Save Search

Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Thursday, 4 February 2010
Page: 436


Mr HUNT (11:27 AM) —The carbon pollution reduction scheme legislation, introduced into the House this week for a third time, does three things to the Australian public. Firstly, it establishes a tax on families of $1,100 per annum. That tax translates directly to an electricity tax which the Prime Minister, from the seat now occupied by the member for Maribyrnong today, conceded yesterday would not lead to a seven per cent electricity price rise, as he said on Tuesday, would not lead to an 11 or 12 per cent price rise, but would bring about a 19 per cent price rise. In the course of 24 hours the bill to Australian families, in electricity terms, went up almost threefold by the Prime Minister’s own words. We know this only because he was forced under questioning to reveal the fact that he had left out the second year of the price rises. Yesterday, he did not mention the third or the fourth or the fifth year of the electricity price rises. He dismissed the New South Wales government’s Independent Pricing and Regulatory Tribunal estimates of well over 20 per cent of electricity price rises as if they did not exist, as if they were estimates just from some body. Actually, it is an independent pricing and regulatory tribunal which set the price rises for New South Wales—not hypothetical; it set the price rises for New South Wales.

I turn to the second of the things which occur in this bill, which introduces this tax on Australian families. It is more than just the $1,100; it is a cost to the economy of a $114 billion tax between now and 2020. What does that mean? In its first year, it is $4½ billion. In its second year, it is $11½ million. Over its first four years, it is $40 billion of electricity taxing, of food and grocery taxing, of taxing of heating and cooling for pensioners. These are the costs to Australia. These are the costs to Australian families. They are not hypothetical; they are factored into the price rises.

There are some very simple questions for every member of the government today. Why does your bill need to compensate Australian families? Why does your bill need to compensate pensioners? Why does your bill need to compensate mums and dads? Why doesn’t your bill compensate 750,000 small businesses? There is only one answer to why there is a large-scale compensation package—which is nevertheless wildly inadequate—and that is that this bill being introduced into this House this week will drive up the price of electricity by a minimum of 19 per cent in the first two years—through the words of the Prime Minister, extracted through gritted teeth at this table only yesterday, having said seven per cent the day before. The Prime Minister was willing to say to the Australian people, ‘A seven per cent electricity price rise,’ on Tuesday and on Wednesday it is a 19 per cent price rise. On Thursday, he might perhaps acknowledge the 300 per cent over the coming years which the Queensland government has referred to or the 62 per cent which the IPART has referred to—of which the CPRS alone is well over 20 per cent in terms of the addition to price rises.

That brings me to the third of the areas of punishment under this bill—and I will go through all of the areas in more detail. The third is the windfall to big business for doing nothing, for doing business as usual, for not cutting a single gram—not a tonne, not a hundred tonnes but a single gram—of CO2 emissions. This bill, unbeknown to the Australian public because the Prime Minister is silent on it, gives big business $40 billion straight from the pockets of pensioners, mums and dads, self-funded retirees and small businesses—$40 billion for business as usual—whereas, under the coalition’s approach of direct action to reduce emissions through real action, not a dollar goes to anybody who is not actually reducing emissions.

We have an incentives based scheme; they have a punishment scheme based on driving up electricity prices as high as possible to try to effect some change through the pressure on what is widely known to be a largely inelastic good. So it is based, at its heart, on a flawed economic assumption that, in order to change behaviour, you have to drive up the highest cost mechanism and hope that people’s behaviour will change. There are enormous costs to families, enormous costs to the economy and an enormous windfall to big business—$40 billion for business as usual coming straight from the pockets of mums and dads, pensioners, self-funded retirees, single parents, small businesses, farmers and others who are out there struggling away. These are the people who will pay for a $114 billion, great big $1,100 electricity tax on mums and dads all around Australia.

Then we see the extraordinary jobs impact of this bill. This is the fourth element of the bill. What do we see in terms of jobs? We see that job losses will occur in the Hunter Valley and in the Latrobe Valley and job losses in manufacturing all around Australia. And, if you are a small business operator, you are likely to see an extraordinary impact on your business.

That is what is real in the government’s policy. But let me go through the government’s policy in more detail before addressing some of their issues in relation to our policy and then going through the essential elements of a direct action policy, which is $3.2 billion as opposed to $40 billion, and how that will produce jobs, protect jobs and, above all else, achieve the same target as the government’s but at a dramatically lower cost to the economy and a radically lower cost to Australian mums and dads. We think direct action, irrespective of what people think about the great challenge of climate change, will have a real impact with real benefits for the environment.

