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Wednesday, 3 March 2004
Page: 25743

Mr KELVIN THOMSON (12:20 PM) —This Great Barrier Reef Marine Park Amendment Bill 2004 is a bill which should have been put through no later than the latter part of 2002 when it became abundantly clear that the government had created an unholy mess by slapping a tax on a tax via the introduction of the GST. I pay tribute to Senator Jan McLucas and the member for Hunter, in his capacity as shadow tourism minister, for the work that they have done in persuading the government that this issue needed to be addressed.

Since 1993 a visitation charge has been applied to every visitor who travels to the Great Barrier Reef. This visitation charge—the environmental management charge, or EMC—is commonly referred to as the `reef tax'. It is probably fair to note that, right from the outset, tourism operators offered some strong opposition to this charge. Nevertheless, after its introduction, tourism operators agreed to collect the environmental management charge on behalf of the government. I think it was realised at the time, and after some protracted discussion, that if the government had had to collect the environmental management charge it would have had to be higher and that that was a messier arrangement organisationally. And so it was that the marine park tourism operators dutifully collected the environmental management charge and passed it on to the government.

The funds generated from the environmental management charge are remitted to the Great Barrier Reef Marine Park Authority and are used for the management of the Great Barrier Reef. There is and always has been some concern that the funds raised by the environmental management charge are being used to replace rather than supplement revenue that should be provided through government appropriation. That is a bone of contention that will have to exist until we have a government willing to address the issue.

This collection and remittance process operated quite smoothly until the 1998 election, when there was quite a lot of discussion and no little confusion about whether or not the goods and services tax could or should apply to a tax already being charged by government. Simply put, the question was whether there was going to be a tax on a tax. The reef tax was used as a prime example in North Queensland. We will not forget those parading coalition candidates giving absolute assurances to the marine park tourism industry operators during the lead-up to that election that GST would not apply to the EMC—the reef tax. Those assurances turned out to be non-core promises.

The Association of Marine Park Tourism Operators wisely decided that it was unwise on their part to rely absolutely on assurances from coalition candidates. They went off to the Assistant Treasurer and sought an assurance that the GST would not be applied to the reef tax. In June 2000, the taxation adviser from the Assistant Treasurer's office wrote to the tourism operators and proclaimed:

... the Government intends to include the Environment Management Charge (EMC) in the list of taxes and charges that do not constitute consideration for the purposes of the GST.

This adviser went on to say:

... the Treasurer has recently made a Determination that lists the taxes and other Government charges that will not be subject to the GST.

Having received this response on 13 June 2000 in response to their letter of 23 February, the Association of Marine Park Tourism Operators wrote in good faith to their members and said that they should not collect the GST on top of the environment management charge as the GST did not apply to it. So the members went about their business and collected the environment management charge for the government without adding the GST to the reef tax. You can imagine their surprise and horror when the tax office began auditing operators and handing down decisions that completely overruled the assurances that had been given by government candidates and members and the statement that they had received from the office of the Assistant Treasurer. Operators were handed bills by the tax office for various amounts, ranging from $15,000 in one case to potentially $60,000 in another. These were the accumulation of retrospective payments which the tax office had deemed necessary because, they said, the GST should have been applied to the EMC or reef tax.

The goalposts had shifted. The members of the Association of Marine Park Tourism Operators had been left high and dry with bills to pay, which this government had assured them would not happen. Naturally, these operators contacted the government in a bid to find out what had happened to the government's assurances. During the initial lobbying process to get the government's assurances that a tax would not be charged on a tax, the member for Leichhardt wrote to the Treasurer, stating:

In the run-up to the introduction of the GST the Marine Tourism Industry successfully lobbied the government to have EMC exempted from the GST. I was intimately involved in this lobbying and was personally assured by the then Assistant Treasurer that the EMC would be exempted from the GST. The basis of our argument was that it was stated government policy not to levy a tax (GST) on a tax (EMC).

The tax office had ruled that the reef tax was not subject to GST when charged by the Great Barrier Reef Marine Park Authority to the operator as per the Treasurer's determination. However, it was payable when the amount charged by the operator to its customer included the on-charge tax as part of the make-up of the price. What an appalling mess. What appalling confusion. The government assurances had been shown to be false.

