asked Mr Blair Comley, Secretary of the federal Department of Climate Change and Energy Efficiency, if the claims made by the Australian Trade and Industry Alliance that Australians will pay a higher carbon price than that paid in the European Union were accurate. Mr Comley provided a detailed explanation as to how the ATIA did not compare like with like in their analysis and that, on a like-for-like basis, the EU scheme is more than five times the size of the Australian scheme. When I raised this answer with Mr Greg Evans, chief economist of the Australian Chamber of Commerce and Industry, who badged themselves as the ATIA for this campaign, and asked why the false ads were not promptly pulled after their error was discovered by the media, Mr Evans provided not much of an explanation. It appears that one of Australia's leading industry representatives is quite happy to spread falsities for political gain.
In fact, this was a general theme of the hearings, where there was a lack of detail in a lot of the reasoning by those opposed to a price on carbon. I contrast this to the enthusiasm and clear, rational contributions from witnesses who were in favour of a price on carbon. A highlight of the hearings was the enthusiasm from a number of witnesses about the government's Carbon Farming Initiative, which will give those in Australia's vast rural sector an opportunity to secure economic rewards from their continued strong management of their land. Credits generated under the Carbon Farming Initiative and recognised for Australia's international obligations under the Kyoto protocol on climate change will be able to be sold to companies with liabilities under the carbon pricing mechanism. This includes credits earned from activities such as reforestation, savanna fire management and reductions in pollution from livestock and fertiliser.
Putting a price on carbon is not an extreme or radical idea. To continue to say that we are acting ahead of the world is bewildering given the access to information in the year 2011. A simple online search can enlighten those opposite about the multitude of emissions trading schemes that are in development or in action across the world, emissions trading schemes that will one day link in with Australia's to provide for the lowest cost abatement.
At a hearing of the select committee, in response to a question from one of the opposition senators on the limits of international linkages, Mr Martijn Wilder, the head of global environmental markets at the law firm Baker and McKenzie, said:
One has to be a realist here. If we continue to wait forever for a global agreement that is comprehensive and to which everyone agrees we will never see emissions reduced.
… … …
We need to be working on all fronts to achieve reductions. We do not have time to wait around to see which one is going to be best.
That is exactly what the government, like many governments the world over, acknowledge and are moving to rectify.
The facts are that several states of America, many provinces of China and the entire European Union already have a price on pollution. Just last week, the California Air Resources Board, the regulator of the eighth largest economy in the world, unanimously adopted a set of cap-and-trade regulations. This landmark set of air pollution controls will address climate change and help the state achieve its ambitious goals to reduce carbon pollution to 1990 levels by 2020. The system will begin in 2013 and put a price on heat-trapping pollution by allowing California's dirtiest industries to trade carbon credits. It has been years in the making, overcoming legal challenges and an aggressive oil industry sponsored ballot initiative. A second phase of compliance begins in 2015 and is expected to include 85 per cent of California's emissions sources.
… adoption of a cap-and-trade program is a major milestone for California's continued leadership on reducing the world's greenhouse gases. As I said both when we signed the legislation in 2006, and when we fought to protect it last year when Texan oil companies attempted to overturn it with Proposition 23, the most critical phase in the fight against climate change is diligently, aggressively, and correctly implementing this law.
It is a great tragedy that Australia's own self-proclaimed action man cannot bring himself to support a price on carbon like fellow conservative and action man Governor Schwarzenegger. It is a great shame that those opposite cannot put short-term political interests to one side and get on with the tough reforms needed for our nation's future, reforms that many on that side actually support. All we hear from those opposite is the politics of fear, from pledges in blood to threatening businesses to not hedge and buy permits because a coalition government would not refund them, to promising to abolish the household compensation. I am proud to stand here on the government side and say that we are pushing an agenda of hope. Day after day in this place, we push a positive agenda for Australia's future that will cut pollution, support households, support jobs and grow renewable energy use in this great country.
This legislation is based on a lie and is fraudulent in that rather than reducing carbon emissions published Treasury modelling shows that such emissions will actually increase if this scheme is introduced. Julia Gillard solemnly promised before the last election that there would never be a carbon tax under a government she led. There is no doubt that Ms Gillard was elected on the basis of that statement because it allayed public concern about the proposed tax and emissions trading scheme—which the Labor Party then proposed—and the amount that these measures would add to the cost of living for average people. However, as we all know, once elected Ms Gillard broke her solemn promise to the Australian people to never introduce a carbon tax, the promise on which she was elected, and introduced a carbon tax in what must be the biggest deception in Australian political history. John Howard, as I am sure everybody will recall, changed his mind about the goods and services tax. But he took the proposition that we should have a goods and services tax to the people to gain their endorsement before introducing that tax. That was the right thing to do and Ms Gillard should have done the same thing with the carbon tax.
As I said, not only is this legislation tainted by being the outcome of a lie but it is fraudulent. It is fraudulent because according to Treasury modelling this legislation will not result in a reduction of carbon emissions in Australia at all. In fact, on Treasury's published figures emissions are predicted to rise from 2015. Under this emissions trading scheme, rather than reducing emissions polluters will be able to trade them off with carbon credits from a rainforest in Indonesia or some such place. This is just nonsense and a further insult to the people of Australia. The losers from this legislation will be the Australian people and the only winners will be the merchant bankers who will make millions from trading carbon credits. Carbon emissions, by the Treasury's own figures, will increase from 578 megatonnes per annum in 2012 to 621 megatonnes per annum.
The last time that we debated this issue was in the CPRS debate in 2008. In 2009, the Minerals Council of Australia said that Rudd's failed CPRS would have cost thousands of jobs and billions of dollars of investment in regional and remote Australia while failing to materially reduce global greenhouse gas levels. In September of this year, the Minerals Council of Australia published an article outlining the extensive damage to jobs that would be caused by a Gillard government carbon tax. It stated that in Australia just 93,610 employees out of a total manufacturing force of over a million are employed in sectors designated to receive assistance under the Jobs and Competitiveness Program, which is the government's primary initiative to safeguard trade exposed industries. This represents just 8.95 per cent of manufacturing employment.
Further research undertaken by the Minerals Council of Australia compares the carbon tax of the Gillard government with the European Union's emissions trading scheme and illustrates the widespread negative outcomes that it would have for our economy. Under the European Union scheme, 48 per cent of manufacturing value-added is covered by industry assistance provisions. In Australia, only 22 per cent of manufacturing value-added will be eligible for assistance. Under the EU scheme, 78 per cent of manufactured exports will be eligible for safeguards to ensure that they remain competitive under carbon pricing. In Australia, only 41 per cent will be covered. The EU assistance provisions cover 52 per cent of employees in the mining sector. The coverage in Australia, where we have a huge mining industry, by contrast is minute.
