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Tuesday, 1 November 2011
Page: 7846


Senator PAYNE (New South Wales) (21:50): I am not the first person to say in this place or in Australia that this carbon tax legislation represents an absolute betrayal by this government and by this Prime Minister of the Australian people, and I most certainly will not be the last. The one thing you can say about the Australian electorate is that it has a particularly good memory for deceptions like this one. The promise was:

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

The fact that we stand here in this chamber, and in recent weeks in the House of Representatives, and spend time on this debate and on having this discussion exposes that statement for the absolute blatant lie that it was.

What the next election will represent, therefore, is an opportunity for Australians to pass judgment on that betrayal by 72 Labor members of the House of Representatives of their own communities, their own small businesses, their own families, their own commuters and their own workers in every conceivable corner of their own electorates. That election will ensure, we hope, that Australia is not burdened with an expensive tax that will increase cost-of-living pressures for all Australians, will export jobs overseas and, as we know, will not make any material contribution to slowing the rate of climate change. The next election will be, amongst other things, a judgment by the Australian people of this carbon tax. We will continue to fight it. We will give the community a say on this pervasive tax, something the Labor government was not prepared to do. Frankly, that speaks volumes.

This carbon tax will do nothing to slow the rate of change of the earth's climate. The government's own modelling reveals that Australia's carbon emissions will actually increase, notwithstanding the price Australia will pay for imposing such a tax on itself. Emissions are forecast to go from 578 million tonnes in 2012 to 621 million tonnes in 2020. The legislation we have before us, rather than bringing down our emissions, will require Australia to purchase carbon credits overseas. It is a tax predicated on the deliberate transfer of Australian wealth to other countries at a time when our manu­facturing sector is already under pressure. It is in fact designed to export Australian jobs, not even to countries that will improve the efficiency of manufacturing but to countries whose factories produce a higher level of emissions than our own produce does. All it will do is move the problem to other parts of the world.

If it is a global problem, how are we doing our part by paying other nations to produce carbon intensive products that we can actually produce more cleanly? This tax is not designed to help the world; it is designed to give this government an excuse to wash its hands of the issue. It is environmental vanity on so many interpretations, and it is Austra­lians who will pay the price in money and jobs. It is Australians who will bear the brunt of this.

Some in the community have unfortu­nately been misled into believing that this tax, even though it will export our emissions overseas at great cost to Australia, is at least part of a global system that will work to bring down overall carbon emissions across the planet; that we are playing some part in an international effort to mitigate the effects of climate change. In fact, that is wrong, plain wrong. The Productivity Commission, one of the government's own key economic advisory agencies, has provided quite clear advice about the international linkages that this sort of scheme will have. The government set terms of reference for the Productivity Commission, one imagines, according to the time-honoured principle that one should never commission a report unless one knows what the findings will be. Despite this, the Productivity Commission clearly stated that not one other country has or is bringing in an economy-wide carbon tax or emissions trading scheme.

The much lauded European ETS does not cover the whole economy and it provides so many free emissions permits that it raises a relatively small amount of money a year, about $500 million. We have a much smaller population and a smaller economy and, with that, we will be paying around $9 billion a year into government coffers as part of this scheme. The US, as Senator Ronaldson referred to, has abandoned consideration of a national cap and trade scheme, and China, a country that will continue to industrialise and grow at the most extraordinary speed, a country that the government has pointed to as some shining light of climate change action, will increase emissions by 500 per cent by 2020. Climate change is a global problem, yet alone amongst leaders of the world's major economies our Prime Minister apparently believes it has a local solution.

But this carbon tax is not designed to solve climate change; it is designed to indulge the Labor-Greens alliance to prevent this fragile and incompetent government from falling apart. The Prime Minister is bargaining away Australian people's money in her gamble with the Greens on this package. It is not going to assist the world in tackling climate change.

Some would argue, apparently, that even though we are going it alone at this stage we are taking a moral stand—and in fact I recall the previous Prime Minister calling climate change the greatest moral issue that ever was—that will encourage other, more polluting countries to adopt similar schemes and drive down global emissions. But surely the prospect of other countries following such steps—and one questions that logic anyway, based on the evidence available—has also to be weighed against the cost to the Australian people of taking this particular stand? Not only will this carbon tax fail to fix the environment; it will damage the Australian economy, it will take money out of the wallets of ordinary Australians and it will send Australian jobs overseas. The government will be taxing the Australian economy to the tune of $9 billion a year—resulting in possibly a 10 per cent hike in electricity bills in the first year and a nine per cent hike in gas bills in the first year—and stripping $4½ billion from the Common­wealth budget, all at a time when the average Australian family is struggling with rising costs of living.

The government promises compensation. Even if the modelling is correct—even if we were to accept that—the compensation will be adequate only for the first three years of the carbon tax, because after that time the price the government levies on carbon emissions will be determined by the market, not by the government. Even the govern­ment's own modelling predicts that the price will increase from $23 a tonne to $29 a tonne by 2016, rising to $37 a tonne in 2020 and a potentially devastating $350 a tonne in 2050. The Centre for International Economics has forecast a price of $49 a tonne as early as 2016. Of course we know that the Greens, the government's alliance partner, who have insisted on this tax, have said that the price must be at least $40 a tonne to shift electricity generation from coal.

How can Australians take this government at its word—you and I both know, Mr Acting Deputy President, that they cannot—when it promises compensation knowing full well that just three years after the tax is introduced it will increase far beyond the compensation offered, and in a manner over which the government has no control? Why on earth would you take a government that has betrayed its people at its word for that as well? You would not.

Every single Australian will be affected by this large, pointless and increasing new tax, but it will certainly hurt some more than others. As the Senate would be aware, the cost of housing in Australia has been increasing for many years and housing affordability is a very significant challenge. It has now reached a point where the dream of home ownership and even the prospect of renting is far out of reach for many Australians, especially those Australians who were unlucky enough not to be able to buy a house before the turn of the century, especially young Australians. Not only does the government seem to have very little interest in this and other cost-of-living issues; it is introducing a tax that is going to drive house prices up even further.

The Gillard-Greens government wants to force Australians to cut their spending by imposing a carbon tax, apparently, but will not lead by example and live within its own means. What a carbon tax of $23 per tonne will do is add at least $5,000 to the cost of building an average, modest new home, including the cost of construction and developing the land, according to the work of the Housing Industry Association on this issue. The residential building sector, as we all know, is dominated by independent subcontractors—your average, everyday subbie. We all use them for something and you cannot build a house without them. They will receive no compensation under the carbon tax arrangements. What are those small businesses supposed to do? The carbon tax will add $36 a month—that is $432 a year—to the cost of servicing the ABS defined average mortgage on a new owner-occupied dwelling of $340,600 based on the Reserve Bank average standard variable mortgage rate of 7.8 per cent. What of rents? Rents will rise even further as investors in new housing pass on the cost of servicing their large mortgages to their tenants through higher rents.

Debate interrupted.