Tuesday, 19 June 2012
Questions without Notice: Take Note of Answers
That the Senate take note of the answers given by the Minister for Finance and Deregulation (Senator Wong) to questions without notice asked by Opposition senators today.
In her answers today, Senator Wong again refuses to acknowledge that this whole carbon tax legislative process is based on one of the greatest political lies in recent political history—that is, 'there will be no carbon tax under the government I lead', a statement made by the Prime Minister, Julia Gillard, six days before the last election and then repeated in the days preceding the election. The government puts forward economy-wide percentages in the context of the cost increases that will apply to households, to business and to power prices but, as we have seen from questions asked by the opposition today, those things are quite variable and in some cases, like the ACT, they appear to be in excess of the predictions made under the modelling.
The modelling is economy-wide modelling, which does not take into account regional differences. In small regional communities such as Flinders Island or King Island, which are dependent on shipping to get all their goods and services on and off the island, or, for that matter, in a state such as Tasmania, which again is dependent on shipping and airlines for freight service on and off the island, there is a disproportionate effect. According to the advice that people on King Island have recently been given, for shipping the additional cost of the fuel levy and the carbon tax combined will be 12.9 per cent, and that is before GST. There will be about another 1.3 per cent on top of that for the fuel levy and the carbon tax, just for shipping things on and off King Island. As I indicated yesterday, King Island beef and King Island cheese are two significant brands in the Australian food sector—iconic brands, I would have to say. They are the best known brands in the country. The employees of those small businesses and the farmers who support them are disproportionately affected by the carbon tax, which is based on the lie: 'there will be no carbon tax under a government I lead'.
But the government has taken no account of that. It has not done any modelling to understand those regional impacts or the small business impacts. There is no support for small business. The owners of the little coffee shop next to my office tell me that their power bill is going to go up in excess of $6,000. They are not seeing any support. They are going to have to make a couple of thousand extra coffees, for example, to pay for that increase. A number of other imposts are being placed on businesses by this Labor government, particularly around their employment and wage costs. So, again, incremental increases in costs are being imposed by this government across the board. The government tries to separate them out by indicating that they are small in their own right and do not have a major impact; but, when you add them all up, you have a significant impact on the cost of doing business and that cost is being driven up by this government and its broader policies.
With respect to the carbon tax and agriculture, dairy farmers will be looking at an additional $10,000 on average for power costs for an irrigated dairy farm. Let us not mention the fertiliser and other input costs that farmers also have. Of course, we know that the processors will not be interested in giving dairy farmers extra money. The processors are more likely to pass back costs to the dairy farmers because they are playing in a global market and their competitors are not subject to the carbon tax that is being imposed on Australian dairy farmers. There will be the additional $10,000 cost on average for an irrigated dairy farm, and then farmers will be looking at a similar amount coming back from the processors. All of this is adding up—and of course there is no assistance. There is the Carbon Farming Initiative. However, we understand, after having properly scrutinised that piece of legislation, that it is unlikely to have much effect before the next election at least. But we know that the carbon tax starts at the end of next week.
The government continues to dishonestly suggest to the Australian community that there is going to be a small impact from this carbon tax, but every single business and every single household is going to be impacted by it and they are going to feel it. For small businesses that are not compensated, I think they are quite justified in feeling the lie: 'There will be no carbon tax under a government I lead.' (Time expired)
I would like to begin my contribution on this motion to take note of answers by applauding the contribution of Senator Sinodinos where he asked the question about what was to be done for people with special needs in the state of New South Wales. Perhaps his great influence in the Liberal Party would be put to better use if he were to get the O'Farrell government to withdraw from increasing public housing rents exactly at the same time as those households will receive their compensation for the carbon price. Pensioners and self-funded retirees will get an extra $338 per year if they are single and there will be $510 for couples combined. This will all go towards ameliorating the impact of the carbon price, yet we have a state government that is putting up the cost of public housing and hitting those who can least afford it. If Senator Sinodinos is so concerned about these people, perhaps we could see some intervention on his part in relation to this matter.