Importantly, seven per cent of employees in the European Union work in industries that will receive assistance to prevent loss of competitiveness and resultant carbon leakage. In Australia, just one per cent of Australian jobs are covered by competitiveness safeguards. Families and households need to be a priority when considering this carbon tax. However, if the Gillard government continues to ignore the plight of industry, it has the option of moving overseas to places like China, the gulf or Indonesia, where—ironically—electricity generation is much dirtier. On the other hand, families and households will end up paying a carbon tax. They will pay, indeed, with a higher cost of living and potentially pay with their jobs. Under the government's own figures, three million Australian households will be worse off under the carbon tax. Analysis by the WA Treasury shows that over half of WA households will be worse off under a carbon tax, as the government's supposed assistance will not fully compensate households for increases in their costs of living. Australia's forgotten families are already struggling with soaring costs of living, and the carbon tax will make a bad situation much worse. Australians will pay $9 billion in carbon tax each year and see their electricity prices go up and up. If this legislation passes, with the support of the Greens, it will mean a 10 per cent increase in electricity bills in the first year alone and a nine per cent increase in gas bills in the first year alone. It will mean higher marginal tax rates for low- and middle-income earners and a $4.3 billion hit on the Australian budget bottom line.
Interestingly, a number of economists argue that carbon pricing is not likely to be as effective in reducing emissions as other methods, such as direct investment to accelerate the development of competitive renewable or non-carbon sources. It is argued that, while a carbon tax may initially influence some industries to increase energy efficiency, in the longer term it may not be enough to instigate investment in lower carbon technologies and processes. So, arguably, the institution of a carbon tax will discourage research into lower carbon technologies.
Western Australia and Queensland, as Australia's largest states, stand to lose more than most if this carbon tax is introduced. These states' decentralised economies and large geographical areas mean the impact of higher energy prices and transportation costs will be felt extra hard. This will mean a profound effect on Australia's international competitiveness. The Western Australian Chamber of Commerce and Industry echoed this concern, noting that the proposed carbon tax is not part of a global solution. As the WACCI noted, none of Australia's trading competitors have an economy-wide carbon tax or a price on carbon. The last speaker talked about the fact that there are some emissions trading schemes around the world, but our major trading partners are China, India, the United States, South Korea and Japan. In 2008 I went to a renewable energy forum in Beijing. At the end of the last session I asked the Chinese, Japanese and Korean delegates to tell the forum whether or not their countries planned to have a carbon tax or an emissions trading scheme. The answer I got was no.
Only last week, during the Commonwealth Business Forum of the CHOGM conference in Perth, I went to the session with India and I asked the same question. I said we would be debating a carbon tax this week in the Senate and asked them whether they were going to introduce a carbon tax or an emissions trading scheme in India. The response I was given was that this was not seen as a significant problem in India and no, they would not be having a carbon tax, much less an emissions trading scheme. The WA Chamber of Commerce and Industry, adding to the report I mentioned above, said that a carbon tax will add to the cost of doing business and has the potential to discourage new investment. So I ask: how then can the government claim that a carbon tax will be good for Australia? The proposition simply defies logic.
A vote for the carbon tax, in my view, is a vote to decimate Australia's standard of living, to rip the heart from our competitive trade landscape and to ravage jobs, all for no gain whatsoever to the environment. It cannot correctly be called economic reform when incomes, productivity and our gross domestic product will ultimately fall. Far from reform, it is a national disaster, in my view.
As the Australian Industry Group noted, the introduction of a carbon tax coincides with a period of intense global uncertainty and uneven economic performance across the world. The manufacturing industry has already seen a 10 per cent reduction in its workforce over the past three years and stands to be particularly affected by the imposition of a carbon tax. According to the Business Council of Australia and the Minerals Council of Australia, uncertainty is something business fears and they want certainty. There is no doubt, however, that this tax will do nothing but bring uncertainty and realise the worst fears of both the Business Council of Australia and the Minerals Council of Australia as business attempts to cope with ever-increasing but unpredictable costs and the loss of core markets.
Trade exposed industries will bear the burden of a high cost on their business, a cost which their competitors will not share. According to the Business Council of Australia the government's carbon tax legislation does not include adequate clauses or safeguards which would secure industry arrangements in the Jobs and Competitiveness package, address the risk of adverse economic impacts of the policy, manage the impact of external economics especially during the fixed price period, or address the risk of Australia being economically disadvantaged as a result of the limited progress in international negotiations to put demonstrable prices on greenhouse gas emissions. Finally, the legislation does not provide arrangements for trade exposed industries which mean they could maintain their competitiveness in the absence of international competitors having a price on their greenhouse gas emissions. However, I am pleased to say there is another way, a better way and a more effective way, and that is the coalition's direct action plan. It is a strong and effective policy that will reduce carbon emissions by five per cent by 2020 and will achieve that reduction without imposing a great big tax on everything in this country and making our industries uncompetitive. Our direct action plan is costed, capped and fully funded from savings to the budget. Direct action means no cost to households, no new taxes and no increase in electricity prices as a result of a misguided policy. There is an alternative to this carbon tax. Most importantly, there is no need for Australia, a country producing just over one per cent of world emissions, to risk introducing an emissions trading scheme, which will cripple the effectiveness of our industries, increase the cost of consumer goods and put Australia out on a limb with no-one to trade with once these expensive carbon credits are introduced—if in fact they are—in 2015.
In conclusion, I believe this is easily the most corrupt piece of legislation to have ever been brought before this parliament. I am sure the Gillard government will discover the public's feelings about this legislation when the next election is held and the people have an opportunity to have their voices heard on this matter.
It is with great pride that I rise today to speak on the nation's first climate laws. This is truly a historic day for our nation. Today we reject the short-term, greedy and selfish thinking that has seen us deplete the world's non-renewable resources and pollute our atmosphere to the extent that it threatens our very survival. Today we think of the future of this unique planet, and we act for the good of our grandchildren's grandchildren and all the other creatures that we share this place with. Today we can hold our heads high.
I am a proud Queenslander and 10 months ago we suffered the state's worst flooding in my lifetime. While we came through that devastation stronger and more unified as a community, our spirit and our environment do have their limits. Scientists predict that there will be more wild weather, more intense cyclones, more crippling droughts and more terrible floods as the climate changes. It is on our watch now. My state is home to the internationally significant Great Barrier Reef and Wet Tropics rainforest. Both of these beautiful biodiversity icons and great tourist attractions are under threat from climate change. We have come a long way since John Howard said that a six-degree rise in global temperature would make it uncomfortable for some. Now we have reef scientists like Professor Ove Hoegh-Guldberg saying that even a one-degree rise would lead to massive coral bleaching—and we are already at a 0.7-degree rise. We must do all that we can to protect this underwater paradise, the $6 billion annual boon that it delivers us and the 67,000 people who rely on it for their livelihood.
It gives me great joy that today we take these first crucial steps toward mitigating runaway climate change. I am most excited about the $10 billion renewable energy funding package and the almost $1 billion biodiversity funding package. It is thanks to the Greens that we have the Multi-Party Climate Change Committee, which led to the carbon price. It is because of the Greens that those complementary measures are included in the package. I want to thank Senator Christine Milne, Senator Bob Brown and the member for Melbourne, Adam Bandt, for their tireless work, their vision and their selfless dedication to the future of this world.
