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Tuesday, 20 March 2012
Page: 3515


Mrs PRENTICE (Ryan) (16:06): This carbon tax is a strong betrayal of everything the ALP stands for. It is a betrayal of the workers of Australia. It is a betrayal of honesty in government. This is a government so obsessed with winning, spin and the PM's willingness to 'do whatever it takes' that it has forgotten the people of Australia. It is the people of Australia and Queensland who will bear the pain of lost jobs and increased prices. It is the people of Australia and Queensland who will be watching electricity bills rise relentlessly—caused by this government's obsession with focus groups and opinion polls.

Do not accept the deception that the carbon tax has anything to do with principle. According to a Galaxy poll conducted for the Institute of Public Affairs, more Australians are worried about price rises on electricity than on other major household expenses. Those not yet worried about the impact of skyrocketing electricity price rises certainly will be when the impacts of the carbon tax start flowing through in just three months. Thousands of jobs and billions of dollars of investment in coal mines and related businesses are at risk from the carbon tax, according to the Australian Coal Association. ACA chairman John Pegler criticised the federal government, saying:

In our view the government has underestimated the impact of the carbon tax …

The $18 billion cost impact of the carbon tax will hit many of Australia's mines making them uncompetitive in international markets.

This occurs at a time when the International Monetary Fund is warning that economic growth in our major coal export markets in Asia could be slashed by a third.

Nowhere will the carbon tax hurt businesses, communities and residents more than in my home state of Queensland, a state where the Labor government benefited from years of record mining royalties—rivers of gold—and did nothing with it. Even worse, their financial incompetence resulted in the state losing its AAA credit rating. This a state where the Labor government continues to set new records for poor and reckless financial management, nowhere as stark as in the health department where it will cost $220 million to fix the failed payroll system, where a fake Tahitian prince stole $15 million and where they cannot even get the basics right to pay their nurses.

The state Labor government know that the carbon tax will spell disaster for many businesses and thousands of jobs, particularly in the mining sector—but their silence has been deafening. Did the Queensland Labor state government question their federal colleagues? Did the Labor state government stand up for Queenslanders on the insidious carbon tax or mining tax? No. The Queensland state Labor members are too busy distancing themselves from the ALP and pretending to be Independents for this weekend's election.

What compounds the failure of the state Labor government to stand up for mining and mineral-processing communities in Queensland is that last year the Bligh Labor government commissioned a report from Deloitte Access Economics regarding the carbon tax impact on my home state of Queensland. Keep in mind that this was a report commissioned by a state Labor government and a Labor premier who is also the Labor Party's past national president. This report found that Queensland's gross state product would be 2.76 per cent lower by 2020 and 4.11 per cent lower in 2050 with a carbon tax compared to without one. That is a five per cent reduction in Queensland's gross state product under a carbon tax and will result in a predicted 21,000 jobs lost in Queensland alone. On top of this, the Queensland Treasury has estimated a loss in economic value of the state's generation companies of $640 million, which undoubtedly will be passed on to consumers. Yesterday, during the leaders' debate, Labor Premier Anna Bligh boasted that her government would be leaving Queensland better off than when her very old and tired government first came to power. Assisted by her federal colleagues, and on the evidence of her own report, this is clearly not the case.

Frighteningly, this $640 million in Queensland pales in comparison to the $40 billion cost the National Generators Forum estimates the generation sector will incur across the country. However, as in Queensland, it is likely that nearly all of this cost will be passed on to consumers. Part of this high cost is due to the starting price of $23 per tonne being far higher than carbon prices elsewhere in the world, and it has put Australia at a considerable disadvantage compared to other countries. Without a carbon tax, the Productivity Commission puts Australia in the middle of the pack with regard to tackling climate change. So by waiting for international action for the sake of our economy, and particularly our manufacturers, we would by no means be dragging our feet. It is a matter of plain common sense.

The Gillard government should be embarrassed and ashamed about introducing a carbon tax and the hurt it will inflict on families and communities across Australia. And yet the scene in this chamber when this tax was passed—similar to the scenes in the Senate last night when the mining tax was carried—was one of celebration and jubilation. What sort of government celebrates inflicting hardship on the people and communities of Australia?

On 20 August 2010, the day before the last federal election, the Prime Minister categorically stated, 'I rule out a carbon tax.' This morning in a press conference she boasted, 'Guess what? We now have a carbon tax.' She should hang her head in shame for that duplicity. This is not only yet another tax but also a bad tax. It is as simple as that. Taxes affect prices, and prices change behaviour; but this tax is different from a consumption tax such as the GST, which, I remind the House, was taken to an election and won a true mandate before being introduced by the Howard government. This tax is different because it is a tax on producers, which drives up their costs. As I said before, changes in price change behaviour, but with a tax on production rather than consumption the effects are multiplied. Costs rise for producers, so they change their behaviour by reducing their costs through cutting services or laying off staff—no-one wins. Alternatively, they could shut up shop, unable to afford these increased costs, which would mean no services and no jobs—and definitely no winners—or they could pass their increased costs on to the consumer and raise prices.

Consumers react to a change in costs by changing their behaviour as well. But consumers must still buy food and must still buy power, so their cost of living will increase dramatically under this tax—and by much more than any so-called compensation package would cover. The government's own modelling shows that under this tax there will be an immediate 10 per cent increase in electricity prices and a nine percent rise in gas bills. Food costs will increase due to the electricity price rise and increased transportation costs. Be in no doubt that the basic necessities for life will cost more. If families cannot save through not buying necessities, they will buy less—less entertainment, less clothing and less generally from the already struggling retail sector.

The Prime Minister says that this carbon tax, when the so-called tax reform compensation package is taken into account, will cost Australians just a couple of dollars a week, if anything. But that couple of dollars a week will be on top of the 'just a couple of dollars a week' caused by the 18 other new taxes introduced since 2007, and the 'just a couple of dollars per week' not spent by every customer on just one cup of coffee or just one magazine is a big cost to small business. Across the road from my office is a coffee shop. Talk to them about the effects of 200 or more customers buying just one fewer cup of coffee a week. Ask the newsagency next door how his customers buying one fewer magazine a week will affect his margin.

The people and communities of Queensland—indeed, of Australia—need a government they can trust. They need a government that honours its commitments and delivers on its promises, and the Leader of the Opposition has stated categorically:

The carbon tax will be rescinded in its entirety by an incoming Coalition Government. The first order of business for an incoming Coalition Government will be the scrapping of the carbon tax and everything associated with it. Now, this carbon tax is going to impact in every nook and cranny of our economy … Every transaction in this country is going to be impacted by the carbon tax. Everything that people do or buy is going to be impacted by the carbon tax. That's why the best thing we can do to promote certainty and stability is to stop Labor's big new taxes starting with the carbon tax.

Lower, simpler, fairer, fewer taxes—that is what the coalition is on about.

Queensland and Australia need strong action now, not more taxes and not more empty promises and political tricks. A tax cut that is paid for by a tax hike is not a tax cut—it is a tax con. It is time to get Queensland back on track. Queensland needs Campbell Newman as Premier.