The simple fact of the matter—and I suppose we will be indulging in the same repetition that the coalition indulges in—is that the Australian Labor Party and the Liberal Party are both committed to a five per cent carbon reduction and renewable energy target by 2020. So the objectives are the same but our plan is simply to price the 500 biggest polluters. It is as simple as that. There are about 20 in South Australia. The other side of the argument is that the coalition will pay polluters to stop polluting. This seems to me to be counterintuitive. Under that scenario it is a case of the longer you pollute the more you get paid—and the coalition will use tax dollars to do it. So low-income households or taxpayers will be paying extra tax to tell people to stop polluting. Pricing carbon will change behaviour. That is an economic fact. If there is a monetary disincentive to do something then people will find another way to do it, either through innovation investment or changing their behaviour. If you are getting paid to pollute, I am not sure that you would change all that quickly.
Let us return to the simple fact that we are going to compensate nine out of 10 households. Nine out 10 households will receive compensation. As I said, pensioners and self-funded retirees will get $338 per year if they are single and $510 if they are couples. Families receiving family tax benefit A will get an extra $110 per child per year. Eligible families will get an extra $69 under family tax benefit part B per year. Allowance recipients will get $218 per year for singles. There will be $234 per year for single parents and $390 per year for couples combined. Importantly, the tax free threshold will rise to $18,000. Over a million workers will pay no tax at all. They will not have to lodge a tax return. These are some of the most vulnerable in the community—people working part time, young kids at university doing a part-time job. They will not have to lodge a tax return. That is a very important issue for a lot of people who are struggling to make ends meet. On top of this, 7.5 million taxpayers with an annual income of under $80,000 will also receive a tax cut. Most will receive at least $300 per year. The interesting thing now is that Tony Abbott and the coalition—
I will take that interjection as it is appropriate. Mr Tony Abbott, the Leader of the Opposition, has committed to repealing the carbon price as well as somehow taking away tax cuts and increased payments that the most vulnerable in the community and those earning under $80,000 will receive. I did hear his speech either today or yesterday where he said that as an incoming government, 'I'm going to do all of this.' I wonder how that is to be done legislatively. It will take some time. I note that his has committed to bulldozing the changes through parliament should he win government—and that is up to the Australian electorate. But the reality is that most people, particularly in South Australia, fundamentally like clean energy. With a 20 per cent renewable target already achieved— (Time expired)
I rise from my rock to take note of all answers by Senator Wong, dragging my knuckles all the way. The carbon tax: I did want to touch on something Senator Carr mentioned in one of his answers that tickled my fancy. He said that he did not want to deny—
Yes, I am getting on to that. I will focus on that then. Senator Wong was answering a lot of questions about the carbon tax, which arrives on our doorstep in less than a month. The Treasurer and Acting Prime Minister, Mr Swan, told his caucus colleagues this morning that the carbon tax would be a 'game changer'. You can bet your bottom dollar it is going to be a game changer. You know what is really important in playing any sort of game, particularly field games? It is a level playing field. We will not have one. Australian businesses will not have one. They will be snookered. They will be behind the eight ball, thanks to being lumped with this carbon tax.
Last Friday, the Gillard Labor government released a further list of local councils that will experience a significant carbon tax hit due to their landfill operations. In my home state of Victoria the outermetropolitan councils of Hume and Wyndham will be affected, as will the City of Greater Bendigo, and the great regional city of Geelong will be severely impacted. Councils will then have to charge ratepayers. This is in addition to the local councils that were previously mentioned, particularly Wagga Wagga, with their significantly increased bills for landfill issues because of the carbon tax that many of them have not put into their forward planning. They are going to be slugged.
Some on the other side have been raising the issue of compensation. Nine in 10 households, I heard it said, will be compensated. My question is: where is the incentive to change behaviour if we are going to be compensating households to the extent that we are? We have the same policy as the government. We do want to reduce greenhouse gases by 2020 by five per cent. That will require all of us to change our behaviour.
