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Wednesday, 3 June 2009
Page: 5421

Mr BALDWIN (12:01 PM) —I rise today to speak on the Carbon Pollution Reduction Scheme Bill 2009 and associated bills. Significantly reducing the global level of CO2 and other emissions in the atmosphere is an issue of great concern and consequence to all of us.

Let us be absolutely clear about it—these are uncharted waters for all. These are uncharted waters for me because I am not a scientist. But one thing that is abundantly clear from the evidence presented is that humankind is definitely adding to the problem—by how much I do not know because there are too many sides to the argument, all proffering different opinions. On one side, we have Professor Ian Plimer, who is disagreeing with the theory of human induced climate change. On the other side, we have the United Nations Intergovernmental Panel on Climate Change stating:

There is new and stronger evidence that most of the warming observed over the last 50 years is attributable to human activities.

What I do know, though, is that prior to the 2007 election the Prime Minister promised to introduce an emissions trading scheme that would produce deep cuts in CO2 emissions but would not disadvantage Australia’s export and import industries. The Prime Minister’s other election promises included establishing an ETS by 2010 and setting a target of a 60 per cent reduction by 2050 from 2000 levels.

However, we now see that the government’s scheme is in disarray. It is rushed. It is bungled. It is deeply flawed because it has been rushed to suit a political timetable and the Prime Minister’s political agenda. It even fails to contain regulations for the operation of this scheme. Failing to wait just six months for the outcome of the Copenhagen conference will see the Rudd government export thousands of Australian jobs, many from my region.

It should be noted that it was the former government that spearheaded the campaign to develop and transfer low-emitting technology to developing countries through the establishment of the then AP6—the Asia-Pacific Partnership on Clean Development and Climate. This partnership came out of the 12th meeting of the ASEAN Regional Forum in Laos and was formally launched in 2006. This is the only international agreement which involved the US, China and India. It also contains South Korea, Japan and now Canada, with all seven countries involved having a history of close bilateral and multilateral cooperation on clean development, energy and climate change efforts.

Unfortunately, for purely political reasons, the Rudd government hindered this program and partnership. Australia on its own, however, will not revolutionise the climate change world. It is an undisputable fact that Australia is responsible for 1.4 per cent of the world’s emissions of greenhouse gases. Australia represents but a tiny sliver of the global greenhouse gas emission pie graph. Any action the government takes on committing Australia to a climate change solution must be carefully considered. Neither families in my electorate of Paterson nor any other Australian working family can afford to shoulder a disproportionate share of the global burden of addressing climate change. With Australia producing just over one per cent of the world’s emissions, there is no unilateral Australian solution—only a global solution. Voting on Rudd’s emissions trading scheme would put Australians in the position of shouldering that burden alone.

What we the coalition propose to do is work with the largest emitters, such as China and the US, and come up with a holistic approach. As the world’s largest emitter of greenhouse gases, the US have developed a very clear strategy to address their own carbon emissions and to implement their own carbon trading scheme. It is clear that the Waxman-Markey bill currently before the congress offers substantial and considerable protection to US businesses engaged in trade exposed industries. Their bill provides 100 per cent protection to US export- and import-competing industries in any future emissions trading scheme until 2025.

There is obviously a stark difference emerging—with far greater protection for the US than what is on offer for Australian businesses in the Prime Minister’s emissions trading scheme. Under the Rudd government’s current proposals for an emissions trading scheme, Australian businesses will be left out in the cold, Paterson’s businesses will be left out in the cold and Australian exposed businesses will be left disadvantaged against other competing countries in the market. Forcing through the current proposal would be to forgo common sense and would subsequently be the marker of massive risk and uncertainty for Australian businesses over the next 20 years.

Australian trade-exposed businesses will not be on a level playing field with their competitors. The current ETS proposal poses a significant threat to the continued competitiveness of Australian businesses operating in those trade exposed industries. The CPRS is expected to result in a 30 to 40 per cent increase in electricity prices alone, and this will flow through to many everyday products and services.