What did the government do about it? It did nothing about it. It was only after Senator McLucas raised this issue with Senator Hill during environment estimates committee hearings last year and then followed it up with the tax office in finance estimates committee hearings that we started learning what an unreasonable situation those tourism operators were in and how the government was failing to honour its pre-election commitment that the GST would not be charged on the reef tax.

That confusion has been around since 2002. It is a very sad state of affairs when the government of the day first denies knowledge of a problem and then procrastinates and fails to take action to deal with it. It is now March 2004—over eight years since this government came to power—and the government is finally introducing the legislative change for which marine park tourist operators and the opposition have been calling for nearly two years. I suppose some people would say in relation to this that it is better late than never. Regrettably, this is just another example of a tired, lacklustre government finally responding to the very reasonable concerns of the community and the opposition after taking an excessively unreasonable amount of time to address the problem. Therefore, I move:

That all words after “That” be omitted with a view to substituting the following words:

“whilst not declining to give the Bill a second reading, the House condemns the Government for:

(1) its complete and utter mishandling of the application of the GST to the Environment Management Charge; and

(2) its continued ignorance and disregard for the concerns of marine park tourist operators”.

The DEPUTY SPEAKER (Mr Lindsay)—Is the amendment seconded?

Mr Zahra —I second the amendment.

Mr KELVIN THOMSON —When this issue was raised in the Senate by my colleague Senator McLucas, she asked the Assistant Treasurer to confirm that she had representations made to her on behalf of Adrenalin Dive in Townsville on 27 August and 10 September 2002, or some 10 months prior to this question, in relation to the application of GST on the reef tax. The Assistant Treasurer claimed that she was only recently advised of the problem, yet she had been advised of the problem by industry for over 10 months. The representations came as early as 27 August and 10 September 2002, yet 10 months later the minister was saying, `I've only just learned of the problem.' Indeed, it has taken until right into 2004 before we have seen any action to deal with it.

It is little wonder that the Cairns Post on 5 June last year was moved to say that this mess needed to be fixed up and that, given the government's commitment that GST would not be applicable, there was an easy solution: our politicians should pass the required laws before parliament rose for the winter recess and indeed postpone their annual jaunts to the north and keep parliament sitting while they amended the law. Unfortunately, the government took no notice of the Cairns Post and parliament did rise last year well before this legislation came to the House. We are only now seeing the legislation before the House and some effort being made to address what has been an unholy mess in relation to GST and the reef tax.

The amendment that I have moved condemns the government for `its continued ignorance and disregard for the concerns of marine park tourist operators'. Noting that, I want to draw to the attention of the House the ongoing concern of marine park tourist operators about the government's failure to adequately protect the Great Barrier Reef. A couple of weeks ago I was visited by Daniel Gschwind, who is the Chief Executive Officer of the Queensland Tourism Industry Council, in company with representatives of the Worldwide Fund for Nature. They outlined to me a report, which they have subsequently released, on the implications of climate change for Australia's Great Barrier Reef. The tourism operators were sufficiently concerned about the impacts of climate change on the Great Barrier Reef to commission this report.

The findings of the report are very revealing. They indicate that global warming is not disputed within credible scientific circles; that current estimates of global temperature change suggest that planetary temperatures are increasing at rates many times faster than those seen during the warming after the ice ages; that ocean temperatures are reaching higher and higher levels in many parts of the world; and that, during the 1990s, mass coral bleaching—when corals, which are the builders of the reef, get sick and die—increased in frequency and severity.

Mrs De-Anne Kelly —They don't die.

Mr KELVIN THOMSON —In 1998, 16 per cent of all corals across the planet died. The member for Dawson really ought to know something about corals and the Great Barrier Reef, seeing that she represents an area in that part of the world. I feel an obligation to inform her that in 1998 mass coral bleaching led to the death of 16 per cent of all corals across the planet. Mass bleaching has been experienced on the Great Barrier Reef three times since the beginning of 1998, which was the worst coral bleaching event until 2002, when more corals were affected than ever before—around 60 per cent of all reefs within the Great Barrier Reef Marine Park. Indeed, the Great Barrier Reef Marine Park Authority and the scientific community are concerned that we are now witnessing another potential bleaching event. I do not know whether the member for Dawson is concerned about that, but she ought to be. Queensland is reliant on the reef for sustainable tourism and fisheries, and they in turn depend on healthy coral communities.

