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Monday, 21 March 2011
Page: 2500


Mr HUNT (8:11 PM) —Pink batts, green loans, citizens assembly, cash for clunkers, carbon tax—anybody notice a pattern here? This is not a debate about belief or science. This is not a debate about targets. This is a debate about economic competency and the best way to manage a problem. The government which gave us pink batts, green loans, the citizens assembly which never saw the light of day, and cash for clunkers, which had a problematic birth as well, has now given us a carbon tax.

I want to deal with this issue through a series of steps: firstly, the promise; secondly, the global situation; thirdly, the proposal; and, fourthly, our system. Let me begin with the promise. It is now infamous right around Australia that twice in the last week of the election campaign the Prime Minister ruled out a carbon tax. Firstly, on the Monday before the election, she most famously said: ‘There will be no carbon tax under the government I lead.’ Secondly, on the day before the election, in her last 24-hour pitch to the Australian people to seek a mandate, she said on the front page of the Australian newspaper, the major national broadsheet: ‘I rule out a carbon tax.’ An election is about seeking a mandate to govern. It is about what we agree to do and it is also about what we agree not to do. There could not have been a more express, clear or absolute statement to the Australian people.

The Prime Minister has been through a series of defences since that time as to why that promise was broken. Firstly, she denied that there was a broken promise. We went through this evasive period where she would not even utter the words ‘carbon tax’, even though that was what she had produced, preferring instead to refer to a ‘fixed price on carbon’—which is, by the way, the very definition of a carbon tax. That was unsustainable because it was farcical and a fraud upon the Australian people. Secondly, she put forward the notion that, really, that was what she meant all along—‘Well, I’d always intended to say this.’ But there was no getting around the fact that she had ruled it out.

Most recently, we have had this wonderful roadblock analogy: if you head home intending to get there by taking the main highway and that highway is blocked, then you can take another route. The problem is that right from day one, before the Prime Minister even left her workplace, that highway was always going to be blocked. Every person in this chamber knew that the Australian Greens would hold the balance of power in the Senate, that they wanted a carbon tax and that she would deliver a carbon tax. The context of her comments was that right throughout those last two weeks we were advertising that, as sure as night followed day, the government would produce a carbon tax. The reason we said that was that the Greens wanted it and that the coalition, the government and Australians all knew that the Greens would hold the balance of power in the Senate. The road was blocked before the journey began. That is the fallacy, the fraudulence and the myth behind the Prime Minister’s latest attempt to excuse herself. She deceived the Australian people outright, and she is continuing to engage in that process and practice now.

The second part of the member for Throsby’s motion is about the international circumstances. We are going through a period of deception about what is occurring overseas. There is movement, as there should be, on climate change. It is important to take action, but it is about taking the right action. The Prime Minister’s reference to coal fired power stations being closed down in China was utterly deceptive. I have done a little bit of research on this. In the words of Professor Warwick McKibbin of the Reserve Bank of Australia—I know he is only on the Reserve Bank—China is currently, from 1990 to 2020, going through a period of increasing its total emissions by 496 per cent. It is going through the fastest growth in human emissions in history. That fact is the precise opposite of the impression that the Prime Minister of Australia wanted to leave. You have a duty not just to be literally truthful but also to be truthful in the intent of what you say if you hold the high office of Prime Minister of Australia, and that duty has been breached.

Moreover, specifically on the question of coal, in 2002 Chinese coal consumption was 1.5 billion tonnes, and the best projection is that in 2015 Chinese coal consumption will be four billion tonnes. In other words, their consumption of coal will be 266 per cent of what it was in 1992. So we are not only seeing the greatest growth in human emissions in history; we are seeing the greatest expansion of coal fired power in the history of industrialised society. That is happening right now—today—in China, and that is precisely the opposite of what the Prime Minister sought to convey. It was deceptive, deliberate and dishonest—unacceptable from somebody who holds the highest office in the land.

That brings us to the impact on families of this government’s proposal, and all the while we say that there is a better way. I begin at the highest levels, the Nobel laureates Finn Kydland, Thomas Schelling, Vernon Smith and Jagdish Bhagwati who, along with others, put together an assessment of 15 different approaches to dealing with climate change. They took as their starting point the reality of the science and the need to take action. Of those 15 different approaches, they examined three versions of a carbon tax, and they ranked them at numbers 13, 14 and 15. That is what Nobel laureates have said. I acknowledge that there is debate, but these are three of the Nobel laureates in economics from the last decade, and that is what they have said at a global level.

How does the tax operate here? It operates by raising $114 billion—on the basis of Treasury’s modelling for the emissions trading scheme, it will be roughly proximate. That money will be raised through higher prices for petrol, gas and, above all else, electricity. The electricity prices for mums and dads will start by rising by $300 per annum, on average, according to the work of the Australian Industry Group, the New South Wales regulator and the former Prime Minister, the member for Griffith. In this House on 3 February last year the former Prime Minister acknowledged that there would be a 19 per cent increase over two years but then refused to say what the increase would be in the third year. So we will see that it begins there; but the Minerals Council last week let the cat out of the bag when they indicated that the price of carbon will rise from $26 to $52 over the coming few years. What that means is that, in this week of the New South Wales election, the price of electricity should be declared by the Prime Minister to be increasing from $300 to $600 per family on top of everything else.

The other great myth propagated by this government is that carbon pricing will replace all other electricity price rises. New South Wales IPART prepared a legally binding determination which said that without carbon pricing there would be a certain proportion of increase but that with carbon pricing 25 per cent would be added over three years. That is a legally binding determination which stands to this day. So we know that electricity and gas prices will rise in order to raise $114 billion, the vast bulk of which will be cycled around the economy. Another myth here is that that will affect demand; but demand for electricity and petrol is largely inelastic. New South Wales IPART showed that a 50 per cent price rise in electricity had an elasticity of 0.01 per cent—in other words, for every 10 per cent increase in the price there was approximately a one per cent increase in demand. It is an incredibly blunt instrument, and jobs will be lost. That is why we believe there is a better way—and the member for Gilmore and the member for Hughes will address this—involving direct action to reduce emissions by cleaning up our power stations, our coalmines and directly investing in our farms, our soils and our trees—real action to reduce emissions which can begin immediately with a fast start to make Australia a country which is smart as well as clean. (Time expired)