In Queensland, the sunshine state, we have such potential to become a renewable energy powerhouse. Our economy, with the carbon price, is projected to continue its strong growth in all sectors in the decades to come. With the $10 billion Clean Energy Finance Corporation for renewable energy, negotiated by the Greens, we have exciting new prospects. Queensland has promising geothermal deposits. We have wave and tidal potential and, to a lesser extent, wind potential. But we have unparalleled solar resources. Rather than doubling our coal exports in the next 15 years to help the world's fossil fuel addiction and then shipping it out through our Great Barrier Reef, I would like to see Queensland build solar thermal power plants generating clean, baseload renewable energy for domestic use and exporting clean technologies to the world. I would like to see Queensland leading Australia's charge in the new low-carbon economy.
Recently, experts from the University of Melbourne in conjunction with Beyond Zero Emissions have found that we have the technological capacity to power our nation with 100 per cent renewables within a decade. Through the carbon price package, we have tasked the Australian energy market operator with preparing plans for the grid to do just that—to operate with 100 per cent renewables. That is good news not just for the planet but for job creation. Numerous reports have found that renewable energy generation is far more job intensive than fossil fuel energy generation. It is no longer, nor was it ever, a question of jobs versus the environment. We can do both. Green jobs will be created in manufacturing, ecotourism, renewable energy, energy efficiency, public transport and the list goes on. They will be that the boom industries of the future, and Australia can now be part of that. Thanks to the carbon price package and the $10 billion Renewable Energy Fund that the Greens negotiated, Australia now has the opportunity to be a world leader in green industries. With Australian innovation and technological investment we can create a clean, green boom which respects and protects our fragile environment. The economic benefits of a low-carbon future are clear, but the beauty of this package is that it helps people along the way to that new future. There is almost $1 billion in grants for energy efficiency programs for the manufacturing sector, small business, foundries and community groups. Similarly, and at the behest of the Greens, there is a $200 million Low Carbon Communities fund to help low-income households and community groups manage rising energy costs through energy efficiency upgrades, which is the best way of helping people out of energy poverty and at the same time allowing them to do their bit to reduce their emissions. And of course more than half the revenue raised from the carbon price will be given back to households through tax cuts, higher family payments and increases in pensions and allowances. This does not negate the benefits of the carbon price—quite the contrary. The carbon price will be paid by polluters, sending the market signal that it will cost to keep polluting. If they pass that cost on, rather than innovating and investing in renewable energy or energy efficiency, households will be compensated for that price rise. But shoppers will see on the shelves the comparatively lower prices for products made with less pollution, and they will be able to reinforce that market signal to polluters with their purchasing power. And they will, because Australians care about our future.
The lifting of our target of cutting our emissions by 80 per cent by 2050 will bring a smile to the faces and probably a tear to the eye of many parents. My support for these bills is for my daughter's future. And while the package is not as ambitious at the outset as the Greens would have it, it is designed to be strengthened and to keep pace with our understanding of climate science. That is a crucial point. The Greens will always support science based policy. We must act because there is simply too much at stake. Renowned climate scientist Professor Will Steffen said in his 2009 report on the impacts of climate change on biodiversity that, globally, mass extinctions are likely without urgent action to reduce greenhouse gas emissions. Cloud forests and other highland rainforest types are predicted to contract and fragment across the wet tropics of Queensland, and with a two-degree rise projected native tropical rainforest vertebrates such as the beautiful ringtail possums, tree kangaroos and many fantastic insects will be sent to extinction.
CSIRO says our underwater biodiversity is already affected by sea level rise, increased ocean storm intensity, ocean acidification and increasing sea surface temperatures, and that these effects will cascade throughout our marine food chains with flow-on effects that cannot be fully anticipated. Great Barrier Reef waters are predicted to become more acidic with greater carbon dioxide concentration, decreasing the capacity of corals to form the skeletons which are the backbone of the reef and the habitat for so much of its rich biodiversity. CSIRO also notes that climate change will exacerbate existing threats to biodiversity, such as fire, invasive species and the availability of water.
Acting on climate change, of which this carbon price package is the first step, will help maintain the 67,000 jobs dependent on a healthy Great Barrier Reef and the thousands more dependent on Queensland's rainforests and wonderful biodiversity. The $948 million ongoing biodiversity fund the Greens negotiated into the carbon price package will help protect biodiversity and create jobs in rural and Indigenous communities by funding biodiversity projects that establish, restore, protect or manage biodiverse carbon stores. For example, landholders will be supported to maintain existing vegetation, restore habitat or plant new vegetation where it would create wildlife corridors, and they can also receive funding to control weeds, pests and feral animals. That is a great outcome for our climate, our biodiversity and our land managers.
Our land managers will also benefit from action on climate change, because climate change threatens to undermine Australia's food security. Agricultural productivity is projected to decline by 2030 over much of eastern Australia due to increased drought, reduced water resources and higher temperatures. That is a huge threat to our rural communities and to Queensland's economy which we must address. Already we are going to need to draw on the best knowledge and experience of the ag sector to help us adapt and to ensure food security in the years ahead. Frankly, that is all the more reason not to deplete the precious underground water resources of the Great Artesian Basin on which much of our farming relies with coal seam gas mining, but that is a story for another day.
I said in my first speech in this place that I could not think of a greater honour than to be part of the parliament that passes climate laws. One day our great-grandchildren will talk about this day, and they will thank all of us in this chamber for having the foresight and the good sense to finally start to take action on this most pressing of global issues. So it is with unshakeable hope for our future that I commend this bill to the house.
I am very proud to be part of a government that is making history through the package of clean energy bills now before us in the Senate. We are making history as a nation alive to the immediate danger that is the global energy challenge. At such times we are called upon to be bold, to do what needs to be done, to recognise that we have to shake off a national complacency and play our part in the changes that are occurring all over the world.
Our focus in this package is an achievable, affordable and transformative agenda. It represents a challenge to all Australians in every walk of life. We know that. But it is we who have to bring the political leadership to the table, and part of this challenge is to bring the nation with us. At a time when the global economic situation is shaky and energy costs are rising, institutions everywhere are under pressure, and that is the pressure we are all feeling. It is reflected in the many small decisions we make about the issues that we feel we can control. But as politicians this is the time when we also have to be of strong heart and steady resolve.
Many speakers today have already spoken about the evidence of climate change—its devastating impact on Australian landscapes, whether that be the loss of native species, bleaching of the Great Barrier Reef, unprecedented bushfires, higher temperatures, frightening lightning strikes, the distinctive rainfall pattern changes in Western Australia or melting polar icecaps and melting glaciers. Globally the evidence is of desertification across the African continent, floods, storms and rising sea levels in the Pacific region. These issues were discussed at CHOGM, as they continue to be discussed at other forums and conferences around the world.
