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Monday, 19 September 2011
Page: 10454


Dr SOUTHCOTT (Boothby) (12:18): I rise to speak on the bills which will introduce the carbon tax. I welcome the opportunity to speak on this important issue facing this parliament. It comes to one of the most fundamental issues in our democracy, and that is whether the community should be told what a government is going to do before an election. Six days before the last election the Prime Minister said, 'There will be no carbon tax under the government I lead.' It was explicit and in none of the documentation—in none of the policies, in none of the material that was put out by any Labor candidate—did the government say they would be introducing a carbon tax.

Australian political history shows that Australians will exact a very heavy price on governments which mislead. Paul Keating, campaigning against a GST, in effect introduced a GST by stealth in the 1993 budget. He massively increased the then wholesale sales tax on a range of goods. Here we have a carbon tax bill that emerged after the 2010 election, when the Prime Minister clearly said, 'There will be no carbon tax under the government I lead.' This shows no respect for democracy in this country. You cannot make specific promises as part of your election platform and then ignore them once elected.

The proposal of the government will cost Australians $9 billion per year. To put this in perspective, the carbon trading scheme in Europe, a much larger economy than Australia's, raises $500 million a year. The impact of the carbon tax will be felt very heavily by people with fixed incomes, such as self-funded retirees and pensioners, and by families. The government has spent a lot of time in this debate focusing on the compensation that people are to receive. If you do not tax someone, you do not need to compensate them. But, if the carbon tax does not hurt, it will not work. What will happen is that the carbon tax will result in a 10 per rise in electricity prices and a nine per cent rise in gas bills in the first year alone. There will be a $4.3 billion hit on the budget bottom line. At the moment we already see enormous pressure on the cost of living for families and all this will do is add to it. At a time when we are seeing retail and small business sectors struggling as never before, this is the worst time to be introducing a carbon tax, which will only increase all of those pressures. Since 2007, when Labor came to office, on average electricity prices have risen 51 per cent, gas prices have risen 30 per cent and water and sewerage prices have risen 46 per cent. Despite what the government says, any tax cuts provided will not keep pace with the increasing cost of the carbon tax, and most Australians know this. While the carbon tax will start at $23 per tonne, it will be a floating price after three years, with the government expecting the price to be $37 a tonne in 2020 and over $350 a tonne in 2050.

What will this do to the cost of living? Australian manufacturing is already under pressure, cost of living for everyday Australians is forever increasing, and a carbon tax will only make this worse. Australian businesses will be put at a major disadvantage. On the government's own figures, more than three million Australian households are going to be worse off under the carbon tax.

But worst of all is that under Labor's carbon tax scheme emissions will actually increase. Australian emissions will increase from 578 million tonnes in 2012 to 621 million tonnes in 2020. The whole point of the government's proposal is to reduce emissions in Australia. At the most basic argument, the carbon tax fails in this purpose. The only way the government is going to reach its emissions reduction targets is to buy offshore carbon credits from foreign carbon traders. Under Labor's proposal, the government itself estimates that Australia will be spending $3½ billion purchasing carbon credits from foreign carbon traders in 2020. By 2050 we as a nation will be spending $57 billion a year, or 1½ per cent of our GDP, on purchasing offshore carbon credits from foreign carbon traders. This means that we will be spending $3½ billion in 2020 to buy up foreign carbon credits from potentially dodgy foreign carbon traders to plant trees in other countries, not in Australia. To put this into perspective, Australian government health funding in the latest financial year, as a percentage of GDP, was only 4.1 per cent.

All the Labor Party's carbon tax will do is shift emissions overseas, at a huge cost to the Australian taxpayer. The only way that a carbon tax can reduce emissions is if people use less coal produced electricity and less oil powered transport. The problem with this is that the use of electricity is inelastic—not entirely, but quite significantly. Electricity consumption does not drop with increased costs. We are dependent on electricity. Labor's carbon tax will not work. It will hurt families and cost jobs.

The government's own paperwork reveals that the scheme will raise $27 billion in revenue in the first three years of the tax. This is not a tax about the environment; this is a wealth redistribution tax. The 750,000 small businesses in Australia will receive no direct compensation for the massive hikes in electricity prices. What it means is that jobs will be lost and product prices will rise.