That brings me to the incentives and the strategies in this policy implementation phase that this government has been undertaking over recent weeks and to the advertising campaign around the carbon tax. What a waste of money it is when we are talking about behaviour change. We had a carbon tax ad that did not even mention it. $70 million was spent to tell people that they would find money in their bank accounts. You do not have to do anything to get it; it is just going to be there. When questioned during estimates on the folly of this sort of policy, it was acknowledged that, 'Sometimes we advertise so that those who are not eligible know they are not eligible.' I thought it was an odd strategy to pursue and a waste of money, but this government has form on that sort of behaviour with their policy implementation.
What I think is not being spoken about enough is the annual increases in electricity prices due to the carbon tax—year in and year out. It comes at the worst possible time for Australian families and businesses. Business is already hurting. One company on the big polluters list is Australia's largest dairy company, Murray Goulburn, which recently announced 300 job losses. I would like to take note of two mayors representing great Murray Goulburn dairy-producing districts in the gallery today—Kevin Simpson and Alex Monk from the Victorian region. Australian businesses are under pressure as they struggle with the continued high dollar and increased input costs, as admitted by Minister Combet last month. But the coming carbon tax for a business like Murray Goulburn slugs the producer and the shareholders. That is not to mention the dairy farmers', the actual producers, $10,000 electricity cost before we get the milk out of the farm gate. My state's largest exporter off the dock every day and a regional success story, Murray Goulburn is now bearing the brunt of the government's failed policy—and we are sick to death of it.
I rise on the motion to take note of the answers given by Minister Wong on the government's clean energy future package. As much as those opposite want it to, climate change is an issue that is not going to go away. It cannot be chased away simply by the scaremongering of those opposite. Their current scare campaign is focused on power price rises and trying to do their bit to discredit the professional price estimates conducted by the independent utility regulators in each state. For example, the New South Wales pricing regulator estimates that for the typical small business customer for each of the three New South Wales networks the increase would be less than $5 a week. The Council of Small Business Organisations of Australia has confirmed that the impact on small business consumers will be around $5 per week.
However, the government is still committed to assisting small businesses through a range of measures, including $27.5 million to extend the highly successful Small Business Advisory Services program for a further four years, allowing incorporated small businesses carrying up to $1 million worth of losses to get a refund of tax paid in the previous year. Also, the small business instant asset write-off will increase from $1,000 to $6,500 from 2012-13. This will improve cash flow for small business operators and provide additional incentives for investment and productivity improvements.
As part of the clean energy future package, the government has tasked and resourced the ACCC to investigate and take action against businesses that make false or misleading claims about the impact of carbon pricing on their prices. Those opposite have spent a good while scaremongering that the forecasted electricity prices are wrong and that electricity prices will rise by exorbitant amounts under a carbon price. On 12 June 2012 the chairman of the Australian Competition and Consumer Commission, Mr Rod Sims, said he could not see any circumstances where an average small business would have a carbon related price increase of anything like 25 per cent.
One thing is absolutely clear: it is in Australia's long-term national interest to deal with climate change. In this chamber we have heard for many years from Minister Wong as well as many others on this side of the chamber and even some opposite about the positives of using an emissions trading scheme in tackling climate change. At the core of our emissions trading scheme is a cap on carbon pollution. The cap will guarantee reductions in carbon pollution and allow us to achieve our long-term goal of an 80 per cent reduction from the 2000 levels by 2050. That is 17 billion tonnes of carbon pollution out of the atmosphere between now and 2050.
This Gillard Labor government is committed to a smooth transition and will use all of the revenue to support households, to invest in a clean energy future and climate change programs and to support jobs and competitiveness in energy intensive industries. For households there will be tax cuts, increases in family payments and higher pensions, benefits and other government allowances. Nine out of 10 households receive or will soon receive assistance through tax cuts and/or payment increases through the transfer system.