The environmental pressures and impacts are one perspective of this important debate. There are other perspectives as well: the economic impact of climate change, the peak oil challenge, the global energy crisis, the implications of the Fukushima disaster and the decision by several countries to move away from nuclear energy to renewables. We have evidence of the national security implications of the climate crisis too, including the possibility of millions of climate refugees needing to be accommodated around the world. The international debate includes concerns about the 'energy tsunami' that would be triggered by a loss of access to foreign oil. And it is beyond challenge that the pathway to sustainable development for growing economies is through the development of a green economy and the eradication of poverty.
I have recently returned from the international Inter-Parliamentary Union Assembly in Switzerland where I was able to articulate Australia's efforts and commitment to dealing with climate change and a clean energy future. And nations are observing our efforts and following our example, taking from Australia's lead to seek to put a price on carbon and end our reliance on carbon based fuels. Across the globe investment in renewables is bringing down the cost of those technologies and, with that, growing the green economy. In Germany, the decision to decommission that country's nuclear power plants by 2023 has seen a determination to invest in wind, solar, geothermal, hydro and biomass technologies, and the challenge for the German government is to meet the commitment for its baseload power within our generation.
In the fast-growing Indian economy, the investment of research and development in thorium based technology as a viable alternative to any nuclear option is exciting and something that we, here in Australia, should also be considering, as are Norway, America and several European Union members. I am very pleased to see that there will be a thorium symposium held at the end of the month in Canberra to stimulate that conversation. I encourage every member and senator to respond to the invitation from Thorium Australia to be involved.
Next year, 20 years after the Rio Earth Summit, there is another summit scheduled for Rio in a world very different and very changed in two decades. We are an increasingly educated population, alive to the need to conserve our consumption, to improve our energy efficiency, to reduce waste and to improve our energy usage, and as the demand for renewable energy grows we know the costs will continue to fall. The energy economy focuses on the costs of oil and coal and on the perspective of depleting global energy sources needed to feed a rapidly growing demand all around the world as we sustain a seven billion population on this planet. It focuses on the green economy—green industries and innovation, green jobs and green investment. We all know that many in the opposition recognise and acknowledge those challenges—including a former Prime Minister, Mr Howard—privately acknowledging that Mr Abbott's 'direct action' plan lacks ambition. There are others, the nay-sayers—including Mr Abbott—who are the voices defending the status quo, the ones with a vested interest in perpetuating the current system no matter how high a price the rest of Australia will have to pay.
Of those who say the government is being too ambitious in its targets, I ask that they consider the evidence: what the world's scientists are telling us about the risks we face if we do not act. Another response from the IPU delegates was a sense of disbelief that there are still people in Australia denying that climate change is real. The leading experts predict that we have less than a decade to make dramatic changes in our global warming pollution or we may lose our ability to ever recover from this environmental crisis. When the use of oil and coal goes up, pollution goes up. When the use of solar, wind and geothermal increases, pollution comes down. It is very straightforward. Around the world, as witnessed at the IPU, there is a strong appetite for change. It is a case of enlightened self-interest for some but it is now a mainstream debate in every forum—a shift from environmental economics to the main debates of the assembly as well as incidental conversations and bilateral discussions. There was a clearly articulated argument about the important need to deliver material wealth without the expense of growing environmental risks, ecological scarcities and social disparities.
So we, as a government, recognise the importance of transitioning to a green economy. There are sound economic and social justifications. But there is also a strong case for a redoubling of efforts by both governments and the private sector to engage in such economic transformation. That is what this package of legislation is seeking to deliver through the development of a carbon price mechanism and through outlining the entities and emissions that are covered by the mechanism, how emission units will be issued, how carbon units will be defined and allocated, how costs will be contained through price floors and ceilings and the fixed charge period, and how the mechanism will link to other emission trading schemes. We have recognised that there are emissions-intensive trade-exposed activities and coal-fired electricity generators that need support and assistance. We have framed the establishment of the Clean Energy Regulator to administer the mechanism and enforce the law as well as administer the National Greenhouse and Energy Reporting system, the renewable energy target and the Carbon Farming Initiative, as well as the independent body, the Climate Change Authority, to advise government on key aspects of the mechanism, and the Land Sector Carbon and Biodiversity Board, which will advise on key initiatives in the land sector.
But we need to do more than that. We need to increase the value, integrity and efficiency of our national grid. So the Tamberlin report, released today by the O'Farrell government in New South Wales, has important implications for the integrity of our national energy supply. As a nation, we need to improve our commitment to efficiency and conservation, so public education is also a critical factor in this clean energy package. Of course, we could and should speed up this transition by insisting that the price of carbon based energy include the costs of the environmental damage it causes. That is why we should tax what we burn, not what we earn, and the package includes a reduction in personal taxation limits and a price on the carbon emissions of heavy industry. This is the single most important policy change we are making: those who pollute our environment need to be encouraged to recognise that there is a cost.
We know that Australia has to join the global community and lead efforts to secure an international treaty that includes a cap on CO2 emissions and a global partnership that recognises the necessity of addressing the threats of extreme poverty and disease as part of the world's agenda for solving the climate crisis. We cannot do this alone, nor can we put up a barrier around our borders and pretend that we are not part of the global problem through our mining efforts and therefore do not need to be part of the global solution.
New ideas are by their very nature disruptive but far less disruptive than a world running low on drinking water and productive land, set against the backdrop of climate change, extreme weather events and rising natural resource scarcities. What is important for all Australians to understand is that a green economy does not favour one political perspective over another. It is relevant to all economies. It is a way of realising development at the national, regional and global levels and in ways that resonate with and amplify the implementation of Agenda 21. We are already making this transition in Australia to the green economy. We need to maintain the momentum, to foster the innovation that is characteristic of a transformative policy agenda. So we acknowledge that as a nation we have been subsidising fossil fuels for decades. We have to enable an environment for change, we have to foster new market based instruments, we have to target public investment to green key sectors and we need to focus on greening public procurement and improving environmental rules and regulations and their enforcement mechanisms. And we need to add to market infrastructure in our international trade and our aid flows and foster greater international cooperation. This is the strength and these are the features of the package before us today. I commend them to the Senate.
I rise this evening to contribute to this debate and to make the obvious point that, as we all know, history will judge this 43rd Parliament very harshly, but the worst and strongest criticism will be reserved for these so-called clean energy bills. I can see already the epitaph, which will be along the lines by the historians, 'Never through the decision of any Australian parliament have so many lost so much for so little.' Regrettably, what we see here is ideology replacing policy, and it was pretty poor policy to start with.