As I go around my electorate holding my listening posts and doorknocking, the issue of the carbon tax is raised continually. Residents in my electorate have constantly contacted me about the impact that this carbon tax is going to have on their family, their household or their business. People tell me how this tax is going to mean that their small business is going to struggle even more than before when their expenses go up under the carbon tax. Labor members have spent a lot of time talking about compensation which families will receive, but they have not spent any time talking about the impact on small business, who will receive no compensation. Self-funded retirees and other people on fixed incomes tell me how this tax is going to mean they will struggle to make ends meet because grocery bills and electricity bills are going to go up. These bills are going to go up just as our emissions are going to go up under this carbon tax. There is negligible environmental benefit achieved under this new tax.

I recently met with one of the local councils in my electorate. They informed me that their annual power bill is $1.3 million, 70 per cent of which is for street lighting. Based on the government's own figures, the carbon tax will have an instant impact of $130,000 a year on this local council's budget—money that would otherwise have been spent on providing services to the community. The only way they can recover that $130,000 per year is to increase rates on their ratepayers. This is an example of the fact that power is inelastic. The council cannot just turn off its street lights.

I would also like to focus a bit on the impact that the carbon tax will have on health care in this country. We have already heard from the Victorian government that this will have an impact of millions of dollars on the power bills of hospitals in Victoria. The carbon tax will dramatically increase the cost of running Australia's public and private hospitals. Hospitals are huge consumers of electricity, and there is no way that this consumption can be reduced. Hospitals, through services like radiotherapy and diagnostic imaging, use enormous amounts of electricity, and there is no compensation for them in this carbon tax proposal. What a diagnostic imaging practice will see is a 10 per cent increase in their electricity bill. What a public hospital will see is, again, a 10 per cent increase in their electricity bill. A private hospital will see the same. For a clinic delivering radiotherapy and radiation oncology, it will be a 10 per cent increase in that power bill. Electricity prices will increase by 10 per cent in the first year alone, and the government refuses to tell us how much they are expected to rise in future years. When you consider primary care, a general practice, again, will see a 10 per cent increase in their power bill. In allied health, high users of electricity such as physiotherapy practices and dentists will also see a 10 per cent increase in their power bill, with no offset there at all. This is money that could have been spent on providing more front-line health services, and instead it will now be spent on electricity bills due to the government's carbon tax.

I would like now to talk about the coalition's alternative, which is our direct action plan. Despite what those opposite say, the coalition does believe that climate change is real and that mankind is making a contribution. Therefore we do support practical action on climate change. It is right that we protect our environment, and I do not think any Australian would argue with that. During the 2010 election, I made a promise that under a coalition government there would be several Green Corps projects to improve environmental conservation within my electorate. Our direct action policy is aimed at reducing emissions by five per cent by 2020, just like the government's plan. However, we believe that the action we take must be reasonable. We believe that the action we take must not be at the expense of Australian jobs or at the expense of our standards of living. The action we take should not, and must not, drive up the cost of living for people who are already struggling. There is a fundamental difference between the ideology of those opposite and that of the coalition. While those opposite prefer to penalise, punish, and tax, the coalition believes in providing incentive and optimism. This can be seen in many of the government's policies, but it is most clearly seen in their attitude towards climate change.

The coalition's direct action climate policy provides incentives for Australian businesses to reduce their carbon emissions voluntarily. Under a coalition direct action plan, there will be no cost to families, no new taxes and no rise in electricity prices. Our direct action plan is costed, capped and fully funded. By using incentives, our plan allows the market to determine the cheapest way to reduce emissions.

This is a bad tax, based on a lie. We must never forget that the Prime Minister lied to our country before the election—

The DEPUTY SPEAKER ( Ms AE Burke ): The member for Boothby knows that he cannot use that word.

Dr SOUTHCOTT: Madam Deputy Speaker, I withdraw.

The Prime Minister, six days before the election, said, 'There will be no carbon tax under the government I lead.' That can only be described as misleading. Residents in the minister's own electorate are well aware of this. I have a very clear vision of a nice photo opportunity held at the Findon bowling club, where the Prime Minister was explaining her carbon tax. She was buttonholed by a constituent who realised instantly what the impact of the carbon tax was going to be and said, very correctly, that India and the major emitters were not taking any action. This is a major breach of faith by the Prime Minister. The coalition will be voting against the carbon tax legislation and, if elected, we will rescind the carbon tax legislation.