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Wednesday, 17 August 2011
Page: 4639

Senator COLBECK (Tasmania) (12:19): It is unfortunate that I had to leave the chamber and I was not privy to any comments that Senator Ludwig may have made in response to the questions I asked in my last contribution on the draft regulations provided to the chamber yesterday morning. I have to say that, for me, this is a really serious issue and I tried to stress that in my previous contribution. This actually introduces something into the legislative process that has not existed before. To demonstrate that we were serious about this we expressed our concerns in our report in response to the legislation. We said at that time that the lists are also a potential trojan horse in the introduction of measures that are not current common practice but are the subject of much community debate and would be best resolved outside this process.

Now we have them being inserted into the regulations. I accept that they were part of the draft negative list. It is much more defined in here now, but I am seriously concerned about the way it was defined. As I said before, I do not see how you can, in a blanket way, say that for a 100-millimetre or greater than 1,000 millimetres rainfall range you have to have a set high-value water entitlement. I just cannot fathom why, for a 600 to 700 millimetre long-term average rainfall, you have to have a 0.9 megalitre water offset licence per hectare per year for the life of the project. I just cannot work that out. It depends on where you are and what you are planting, and that will vary.

It is just like a number of other measures that are included in this bill. We talked about those in the dissenting report—for example, the risk of reversal buffer. The government has put a set five per cent risk of reversal buffer into this legislation and that would be best placed in the individual plan for each of the projects. We know that the risks of reversal vary according to the different forms of sequestration being proposed. Some are higher security than others. Some are much lower. Yet we have a fixed five per cent risk of reversal buffer proposed in the legislation. The same concept is being applied here. It is no different to what the government has done when the Prime Minister has said that no prices should go up by more than one per cent under the carbon tax. She has taken a piece of modelling and tried to apply that across the board. It just does not work. It is simplistic and you cannot apply it that way.

I spoke to a small regional airline a few weeks ago. They said that 30 per cent of their overhead cost is aviation fuel. On the government's own modelling, that is going up by 10 per cent. What does that mean? In simple maths it means a three per cent increase in their prices. They have no option. That is before they apply any of the other costs that they might have—the electricity costs to run their hangars and their servicing business and all that sort of stuff. Their prices will go up by three per cent just from the cost of aviation fuel, which is not exempted under the proposed carbon tax, and so you have the government saying, 'We are going to give extra money to the ACCC and we are going to send the ACCC after anyone who says they are putting their prices up by more than one per cent.'

What do we tell all the small regional airlines around Australia whose overhead costs of operation are 30 per cent aviation fuel? It is not going to vary broadly. It is going to be pretty consistent across those small businesses and 30 per cent of their overhead cost is aviation fuel. It is going up by 10 per cent, a three per cent increase in cost to business. Do we say to them, 'The ACCC is going to come and see you; you cannot put your prices up by more than one per cent because the Prime Minister said so'? Her modelling reckons it should go up by less than one per cent. She told the people on King Island that it is 7c in $100. That is what she is applying, yet King Island gets the triple whammy. Their airfares are going up by at least three per cent. The only way to get on and off the island is by air. Shipping is not exempt. That is all going to go up, and we all know that it costs more to get things to those islands because you have to ship it all in by sea or by air. Of course, they already pay more for energy because that is the way it is in those places, unfortunately. There is no equalisation provided to them by the state, so their already higher power prices will go up by 10 per cent. We know that—the local power authority said so.

So here we have this process of taking an average and applying it across everything. It just does not work. It is not practical. So how can you say that, if you are in an area that has a 900 to 1,000 millimetre long-term average rainfall, you need a 1.8 megalitre water offset entitlement per hectare per year for the life of the project? How does that work? Surely the best way to deal with that is to say, 'When you submit your plan for your project, we need you to consider what the water use might be and then, in that plan, tell us what you are saying it is and provide us with the information to back it up.' I cannot see me recommending support in my party room for these regulations the way that they are written at the moment. Why would you? As the coalition stated in its dissenting report, here we have Trojan horses. I have said a number of times this concept has not been seen in the legislative process in Australia before. It is probably there at the insistence of the Greens, prepared to give the Labor Party the benefit of the doubt on that. I notice the Greens have vacated the field.

