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Wednesday, 3 June 2009
Page: 5494


Mrs HULL (5:07 PM) —The Rudd government have put into this House rushed and bungled chaos in the form of an ETS which does not take into consideration the many options that are available that could be more effective. The government’s immensely complex Carbon Pollution Reduction Scheme would seriously disadvantage our export- and import-competing industries and cost us thousands of jobs, kill our investment and yet not produce any meaningful CO2 abatement. Under the Rudd scheme, Australian export- and import-competing industries will be effectively taxed an extra $12 billion over five years that they simply cannot pass on. And, if we move too far ahead of the world, any cuts in Australia’s emissions will not necessarily have a global impact.

Take the LNG industry. The proposed scheme would perversely prevent up to 180 million tonnes of CO2, one-third of Australia’s emissions, being avoided each year because of gas projects that will not go ahead. For every tonne of greenhouse gas associated with the production of LNG in Australia, between 4.5 and nine tonnes are avoided in the Asia-Pacific region when this gas is substituted for coal in generating electricity. Natural gas is part of the global solution, not part of the problem, yet the scheme significantly penalises LNG exports. It makes no sense at all.

The Rudd scheme involves generating permit revenue of nearly $13 billion from year 1, a massive increase in taxation. This will see a huge administration set up to churn these billions of dollars back through the economy, with the government picking winners as to who gets compensation and who does not. The government’s scheme will inhibit new resource projects to get off the ground in Australia. Companies will have to be spoonfed by the government’s free quota of permits just to make their investment competitive. This is at a time when we need to be rejuvenating our economy. We are in the midst of the most terrible credit crunch in 80 years, so the capacity of companies to source the finance to buy almost $13 billion worth of permits is highly challenging.

I believe that the general public has no concept of the real cost of the Rudd government proposed scheme in this legislation, the Carbon Pollution Reduction Scheme Bill 2009 and related bills. The design of the scheme means that any actions by individual Australians or families to reduce emissions will do nothing to reduce the overall output of greenhouse gases. It will just allow more emissions by industries to go up to the cap. There is little or no acknowledgement from this government that households and small to medium businesses will face unprecedented rises in energy costs associated with the introduction of this scheme. And the plan fails to include any option for energy-saving initiatives that will assist to reduce the impacts of these price rises.

I believe that the effect of any CPRS on small and medium sized businesses must be taken into consideration before the government locks into a scheme. Crucial areas such as agriculture and Australia’s huge commercial building sector are not in the scheme and are effectively ignored as sources of abatement. The Rudd scheme involves a tax that indirectly and significantly hits the bottom line of these sectors. Over recent months, company after company has publicly indicated that the cost to jobs of the proposed scheme that the Rudd government has in front of this House today is enormous. The Minerals Council has found over 66,000 jobs will be lost or forgone, and even Ford Australia believes that the ETS will drive jobs overseas.

But let us talk about the regional impacts, because that is primarily my concern at the moment. Research commissioned by the New South Wales government into the regional impacts of the government scheme found that regional centres across Australia could shrink by 20 per cent under this Rudd government scheme. I ask you, Mr Deputy Speaker Scott: who is looking after the people? When does food security get considered? Food security and water security are the biggest issues confronting Australia and the world. Even now we have the ABARE report titled Effects of the Carbon Pollution Reduction Scheme on the economic value of farm production stating:

Even if the agriculture sector is not a covered sector under the [Rudd] CPRS, agricultural producers will face increased input costs associated with the use of electricity, fuels and freight and may face lower farm-gate prices for their goods from downstream processors. These will have implications for the economic value of farm production.

The report reveals a drop in income for beef producers of 22 per cent; lamb wool incomes will drop by 17 per cent—this is ABARE, an Australian government department—grain growers’ income will drop by 14.5 per cent. Every family needs a farmer who is producing food for survival, but who is looking after the farmers’ survival? Not the Rudd government, not this ETS.

And where are the voices of the members of the government who are Labor regional members? Where are their voices talking about looking after their local constituents who are going to be impacted by the ABARE report that was presented just two days ago? Where are their voices? The member for Leichhardt, Jim Turnour; Dawson, James Bidgood; Capricornia, Kirsten Livermore; Flynn, Chris Trevor; Richmond, Justine Elliot; Page, Janelle Saffin; Hunter, Joel Fitzgibbon; Macquarie, Bob Debus; Bendigo, Steve Gibbons; Wakefield, Nick Champion; Lingiari, Warren Snowdon; Franklin, Julie Collins; Lyons, Dick Adams; Bass, Jodie Campbell; Ballarat, Catherine King; Blair, Shayne Neumann; and Braddon, the surly Sid Sidebottom. Basically, here we have a group of people who are simply voiceless; they are silent on the issues that are affecting their constituents. They do not want to read these reports because they may have to acknowledge that they have not got the courage to stand up in the best interests of the people that they represent.

The critical area of agriculture is not in the scheme and has been effectively ignored as a source of abatement: there is no recognition of the fact that we have to eat. As one learned constituent of mine in the Riverina said:

We should accept that we need to eat and then put our efforts into improving how we produce food in a more carbon beneficial way, thus increasing our ability to sequester carbon through a variety of carbon sensitive measures.

The latest proposed US legislation explicitly excludes agriculture from the cap, but it explicitly includes agriculture in the opportunities to develop offsets to create a revenue stream for farmers. No such action has been taken by the Rudd government. There is a clear indication that the US is heading towards the development of a market based scheme in concert with voluntary, regulatory and incentive based measures. Such possibilities have been totally ignored by the Rudd government. Take the recycling industry. Visy employ thousands of people in regional areas. They have publicly stated that the Rudd government’s proposal will seriously disadvantage their business, because recycling is not recognised under the CPRS that we are discussing here today. Visy’s renewable steam energy is not counted in emissions offsets. Can you believe it?

I firmly believe that Australia is going the wrong way on the design of the emissions trading scheme. The government’s ETS is not the only option to reduce greenhouse gas emissions. To begin with, an effective emissions trading scheme should be designed to protect the competitiveness of Australia’s competing export and import industries. As well, an emissions trading scheme is not an end in itself. It is only part of the solution—one tool in the climate change toolbox. There exist a wide suite of practical and effective approaches that could be employed to reduce levels of CO2 in the atmosphere, but these approaches are being absolutely ignored. They include boosting energy efficiency, especially in the commercial building and housing sectors; soil carbon; biochar; and revegetation of marginal land, including reafforestation. The government is rushing ahead with a scheme that will undoubtedly impact on jobs enormously. Jobs will be lost under this scheme.

The questions are: will the proposed CPRS be effective in substantially reducing global emissions? Who is looking after food security? Not the Rudd government. What will be the short- and medium-term impact of the CPRS on the economy and on jobs? Why are we allowing Australia’s trade exposed industries to be disadvantaged compared to their competitors, unlike in the much cited European emissions trading scheme? What other approaches or scheme designs have been investigated that may be more effective without crippling Australian industry? As Rupert Murdoch has suggested, Australia’s emphasis should be on practical solutions. He said:

The ultimate solution is not to punish the Australian economy by imposing standards that the rest of the world will never meet.