Ms NEAL (2:12 PM) —My question is to the Treasurer. Why is the introduction of a carbon pollution reduction scheme such a vital economic reform for Australia’s future?

Mr SWAN (Treasurer) —I thank the member for Robertson for her question. The rationale for the CPRS is very simple and it is very clear. By taking action now, we avoid larger costs for future generations, something everyone in this House should be concerned about, because climate change is a very serious economic challenge to future prosperity. It would be wonderful to think that it does not exist, but it does, and hard-headed governments must deal with it—and hard-headed governments around the world are dealing with it. They are dealing with it because it is an economic threat, not just an environmental threat.

Australia has more to lose that just about every other developed nation, so there is an urgency in this country to deal with it, and we must, because every tonne of carbon that is pumped into the atmosphere imposes a cost on our community. It is a cost that is felt right across the community and right across the economy: hotter days, water restrictions, bushfires and drought. Of course, that is denied by so many opposite. But we are now experiencing only a fraction of the costs that will be left for future generations if we do not act, and that is why we must act.

We now have and have had for some time the modelling from the Garnaut review. I would like to go through some of those conclusions because I think they are worth reviewing as we go into this debate through the next 24 hours. Increased temperature and reduced rainfall will cause substantial reductions in agricultural output. That should be obvious to just about anybody. The modelling forecasts a 92 per cent decline in irrigated agricultural production in the Murray-Darling Basin by the end of the century. Unmitigated climate change would disproportionately affect the price of food. Relative to other goods, Garnaut found that the cost of food could increase by more than 10 per cent.

There are fundamental bread-and-butter impacts from climate change and long-term damage to the economy that many opposite simply will not face up to. They just want to put their head in the sand and wish it was not happening. But governments committed to hard-headed reforms, which protect our prosperity, know that in these circumstances we must act. Nobody else can act. We cannot leave it up to voluntary groups, welfare groups or volunteers. There is only one group in a society that can act in these circumstances and, of course, that is government. That is what members of this House are elected to do, to represent the community and protect the national economic interest.

There is so much of this debate that reminds me of debates of earlier times about the hard-headed decisions that were taken, which were not necessarily popular at the time but which have ensured our prosperity. I well remember the debate about the introduction of national superannuation and how many on that side of the House went around and said, ‘We cannot do this, it is a tax and it is a cost to business.’ But it was right for the nation. As we go forward we have discovered just how important that long-term reform was to our economic prosperity. It has been demonstrated, particularly in the past 12 months, because that pool of superannuation savings has been absolutely critical in ensuring finance in this economy as we go forward. But there were plenty of people who were not prepared to take the hard decision back when that long-term reform was introduced and many of them were on that side of the House.

What we have got to do is put aside the short-term scaremongering. What we have got to do is put in place policies for the long-term national interest that will look after future generations and of course do the right thing by our economy.

Those opposite have got 24 hours to make up their minds. I hope they think long and hard about their position. I hope they don’t do what they did with the economic stimulus, which was a short-term populist thing to oppose it in this House. I hope they don’t do that. I hope they don’t do what they did over the years when they did not invest in infrastructure. I hope they face up to the long-term responsibility and acknowledge that action is required. I hope they don’t do what they have been doing recently by opposing in this House essential savings measures. Those opposite always take the easy decisions. What I hope is that there are enough in the party room that acknowledge the national interest and get behind this important long-term reform for our children and for the future prosperity of our national economy.