This is legislation based on a lie from a government which itself is here as the result of a lie. I quote the words of the Prime Minister, Ms Gillard, in the days leading up to the 2010 election, which will resonate around this country for many years to come: 'There will be no carbon tax under a government that I lead.' Given the fact that the new tax is not to be introduced until 1 July 2013 she was probably right, because with any luck there will have been an election and, therefore, a change of government by that time, or certainly her own side will have cast her aside as she and the other lot cast aside previous Prime Minister Rudd. It was bad enough that the Prime Minister came out with this lie in the days before the election last year, but let me quote the Deputy Prime Minister and Treasurer, Mr Swan, when he said: 'We certainly wish to reject the hysterical allegation of the Liberal Party in their advertising that we are leaning towards a carbon tax. We certainly want to reject that.'
Just in case truth might get in the way of the stories that we are hearing this evening, let me tell a few stories about carbon dioxide, because it is important for the wider community to know what we are vilifying. In the air what percentage or proportion is carbon dioxide? It is less than 0.04 of one per cent. It is one twenty-seventh of one per cent. What do the humans in the world produce? The easiest way for me to describe it to you is that all of mankind on this planet contributes one molecule of carbon dioxide for every 90,000 molecules in the air. But it gets even more interesting. In Australia, where we produce only one to 1½ per cent, the best way to describe it to the wider community is that Australians contribute one molecule of carbon dioxide for every nine million molecules of air. That is the effect we are speaking about. Carbon dioxide is being vilified as a pollutant. What have we always known? For the growth of plants carbon dioxide is essential. Carbon is essential for our own beings. We inspire and we expire carbon dioxide. When we want to stimulate plant growth we do it by using carbon dioxide.
Then there is the greatest myth of all. The fact is that with Australia's contribution of less than 1½ per cent of greenhouse gases in the world this legislation, if and when passed, will contribute absolutely nothing to the improvement of the environment. In fact, through what is called carbon leakage, probably it will have a negative effect. The best and easiest example of that is zinc. In this country, because of our efficiency, we transfer a tonne of zinc for three tonnes of carbon produced. When our zinc production in this country disappears as a result of this legislation, if passed, the best that the Chinese can do is a tonne of zinc for 10 tonnes of carbon—350 per cent less efficiency than Australia. That is the type of scenario we are speaking about.
I refer, as others have done, to the impact on business in this country should this legislation be passed. The normal trader in the street will be facing job losses. They will be facing competition and they will be facing added costs for no benefit. If per chance they should be producing a product for which there is competition from overseas, they will immediately be disadvantaged simply because their international competitor will not be saddled with this carbon tax in the country where it is produced.
But then we go a stage further, to our own exporters. Only last week was I speaking to a grain producer who adds value to grains in Australia—that is, rolled oats, barley, peas and others—and he exports around the world. He said to me: 'I can compete, Chris, with those in Asian countries who are paying $1 per hour for labour, and I'll tell you why: because I have invested richly in infrastructure, in high-efficiency equipment and in automation.' That is what has allowed that company in rural Australia to remain competitive. As he said to me, the very technology in which he has invested to remain competitive will now be the subject of heavy taxation because it is all energy intensive. Jobs will go, that company will close and Australia will be the poorer for the example.
We see it all around the nation. Last week I was in Kalgoorlie talking to miners and others about the potential of that area. We talked about the potential of magnetite, which I heard my colleague Senator Johnston speak about this evening, and the absolute enormity that is required for energy consumption in magnetite processing and the value-adding of magnetite. The figure of 400 million tonnes of freight moved on Western Australian roads resonates when you look at the fact that we will be looking at a 10 to 15 per cent increase in fuel costs. Many of the operations are still using diesel-powered generators. They are using 5,000, 6,000, 100,000 and even up to one million litres a month to run their diesel-powered generators. They will simply not be able to survive this circumstance. We have been told by the government that there will be no impact on agriculture. Hello! The big inputs to agriculture—fertilisers, chemicals, fuels and other forms of transport—are all to be taxed as a result of this new taxation on the Australian consumer. All of it, of course, will be for no gain to the environment and a simple loss to Australian industry. We know that there will be significant increases in the cost of domestic air travel, and this in a country that relies, as we have come to see in the last 48 hours, so much on its domestic air travel.
I turn now to the impact on the community itself. The government has admitted a modest increase of up to 10 per cent in energy costs and nine per cent in fuel costs. I just say: where in the world do they think this is a modest impost? This increase is before—and I will come soon to the famous 500 polluters—we see the actual impact that will be borne by industry as a result of this tax. What has happened to democracy in this country? The surveys are telling us that 80 per cent of the community are opposed to this tax. Australian manufacturers have come out and said to the government, 'Not now,' because of the uncertainty in Europe. The union movement has come out and said, 'Not now.' The Australian Industry Group, no friends of our side, have come out and said, 'Not now.' But all we see is a government hell-bent on introducing legislation that will assist nothing when it comes to the environment.
What is interesting in the whole debate is the fact that compensation will be paid to low-income people, pensioners and other members of the community. Therefore, where is the incentive for these people to change their behaviours if they are going to be compensated? But we know the real truth. We know that the actual increases will far exceed the compensation to be offered. We also know, as is inevitably the case, that eventually this form of compensation will be wound back or wound out altogether. What then happens to people in the low socioeconomic sectors when they have been so richly cheated like this?
Why is it that we are saving more at the moment than we have since the 1960s? The reason is that people do not trust this government as an economic manager and they certainly do not trust this government to implement this legislation. We have heard this Labor government go on about the Howard government and the GST. I remind the chamber yet again of what Mr Howard did when he made the decision that a GST was appropriate for this country. He went to the people in an election and said, 'If I get a mandate I will introduce this.' This is what we call on the Gillard-Brown government to do. Go to the people and seek a mandate, particularly since she told us there would be 'no carbon tax under a government that I lead'.
I often reflect and ask others: why and how do people think it is that a country with such a large landmass as ours, the size of the United States, and with a very, very small population of 23 million people is such a wealthy country? Is it because of gold? No. Is it because of agriculture? No. Is it because of mining royalties and mining income? No, it is not. Mr Acting Deputy President Cameron, you know from your own industry that the reason Australia is in such a tremendous position in terms of per capita wealth is two words, and those words are 'cheap energy'. This country has been built on cheap energy. I am at an absolute loss to know why we are throwing this advantage away, why we are so hell-bent on getting rid of our coal and other products at ridiculously cheap prices, as seen by India, America and other countries—China included—so that they can enjoy the value and benefit that we have had in the past. I just do not understand where this comes from. This is an advantage which this country has been built on. This government is hell-bent on losing it.
Only recently the chairman of BHP Billiton, Mr Nasser, made this observation in public when in Melbourne: 'I have three strong principles for my company. The first is to maintain a strong balance sheet, the second is to invest in income-building assets and the third is to return a reasonable dividend to shareholders.' He then turned to the audience and said, 'It's not a bad principle for a government either.' If you have a look at the performance of the Rudd government followed by the Gillard-Brown government, you see that they fall very, very far short of those three principles.
Down at the household level, we all know that if a household is to survive over time it must always have its income exceeding its expenditure, otherwise that family goes into deficit. If it borrows and goes into debt, which indeed we all do, it ought to be for asset-building purposes and not for the wastage of liabilities. One need only look back over the history of this government, Rudd followed by the Gillard government since 2007, to see the squandering. There was a surplus provided to it by the last coalition government and now there is debt upon debt upon debt as a result of wastage through liabilities.