The tax effect of the CPRS is equivalent to increasing the GST from 10 per cent to 12½ per cent. The difference is that it will be added all the way down the line, unlike the GST, which is rebated until the end user, if consumed in Australia, or rebated so that exports are free of GST. They will not be free of the CPRS. The design of the Rudd government’s CPRS assumes that our major competitors will move to put in place major new taxes on carbon across the economy, including on export- and import-competing industries in the early years.

When we consider all of the information that has been put before us, it is prudent to ask the government if the goal of this bill is to genuinely reduce greenhouse gas emissions or if it is aimed at taking another tax grab from Australian families and businesses, who already have to pay the cost of Labor’s reckless spending. Of the $13 billion that will be collected from affected businesses under this scheme in the first year, how much of that money will be spent by the government on actually reducing emissions? How much will be used to pay off the Rudd Labor government’s $315 billion debt? It is also important to note the recent comments by industry bodies that agree with the coalition on this position. For example, the Minerals Council of Australia statement on 26 May 2009 stated:

The Minerals Council of Australia cannot support the legislation in its current form and therefore backs efforts that will lead to a better, simpler emissions trading scheme that won’t cost tens of thousands of mining jobs.

The only certainty created by the Rudd government’s emissions trading scheme is the certainty of unemployment.

Only recently did the shadow minister for energy and resources, the Hon. Ian Macfarlane, and I meet with local companies in my electorate, including Tomago Aluminium, Bloomfield Collieries and Gloucester Coal, which manage the Stratford and Duralie mines, to talk about the impact that this scheme would have on their businesses. Specifically, I would like to draw the attention of the House to Tomago Aluminium company. Tomago Aluminium currently employs almost 1,400 workers, who reside in and around the Paterson electorate, many actually living in the Paterson electorate. The company operates the second largest smelter in Australia. One of the most significant challenges facing Tomago Aluminium is uncertainty—and the possibility, therefore, of jobs going offshore—as to what to expect from the Rudd Labor government, who were trusted by the Australian people not to subject our trade exposed industries to undue hardship and disadvantage. If the CPRS is not handled carefully, jobs will go offshore to more competitive markets with less environmental restrictions.

I would like to make it clear: the coalition will support an emissions trading scheme, but we believe Australia is going about it the wrong way in the design of the process. The CPRS is not the only option to reduce greenhouse gas emissions. It is also not the best way. It is important to note that there exist a wide suite of practical and effective approaches that could be employed to reduce the levels of CO2 in the atmosphere, approaches that are currently being ignored by the Rudd Labor government, such as: boosting energy efficiency, especially in the commercial building and housing sectors; developing agricultural land in the arid regions; biochar; revegetating marginal land, including reforestation; clean coal; and renewable energies.

The coalition announced in January 2009 that, as part of the Green Carbon Initiative, we are aiming, by 2020, for additional annual reductions of at least 150 million tonnes of carbon dioxide equivalent, encompassing such measures as previously stated. What is astounding is the fact that no other approaches aimed at establishing a price of carbon have been modelled or properly debated. We take this proposed legislation seriously. The coalition has evaluated the government’s legislation and has measured the legislation against the impact on jobs and emissions. The coalition commissioned its own independent review of the government’s white paper, by the Centre of International Economics, a review which received nearly 50 industry and organisational submissions.

In conclusion, the Prime Minister is on a downward spiral on emissions trading, running the enormous risk of going it alone for little or no global environmental gain. The Rudd government’s scheme as it currently stands puts major industries such as our coal industry and Tomago Aluminium, and the jobs that go with them, at considerable risk. It is not a time to gamble with Australian jobs just to gain political mileage. It is time for forethought, careful policymaking and common sense. The government’s scheme is in no shape to be passed, so I ask: why do we need to rush this legislation? The vote must be deferred until later this year, when we have seen the intentions of the rest of the world at Copenhagen and when the US scheme is clearer. This is one of the biggest structural changes to our economy, and we must get it right. We as the elected federal representatives of our electorates have the responsibility for getting it right the first time.