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Wednesday, 22 August 2012
Page: 6104


Senator GALLACHER (South Australia) (15:06): I rise to participate in this debate on the motion to take note of answers. The first point I would like to make is that the well-known and dominant principle called the 'vomit principle' is apparent in this debate. During every single question time and at every single opportunity the Leader of the Opposition, the Hon. Tony Abbott, and his disciples repeat, ad infinitum, erroneous and non-factual positions on the carbon price. They believe if these positions are repeated often enough they will become part of the Australian public's understanding.

It is a fairly sobering position that Australia is the 15th largest polluter in the world and the largest polluter per person. There is a general community understanding that something needs to be done about this position. I have participated in a number of climate change forums where people have been invited to come along and make a contribution to this debate. I can specifically recall one at the Norwood town hall which, I must admit, I went to with a degree of trepidation having listened to the position from the other side and being a recently elected senator. It was a reasonably well-attended forum and the people there were concerned that Australia was 15th in the world in pollution and the largest polluter per person. There was no regurgitating of the position put by the opposition. One of the important contributions in that debate was a simple and clear presentation from a university lecturer from the University of Adelaide. He had a very dry economic position. Simply put, his position was: 'If it is free to pollute there is no incentive not to pollute; if there is a price on pollution then you will change behaviour.' That is an economic principle which I think stands across a number of areas, not only the carbon emission debate.

I was a bit of a spender, if you like, with my electricity. I would not turn off lights when I moved from different parts of the house. I quickly got re-educated by the person in charge of the household. I can go back to a debate we had during an enterprise bargaining negotiation in Alice Springs, where the airport manager actually insisted that everybody start being frugal with electricity in order to reduce their bills. We laughed at him but I might add that after a month of him taking solitary action he came back to show us the difference in the electricity bill.

I do not think there is anything wrong with a price on carbon which has the effect of changing our behaviour in using a scarce and expensive resource. What is really apparent in this debate is the absurdity of the coalition. They fail to disclose that cost impacts are only a percentage of business turnover—that electricity is a percentage of business turnover. It is estimated that total electricity costs represent only two per cent of turnover. To come in here with all these examples of educational institutions and hotels that are going to close their doors, lay people off, stop selling or stop educating because a fraction of their business cost has gone up is quite erroneous.

The other side of the equation is simply that there is a compensation package which allows people, particularly small business, to justify the impact of any electricity increase and pass it on. There are proper tests and checks and balances in respect of that but that is a clear and unequivocal position. The compensation package is widely understood to be in place in that event.

In summary, a price on emissions will change behaviour. It will change the behaviour of the big polluters. It has changed my behaviour. I may not be under the same pressure as an ordinary householder in paying my electricity bill but I have changed my behaviour in this matter.