Tuesday, 11 September 2012
Matters of Public Importance
A letter has been received from Senator Fifield:
Pursuant to standing order 75, I propose that the following matter of public importance be submitted to the Senate for discussion:
The unravelling of the Gillard Government's carbon tax.
Is the proposal supported?
More than the number of senators required by the standing orders having risen in their places—
Yes, Labor's carbon tax is unravelling—and it is unravelling fast, at a rate of knots. Labor is in a complete mess over the carbon tax; the government is in complete chaos over the carbon tax. Why is that so? Because fundamentally, at least privately, Labor members and senators understand that Labor's carbon tax, the Gillard government's carbon tax, is taking Australia in the wrong direction.
There is never a good time to introduce a bad tax. There is never a good time to introduce a job-destroying tax. There is never a good time to introduce a tax which will push up the cost of electricity, which will push up the cost of living, which will push up the cost of doing business in Australia, which will make us less competitive internationally and which will just shift jobs and emissions overseas instead of reducing emissions. There is never a good time for such a tax, but this would have to be just about the worst time for any government to introduce a tax like this.
Do not take my word for it when I talk about the impact of the carbon tax on our economy and on jobs. Look no further than the government's own Treasury modelling. This government knows what the impact of the carbon tax is going to be on the economy, on the cost of living, on the cost of doing business and on jobs because their Treasury modelling pointed it out. And because their Treasury modelling pointed it out there is only one possible conclusion, and that is that the Gillard Labor government is wilfully and recklessly taking Australia in the wrong direction with its carbon tax. By pushing up the cost of electricity, by pushing up the cost of doing business in Australia, this government is making it harder for Australian businesses to compete with businesses in other parts of the world—with businesses in Asia, in the US, in South America, across Africa and even in the European Union. Yes, the cost of doing business in Australia as a result of Labor's carbon tax is going up by even more than it would in the European Union under their particular scheme.
How did the government go about all of this? As they put together their carbon tax package, their first political strategy was to suck in everybody across Australia with the proposition that the success or failure of the carbon tax had to be judged on day one: if the sky did not fall in on 1 July 2012, it would mean that the carbon tax was a success. What a minimalistic benchmark for success by this Gillard Labor government: if the sky does not fall in, this must be a great new tax! Well, the sky was never going to fall in on day one; the implications of a tax like this on our economy, on the cost of living, on the cost of doing business, on jobs and on our international competitiveness has got to be judged over time—and no amount of hoping that the frog-in-boiling-water syndrome is going to somehow come in as the political saviour for this government is going to do away with that fact.
When it comes to the carbon tax, this government has put all its hopes in the frog-in-boiling-water syndrome. I can see you smiling, Mr Acting Deputy President, but, just to remind the chamber, this is the frog-in-boiling-water syndrome: if you put a frog in a pot of boiling water, he will jump out; but if you put a drop in a pot of cold water and just gradually increase the heat, he will stay there as he is slowly brought to the boil. That is exactly how the Gillard Labor government hoped that the carbon tax would play out—that people across Australia, businesses across Australia, would not realise that the carbon tax was slowly and gradually having its effect and would think that things other than the carbon tax were to blame. That is why they put all of the additional cash handouts on the table up-front; that is like putting additional cold water into the pot of boiling water. That is why they wanted to provide all that additional transitional assistance up-front—so that people would not quite realise what the impact of the carbon tax was going to be on the cost of electricity, the cost of living and the cost of doing business.
But people are starting to realise, and that is because Labor's carbon tax is the biggest such tax anywhere in the world. The government often likes to point to the European Union and say: 'They've got an emissions trading scheme. They've got a price on carbon. If they can do it, why can't we?' Well, you have got to look at the detail. When we started asking questions of this government, they could not provide any answers. Here is one question: why is it fair to Australian businesses and Australian workers that 23 million Australians are being asked to pay over the next three years five times the carbon tax of 500 million Europeans across 30 countries? We have 23 million Australians in one country who are being expected by this government to pay five times as much carbon tax as more than 500 million Europeans across 30 countries. How can that not have an impact on our international competitiveness? How can that not have an impact on the capacity of our businesses to compete with businesses, even in Europe? And our carbon tax is also bigger than the regional greenhouse initiative in the northern part of the US that the government often points to. In fact, we are expected to pay 20 times the carbon tax that is paid by a part of the US that has twice our population.
