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Monday, 17 August 2009
Page: 5010

Senator HUMPHRIES (3:12 PM) —I move:

That the Senate take note of the answers given by the Minister for Climate Change and Water (Senator Wong) to questions without notice asked by Senators Humphries and Back today relating to the proposed emissions trading scheme and grocery prices.

Any Australians listening to, or watching, question time today would have to have been rather worried. We had here the Minister for Climate Change and Water asked a question: ‘How much will grocery prices rise?’ under her emissions trading scheme. She gave an answer—a rather exceptional circumstance in this place. She said the prices rises would be in the order of 0.1 per cent. It was put to the minister that this was at variance with the estimates made by others in the field, particularly the Australian Food and Grocery Council, of a five per cent rise in grocery prices. Indeed, some members of that organisation, some larger retailers, are estimating increases of up to seven per cent in the price of groceries as a result of the emissions trading scheme.

That is a very alarming difference. That is a difference of some 6,000 per cent or more between the estimate the minister has given the chamber and the estimate given by those people who are actually selling the groceries, or representing those who are selling the groceries, to the overall majority of Australians. Who are we to believe?

The minister says that her figures are based on modelling. We have not seen that modelling. We do not know what the modelling actually says. We only have the minister’s word that it accurately and appropriately reflects a scheme which delivers a mere 0.1 per cent rise in grocery prices.

Those in the field say that their estimates are much, much greater. They point out that grocery prices make up about 20 per cent of the average household budget each week, and that a hit of around five per cent—what they call a price shock—for Australian made food and groceries will be a significant impost on Australian families. And so it will. It will be a very significant impost because, as they point out, this is not just a hit to the bottom line of Australian families; it is also a very serious hit to Australian food producers because that five or seven per cent increase, which the sellers of food in this country say is likely to occur, is a hit on those who—

Senator Marshall —Based on what?

Senator HUMPHRIES —Based on their estimates of their flowthroughs. It is based on the fact that that is going to be an impost on Australian producers of food and groceries, whereas those producing food and groceries that are imported into Australia will not have to face that kind of increase. So bananas produced in the Philippines, or other products produced in Indonesia or Malaysia or Thailand, will not be affected immediately by these increases because those countries do not have the prospect of emissions trading schemes any time soon. Those prices will not be affected by emissions trading schemes in those countries or, therefore, in Australia, but Australian made goods and services will be and that of course includes food. That indicates a very serious impact on the capacity of Australian agriculture to produce goods and services and to keep Australian produced goods and services within reasonable price ranges.

The Prime Minister once said that he did not want to be the Prime Minister of a country that did not make anything. But, with respect, what his hasty, ill-conceived, badly thought through emissions trading scheme has potential to do is precisely that: to remove incentives from Australians to produce their own food.

This is effectively a GST on food. I remind those opposite that they campaigned against a GST on food.

Senator Marshall —But you supported that!

Senator HUMPHRIES —Maybe so, but we did not do so in circumstances that were going to push up prices without compensation. And what compensation have you got in place? You have a compensation for energy increases. You proposed a compensation scheme for those increases in energy costs for Australians, but not, at this point at least, a proposal for increases in compensation to cover the cost of food and groceries.

The fact is that this emissions trading scheme has not been well thought through. The implications are inadequately identified and compensated for, and it is a result of the fact that this emissions trading scheme that this government has advanced is in fact a political exercise, not a policy exercise. The inability of the government and the minister in this place today to put any flesh on her bald assertions about price rises, and the fact that she has had no consultation with the industries concerned, reflects on the government very badly and suggests we are going to be facing very serious increases in those costs in the future. (Time expired)