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Thursday, 3 November 2011
Page: 8189

Senator SINODINOS (New South Wales) (15:40): This is not my first speech; it is a premaiden speech, if you like. It is an opportunity to talk on this very important matter. Thank you to Senator Fifield for suggesting it. I take as my text, in part, an excellent report around the impact of the carbon tax, which was produced by the Select Committee on Scrutiny of New Taxes under the chairmanship of Senator Mathias Cormann. It is a very forensic report.

Tony Abbott, the Leader of the Opposition, talks about how the first duty of government is to do no harm. In the carbon context, that means a policy of no regrets, avoiding irreversible damage to our economy. The carbon tax does not meet that test.

One furphy the government, and the Prime Minister in particular, has raised about this carbon tax is that it is the greatest economic reform in a generation. This tax is not an economic reform in the way of, say, removing tariffs or, say, the introduction of the GST. They would be classified as reforms. When we removed tariffs we took certain costs off certain sectors, and that improved our overall national output and productivity and so on. It was the same with the GST, which replaced a whole ramshackle array of indirect taxes. It reallocated resources from lower valued uses to higher valued uses. That raised our GDP and our productivity. It underpinned higher real wages, higher tax collections and higher living standards for all Australians.

The carbon tax, the highest in the world, fails any sensible cost-benefit test. It is high enough to impact significantly on family living costs, industry competitiveness and regional communities for very little environmental gain.

Let us try to put these numbers into perspective. According the Treasury's updated carbon tax modelling, the tax will reduce our GDP by an allegedly modest 2.8 per cent by 2050. (Time expired)