The report asks the important question: what happens if climate change continues and coral becomes rare on the Great Barrier Reef? It explores the questions of the impact of this by projecting how the biology of the Great Barrier Reef is likely to change, and it analyses the economics of reef dependent industries in Australia and projects how these industries would go under the principal International Panel on Climate Change scenarios.

The world's oceans are heating and the measurements of this suggest that the conditions which presently apply in the Torres Strait will have moved to the bottom end of the Great Barrier Reef by 2030. Corals live close to their upper thermal maxima. That means that, if temperatures are one degree over the summer maxima for three weeks—just a one-degree increase in water temperature—that is enough to cause bleaching. Bleaching is the loss of zooxanthella. If it is severe enough, the corals will die. Mass bleaching has been increasing in severity and frequency over the past two decades. The Great Barrier Reef, having had three major events since 1998, may well be on the verge of another. The projections are that sea temperatures will rise above the known tolerances of reef-building corals and that the heat stress will rise above anything previously experienced and go beyond the quite catastrophic levels that were seen in 2002.

Reefs do have a capacity to recover, but they need enough time to recover. Experts suggest that a reasonable recovery time for reefs is of the order of 15 years. So, if the coral are killed and you then have another major mortality event within a shorter period—less than 15 years—the reef simply will not recover. According to the current estimates and projections in this report, by 2030 we are likely to have these major mortality events, the coral-bleaching events, every three years. So our current understanding of coral and the reefs that they build indicates that they simply cannot evolve at this rate; they cannot recover fast enough. Given that coral reef organisms are highly co-evolved, removal of coral will remove the majority of the biodiversity that typifies the reef that surely all of us in Australia want to protect.

Reef industry figures indicate that tourism in Queensland is highly reef focused. The report suggests that, for the Great Barrier Reef as a whole, $2.4 billion of a total expenditure of $3.4 billion was attributable to reef-interested tourism in 1999—that is 63 per cent. Indeed, visitors associate Australia with the Great Barrier Reef more than with any other Australian icon.

The WWF report sets out a very disturbing picture of the impact of climate change on the Great Barrier Reef. It tells us:

Coral reefs have suffered some of the most dramatic impacts of climate change ...

and that from 1979 onwards we have had worldwide coral-bleaching events as the thermal threshold of many of the world's coral populations was exceeded. The report goes on:

Global cycles of coral bleaching and mortality have increased dramatically as sea temperatures have reached higher and higher values over the past 20 years. In the last five years the Great Barrier Reef ... experienced two of the worst bleaching events in its history.

... ... ...

When corals become stressed the brown algae are expelled turning the coral a brilliant white. In cases where the stress is mild, coral can recover. When stress is more intense, corals die, often across huge sectors of the world's oceans.

Back in 1998, as I said before, 16 per cent of the world's coral died. According to the report:

In some regions such as the Western Indian Ocean more than 48% of living coral was eliminated. The removal of these key organisms has huge implications for the ecosystems and for people who depend on these critically important coral reef resources.

The report continues:

Global climate change ... is not alone in causing the loss of coral reefs across the Earth. The stress to coral reefs across the world is being aggravated by ... coastal land practices, overfishing and marine based pollution. These influences ... have been estimated to potentially remove over 50% of coral reefs over the next 30-50 years, even before we factor in the effects of climate change.

... ... ...

Climate change and the other human influences are likely to have a dramatic impact on the world's coral reefs over the next 50 years. Under some scenarios, coral cover degrades ... to less than five per cent of the total cover on a coral reef. If this happens, major changes to fish populations and the natural values of coral reefs will occur. This will affect millions of reef users and associated industries such as fisheries and tourism.

If the temperatures of our seas increase—and the projections are anywhere between two degrees Celsius and six degrees Celsius in the course of this century—then thermal stress is inevitable for coral reefs like the Great Barrier Reef. According to the WWF report:

... the flora and fauna of the ... reef will change dramatically as climate change gathers impetus ... Reefs will be devoid of coral and dominated by seaweed and blue-green algae.