Over the past few weeks I have asked questions of the government—through Senator Wong, who was then representing the Minister for Climate Change and Energy Efficiency as well as the Treasurer. I asked: how do you think it is fair to impose that cost on businesses here in Australia who are not fazed by our competitors in other parts of the world? How is it fair to impose that cost on businesses in Australia, putting jobs at risk, when all we are doing is shifting emissions to other parts of the world, not reducing them? How is it fair to ask people here in Australia to make a sacrifice when other countries are not being asked to make the same sacrifice and there is not going to be a beneficial outcome in terms of reduced global greenhouse gas emissions as a result? Senator Wong's answer to some of my questions was that we have got to remember the free carbon permits. She said the free carbon permits will reduce the impact of the carbon tax on the most emissions intensive trade exposed industries down to about $1.30 a tonne, so those businesses will only have to pay about $1.30 a tonne for their emissions. So I asked the minister the obvious question: how many of Australia's 42,500-plus export businesses will actually get the benefit of free carbon permits? The minister threw her hands up in the air and effectively said, 'I don't know.'
But last night in this chamber the government finally came clean and released the information. What we found out last night is that not a single business in Australia so far has received a free carbon permit and, even when all of the free carbon permits have been delivered, the government does not expect to hand out more than 170 of them. So up to 170 businesses across Australia will get free carbon permits. What about the other 42,500 export businesses? What about the hundreds of thousands of import competing businesses? And then they go off and drop the floor price. They say to us that they still believe the price will be $29 a tonne. Well, if that is the case, why do you think you have got to drop the floor price of $15 a tonne? It does not make sense. If it is going to be the same, people will still face the same impact on their cost of living. If it is going to be less, the government will face a multi-billion-dollar budget black hole—part of their $120 billion budget black hole. If it is going to be as high as the Greens say, $50 a tonne, what a massive new additional hit that will be on household budgets—and, of course, a significant revenue windfall for the government.
There are problems wherever you look. They link it to the EU scheme now, which means that Australian coal producers will eventually have to use the European coal price when European coal producers do not—because in Europe fugitive emissions are excluded from the scheme but in Australia they are included in the scheme. Wherever you look there is problem after problem. That is why the government is chopping and changing this bad tax. That is why the government is in complete chaos over this tax. The only way to fix this bad tax is to scrap it.
Well: another day, another matter of public importance debate and even more incomprehensible ravings from Senator Cormann. I challenge anyone to make any sense of what he has said, even people on his own side of politics. But it does provide the government with the opportunity to clear up some of the negative misconceptions that Senator Cormann is trying to spread, and which certainly are being spread about by the opposition. It certainly does give me an opportunity to inform the Senate of some of the positive things that are going on in the Australian economy as a direct result of the critically important reform of putting a price on carbon.
We have heard from the opposition—and it is very predictable, I suppose—their suggestion that the removal of the carbon floor price from 2015 and the merger of the Australian domestic carbon-pricing scheme and the European's scheme signal what they described today as an unravelling of the government's Clean Energy Future package. That is absolutely wrong. But I will attempt in my contribution this afternoon to clear the matter up, if I can, for the opposition.
Last month the government secured an agreement to link Australia's carbon price with the European Union's emissions-trading scheme. From 1 July 2015 Australia's carbon price will reflect the price paid by at least 30 other countries—30 other countries that form our second-largest trading bloc, covering 530 million people in total and including countries such as the United Kingdom, France and Germany. This is a transition to an internationally linked ETS, where the global market sets the price, meaning that we can reduce carbon pollution at the lowest cost. And with emissions-trading schemes being developed in China, in Korea, in the state of California in the US, in Canada and in South America, this linkage with the European Union is likely to be the first of many international links that will form a truly global carbon market. In fact, by next year Treasury suggests that more than 850 million people will be living in a jurisdiction with a carbon price.
Who can forget those comments from the Leader of the Opposition, Mr Abbott, who said, 'There is no sign, no sign whatsoever, that the rest of the world is going to do things like introduce carbon taxes or emissions-trading schemes'. They were Mr Abbott's words. Oh dear, Mr Abbott said that. But I would have to say that I think that if anything is unravelling it would have to be this claim from the federal opposition that Australia is going it alone. What? Going it alone with 850 million other people? Going it alone with the European Union? Going it alone with 17 other countries currently developing emissions-trading policies? But I have to say that it gets even more embarrassing. Last month the Leader of the Opposition, Mr Abbott, said:
There are no developing carbon markets in the Asia-Pacific.
Mr Tony Abbott, Leader of the Opposition.