We have a vision of improving our soils, with a once-in-a-century replenishment of soils, of making Australia a solar continent—of a solar sunrise fuelled with a million solar homes, over and above that which is in place, by the year 2020. That is an exciting vision and it engages people and it gives them an opportunity to be part of the solution rather than to be punished for simply opening the refrigerator door, to be punished for turning on their cooling in North Queensland or to be punished for turning on their heating—and, if you are a senior Australian in Cooma, Jindabyne, Launceston or Burnie in the dead of winter, that is what is going to occur. I want to make the point that we have two radically different visions: the lowest cost abatement model versus a model based on trying to change people’s behaviour through driving electricity prices through the ceiling.

Let me turn first to the issue of the cost to families in more detail. Mr Deputy Speaker Secker, in 2012-13 constituents in your electorate and constituents around the country will be paying $1,100 per family. The government have disputed this figure. They have said, ‘How could it be that Australian households will pay $1,100 per family?’ The answer is very simple. The government’s own figures set out a permit revenue, a tax revenue, of $11½ billion for 2012-13 alone. That money is not coming from big business; that money is being funded through increased electricity prices, increased grocery prices and increased heating and cooling prices for mums and dads, pensioners and farmers around the country. That is factored into everything the government do. How do we know this? Because they recognise that there has to be a massive but inadequate compensation package. So, in other words, their whole scheme is predicated on increasing prices—and they acknowledge it through the fact that they have to compensate people.

Where do we get the $1100 figure from? It is not just us. Whether it was the Daily Telegraph in November on the splash front page ‘$1100 per family the cost of Mr Rudd’s ETS’, whether it was the work of the Brotherhood of St Lawrence or whether it has been confirmed by other organisations, it comes down to simple arithmetic. The ABS lists 8.7 million Australian families. You need to multiply 8.7 million by $1,100. Multiplying 8.7 million by $1,000 gives $8.7 billion. You then add another $900 million, let us call it, and that gives you $9.6 billion. We are still $2 billion short of making up Mr Rudd’s tax. We are assuming that that component will be met off the bottom line of business, but if business passes that through it will be more than $1,100 per family. So remember this: it is the 8.7 million Australian families who are the ones that have to make up the $11½ billion. We are giving Mr Rudd the benefit of the doubt. We are saying that they will only have to make up $9.6 billion and that business will cop the other $2 billion and not pass the costs through for that, but it is likely that it will be higher than $1,100 per family. That is a very important thing.

What does that then mean for electricity prices? Let us go to the detail. In the government’s own modelling, they have a seven per cent rise in the first year. So, when I asked the Prime Minister on Tuesday what the cost of electricity price rises would be to a dry cleaner over the course of his scheme, he said, ‘Seven per cent.’ We knew immediately that he had taken the lowest figure from the first year. It was deliberately misleading. It was an intentional and deliberate withholding of some of the information that was necessary. When the next day we asked, ‘What about the next year of the scheme?’ he knew the jig was up. He knew that he had been caught withholding information from this House, and so the Prime Minister was forced to concede, ‘Ah, yes, I said seven per cent in the first year but, okay, there is another 12 per cent electricity price rise in the second year.’

That is not the end of it. That is not the end of the electricity price rises. On this day and in this place the Prime Minister must make a statement setting out the electricity price rises forecast for Australian families, for Australian pensioners, for Australian farmers and for Australian small businesses not just for one year, not just for two years, but for the entire course of the scheme up to 2020. We know that, in the first three years alone, IPART, the Independent Pricing and Regulatory Tribunal of New South Wales, predicts a rise of well over 20 per cent. That is for the first three years alone. What is the nine-year electricity cost, Prime Minister? That is the question we ask and we expect a statement in this House this day before the parliament rises or there will have been a derogation of duty. We are in a battle right now about being honest with the Australian public about the costs. I know, because for the first time I see hangdog looks of shame on the faces of the members of the government that they know that their scheme requires massive compensation since it will drive up prices. They also know that that massive compensation is not acceptable and is not sufficient because you cannot take $40 billion out of the pockets of mums and dads in Australia, give it back to big business and expect those mums and dads to be better off. That is a problem.

