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Wednesday, 28 May 2008
Page: 3723

Mr WINDSOR (7:13 PM) —Without wishing to repeat what the member for Lingiari had to say, I agree with many of his comments. Before the member for Lingiari leaves the room, I congratulate him on his strident views and representation of Aboriginal people. I would like to place on record the feeling that was in this building the day that the apology was made. I think that was one of the outstanding days of public life. It will live in my memory for a very long time. The thing that will come back to me is when the Prime Minister and the Leader of the Opposition had both spoken and they walked together towards the back of the chamber, where there were Aboriginal elders. There was a moment of virtual silence. A woman in the Speaker’s gallery—I presume it was an Aboriginal woman—said two simple words: ‘Thank you.’ I know there were interpretations of who said what, the politics of it all, but I thought the conduct of the Prime Minister and the Leader of the Opposition, particularly at the moment, was something unique in our parliamentary process.

I agreed with a lot of things the member for Lingiari said a moment ago. I will not go into them, but I know that a lot of his lobbying and representations over the years probably in no small way led to that exchange on that particular day. That does not mean the problems are solved. I think we are all very much aware of that. I think it was a very good start for this parliament—all of us, irrespective of some of the reports that were made.

The budget paper is an interesting one, obviously, the first one for the new government. There are a number of comments that I would like to make in terms of positives and negatives as I see them. The member for Kennedy spoke earlier about inflation. Inflation is obviously something that the government is worried about and they should be, because, in my view, it is possibly the only thing that will defeat this government in its first term—if inflation actually gets out of control with the consequent management of interest rates et cetera.

I do not believe—and I hope I am wrong—that the government did enough in terms of inflation. I think the government fell for a trap that was set by the previous Prime Minister, John Howard, on day one of the election campaign when the matter of tax cuts was raised. The former Prime Minister promised the tax cuts and the current Prime Minister had a strategy worked out of agreeing with most things and there was enough of a margin in Work Choices of five or six per cent to win the election, which worked out to be quite correct.

The agreement on tax cuts did a number of things. It restricted—a great political ploy on behalf of John Howard—the spending capacity of the then opposition in terms of promises. If they made wild promises, they were obviously irresponsible in their economic management. But it also did another thing in my view, it restricted their ability to deal with the inflationary problem. In fact, it led them to a real issue: how do you restrict spending while you are throwing cash on the fire? How do those things work together? Obviously their strategy was: we have to abide by the tax cuts but we will make cuts in other areas. In some of those areas I do not think they were warranted. They would not have been required if the tax cuts had not been made in the first place.

As I said, I hope I am wrong because I remember, as would Deputy Speaker Scott and others, what happened through the late eighties when inflation and interest rates galloped away. The government does have a number of exterior issues to deal with—the high price of fuel, energy and what is happening there, and the climate change debate and the way in which that may interact with energy prices further down the stream. A lot of them are external factors. The price of fuel has some domestic factors that are quite involved and I support the Leader of the Opposition in a reduction in fuel excise. The fuel excise was brought in many years ago to get us ready for some sort of oil shock. Then it was supposedly some sort of road maintenance arrangement. We spend about 16 per cent of it at the moment on road maintenance or construction—very little. But it has gone on and on.

Then some—the Greens and others—have in their minds that you have to have a high price to deter people from actually driving fuel guzzling vehicles. We had a rather absurd debate today about a luxury car tax. In fact, in the four-wheel drive market that most country Australians would require because of the state of their roads et cetera, the piece of legislation passed today will drive people back to buying V8 Land Cruisers rather than more fuel efficient diesel motors, because those are more expensive and more of a luxury, apparently. I made my point in the other chamber in relation to those particular issues. But there are contradictory messages constantly out there.

The member for Kennedy made a point about biofuels. We are told we have an energy crisis; the price of energy is going through the roof. How are we going to address that? What about emissions? How are we going to address those? We have some people looking at an emissions trading scheme at the moment. How is that going to filter through our economy? How will that affect the price of fuel? Then we have these sorts of side debates about a global food crisis being driven by the price of energy, and Australia has to make a contribution—a major one in some people’s eyes—to feeding the globe. And we have this food versus fuel argument wandering around out there. Different people pick it up and argue the bit that suits them.

All of these things will have an impact in the next few budgets. If you follow the food versus fuel issue, for instance, and pick up on some of the things the member for Kennedy was talking about on ethanol or biofuels, we currently grow food—grain—and we sell 80 per cent of it overseas or attempt to. Occasionally, we have to bribe someone to try to market it. We market that overseas and then we enter another corrupt market, the oil business, and bring energy back to Australia. I think the point that the member for Kennedy was trying to make was that, surely, there is a way through this whereby we can do some of those things at home, where we have a positive impact on climate change emissions, on carbon footprints and on the health of people who breathe in exhaust fumes et cetera. There are a whole range of potential positives.

The fuel debate has been on all this week and last week and there was not one mention of those things by either side of politics. There is an assumption that we have to accept what the international community does to us in terms of our energy and that there is nothing we can do about it, according to the current debate.

