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Tuesday, 7 February 2012
Page: 52

Senator BIRMINGHAM (South Australia) (15:11): The day 1 July 2012 will be the day on which Australian businesses start paying the world's biggest carbon tax. There should be no doubt about this as, in the months since we debated it, we have seen the Australian dollar continue to strengthen relative to the European Union currency, the euro, and we have seen the value of the Australian carbon tax getting bigger and bigger when compared with the only other comparison going around town. So the Labor government's world's biggest carbon tax is just getting bigger by global standards. And that is going to mean that we will see an even greater impact on the competitiveness of Australian businesses from 1 July this year, when this carbon tax comes in.

I am pleased to note that I gather that in the other place the Prime Minister has finally—after being asked the question again and again—acknowledged that she accepts the Treasury modelling of the carbon tax. In accepting the Treasury modelling she is accepting the reality that in future, under the carbon tax, real wages for Australians will be lower than they otherwise would have been. Economic growth in Australia will be lower than it otherwise would have been. These are direct consequences of the carbon tax. It is a reality highlighted and exposed by my colleague Senator Cormann during the countless hours of debate on this. It has a real flow-through throughout the economy. But let's deal with the facts here. We know, as a result of the Treasury modelling, that real wages will be lower than otherwise would have been the case and that the Australian economy will be smaller and will grow by less than would otherwise have been the case.

The government's retort and response is always to highlight the compensation—the claimed compensation—within this package. Senator Carr today spoke about $1.2 billion in industry compensation, but when challenged as to how many of Australia's manufacturing businesses would get it—whether most Australian manufacturing businesses might get some share of this compensation—Senator Carr was silent. He was unable to give even the slightest hint of commitment as to what proportion of Australian manufacturing businesses might share in this elusive compensation. We know from the steel industry fund that ultimately the overwhelming majority of any of this compensation for business will go to just a handful of businesses. Most of the manufact­uring businesses in Australia will miss out. But they will not be the only ones, because then there is the small business sector, and in the small business sector they all miss out. On 1 July every small business around Australia will wake up and face significant rises in their electricity costs. The Treasury modelling, which I am pleased the Prime Minister accepts, indicates at least a 10 per cent rise in electricity costs, a nine per cent rise in gas costs and a rise in water costs. Senator Edwards, in his question today, highlighted research that has been released in South Australia indicating a potential 16 per cent rise in electricity costs. For small businesses, for which electricity is a significant cost impact, this is a massive hit. Small businesses are not able to negotiate contracts with electricity providers for significant discounts or for longer term price certainty; they just have to take the same type of terms and conditions as every other Australian. They will simply have to wear this vast cost impact on their inputs. They will all miss out on any of this elusive compensation. So it will be this key part of the Australian economy where we will see growth held back, real wages held back and job growth in the future held back. As a result of that, we will see a weaker Australian economy in the future.

This will be a year of shame for this government as they introduce the world's biggest carbon tax, by far and away greater in terms of its scope and impact on business and industry than anywhere else around the world. We should not allow them to hide behind a fig leaf of compensation that has a limited life span and limited accessibility for those who get it and ultimately will do nothing to change the reality, found in that Treasury modelling, that the Australian economy will be worse off with a carbon tax than it would be if it did not have a carbon tax. (Time expired)