Well, wrong again: wrong, wrong, wrong! Korea, China, Japan, New Zealand, Thailand, Indonesia and Vietnam all have schemes or are developing emissions-trading schemes right now. I would say that it appears that the only thing we have unravelling here is the opposition's outlandish, embarrassing and negative agenda. But, of course, it does not stop there: it goes on and on. The Leader of the Opposition also claimed that carbon pricing 'means economic death for the Latrobe Valley', and he suggested that contracts for closure of coal-powered stations have been a failure. Wrong again! It is true, of course, that the government set out to negotiate for the closure of up to 2,000 megawatts of high-polluting electricity-generating capacity providing it was value for taxpayers' money. In the end the government could not agree with their owners on the value of these electricity generators. The government did not accept that their valuations would have given taxpayers value for money for the emissions reductions that would have been achieved. So the market will now decide the economic life of these generators. Already market forces have led to the mothballing, closure or curtailment of hundreds of megawatts of high-polluting electricity generation capacity at the Playford B and Northern power stations in South Australia and at Energy Brix in Victoria.
I would say that there are some real and positive changes going on out there in the Australian economy as a direct result of the government's Clean Energy Future package. Since the introduction of the carbon price, many Australian businesses have started taking practical steps to improve energy efficiency, reduce their power bills and reduce the level of their greenhouse gas emissions. Those actions are producing win-win outcomes for many Australian businesses, improving bottom lines and tackling climate change. Let us not forget that—tackling climate change—because that is what this is all about.
From the opposition we have misrepresentation after misrepresentation. From the opposition we have false claim after false claim. Of course, all we have had in today's debate is a convoluted explanation from Senator Cormann about what the 'frog in boiling water' syndrome means. The truth is that the science here is beyond dispute, the facts are clear and the government has the answers in its Clean Energy Future package.
It is quite clear what is happening here. What is happening is that the Labor Party are clearing the decks for an election. It is the most bumbling process that one would ever see. It is an approach that General Braxton Bragg would be very proud of. The only man who could turn a tactical victory into a strategic defeat was Braxton Bragg, and now there is also the Australian Labor Party. We have seen them fumble along and tumble along. They started with an ETS; then they decided not to have an ETS. They started with Prime Minister Rudd, and they decided not to have Prime Minister Rudd. Then they stated there would not be a carbon tax, and then there was a carbon tax. Then they said the carbon tax would never change, and now it is going to change. Then they said they would never have a Pacific solution for immigration, and now there is a Pacific solution for immigration. We know what they are doing, but it is just such a rolling fiasco. They said they were going to have a surplus, yet we currently have about $244 billion in gross debt and we have borrowed in excess of $10 billion since the start of the financial year on top of that. It is just absurd. Everything they do has become a total absurdity.
Now they have a price on carbon because they believe that Prime Minister Gillard and Treasurer Swan can change the climate. I will believe it when I see it. Their price on carbon will have as much chance of changing the climate as a price on sadness would have of changing tears or a price on sickness would have of making the world healthy. It does nothing. The ingenuity of man is the process that is going to take things ahead, and it is not done by tax. The only thing a tax inspires is tax evasion. The only thing this tax inspires is the absolute resentment of the Australian people. They have picked up on that, but why do we have to wait till 1 July 2015? If we are going to have to buy this dud product, why wait till then? If you are forcing us to buy this dud product, why not just drop the price now? What is this interim period all about? What is the purpose of an artificially high price right now? I do not like the price at all and I want to get rid of the whole lot, but what is the point? If you are going to afflict us with this insanity, can't you just afflict us with a cheaper priced insanity sooner? Why do we have to wait till 2015? You have already acknowledged by your own actions that it is absurd, so why not just go to the lesser absurdity now rather than leave us with the greater absurdity for that period of time?
It is interesting. Remember, once upon a time brown coal was an evil rock. There was a naughty rock called brown coal. This naughty rock must be put outside and spanked. Naughty, bad rock! Of course, it was always peculiar, because if the rock passed across water and went to another country it became a righteous rock. Then it was righteous brown coal. It was naughty in Australia but righteous once it passed over water and went overseas. But now it has become righteous back in Australia again. Now it is righteous coal again and it can continue to be used in the Hazelwood Power Station. The correct decision in the first instance was to keep the power station running and provide cheap power to the people—one of the fundamental things to provide the basics of life. That is what a government is supposed to do. But it is just another one of these absurd backflips. There is no meaning to what they do.
So how do they try to cover it up? Obviously now we have all this conjecture within the Labor Party, because with the Labor Left it is like The Silence of the Lambs. It is the silence of the Labor Left. They are so torn apart by their position. Now they do not believe in refugees; they believe in banging them up wherever—Nauru. They are trying to make themselves philosophically pure again, so today we had this absurdity: all of a sudden a fishing boat has become the mechanism of assuaging their guilt. They have now manifestly encompassed in a fishing boat the path to left righteousness. Correct me if I am wrong, but it was only days ago that the same crowd was absolutely pillorying me because of sovereign risk and populism. I was accused of inciting the demons of sovereign risk and populism. I heard Dr Craig Emerson in op-ed after op-ed in the Australian saying what a terrible person I was. I was beginning to agree with him; maybe I am.