I ask the question: who are these so-called 500 big polluters who will be required to buy carbon permits issued by the government? Why the secrecy? Why can we not find out who these 500 companies are? Why are they being vilified? In any other country of the world they would and are being welcomed with open arms. Why be so secretive? Might these in fact be the companies that are the biggest employers in the nation? Might there be represented amongst them companies who are investing the most in exploration for the future asset building of this country, in line with Mr Nasser's comments? Might they be the companies that are creating new wealth for Australia—those who are participating in international trade or who have offshore operations and have every capacity to expand the Australian operations? I simply cannot for the life of me understand why this government is vilifying the very companies that we should be praising and helping. The obvious question is: to what extent will they be passing on these costs to the consumer?
I come now to part of the discussion that has been shared by others in this chamber this evening—that is, the activities of other countries. I will quote to you the thoughts of the foreign minister of Canada when asked, in the joyous outburst of praise and happiness over CHOGM, what his country's attitude was going to be. He said that neither Canada nor the United States would ever introduce an emissions trading scheme. Perhaps they did not look after him well enough in Perth. He went on to say that the ability to trade greenhouse gas emissions or carbon credits is something that is not going to happen in his economy. He said there is only one member of the parliament in Canada as a result of the last election who still supports this particular move and that is a Green member. He then went on to comment that, whilst President Obama of the United States had massive majorities in the House and the Senate, he could not get an emissions trading scheme through. His comments, as I report them, are not good for Australia because 'if the US and Canada do not go down a market road for cutting greenhouse gas emissions, it is impossible that anything remotely resembling a global market could emerge'. Asked if Canada would participate in a carbon trading scheme, he replied:
There's nothing to participate in. Where is it going on today?
That is the opinion of the Canadians.
In response to the comments made some minutes ago by a previous speaker with regard to the renewable energy scheme, I refer to evidence given to the United States House Select Committee on Energy Independence and Global Warming in September 2009, when we were debating the CPRS in this very place, by a Professor Alvarez, who is a professor of applied economics at the environment science faculty of the King Juan Carlos University in Spain. This was his summary of Spain's attempt to lead the world in green and clean energy transformation. For every one green job financed by Spanish taxpayers, 2.2 jobs were lost. Only one out of 10 green job contracts were in maintenance and operations of already installed plants. The others were only sustainable in an expansive environment related to high subsidies. He said that since 2000 Spain had committed €571,000 for each green job and that this had resulted in the destruction of 110,500 jobs. He went on to talk about the bursting of the bubble:
In Spain, we are witnessing the logical conclusion of an unsustainable policy of government subsidies and mandates of uneconomic forms of Energy.
He then went on to quote former British Prime Minister Lady Thatcher:
… "the problem with socialism is that eventually you run out of other people's money." That is what is happening in Spain's renewable energy business today.
In 2011 where is Spain in the overall European economic circumstance? It is facing the possibility of bankruptcy. If I can give you any advice at all for the Melbourne Cup tomorrow from another field, it relates to investment and picking winners. It is simply this: the good ones do not need it and the bad ones do not deserve it. We have seen in the United States in the past year or so the failure of solar energy companies backed by the Obama government. Governments of all persuasions cannot pick winners. If they are good enough to survive in the commercial world, they do not need a subsidy. If they need a subsidy, it is because they cannot survive. Examples can be given of companies that have failed to the tune of $400 million and $500 million simply because they had the wrong economic model. Who on the Labor government side is going to pick these winners? Who is going to spend the taxpayers' money to try to pick winners which industry, business and commerce nationally and internationally cannot?
Is it the case that the Rudd government was the worst in Australia's history? Was it even worse than the Whitlam government, with its failed promises, its pink batts, its school halls and its CPRS legislation, which we fortunately voted down in this chamber so as not to make a fool of Australia in Copenhagen? It is obvious that the Labor government thought it was as bad or worse because they got rid of him. Now we are faced with the prospect of the Labor government removing the current Prime Minister and either reinstating the last Prime Minister or finding another one. We exist in a democracy. If there is any doubt, particularly doubt based on the lie that 'there will be no carbon tax under a government I lead', then this Prime Minister has got no option but to do what her predecessors have done—that is, to go to the people and let the people decide at the polls whether or not they want the form of legislation that we are being asked to look at and to debate at the rate of one minute per senator per bill. It must be voted down.
It is a great privilege to rise today to speak to the Clean Energy Bill 2011 and related bills. Every bill debated in this chamber is important, but I suspect there will be few more important bills that I stand to talk on in my time in the Senate. These bills address a problem that is so daunting in its magnitude that former Prime Minister Kevin Rudd called it the greatest moral, economic and environmental challenge of our generation. He has been pilloried for that statement, but on this issue he was absolutely right.
The fact is our planet's climate is changing and we humans are making a major contribution to that change. We are an integral part of the planet that we live on. Nature is not something out there in faraway jungles or confined to reserves. It is a part of the world that we live in. Our transport, our industries and our individual actions are all changing the global climate in fundamental ways. These changes will affect all life on this fragile planet, not just our own. In the very acrimonious national debate that we have had on this issue, a debate that is often confined to the issues of taxation, compensation and industry restructuring, it is easy to lose sight of that very important fact. It is tremendously disappointing that it has taken us so long to get to this point. When you consider what is at stake and that we are really talking about the threat to all life on this planet, you would think it would be easy to get consensus on taking strong action. You would think that even erring on the side of caution would suggest that we take bold action without delay. Yet at almost every step of the way taking positive action on climate change has been a momentous struggle. Even now, on the eve of the passage of some of this nation's most important legislation, the country remains divided.
For me this is a straightforward issue; it is a debate about the very nature of science. I could stand here and talk, particularly to those opposite, about the irony of criticising reform in this area and the description of carbon dioxide as a colourless, odourless and weightless gas, when their own policy is one that is designed to remove tons of carbon dioxide from the atmosphere. I could stand here and give a defence of the science, but I will not do that because the simple fact is that there is a very clear consensus on climate change and its causes among those most qualified to speak on this issue. The scientific community agree that climate change is happening, that it is caused primarily by humans, that the most important emission as part of the process of climate change is carbon dioxide and that an increase in the amount of carbon dioxide in the atmosphere will have profound impacts on the planet. That is scientific fact. The consensus that has emerged is a result of the scientific process. It is the result of the publication of thousands of peer reviewed scientific papers. The simple fact is that not one credible, peer reviewed paper has been produced that challenges this fundamental proposition.
There might be some debate, it is true, around the pace of change and the intensity and scale of the impacts of climate change, but these are debates at the margin. On the fundamentals of anthropogenic climate change, the science is abundantly clear. Of course this does not mean we should not debate how best to respond to the scientific conclusions about how our planet is changing, but to call the science itself into question is dishonest, illogical and self-serving.
