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Thursday, 29 October 2009
Page: 11511


Mr OAKESHOTT (12:30 PM) —Contrary to the previous speaker and to several of the speeches heard yesterday and today, I am one who is giving the green light to the government to get the Carbon Pollution Reduction Scheme Bill 2009 [No. 2] and the framework legislation through this parliament. Rather than this being a pre-emptive discussion two months before Copenhagen, I believe that this is a bit like groundhog day, where we in the political circles are repeating a discussion that has gone on since the time of former environment minister Robert Hill and former Prime Minister John Howard. We have had an election in which this was a central issue and we have had reports from eminent authorities such as Ross Garnaut. This issue has been around for a fair amount of time now for everyone in the political process to make clear decisions. In my view the world is moving in response and I think that Australia, in its national interest, should also move in response.

The comment from the previous speaker—and I think I have heard it verbatim from others—is that we have got to wait until we know what the world is doing. In response to that, I say, ‘We do know what the world is doing.’ The world is responding to the issue of climate change and it is responding significantly en masse through the form of trading schemes. We have already seen trading schemes put in place in many developed countries, such as in many European countries, which for some reason seem repeatedly to lead the way on these issues. Also, we are seeing that in many other countries where trading schemes are not in place they are at various stages of development for being put into place. I think it is a furphy to say that the world needs to wait and that countries need to wait for Copenhagen. There is far too much weight being put on that meeting of leaders on that date. In reality, countries are moving to market based responses to the natural resources management question of our time. Also, we are seeing in countries all around the world at the moment schemes either put in place or in development, and I would hope that Australia does not get left behind in the political positioning we see in this place and the other place.

My position has not changed since the last time. I am giving the green light to the government to progress this legislation and get the framework for a carbon pollution reduction scheme and an emissions trading scheme up and running within Australia. I do that by not necessarily supporting a Labor emissions trading scheme—a term that I have heard being thrown around—but it is just as easy to say that I support a Robert Hill/John Howard emissions trading scheme, which this government has really adopted and put in the public domain. We are now seeing it debated and hopefully will see it progress through on this second attempt.

I will again run through the reasons I support it. I believe that most people in this place are accepting of the science in regards to the issue of human based influence on the climate. I accept that there are those in this place who have not, for very genuine reasons—I am not one to use the word ‘sceptic’. If you jump through that gate of logic that accepts the science it becomes a question of a response in regards to how we as a country and as a world put together a policy response to minimise and, hopefully, start to turn around this issue of the human based influence on global warming.

As far as a response is concerned, jumping again through those gates of logic, I see that it comes down to three options. There is the ‘do nothing’ option in which we place the risk on future generations. We cross our fingers and hope that it is going to go away or that the human based influence on the climate today is not as we expected. The second option is a completely publicly owned response, which would in most cases be in the form of a carbon tax. That would be a direct and significant cost on consumables throughout Australia and in any market in which such a public based response was put in place. The third option is a market based response where it is an exercise in building a framework, in engaging the private sector through the policy development and in developing a market based response to try to minimise carbon outputs which will, hopefully, minimise human based influences.

If I jump through that first gate of logic, which is, ‘Yes, there are human based influences,’ then, out of the three options that I see as being available, I choose the third option, which is a market based response. I do that because I think there are higher costs involved if it is a publicly owned response, if it is a carbon tax. I think that is going to be a huge cost on the community of Australia. I also choose a market based response over the do-nothing option, because I think it accepts risk. We do need to consider in all of this that no-one is the holder of all wisdom. But if we are risk mitigators then a market based response is much less risky than the do-nothing, ‘cross the fingers and leave it for future generations’ approach.

The previous speaker asked for someone to explain their position. I hope I have done that as clearly as possible. I choose to green-light the government on this. This is, if anything, quite ironically, a Liberal based response, if we are talking about the type of engagement of the private sector. Traditionally, an emissions trading scheme would be a Liberal type of response in Australian politics to this issue of human based climate change. So it is a little bit ironic to see the political positioning going on at the moment. However, that is the nature of Australian politics.

In choosing that third option of the market based response, and green-lighting this process, I would hate anyone to think I am 100 per cent, cut-and-bleed sworn up to the model that the government has on the table with regard to that broader concept of a market based response. I think they can do better. I would certainly be one to hope that over time we can see this legislation improved. In my view it is very important that in this case we actually do let the market rip, which seems to have been a source of nervousness for government in their position earlier this year. If we are going to go down this path of having a market based response, we want to allow the market to operate in its most healthy way possible, and any exemptions and compensations are chipping away at the edges of allowing that market to rip.

I would hope that anyone who has done economics 101 would accept as a broad argument that, if we are going to go down this market based path, we want to give the market its full steam. That is where I think there are some concerns. I can understand why the government is having to dumb down this legislation to get it through the parliament, but I think there are some concerns about the future that we do need to address over time. We need to look at all those impediments that have been built into what is a market based response to a science question to get this legislation through the parliament that over time may actually work against a market based response and may therefore not answer the question that we are being posed with as well as it could.