But today out of nowhere comes a statement that is an absolute affront to sovereign risk. This time they have actually bought the boat. It is sitting up at Brisbane, I think. No, it is not; it is sitting at Whyalla in South Australia.
Port Lincoln. That is where it is; thank you very much. And why did they change it? Because it was popular. All I am waiting for is the apology, because otherwise you are total and utter hypocrites.
It is all part of this chaos. There is not a tenet of consistency. Nobody can believe a thing you say anymore. Everything you say is absurdity backed up to absurdity—absurdity but with an austere, sincere face at the press conference. If you want real sincerity, go out in duplicate so we can have Minister Burke and Minister Ludwig standing side by side, looking doubly ridiculous as they try to convince us that everything they espoused not a year ago, not a month ago but a week ago about me is apparently now virtuous. Okay—stick to your guns!
So what are they doing? They are clearing the decks for an election. They are clearing the decks and doing it in the most bumbling, stumbling, hopeless, ridiculous way.
No, it is not a surprise. And of course there is always a report card coming out, and it is called the debt. Every time you want to know where this circus is off to, you just go to the Australian Office of Financial Management—AOFM for all the good people listening; Google it—and look at our debt. And you can track your debt. You can watch it grow. It is like one of those magic monkeys you used to buy from the cartoon characters: just add water and watch the debt grow! This is the crowd that is apparently at the tiller of our nation. This is the crowd that, if you believe them—if you look up at the vault of heaven—are the ones who can cool the planet. They are going to be part of it.
Even Senator Faulkner, who I believe is consistent but has just been a bit cowardly lately because he has not stood up for what he believed in, talks about: 'Other countries are going down this thing or they are "developing" a program. They are thinking about it.' That is what you have to worry about. They are thinking about doing something and, because someone is thinking about it, we must do it. He compared us to China. Well and good, and very clever they are. I have no problems with them being clever; I have a big problem with us being stupid. They are going to get carbon credits. They are going to get a whole heap of dirty little coal-fired power stations, turn them into a big new coal-fired power station and collect the carbon credits, and who will send the carbon credits? We will; we will send them the carbon credits. But we do not have any money, so where are we going to get the money from? We will borrow it. And who will we borrow the money off? We will borrow the money off them. Economics like that could only ever make sense in the Australian Labor Party, and it is probably because none of them have ever really run anything, or had a job. I take that back: they have all had a job, but they have never run a business.
This is part of where we are off to in this insane world. What will this world look like if they stay there? What on earth will Australia look like if this crowd stays there? Their own people cannot believe them. They have walked all over the left; to the right they look absolutely absurd. The NBN is another complete absurdity. The only thing we can do to fix it is get rid of them.
Another day, another fear campaign, another bungled, distorted rant by Senator Joyce. Fear, spin and distortion of the facts. This Labor government has continued on with our agenda to move Australia to a clean energy future. We have pushed on with this vital reform because we know it is the right thing to do for our community and we definitely are not going to let the almightiest of fear campaigns bring us down.
Today we are debating a matter of public importance that shows how lost and confused the conservatives are on this issue. The unravelling of the Gillard government's carbon tax is what those opposite would like us to debate this afternoon. Interesting, isn't it, because the Clean Energy Future package and the carbon price are moving along well. In fact, since the carbon price came into effect on 1 July we have improved our emissions reduction scheme by linking it with the EU and removing the floor price. Last month the government secured an agreement to link Australia's carbon price with the European Union Emissions Trading System. From 1 July 2015, Australia's carbon price will reflect the carbon price paid by at least 30 other countries including the UK, France and Germany. From 2015 we will transition into an internationally linked ETS where the global market sets the price on pollution.
This is an important agreement because linking means we can reduce carbon pollution at the lowest cost. It is also a significant step forward in countries joining together to tackle climate change. With emissions trading schemes being developed in China, Korea, the US state of California, Canada and South America, it is likely to be the first of many international links that will form a global carbon market. But the Leader of the Opposition likes to misrepresent the facts when it comes to international action on climate change. Last year he said:
… there is no sign, no sign whatsoever, that the rest of the world is going to do things like introduce carbon taxes or emissions trading schemes.