There is an important principle to reflect on more broadly than in the climate change debate. In this place we should never allow ideology to triumph over science or allow vested interests to determine the nature of our public policy response. If we do this, we diminish our ability to prosecute important reforms across a range of issues and to respond to crises. It is time to reflect on this very important principle as we continue to tackle climate change and the many other challenges that our nation faces.
As somebody who has worked for a long time in the field of medicine, as both a general practitioner and public health specialist, I have a particular interest in the issue of health care and how it relates to climate change. Climate change is not going to leave any aspect of our life untouched, and it will have a profound impact on the health of our community. In May 2009, the Lancet described climate change as the biggest threat to health of the 21st century. The Lancet is one of the world's most respected medical journals, hardly a bastion of leftist activism. It is a publication that is respected within the medical community, and in fact most people in this place, even those decrying the science of climate change, will most likely have benefited from some of the scientific work of the Lancet. The science of climate change is clear and it has widespread support.
The fact is that the warming climate will impact the health of Australians in many different ways. Some of the impacts will be direct, as we are forced to respond to extremes in our climate, but some will be indirect, as we struggle to cope with those impacts. Some examples: we know that extreme weather events are going to be a much more regular part of our post-warming world; we know that heatwaves will be longer, more frequent and more severe; we know that doctors and emergency departments are going to have to prepare for an influx of patients suffering from heat related conditions such as heat stress and dehydration; and we know that we can expect to see a significant increase in the number of deaths from these conditions. Sadly, as is often the case with issues like this, it will be the elderly, the very young and the very vulnerable who will bear the brunt of climate related illness.
Australia is already well acquainted with the horrors of extreme weather events. We have recently experienced the severe floods in Queensland and the bushfires in my home state of Victoria. Apart from the immediate threat to life and limb posed by rushing floodwaters, there are other, flow-on effects such as the contamination of drinking water and the risk of waterborne disease. All of these pose a huge challenge to our health services in times of flood. In my home state we know that after the events of Black Saturday, as well as those people who died from the direct impact of the fires, countless more were affected by airborne pollutants and by pollutants in water supplies. As well as these physical threats from extreme weather events, we also face an increase in a range of different diseases. Infectious and vector-borne diseases are going to increase. For example, we know that we are going to see an increase in the rate of gastroenteritis. We are going to see an increase in the rate of dengue and Ross River virus. We are going to see the range of those diseases spread across a larger area of Australia's landmass. Climate change, sadly, is going to have an impact on the nation's mental health. Livelihoods are going to be destroyed and communities devastated as people struggle to cope with lengthy droughts and other climatic shifts.
All of these effects will disproportionately affect not only vulnerable communities—low-income communities, the elderly and children—but also those who live in rural and regional communities, our farmers and our Indigenous communities. No-one will be immune from the impacts of climate change.
In my state of Victoria, we had a heatwave in 2009 that had devastating repercussions. During the hottest days of that heatwave, our ambulance service struggled with a 40 per cent increase in its workload. There was a thirty-four-fold increase in direct heat related conditions. We saw cardiac arrest cases increase by a factor of three. We saw hospital emergency rooms operate under a huge drain, including an eightfold increase in heat stress cases, and three times the usual number of patients were dead on arrival at hospital. There were in total 374 excess deaths. That is 374 deaths from one heatwave, in one state, over a very, very short period of time.
Worldwide, the effects of a small increase in temperature are alarming. The World Health Organisation estimates that warming since the 1970s has been responsible for more than 140,000 extra deaths up to 2004, and as many as 300,000 deaths by 2009. The impact of a further two degrees or more is certainly a cause for great concern.
The good news is that action on climate change is also a direct investment in the nation's health budget. In Europe, we estimate that a 30 per cent internal target for emissions cuts generated health benefits in the order of €30 billion saved—so in the ballpark of A$50 billion for a 30 per cent reduction in their internal emissions targets. The reality is that shifting to clean sources of energy is a health initiative as well as a climate one.
Economists talk about externalities in the use of our fossil fuels. It is one of the principles of modern economics. The whole rationale for pricing carbon is to internalise an externality imposing a cost on the broader community. One of the most insignificant but often most overlooked externalities is the effect of climate change on the health of a population. We know that the burning of coal and other fossil fuels has a number of impacts on human health. We know that locally it causes respiratory illness, cardiac disease, cancers, developmental disorders and a range of other conditions. It is very, very hard to overstate the importance of clean air to our health.
Of course, here in Australia we take pride in our clean environment, but even here the health costs of our dependence on fossil fuels are estimated in the billions annually. The health impacts of coal-fired power, combined with the health costs from transport powered by fossil fuels, have been estimated to be in the order of $6 billion. If coal were to truly pay its way—that is, as we said, if the costs were internalised—we would be levying a cost per megawatt hour that paid not just for the environmental impacts of burning that coal but also for the medical care and for the loss of life caused by coal pollution. That is why boosting investment in renewable energies, as these bills will do, is a health initiative as much as it is an environmental one.
This is particularly important in my home state, Victoria. It is crucial for serious action on climate change that the dirtiest of coal-fired power stations be closed. We know that one of the most significant parts of this package is that it will allow power generators such as Hazelwood in Victoria to tender for a buyout and closure. The closure of Hazelwood would significantly improve Victoria's environment, but it will also benefit the health of Victorians.
Of course, we should not stop there. We know that there have been exploration licences now granted for brown coal with a view to exporting coal to other countries. Unless we take action now to stop that emerging industry, not only do we put the health of people in our local communities—such as those people of Bacchus Marsh—at risk; we also stand to export the health risks of burning coal, and brown coal at that, to some of our poorest neighbours.
So I stand here very proudly offering my support for these bills. They are important for Australia's environment. They are very important for Australia's economy. But they are also very, very important for our nation's health. I am very proud of the role that our colleagues have played in this landmark legislation that is before the Senate today. I am proud of the role that Senator Bob Brown and Senator Christine Milne, who is here this evening, and Adam Bandt played in bringing this much-needed change to the Australian community. I also acknowledge the role that the current government have played in ensuring that we get a positive outcome.
The national debate on this issue has been a long one. It has been acrimonious. Politics and science do sometimes make uncomfortable bedfellows. But I have to say that, at this moment, I am very proud of the action that the Greens have taken and that the Australian parliament will shortly take: some very strong, bold and decisive steps when it comes to tackling the critical issue of climate change.
The Clean Energy Bill 2011 and associated bills will establish a carbon price in Australia. This has been a long and often bitter process, but this is a significant reform—vital for the health of our environment and essential for the future of our economy. The fact is our climate is warming. Globally, last decade was the warmest on record. Last year's global temperature was as high as records set in 1998 and 2005. In Australia, 2010 was one of the warmest years in our history. The fact that our climate is warming should not be a point of contention or debate. In the words of the IPCC, evidence for the warming of the climate system is unequivocal.