Treasury's price increase estimates, which formed the basis of the household assistance package, have recently been found to overestimate the price increases in five of six jurisdictions where information is available. In my home state of Tasmania, electricity prices were estimated to rise by nine per cent, but consultants for the Tasmanian electricity pricing regulator have claimed that the rise will only be 6.5 per cent. This is well below the forecast and therefore provides extra assistance to Tasmanian households.
This is a reform that requires the parliament to look at the longer term and not just the short-term politics. It is unfortunate, then, that those opposite are led by a politician who will only ever look to what he believes is a short-term political advantage. Most of those opposite publicly expressed a belief that we need to act on climate change and that supporting an emissions trading scheme is the way forward—until they thought the politics had shifted, until they sought a short-term advantage over the nation's long-term prosperity. It is not too late to put the nation's long-term interests forward and shelve your short-term political interests. It is not too late to realise that your policy and our policy are both to reduce emissions by five per cent by 2020. It is not too late to realise that climate change will not be solved in 2020 and we need a long-term plan to deal with the costs of pollution. It is not too late to do what is right for our grandchildren. (Time expired)
I rise to take note of answers from Senator Wong, but in addressing Senator Wong's answers I must not let Senator Gallacher's comments go unaddressed. I remind Senator Gallacher, who has now left the chamber and is bunkered down in his office, that he might listen to his own leader. Prime Minister Julia Gillard said about the carbon tax:
There will be price impacts. The whole point of pricing carbon is to say that goods that have got a lot of carbon pollution in them get relatively more expensive, people innovate, they start to make things with less carbon pollution in them and those things are cheaper.
Forgive me, but where is the logic in it if that is what you are looking to achieve with this carbon tax? Why do you go out and turn the money wheel, the money churn, and start compensating all of these people with $9.90 a week if you want to change behaviour? I must also point out a further quote from the same leader, Julia Gillard, in one of her radio interviews:
Now I wasn't going to get involved in a semantic and ultimately sterile debate about what you call that fixed price period. That's why I was upfront and said it's effectively like a tax. And it will take us through to a cap and trade emissions trading scheme, a market mechanism to price carbon.
A tax is a tax is a tax.
That is why in South Australia, in my home state, the Olympic Dam project is in doubt. It is a project which offers great hope to South Australia, a state which is lagging well behind the national average in employment and growth. That project offers some 15,000 jobs directly in its construction phase and would add about $6 billion a year to the state's economy. It was revealed also in yesterday's Advertiser that a record number of South Australians are struggling to cope with the skyrocketing power prices. I hear in everybody's retort from the other side that the pricing regulator says it only affects this cost by $5 a week, that one by $5 a week. How many more lots of $5 a week can the Australian people put up with? That $9.90 in compensation does not cover all the $5 here and the $5 there.
Back home in South Australia, the Tea Tree Gully council recently announced that it is being forced to factor in a cost of $500,000 this year for the carbon tax in their rate rises, while Mitcham council has been forced to allow for an increase in costs of $190,000 because of this government's carbon tax. It has also been revealed in the Adelaide Advertiser that the carbon tax will add another $4.6 million to the cost of the Southern Expressway duplication which is now being constructed. To boot, the cost of multi-trip bus tickets will rise to $33.14, and diesel costs for the metropolitan bus services in South Australia will increase by $1.3 million. How many lots of $9.90 per week in compensation to all these people is this going to cover? It is just not going to cut it. Taxpayers of South Australia are getting it everywhere, whether it be municipal rate rises, electricity price rises or the rise in the cost of groceries by virtue of transport and manufacturing.
The Essential Services Commission of South Australia announced last Friday that they would allow South Australia's electricity prices to rise by 18 per cent, 11.5 per cent of which is due to the Gillard government's carbon tax and the green schemes of their state Labor counterparts. What is Minister Wong's message to the households in South Australia, her home state? South Australian households will be paying average energy bills of $2,876 from next year. Shame, Senator Wong. Shame!
Question agreed to.