This is just plain wrong. The world is introducing carbon prices and emissions trading schemes. And this number is set to grow as another 17 countries, across all continents, are currently developing emissions trading policies. By next year, more than 850 million people will be living in a jurisdiction with a carbon price.
Last month the opposition leader said:
There are no developing carbon markets in the Asia Pacific.
The fact is, as Senator Faulkner outlined, that Korea, China, Japan, New Zealand, Thailand, Indonesia and Vietnam either have or are developing emissions trading schemes right now. It was just the latest misleading claim by the opposition leader. These countries know they have to reduce emissions, and they know the cheapest way to do this is to put a price on carbon. This is a significant step forward for global action to tackle climate change.
In the next few years, as the planned markets begin operating in countries around the world, the prospect for internationally linked carbon markets will just improve. On this side of the chamber, our desire is to see Australia do its bit to reduce emissions at the lowest cost. We acknowledge that acting on climate change is necessary. We are working with industry, with the community sector and with state and local governments to do just that.
Since the carbon price came in, businesses have started taking practical steps to improve energy efficiency, reduce their power bills and reduce greenhouse gas emissions. These actions are generating win-win outcomes, improving the business bottom line and helping tackle climate change by reducing greenhouse gas emissions. Carbon pollution can often be reduced with relatively simple technology. At a meatworks, for instance, the settlement pond can be covered. This allows the methane that would otherwise be released into the atmosphere to be captured and flared, potentially removing the carbon price liability. And if the methane is used to generate electricity, this can not only help reduce energy costs but also earn the business extra income from selling this clean energy back to the grid.
Extracting methane from landfills is already being done by local councils. The Tweed Shire Council in Northern New South Wales has been able to reduce emissions below the 25,000 tonne liability threshold at its Stotts Creek Resource and Recovery Centre. The pollution captured is used to power some 400 homes. At a recent forum for local councils in North West Tasmania, councillors expressed an interest in learning more about reducing emissions from Tasmanian landfills. This is about taking an innovative approach to how we do business in Australia. It is a far cry from Mr Abbott's massive scare campaign about the impact of the carbon price on business.
I would like to highlight a grant to Simplot, a potato processing plant in Ulverstone Tasmania, that will assist the company upgrade its coal-powered boilers to natural gas. The 2010 election commitment that the Labor government has delivered upon is an example of what is possible under the Clean Energy Technology Food and Foundries Investment Program. The funding from federal and state Labor governments of $3 million and $1 million each, together with investment from the company of $17 million, will reduce carbon dioxide emissions by 39,000 tonnes a year—the equivalent of taking 8,000 cars off the road. It will also support hundreds of permanent and seasonal jobs across the north-west coast of Tasmania through cutting the energy bills of this large employer in my region. Farmers, farm contractors and service providers whose jobs and businesses depend on Simplot's operations will benefit from this upgrade at the plant through greater certainty and lower costs for the factory. Funding that assists Simplot replace its high energy intensive coal boilers and install gas-fired cogeneration capacity at the Ulverstone potato processing plant will thereby remove the need to burn coal in the production of potato chips.
While this grant was announced in the 2010 election campaign and is therefore not part of the Clean Energy Technology Food and Foundries Investment Program, it is an example of what is possible through the Clean Energy Future package. It is a clear example of how the Gillard Labor government will work with the high power, intensive businesses in the food, metal forging and foundry industries to assist them to remain competitive through switching to low pollution options by providing grants for energy efficiency improvements. This government is committed to working with industry, committed to working with communities and committed to working with other countries to achieve a clean energy future for our world. We are committed to working through the challenges and providing support to Australians.
I had the pleasure of being a member of the Senate Select Committee on Australia's Food Processing Sector. That committee heard evidence from a range of processors from right across the country. There are many examples in the food processing sector that highlight the potential for innovation and opportunities being harnessed through the Clean Energy Technology Food and Foundries Investment Program.
I note that a significant portion of the revenue from carbon pricing is spent on industry assistance. In evidence to the committee, Mrs Mac's, a large-scale bakehouse, expressed appreciation for the range of government grants to assist businesses. Mr Beros said that, through investing with government, Mrs Mac's had a 28 per cent decrease in water heating costs, a 25 per cent increase in one of their line speeds using the same level of energy input, and a 30 per cent efficiency gain in some of their condensers. I also understand that Crafty Chef in Emu Plains, New South Wales, have received nearly $500,000 from carbon pricing revenue to install a new commercial blast freezer. This will reduce the carbon intensity of its operations by over 54 per cent, reduce energy intensity by over 56 per cent and boost turnover by 150 per cent to $50 million per annum.
