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Tuesday, 23 August 2011
Page: 9040


Mr TUDGE (Aston) (16:14): We have just had a 15-minute speech by the member for Lindsay on a matter of public importance which concerns the carbon tax's impact on our manufacturing sector. The member for Lindsay talked about the payroll tax and the land tax. Even Work Choices came up. He talked about the coalition's policies, but he barely mentioned his government's own policy, which is to apply a huge economy-wide carbon tax from next year that will impact on every single manufacturer across the country. The only positive thing that he could say in his entire 15-minute address to this House is that their policy would provide certainty. The certainty in their policy is that the carbon tax starts at $23 and will continue to go up and up and up and up over time. The certainty on this side of the House is that there will be no carbon tax. We are very, very clear in that regard.

If the news from yesterday was not a wake-up call for this government not to proceed with their carbon tax, then I do not know what will be. The headlines of the major papers screamed that a thousand jobs would be lost from BlueScope Steel due to the closure of one of the three remaining blast furnaces. A thousand families will be affected by that decision—a thousand mums and dads who will be going home and telling their kids one of the more difficult things to tell their children that they no longer have a job.

If it were just BlueScope Steel cutting workers that would be bad enough, but it is not. It is happening right across the manufacturing sector right across Australia, and it is happening right now. It is happening in large companies such as BlueScope Steel and it is happening in medium companies and it is happening in small companies and small businesses, including in my own electorate in outer eastern Melbourne, the electorate of Aston. As Alan Oster, the chief economist at the National Australia Bank, has said, manufacturing today is effectively in recession. If you do not want to listen to a big-company economist point out that manufacturing is in recession, then maybe the members of the government would listen to one of their own people. One of the four faceless men who put Julia Gillard into the prime ministership and into the Lodge, Mr Paul Howes, the head of the AWU, said:

… we are now facing a major crisis in Australian manufacturing.

Of course, the numbers support this assessment. As the member for Indi has pointed out, 90,000 jobs have disappeared from manufacturing in the last three years alone.

In the face of this crisis in manufacturing and in the face of weak economic data not just in manufacturing but in retail, in housing and in the unemployment figures right across the board, what does the government suggest should be the response to this crisis? In the context of jobs being lost and weak economic data from Europe and the United States and retail figures being down, what does the government instinctively reach for as the answer to every single problem it faces? That is right: a new tax, as the member for Longman pointed out. It is not just any old tax but a tax which will apply across the board and affect every single business in Australia. It will be the biggest carbon tax in the world with the broadest application and it will be an economy-wide tax. It will add cost to manufacturing. It is a tax that will cost thousands of local manufacturing jobs.

The reason it does this is that the carbon tax will make Australian manufacturers less competitive. Part of the difficulty for Australian manufacturers today is the intense competition coming from places like China. This carbon tax does not support our own manufacturers in the context of very strong competition from places like China and India. The carbon tax does not even create a level playing field for Australian manufacturers versus international manufacturers. No, that is carbon tax is a production tax, which means that it penalises manufacturers in Australia but does not apply penalties to imported competition. The member for Lindsay mentioned the automotive industry. According to a report from PricewaterhouseCoopers, the carbon tax will make every single Australian car up to $400 more expensive, but it will not have any impact on cars made in Japan, Germany or the United States. Australian cars will be up to $400 more expensive due to this carbon tax but it will not apply to the imports.

The Prime Minister is fond of talking about price signals. She comes into this chamber and says, 'This carbon tax is all about sending a price signal to the market.' What sort of price signal does it send when an Australian made car will cost up to $400 more than an internationally made car due to this carbon tax? What sort of price signal does that send? It sends the signal to go and buy an international car. The same applies to every single manufacturer in Australia who competes with international companies, which these days is nearly all of them.

A small example in my electorate is Vicpole in Bayswater, a company I have mentioned before in this House. Alan Vickery, the Managing Director of Vicpole, says, 'I cannot build in a measure to counter a 20 per cent price increase when my competitors do not have that same cost.' His is the only Australian company which manufactures street poles and bollards. All of his competitors are international. He says, 'It would not be the end of Vicpole to have the carbon tax imposed but it would be the end of 40 jobs.' There would be no requirement to have 40 employees to unload containers if he simply imported those street poles rather than manufactured them here in Australia. There are hundreds of examples like this in my electorate and in the adjacent electorates of Deakin and La Trobe, and I ask those members, 'Where are you in standing up for your manufacturers in your electorates?' For example, in the parts of Bayswater and Boronia that are in the La Trobe electorate, where are those members standing up for their electorates?

As I pointed out, manufacturers are doing it exceptionally tough, but this government seems to believe that its carbon tax is actually going to be fantastic for those manufacturers. We heard from the member for Lindsay that it is going to create fantastic certainty. The government is not concerned about additional costs on manufacturers; it thinks this is going to be a good thing. Every single day the Prime Minister comes into this House and says: 'This is all about jobs. This carbon tax is all about creating jobs.' I have news for the members opposite: if you increase the costs to businesses in Australia and you do not increase the costs to competitor businesses overseas, you will end up advantaging those competitor businesses overseas and disadvantaging our businesses here in Australia.

Mr Bradbury interjecting

The DEPUTY SPEAKER ( Hon. Peter Slipper ): Order! The parliamentary secretary has had his opportunity.

Mr TUDGE: If you do not believe me or you do not believe the essential logic that increasing the cost structure for Australian manufacturers is bad for those manufacturers, then maybe you will listen to Manufacturing Australia, which says that 'it will be the death knell for manufacturing in Australia.'

What is the point of all of this pain? Will it reduce emissions? Is this policy which is going to penalise our manufacturers actually going to reduce emissions? No, it will not. What it will probably do is make the overseas manufacturers more competitive, which means that some of our businesses will shut shop here and open businesses in China, where the standards are lower; hence, global emissions, which are what count, may actually grow. This is the ridiculousness of this carbon tax. This is the farce. This is the worst of all possible times to be introducing a carbon tax, when we have manufacturers across the country laying off workers and struggling as it is with a high dollar and fierce competition. They did not need an additional tax which will apply to their businesses and not to their international competitors. (Time expired)