An example of that is the amount of compensation to the big emitters. There is a finite amount of dollars—and a good, healthy finite amount of dollars—involved in this trading scheme. There are other examples of other schemes around the world where there is greater emphasis on offset dollars going to good biodiversity outcomes. In an Australian context what it could be is good soil erosion, water or coastal erosion outcomes—the topic of the week—good, uniquely Australian outcomes. However, this finite amount of dollars is being tipped in a different direction, and that is compensation to the big emitters. I think that is of concern to those who want to see some uniquely Australian outcomes in the long term from such a scheme as this.

There are good potential opportunities written into the legislation. I mentioned reafforestation as one. There is great potential in the concepts on the table in that regard. However, we are seeing, for political reasons, the money tipped in a direction which is trying to get this legislation through but, potentially in the long term, is not in the legislation’s interests and not in the national interest. I would hope that over time we can consider that more thoroughly. I would hope we can find a way to put greater emphasis on these uniquely Australian outcomes from such a scheme. Biodiversity is a big one that I would hope we could see written into this legislation in a better way. Soil erosion, water salinity and the vast array of uniquely Australian issues that we face today can potentially start to be addressed by a scheme that sees a greater emphasis on offsets moneys rather than on compensating big emitters.

In an area such as the mid-North Coast of New South Wales, we do not have big emitters. We are the land of small business, and I think we are reflective of Australia. Ninety-five per cent of our employment is in businesses of five employees or fewer. We are reflective of the country. The engine room of this country is small business. I would hope that, when this legislation passes, there is a great deal of engagement with the small business community in the potential opportunities through this scheme. This cannot be the Goldman Sachs scheme. This cannot be the big emitters’ scheme. This has to be a scheme for Australia and this has to be a scheme for the small business community of Australia. It has to be clearly laid out to many people who do not have the time to go through 440 pages of legislation. It has to clearly lay out the potential opportunities—and there are many—that are in this legislation for regional small businesses in particular. I hope the government will take that up when this legislation passes.

Also with regard to improving this legislation, I do want to comment about the amendments that have been put on the table so far. My colleague the member for New England has one that I would hope this place considers relating to the food chain. I have heard many comments already about the importance of food. I concur with all of those. I therefore think that is an amendment worthy of consideration by government. Rather than looking at it as agriculture generally—because that considers things such as timber, and you cannot eat wood—I think focusing on food and the supply chain is quite a valuable and important way of value-adding to this legislation. I will be sitting alongside my colleague there.

With regard to the coalition amendment, particularly about agriculture, I also concur with those thoughts on the full exemption of agriculture. I have to get on record my very good friend Sinclair Monroe, the Angus farmer from Bingara, who constantly reminds me: how on earth is he expected to monitor his cows’ farts? I think he has a good argument! Exempting agriculture, for reasons very similar in nature to the member for New England’s food supply chain argument, makes sense as we enter an era and a century where food supply is going to increase as an issue of our time and also increase as an issue that will create unrest within regions such as the Asia-Pacific region.

I will be putting up the same amendment as I put up the first time round with regard to the issue of who actually has authority, control and discretion over this legislation once it is passed. The issue of ministerial discretion and ministerial control at the end of the process is a sleeper in this legislation and it has not had the airtime that it deserves. On my reading of the legislation, I came up with roughly 23 or 24 brand-new concepts and market economy theories that are part of this framework of the suite of CPRS legislation. The ultimate authority at the end of the day in pretty much all of those concepts and theories is the minister, whether it is about targets and caps or about the issuing of licences. All of those big, key framework questions are not driven by the science, where we started with this issue and this problem; they are driven by the politics and by the minister of the day. That is an issue that I certainly hope the government thinks deeply about, once this dumbed-down legislation can get through this place. For example, there is the issue of fuel credits. What minister, what government or what executive wants to own the day that sees the removal of fuel credits? I think it is as much in the minister’s and the executive’s interests as it is in the interests of allowing the science to fly that we consider those issues of ministerial discretion that are built into this legislation. Therefore, I once again put up the amendment that tries to establish an independent, arms-length, science based view of the economy and an independent regulatory authority that starts to take care of those framework questions for the good and the bad—basically removing the politics from this issue and making it a science and economy exercise, not a politics and economy exercise, as it has quite clearly been over the last 12 to 18 months.

I certainly hope I get more than two other supporters on that legislation the second time around. I spoke to the minister about it previously and she was very polite in her understanding of it; there is just a philosophical point of difference in that the current government argues the case that it is such an important issue that parliament and the minister should have carriage of it. I take a different view on that philosophical standpoint and that is that it is such an important issue that it should not be part of the political process a la monetary policy, a la competition policy and the range of other independent, arms-length entities that we have built into this process at a time when issues are and quite rightly should be above the politics of the day.

I give this government the green light again this second time round. It is not a full endorsement. I am in the Ross Garnaut camp that this legislation has got to the point where you could be six of one or half a dozen to the other with regard to whether or not you support it. I understand the reasons for the efforts to get this legislation through. I encourage those who the first time round were in opposition to think about that point. If you are opposed to an emissions based and a market based trading scheme then you must be in the camp of the other two, which is the do-nothing answer or the publicly owned carbon tax answer. You cannot build an argument to justify both of those positions. This framework was shaped around a trading scheme first proposed by Robert Hill who has been in another job and left it already—that is how long this has been floating around. This was proposed some time ago by the previous regime and it has been picked up by this regime. I would ask this place and the other place to consider that, to let us move forward in getting the response to the natural resource question of our time sorted out and to do it in the national interest.