Despite the scepticism of some, the reason temperatures are rising is not an issue of serious debate either. The overwhelming majority of scientists agree that human activity is the principal reason for climate change. This is a position supported by all of the world's leading scientific academies. The Australian Academy of Science, along with the Bureau of Meteorology and the CSIRO, consider human activity as the most likely explanation for rising temperatures. A report by the CSIRO describes the scientific evidence that human activities are contributing to climate change as compelling. The evidence that humans are responsible for climate change is compelling, unequivocal and growing. Those wishing to argue otherwise are entitled to their view, but they should not expect to be taken seriously.
Whilst it is correct that the earth's climate has changed in the past, the current rate of temperature rise is unprecedented in human history. Global warming in the 50 years between 1956 and 2005 occurred at nearly twice the rate for the century beginning in 1906. Since 1910, Australia's average annual temperature has increased by 0.9 degrees centigrade. The principal reason for this rise is greenhouse gases. The most significant of these is carbon dioxide, a by-product of industrialisation and our dependence on fossil fuels. There is now more carbon dioxide in the air than at any point in the last 800,000 years. The consequences of a warming planet are already observable. At present, our sea levels are rising, the Arctic icesheet is receding, glaciers are melting and established patterns in our ecosystems are changing. If this continues, it poses significant challenges for this and future generations.
The impacts of climate change in Australia are particularly acute. The impacts of rising sea temperatures and sea levels are profound in a country where 85 per cent of us live on or near the coast. Rising sea levels threaten our coastal communities, placing them at an increased risk of flooding during cyclones and storms. Global sea levels are currently rising at around 3.2 millimetres a year, which is near the upper end of the IPCC's projections. This has already significantly increased the frequency of coastal flooding. Should the status quo continue, it is predicted to get worse. A mid-range sea level rise of 0.5 of a metre means that flooding events that now happen every 10 years will, by the year 2100, occur about every 10 days.
Rising sea temperatures threaten one of our great national icons, the Great Barrier Reef. Mass bleaching events, previously unheard of, have occurred on eight separate occasions since 1979. Research suggests that a one-degree centigrade rise in sea temperature could leave 65 per cent of the reef open to bleaching, threatening a tourism industry worth $5 billion to this nation annually.
Australia is the driest inhabited continent on earth. The impacts on water availability pose significant risks to food security and thus to our future prosperity. Because of climate change, water availability in southern and eastern Australia is likely to decrease, with significant reductions in the already troubled Murray-Darling Basin. Water availability, under a projected median temperature rise, would see a nine per cent reduction in the basin's north and a 13 per cent decline in its south by 2030, endangering the nation's food bowl. More broadly, Australia's agricultural sector is, in the words of a recent CSIRO report, particularly vulnerable to climate change, with potential negative impacts on the amount of produce, the quality of produce and the reliability of production. In a land of drought and flooding rains, climate change will exacerbate our existing weather extremes. New research detected a shift towards extremes of heat and rainfall consistent with higher concentrations of greenhouse gases. Climate change is also related to a drop in the frequency of cyclones but a rise in their intensity.
The impacts of climate change in Australia are acute, but the reasons for acting are economic as well as environmental. Successive reviews, by Professor Stern in the United Kingdom and by Professor Garnaut, show that climate change poses significant risks not only to our environment but also to our economy. Without action, Sir Nicholas Stern estimates that the costs of climate change will eventually be at least five per cent of global GDP per year. Both Stern and Garnaut argue that those economies that act quickly will be those best positioned for the future. In the words of Professor Stern, 'The benefits of strong, early action on climate change outweigh the costs.' The environmental and economic benefits of timely and decisive action are clear.
We must reduce the amount of carbon in the atmosphere by reducing our reliance on fossil fuels. The question of course is: how? Recent work by the Productivity Commission suggests that a broad based market response like a carbon price is the most efficient and effective mechanism for reducing carbon emissions. This is not news to me. I first proposed a modest carbon levy when I was Minister for Environment, Sport and Territories in the Keating government. A lot has happened since then, but this legislation, for the first time in our history, puts a broad based market response in place.
The Clean Energy Bill will create an emissions trading scheme designed to cut our carbon emissions by at least 159 million tonnes by 2020, with a five per cent reduction in carbon emissions by 2020 and an 80 per cent reduction of 2000 levels by the year 2050. This will encourage investment in low-carbon technologies where possible and abatement measures where necessary. Initially the plan is for this to be achieved by making the country's 500 biggest polluters pay for their carbon emissions and by using this revenue to compensate nine out of 10 Australians for the price impacts. After 1 July 2015, the market will determine the carbon price under a cap-and-trade ETS. For most Australians, the price impacts will be negligible. Many people in fact will be better off, as a result of the compensation which is offered in this package.
I think it is also important for us in this debate to acknowledge that our country is by no means alone in taking action on climate change. We often hear the deniers suggest that Australia is going it alone. That is not true. I recall a recent speech by the former Leader of the Opposition Mr Malcolm Turnbull, who many argue might well have lost his position as a result of the stand he took on the issue of dealing with global warming. In this speech—I think it was to the London School of Economics—Mr Turnbull reminded us that in China, the world's largest emitter, billions are being invested in wind, in solar and in electric vehicles. The European Union, Norway, Switzerland and New Zealand, I believe, have all introduced cap-and-trade ETSs, and three of our major trading partners—Japan, South Korea and China—plan to introduce similar initiatives. While we are at it, let's not forget what is happening in North America. In North America, seven US states and four Canadian provinces are set to put in place an ETS by 2015 as part of the Western Climate Initiative.
But do not think for one moment that it is only certain members of the Australian Senate who happen to believe that taking action on climate change is critical to our nation's future and in fact the future of the globe, because it was Mr Rupert Murdoch who said—
Oh, so that is why. You would appreciate that I do not often quote Mr Rupert Murdoch in the Senate, but—and it is important to remember this—he said that 'climate change poses clear, catastrophic threats' to our society. That is what Mr Murdoch said. And guess what? He was dead right about that.
I also know that this is an issue that brings into question, and has for a long time in this debate—certainly since I was Australia's environment minister many years ago—the relationship between expert advice and good governance and the relationship, if you like, between science and government policy. Sometimes politicians are criticised for depending on the views of experts and of scientists. Well, there are not a great number of climatologists, as far as I am aware, in the Australian Senate—in fact, I do not think that any of us in this chamber are climatologists. I for one listen carefully to the views of experts in the field, respect the views of experts in the field and am not ashamed to say so in a debate like this. I say that, faced with the overwhelming evidence for climate change, we must act.
Climate change is a generational challenge that requires a once in a generation response. It requires us to look beyond the near horizon of our immediate interests to the next generation and their future and to the future of generations after them. In politics, I have often argued that our goal should always be—using the words of Ben Chifley—to bring something better to the people. And that is what this legislation does. This legislation ensures that our environmental health and economic prosperity will be better for the people of Australia now and better for future generations. That is why I so strongly support this package of legislation before the Senate tonight.