Treasury modelling of the food manufacturing industry forecasts growth by 108 per cent by 2050. It is government's role to create an enabling environment for strong market participation, and this report highlights some areas of reform that will be critical for the food processing sector. We were provided with inspiring examples of new and emerging products that are capable of transforming parts of the sector. We need to remember, however, that industry is best served by an innovative and adaptive business culture and a trained and supported workforce.
I encourage all Australians to continue to look above the coalition's negative rhetoric and embrace the opportunities available under the clean energy package—to look above the daily fear campaigns and think: 'How can my workplace and my community benefit from this reform?' This Labor government has continued on with its agenda to move Australia to a clean energy future. We have pushed on because it is the right thing to do. Together, we can make a difference to limit Australia's emissions.
I also rise today to speak on the matter of public importance: the unravelling of Labor's world's biggest carbon tax—a tax that on the government's own admission will not reduce Australia's emissions. On the contrary, based on the government's own forecast our emissions will continue to rise over the coming decades such that Labor predict the only way we will meet their emissions reduction targets is by buying permits from other countries—and billions of dollars' worth of them are needed. Again, this is on the government's own numbers. These will be bought from countries that may have far less stringent rules, regulations and oversights to ensure that those permits are truly representative of actual reductions in emissions. So I ask: what gain do we get from the pain that is being inflicted by this carbon tax?
Of course, we should always remember that this is the tax that was brought in on the back of a lie. This is the tax that the Prime Minister promised, hand on heart, that we would never see under a government she leads. Yet here we are, with a government she is leading and the carbon tax she promised we would never have. And the carbon tax is now unravelling before the government's eyes.
Senator Faulkner and Senator Urquhart both made the point that Australia is not the only country that is putting a price on carbon. They both talked about how many other countries have put a price on carbon. I recall some time ago, when Senator Wong was quite happy to be the spokesman for carbon tax and climate change matters in this place, that she was talking about a shadow price on carbon. My understanding is that when Senator Faulkner and Senator Urquhart stand up and talk about other countries having a price on carbon on the whole they are actually talking about the shadow price being on carbon. The shadow price is not an explicit carbon tax or an emissions trading scheme; it is things like renewable energy targets, it is things like putting money into specific green energy programs and renewable energy programs. The government look at all of those sorts of things in other places and they say, 'Look, other places have a price on carbon.' I say: prior to the introduction of this carbon tax, we also had a price on carbon, we also had a renewable energy target, and we also had large investments in renewable energy schemes. We already had a price on carbon, and so the arguments that both Senator Faulkner and Senator Urquhart made in regard to other countries having a price on carbon, we already qualified. We did not need to impose a carbon tax onto Australian business and Australian consumers because we already had that price there.
As I mentioned before, the carbon tax is unravelling. So even with the carbon tax we did not actually have to have—we have it, it took effect on 1 July this year—it is incredible to see the number of changes the government have made in the short period of time since it was introduced. Only two months into its implementation and already we have seen massive changes marked by chaos right across the board. The changes that have been made to this tax in that short time reflect the gymnastic skills of the Australian Olympic team. Rarely have Australians witnessed so many backflips, backdowns and changes of direction in such a short period. But the great shame is that none of these changes actually improve the toxicity of the tax, or the disastrous impact it will have on the competitiveness of Australian businesses, or the across-the-board increase of cost of living it forces onto Australians right across the country.
What these backflips have done, though, is introduce even more uncertainty, additional costs and more legislative conflict into the quagmire that is compliance with the requirements of this tax. Just today 13 New South Wales councils are finding themselves in legal limbo as they are unable, lawfully, to purchase carbon credits because they are considered a derivative. As this chamber may know, the previous New South Wales Labor government banned councils from investing in derivatives in order to protect their ratepayers from potential financial losses, which many of the New South Wales councils suffered during the period of the financial crisis. Accordingly, councils are finding themselves between a rock and a hard place as they have obligations to meet under this toxic carbon tax regime but are unable to purchase permits to meet those obligations. What a shambles! I commend the New South Wales government for their refusal to overturn a law that is in the common interest of the public in the face of a federal law that is detrimental to the public, is poorly thought out and which clearly will not achieve its objectives.
The confusion over this tax and its implementation does not stop there. Just last week, we saw the government abandon their own Contract for Closure program. This flip-flop was not surprising, as the Contract for Closure program was doomed from the start. On the one hand the government were providing the Energy Security Fund with $5.5 billion to help keep brown coal power stations in operation so that they could guarantee the continuity of energy and avoid blackouts and brownouts. But at the same time, the government set up the Contract for Closure fund to pay the same regulators to shut them down. Crazy stuff! The power companies then saw fit to accept the government handouts to keep conducting business as usual and pass on price hikes to businesses, pensioners, families and everyday Australians who are already doing it tough. Again, a complete shambles.