I will rerun a scenario that I painted in the other chamber earlier today, and I will use the Walgett wheat grower as an example. We in this state overproduce grain—and the same thing happens in Western Australia—and we have to find markets elsewhere. The Walgett wheat grower has a carbon footprint and will have one in a legislative sense in a couple of years if we get into emissions trading. He has a carbon footprint growing his crop; he has a carbon footprint when he puts it in a truck to get it to the silo. The train has a carbon footprint when it carts it to the port. The ship has a carbon footprint when it takes it to Egypt or wherever, and the load that the ship is carrying is partly starch and it also has a carbon footprint. Who is going to pay for all those footprints? Is there a need for those footprints to take place if we are looking at the climate change debate? When the ship gets there, they hire another one and go to another corrupt market and buy a bit of oil—a fossil fuel, which everybody is saying we have to get away from— and bring it all the way back to Australia. That has a carbon footprint. They will not put it on a train because there are no trains carrying oil anymore, so they will put it on a truck at the port and drive it all the way back to Walgett. The farmer will get on his tractor to drive around in a circle to produce grain and produce another carbon footprint. Who pays for the return trip? How is that going to filter through in an emissions trading scheme?

I do not know the answer to those questions. I do not think anybody does at the moment. But surely we can see the simple relationship between what the Walgett wheat grower is doing in growing grain and energy. Rather than exporting the grain to buy energy—and the member for Kennedy was not far wrong when he was talking about the prices in Brazil and the United States and the biodiesel market in Europe—surely we can see that the production of energy internally could circumvent this trade situation that we have assumed we are locked into—both corrupt markets. Surely, we have to start looking beyond those things.

Some would say, ‘Yes, but we have a moral obligation to provide food for the starving millions.’ Australia produces 1.75 per cent of the world’s grain, so there is no way we are going to save the starving millions, particularly if we are restricting the area of land use. We are told we have this obligation. If you look at the Sudan in Africa, for instance, we see all sorts of political problems, and they are part of the starving millions.

One thing that Australian agriculture—Mr Deputy Speaker Scott, you would know this more than most in here—does have in terms of a comparative advantage is our capacity to grow food in a dry climate using some of the technologies that are out there at the moment. Some of those may have a positive carbon footprint, soil sequestration for instance. I am pleased the Prime Minister is actually looking at that issue. I know there are difficulties in terms of measurement et cetera, but we might end up with healthier soils and more productive capacity as well.

The Sudan, for instance, has the capacity to produce six times what Australia produces in grain. The Sudan could more than feed Africa. Here we are running around in a circle, growing stuff and leaving carbon footprints all over the world trading with them, when in fact what we are doing when we dump food into their marketplace—thinking we are granting them a great largesse by delivering another boatload of grain—is actually destroying their own infant grain markets. The Sudan has the capacity to produce 200 million tonnes of grain if using the right sort of technology. The soils are there to do it. They are no different to those of a Walgett farm or some of the country on the Darling Downs—or Emerald, as you would be well aware of, Deputy Speaker.

I would implore the government, instead of being locked into Fuelwatch and the debate going on at the moment, to look at some of the other options that we can do something about in terms of our energy. Biofuels must be one of those. For the food versus fuel people, who feel so strongly about this moral obligation, I would like them to start explaining who is going to pay for the footprints. Who pays? I would like them also to explain what happens when we move to second generation biofuels—biomass, cellulosic ethanol, which is technically possible now. What happens when we go down that road? Does government suddenly legislate and say to the Walgett farmer, who used to grow food: ‘Excuse me; you’ve got to stop doing that. You can’t grow biomass. You’ve got to grow food.’ Is it going to legislate land use or determine what people grow, irrespective of whether they can make a profit out of it? The obvious answer is no.

The Americans are pursuing the cellulosic biomass ethanol path quite strongly at the moment with a grass called switchgrass, which grows two metres high and has a root system two metres deep. The production of ethanol or fermentation of the starches in these long molecular structured grasses has the capacity to produce even more ethanol than grain. If we are going to pursue that path in Australia, how is the policy mix going to handle those sorts of issues? These are the questions that I think we really have to think through. If the prairies of the United States, for instance, went back to their original grass—switchgrass was one of them and we have similar grasses in Australia—what would the environmentalists say about that? What if we changed some of the highly erodable soils in the world back to something that was producing energy and not being eroded? What would the environmentalists say about that? What if it was shown—and early evidence is suggesting this—that a return to a grass, a perennial, which is not planted every year, had a positive carbon footprint? Who would get the benefit of that? What if there was a natural sequestration of carbon process going on in a natural grass based operation?

There could be an enormous number of positives. I have been a bit critical of some people in agriculture who have been frightened of this whole climate change debate. I think there are real positives there. If we do not engage in it, agriculture could get judged for its negatives—some methane and nitrous oxide issues—without accumulating any of the positives. But government has to start to talk about alternatives to fossil fuels. Otherwise, they are contradicting themselves in this overarching climate change debate. I was interested to see that buried away in the budget papers there is some money for renewable energy and some money for research into using non-grain feedstock for ethanol, for biofuels. It is essentially biomass.

I am pleased to see that in there but, in terms of the taxation review and a whole range of other economic activities that are going to be happening in the next few years, the government has to make up its mind whether in 2011 it is going to impose a fossil-fuel tax on the production of renewable biofuel. As of the moment, thanks to the legacy of the previous government, that is the existing policy. And the current government has not done or said a thing about modifying that. I know the minister for energy is having a review, and I would urge him to make sure that renewable fuels are part of this overarching renewable energy structure, which is supposed to attack the climate change issues.

There are a number of issues that I think are absolutely critical to next year’s budget, to send a signal that we are serious about some of these issues. But you cannot have a renewable energy debate and leave some things out of it because you think, ‘Well, it’s uncomfortable to send a message.’ It is an absurdity for some people in this place to say the removal of a tax from a renewable fuel source is a subsidy to that industry. It is an absolute absurdity in economics to say that the removal of a tax from an industry is in fact a subsidy to it, when it could be a highly valued part of our energy process. (Time expired)