The rapid reduction in coral cover will have major consequences for other organisms and reef functions.

... ... ...

Coral reefs have already deteriorated due to a combination of human misuse and climate change induced bleaching events such as those in 1998 and 2002. This will have further implications for the tourist industry as more degradation occurs, for commercial fisheries through changing fish community structure and abundance, and other activities such as recreational fishing, indigenous hunting and fishing, and coastal protection.

In Queensland international and domestic tourism has been the major reef based industry, the sector that has been the main driver of regional growth. The report states:

It is strongly oriented towards the Tropical North with smaller nodes elsewhere, especially the Whitsundays north of Mackay. Tropical North Queensland has experienced the strongest economic growth of about 6% per annum, driven by the growth in international tourism.

The WWF Australia and Queensland Tourism Industry Council ... developed a ... measure of the importance of `reef-interested' tourism for the five regions.

It concluded:

In terms of contribution to the regional economies, $AUD1.4 billion of a total $AUD2.1 billion represents the estimated reef-interested component (68%) ...

On that basis, it was highest in Far North Queensland both `absolutely and relative to total tourism in the region'. I would acknowledge that the tourism industry has a well-known resilience and adaptability; nevertheless, it is clearly vulnerable to the deterioration of coral reefs.

What do we need to do about this? The Howard government is being absolutely deficient in sitting on its hands in relation to the climate change issues. If we understand that the most likely outlook for the Great Barrier Reef over coming decades is more frequent mass coral bleaching due to increased sea surface temperatures, what we can do is try to minimise the damage from these events. The report suggests we need to keep the global temperature rise due to human activities to no more than two degrees. The WWF are concerned that if global temperatures increase over the course of the next few decades by more than two degrees that will have catastrophic impacts on the reef. In order to do this, the report proposes that developed countries, like Australia, need to reduce their emissions by 80 per cent, based on 1990 levels, by the year 2050. Indeed, by 2100 they suggest we need to use technology to get our emissions profile down to close to zero. To achieve these kinds of major reductions we need to get to work. The report says, and I agree absolutely:

The Kyoto Protocol should enter into force as soon as possible, with Australian ratification.

It also says:

The Australian Government should actively engage in discussion on how to achieve deeper cuts in greenhouse gas emissions in the second commitment period of the Kyoto Protocol.

The report also proposes that the Australian government promote clean energy technologies that help to reduce national greenhouse gas levels, suggesting:

... a national target for the uptake of co-generation of large industrial would provide an incentive for some of the biggest users of coal-fired electricity to install gas fired generators on site.

The report concludes by saying:

Even if global warming is constrained to 2-2.5C, coral reefs are likely to experience widespread and serious damage. To minimise the extent of damage to the Great Barrier Reef, local efforts to increase the ecological resilience of the Reef are vital.

The report talks about the importance of a comprehensive network of no-take zones, getting serious about implementing the water quality protection plan for the reef and the ending of broad scale clearing of remnant native vegetation. They are a range of measures, all of which will help to protect the resilience of the reef and enable us to get the best possible outcomes, given the prospect that we already face: increasing sea water temperatures.

I regret the fact that this government has been sitting on its hands in relation to the climate change issues. The climate change issues, as this report makes clear, will severely impact on the Great Barrier Reef. They are already impacting on the Great Barrier Reef by way of coral bleaching events. In so doing, they jeopardise the tourism industry—particularly the tourism industry in North Queensland, which is such a source of economic prosperity to that region. They jeopardise what is one of the world's natural wonders. It would be absolutely outrageous if on our watch, knowing what we know and with the evidence we have about the impact of warmer water temperatures on coral bleaching, we did not take action to reduce this impact and we saw our coral reefs suffer and die in the way that other coral reefs around the world have been suffering and dying due to their inability to cope with a range of human actions and the impact that those actions have.

I have moved an amendment to the bill. I hope that the Howard government will take these issues into consideration rather more seriously than they have been doing over the past few years and that they will take the necessary actions to protect the Great Barrier Reef on behalf of the rest of the world, on behalf of future generations and on behalf of the people of North Queensland and the people who depend on that tourism industry.