These continual changes, this flip-flopping is causing Australian businesses and consumers great uncertainty. It is difficult to budget, to plan ahead and to take steps and measures to ensure compliance with legal obligations when those legal obligations are continually changing. Of course, the flip-flops come with consequences and flow-on impacts. The scrapping of the Contract for Closure program means that the planned reduction in emissions that would otherwise have occurred will not be fully reached. So the government have to find another way of lowering them to meet their fictional targets. How will they do this, you may ask. By increasing the amount contributors will have to pay for the carbon tax. And the Gillard government have shown nothing but contempt for the workers and their families of power entities with whom they have been negotiating. Just yesterday, we found out that the negotiations between these power companies and the federal government had completely collapsed
All the government has delivered to the people of Australia in the face of this carbon tax is nothing but uncertainty. For example, on more than 11 occasions, this government stated how crucial the floor price was to maintaining stability. I will just have a look at a couple of those quotes. On 13 September 2011, the Prime Minister stated:
The bill also provides for a price cap and a price floor to apply for the first three years of the floating price period. This will limit market volatility and reduce risk for businesses as they gain experience in having the market set the carbon price.
On 9 November 2011, the Prime Minister also said:
We have set a floor and so there can be stability in pricing. But we did think it was appropriate because people are making very long-term investments to have a band in which the price will move.
When the Prime Minister was being interviewed by John Laws, she said:
Well we just thought for stability, particularly when we move to an emissions trading scheme where the market is setting the price that it was wise for a period to have bands, a ceiling and a floor.
Well we've put in a floor price to provide some confidence over the first few years about the potential variability of the price.
The climate change minister said on 28 September 2011 that the price floor and ceiling would 'avoid sharp price spikes or plunges', and he went on to say:
This will reduce risks for businesses as they gain experience in having a market set the carbon price.
Mark Dreyfus addressed the Carbon Expo in November 2011 and said:
A price floor provides participants with greater certainty upon which abatement decisions to make. For those investing in abatement technologies whose value is sensitive to the level of the carbon price, a price floor helps reduce downside risk.
Mark Dreyfus also said when addressing the Australia-New Zealand Climate Change and Business Conference in Wellington in August 2011:
For the first three years of the flexible price stage, safety valves (price ceilings and price floors) will be built into the system to avoid price spikes or plunges. This will reduce risk for businesses as they gain experience operating in a carbon-constrained environment. This is particularly important in the early years when price uncertainty could be at its highest.
But what have the government done now? Another backflip, another change. Two weeks ago the floor price was scrapped by the Gillard government. Senator Urquhart came in here earlier and was talking about how good the carbon tax is and what a great thing it is going to be for the country, but the very first thing she started talking about was how they have scrapped the floor price and how they are now going to associate the price with the price in the EU scheme.
I have just read out to this chamber comments by the Prime Minister and relevant ministers, all of which explained why it was so important that we have a floor price: that we must have a floor price for certainty for business and to give confidence for business to invest in uncertain technologies in the early years of this carbon tax scheme. Yet, just two weeks ago, in a huge backflip the government scrapped the floor price. Why? Not because it is going to achieve better outcomes but because it will achieve better political outcomes. They are scrambling for their own political survival.
It was no surprise to me at all to hear my Tasmanian colleague Liberal Senator Bushby talking down the economy, and in doing so he is talking down the economy not just of this nation but also of his home state of Tasmania. That is something we cannot afford to hear in Tasmania. That kind of glass-half-empty attitude of setting their own political interests by talking down our economy does us absolutely no good in Tasmania, and certainly does Senator Bushby no good in trying to be a champion for the growing economy that we need in Tasmania.
What we do know about the carbon price is that our economy seeks to benefit and grow. We have developed an emissions trading scheme that, by putting a price on carbon, a price on pollution, is providing an opportunity for renewable energy technologies to grow in this country. That is a very good thing. It is a two-edged benefit not only for the business and economic development aspects but also for the environmental aspects of reducing pollution in our nation and, therefore, reducing global warming and the effects that it is having on our planet.
One thing we know about global warming is that it is global. It is not something that is confined just to the borders of any one country. It is something that is affecting our planet, it is something that is affecting our oceans, and it is something that we all need to play a part in, and that means not just Australia but all the countries in the world. Slowly, one by one—and we certainly were not the first—a number of countries are getting on and doing that. In the last week or so, a global emissions trading scheme is exactly what we have been able to share in and be a part of. That scheme, as we know it, will mean that Australia will be able to trade with the EU. When we say the 'EU', we are talking about some 35 countries that make up the European Union. So already we are getting on and, by 2015-16, which is the compliance year, will provide companies with access to a mature and established carbon market.
