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Tuesday, 13 February 2007
Page: 5

Mr NEVILLE (2:21 PM) —My question is addressed to the Deputy Prime Minister and the Minister for Transport and Regional Services. Would the Deputy Prime Minister inform the House of the importance of coalmining and coal-fired power generation to regional areas, including those in my electorate of Hinkler? How would the proposal being considered in the climate change debate affect working families in regional areas—for example, Gladstone?

Mr VAILE (Minister for Transport and Regional Services) —I thank the member for Hinkler for his question. Obviously the member for Hinkler is taking a very keen interest in this debate as it is focused around the coal industry, given that he represents the port city of Gladstone, arguably one of the most efficient coal-exporting ports on the eastern seaboard, and other areas that have coalmines within them, and many of his constituents are employed in that industry.

It has been clearly established—and the figures were used yesterday—how important coalmining exports are to the Australian economy. Can I also point out how important, particularly in an industrial city like Gladstone, the competitive advantage that Australia has in this cheap energy source is. Coal provides 85 per cent of the nation’s electricity needs—cheap, efficient power supplies, not just for private consumers in their homes but also for businesses and for industry. And there is some very important industry in Gladstone, which employs a lot of the constituents of the member for Hinkler and relies on that internationally competitive energy source that comes from our coal supplies.

Many other nations across the world have a competitive advantage in other areas—for example, China and the cheaper cost of labour.

Mr Fitzgibbon interjecting

The SPEAKER —Order!

Mr VAILE —Our competitive advantage is the cheaper cost of energy.

Mr Fitzgibbon —Comparative advantage.

The SPEAKER —The member for Hunter is warned!

Mr VAILE —The cheaper cost of energy in Australia is threatened by reckless environmental policies in this current debate. You may want to see what happens when you factor into the equation some of the costs that are being proposed. We read in today’s paper about the proposed coalmine in New South Wales. The New South Wales state government has indicated that that mine should factor in a cost of $109 for each tonne of carbon dioxide created when its coal is burnt. That cost is going to go somewhere. That cost is going to go to consumers.

I think that organisations like the New South Wales government proposing this should be honest with consumers and tell them what their electricity charges are going to go up by. If it happened in Queensland, the industry in the city of Gladstone would be paying more for its electricity. If you want to see an example of that, just have a look at what has happened overseas. Have a look at what has happened in Europe. The NUS Consulting Group has done an analysis of the cost per kilowatt hour across a number of different economies. In Australia in 2006 the cost in US cents per kilowatt hour was US5.29c per kilowatt hour. In Germany it was US10.33c per kilowatt hour. In France it was US10.53c. In the United Kingdom it was US11.03c. That is what the cost of environmental taxes does to the competitiveness of the cost of energy, which we rely so heavily on in Australia.

We know that members of the Labor Party do not pay much attention to this issue. When the member for Kingsford Smith was asked, ‘Will consumers have to pay more?’ his reply was, ‘I don’t know what “pay more” means.’ The consumers in Europe and other countries across the world that are bearing this cost know what ‘pay more’ means. It means paying more than US5c a kilowatt hour.

That report on European costs said that this cost increase was due partly to rising oil prices. It also said that it was due to the application of new environmental or green taxes on electricity purchases. That is what happens. These costs are passed on to consumers. We know that will happen. We know that the member for Kingsford Smith has already got that in his mind. In a former life he told Lateline, on 6 May 1999, when he was the President of the Australian Conservation Foundation:

I mean, most countries when they come to a GST and tax reform—and certainly the OECD experience is that—they use that opportunity to get into some environmental taxes.

We know that is what the Labor Party is about. We know that is what the green movement is about. The people of Australia need to understand that what the government is about is making these industries cleaner and investing in clean coal technology so that we can continue to take advantage of our most important competitive advantage, and that is clean and cheap energy in Australia.