I do not think those sorts of general¬≠isations fairly apply. I acknowledge and accept that there are people concerned about the water use of tree plantings. As I said earlier, things like MIS have exacerbated those, but I also know, having read some of the science, that the water uptake varies considerably over the life cycle of the plantings and it varies considerably depend¬≠ing on the type of planting—eucalypt to pine, saltbush, all those sorts of things. They all vary where they are in the catchment. You cannot make some blanket application across the board. If you want to deal with the issue, that is fine, but deal with it in a project based sequence, just in the same way that the coalition said we should do it in relation to the risk of reversal.

We said at the outset that we support the concept of storage of carbon in the landscape. As we have been reminded a number of times during this debate, it is our policy to do that. But, as has been indicated right through the process and in evidence that we heard in the Senate inquiry, this legislation has a whole heap of barriers in it affecting what the government says it wants to do.

I come back to the point that I made in my first contribution this morning. The government says that it wants to protect agricultural land through this amendment, yet what it has done in Tasmania threatens 100,000 hectares of agricultural land—10 per cent of it—because it is pushing the forest out and the only place to situate the plantations that the NGOs, the government and the Greens say that the industry is going to transition to is onto agricultural land. There is no other place to go. We do not want to convert any more native forest to plantation. The conversion of native forest to plantation is one of the issues that underlies the negotiations that are happening in Tasmania right now. Why do we continue to apply those mistakes when we should have learned from them? The Prime Minister should have learned that she cannot go round telling people that prices will not go up by more than one per cent and she will send the ACCC round to tap on somebody's shoulder if that occurs. She just cannot do that. I have given one example. I can give you another one. I went to a powder-coating factory not far from where I operate. They run with gas and they run with electricity. They have done their calculations based on the fact that electricity is going up by 10 per cent and gas by nine per cent. What did they say to me when I asked them how much their prices would have to go up by? They said three per cent; that is their calculation. Are they going to have the ACCC pay them a visit, tap them on the shoulder and go through their books, wasting the time of the business in an investigation because the Prime Minister wants to use the ACCC as a political tool to help her sell her carbon tax? I do not think that that is reasonable or fair. That should not be part of the process.

I repeat that the coalition supports the concept of storing carbon in our landscape. We put up a number of suggestions as part of our report. But the government, being wagged along by the Greens tail, does not want to do any of that. We have this absurd table about how you have to have a high-security water licence, based on rainfall, to plant trees. It does not stack up. As I indicated in our report, tabled earlier in the year, it is a new concept and something that still remains contentious in the community. And yet it has been inserted—slipped—into some regulations, with some very basic principles, just averages, being applied to it.

If you do a calculation or a bit of modelling, then for 600 millimetres to 700 millimetres of rainfall you need a water entitlement of 0.9 megalitres per hectare per year. For 700 millimetres to 800 millimetres, you need 1.2 megalitres of water offset entitlement per hectare per year for the life of the project. And we know that that varies. For 800 millimetres to 900 millimetres of long-term average rainfall, you need 1.5 megalitres of water offset entitlement per hectare per year for the life of the project. For greater than 1,000 millimetres, you need 2.1 megalitres of high-security water entitlement per hectare per year for the life of the project. CSIRO might have come with those averages. They have just plonked them in, but the best way to deal with this is on the basis of saying that this is a measure that needs to be dealt with as part of any individual plan. People should put it in their plans and then have that assessed as part of the approval process for the plan. That makes sense—just like the risk-of-reversal buffer. Those things can be managed.

The government wonders why we do not support the legislation. There are two really good reasons: one, it is very difficult for us to support the regulations in the form that they are in and, two, you are not prepared to consider any of the sensible suggestions that we have made as part of this process. You are more than happy to take on what the Greens tell you you have to but you will not constructively engage with the opposition.