Who would have thought that the Liberal Party would come out against one of their own most fundamental philosophical beliefs, that of the market-driven economy? Who would have thought that? That is what we have just heard today from Senator Bushby in talking down the carbon pricing system. I am proud to be part of the Gillard Labor government, which has delivered such a system in line with our longstanding commitment to emissions trading and to dealing with the effects of climate change. Such effects go well beyond our own generation and ensure that, in reducing pollution in our atmosphere, we are leaving this planet in a much better place and condition for future generations than it has been—for posterity, for my children, for my grandchildren and for Senator Bushby's as well.
The coalition's claim that the carbon price is unravelling comes only two months after a very successful operation of the carbon price. To come here and say that it is unravelling when in fact it is actually operating really well and the sky has not fallen in, business is continuing to invest and Australia is continuing to have one of the best economies in the world just does not make sense. It shows again this kind of meddling with the truth, meddling with the facts, that the Liberal Party continue to espouse in this place. Facts are just a mild inconvenience for the opposition. They prefer, of course, the quick slogans rather than any kind of informed discussion and debate. It is not just scientific papers that the opposition will not read; it is even statements by companies, as we have been able to witness recently in relation to when BHP released their decision not to proceed with Olympic Dam. Mr Abbott did not even read that decision, yet had the audacity to go on the ABC's 7.30 program to comment on it. It did not suit his slogan of the day. There were facts but he didn't even bother to read the statement. Why read the statement to the stock market when you have already got your message sorted. It is all about ignoring the truth. Rather than getting to grips with the things that are genuinely affecting the jobs, lives and livelihoods of Australian families and workers, he would prefer to take the easy and lazy way out. Unfortunately, Liberal senators in this place are doing exactly the same thing and falling in line behind their leader, Mr Abbott, and his poor, pathetic slogans.
What do we know about the carbon price beyond just the environmental and economic benefits that it is going to provide? We also know that this carbon package is going to provide a whole suite of benefits for Australian families, and those benefits are something that will be under threat if, dare I say it, a Liberal government take hold of this country. Things that the opposition would potentially roll back if they were in power would be things like tax cuts. We have tripled the tax-free threshold to $18,000 a year.
Senator Bushby interjecting—
That is incredibly important for low-income Australians, of which there are many in our home state of Tasmania, as Senator Bushby would be very, very aware. It would include increases to pensions, benefits and other allowances to help households to offset a very modest increase to the cost of living as a result of the carbon price. We know that that modest increase—in fact, some $9.90 a week for households will be compensated by $10.10 per week. But, no, these facts, the truth of the matter, are things that the Liberal Party simply do not want to hear. They want to continue to go out there and pretend that every day is doomsday: we must roll back the clock and go back to the 1950s, turn off the fridge and hide in the dark because we certainly do not want to have a progressive economic reform agenda for this country! They do not want to accept the fact that our economy is doing well; they want to say that every day is doomsday. Do they really think the Australian people are that stupid? Do they really think that with all these slogans and rhetoric the Australian people are going to say: 'Yeah, the opposition are right. Things are really bad. The tax-free threshold was just increased to $18,000. That is a really bad policy.' We are doing our bit to reduce global warming for our planet and for our children and grandchildren. 'Oh, that's a really bad thing for our economy.' Do they really think that the Australian people are that stupid? The Australian people have been compensated for the mild increase in the cost of living that comes out of carbon pricing. That is something they understand. They know that we need to play our part, just as we are now through the setting up of trading with the EU and all the other countries.
Let us not forget all the other countries that have also got on with ensuring that they are developing an emissions trading scheme—countries like Indonesia, Japan, China, Korea and Vietnam. These are countries that have or are developing right now an emissions trading scheme, countries with whom we will also soon be trading with through our own scheme. Do the opposition just not get it? There are so many countries engaged ensuring that we are doing something on climate change. It is all out there. Australia should play and is playing its part. I am proud to say that the Gillard Labor government took that important step—a step that also comes with economic reform for our nation.
Last month the opposition leader again played with the truth and said that there were no developing carbon markets in the Asia-Pacific. I have just named at least five. It is really not that hard to see through these misleading claims, this stretching of the truth—that thousands of jobs will be lost, that millions of dollars in investment will just go up in smoke, that price increases will be unimaginable. All of this rhetoric is rubbish. The sky certainly has not fallen in. (Time expired)