Let us go to the question of pensioners. In November, Sky News Agenda asked the Treasurer, ‘Can you guarantee that no-one will be worse off under your scheme?’ His words were, ‘I can’t guarantee that no-one will be worse off.’ I repeat what the Treasurer of Australia said: ‘I can’t guarantee that no-one will be worse off.’ Today on Sky News, the Prime Minister was forced to make a promise which he will never be able to keep: ‘I guarantee that no pensioner will be worse off.’ How can the Prime Minister guarantee to a single pensioner living in Cooma, living in Jindabyne, living in Burnie or living in Devonport that, if their electricity bill is higher than the compensation they receive, they will not be worse off?

This is the question for the Prime Minister of Australia in this House today: will you guarantee to up your compensation if any one single pensioner has a bill higher than the amount which you are returning to them? Will you guarantee to change your compensation for any pensioner who produces a bill higher than the amount of the average compensation which you will be giving to them? If you cannot guarantee that you will change your compensation package, then you have misled the Australian public in your interview today.

The Treasurer was honest when he spoke in November on Sky TV and made the point, ‘I cannot guarantee that no-one will be worse off.’ The Prime Minister today made a promise he can never keep and the test for the Prime Minister today is, firstly, whether he will release the full electricity cost of the scheme from now until 2020 for Australian families, pensioners, mums and dads, farmers and small businesses and, secondly, whether he will make it clear that if any one single pensioner produces an electricity bill in excess of the government’s compensation package he will meet the full cost of their electricity and grocery bills over and above the amount which he has indicated they will get. Either he cannot make that promise or he will have to change his compensation package.

I ask all Australians and all members of this House to focus on the simple question: why does this bill need a massive compensation package? Why would you need a compensation package if there were going to be no impact on prices? There will be a monumental impact on prices. It will be a rise of 19 per cent in electricity prices in the first two years and well over 20 per cent in the first three years, according to IPART—not us but an independent body attached to a state Labor government. It was dismissed by the Prime Minister yesterday as ‘just another organisation’. Unfortunately, it was an inconvenient organisation for him.

This brings me to the issue of the cost to the economy. I want to compare the two schemes. Our scheme sets up a cost of $3.2 billion over four years. The Labor Party scheme is about $40 billion over the first four years, and that is because it relies on driving up electricity prices to achieve a modest reduction in demand and, therefore, you have to cycle the money back—some from the pockets of mums and dads to big business and some back to the mums and dads who paid it in the first place, but not enough to cover the amount they have lost. You have created, as the Leader of the Opposition said, a great big tax, an enormous money-go-round and a massive increase in the costs facing individual pensioners, singles, self-funded retirees, mums and dads, farmers—anybody who has to pay for electricity, gas and groceries in Australia. That is the basis of what we are concerned about.

I also want to make a point about the windfall to business. The Prime Minister has been running around saying, ‘The opposition scheme is all about helping the big polluters.’ Let us be clear here: business in Australia gets not a dollar from the opposition for continuing with their ordinary practice; business under Labor’s scheme, under this bill, introduced in the dead of Tuesday night, gets $40 billion for failing to reduce emissions by a single gram. They do not have to reduce emissions by a single gram and they will get $40 billion in their pockets from the pockets of mums and dads. So let us set this up: we know that the bill itself, Mr Rudd’s scheme, is likely—and this is on the basis of research prepared by Access Economics for the state and territory governments—to cause 126,000 full-time job losses or forgone jobs. On the basis of Concept Economic’s work, there will be 23,510 fewer jobs in the mining industry by 2020. Frontier has identified 45,000 jobs lost in high-energy intensive industries. All this is from the folly of a system which would simply send this manufacturing offshore. That is the problem with the government’s system. That is the fundamental flaw in their approach.

The government has introduced overnight a dodgy document and has been hawking it around the press gallery. I caught Senator Wong’s staff hawking a confidential dodgy document around the press gallery. It is marked ‘DCC in confidence’. This is out in the press gallery. I will table this document, if the government will let me. Will you let me table this dodgy document that has been put around?


Mr Shorten —No.


Mr HUNT —The government has refused our attempt to table the dodgy document which they were caught red-handed giving to the press gallery of Australia. The government will not allow their dodgy document to be tabled. I call on the Prime Minister to table his dodgy document before question time is out, because they will not let us do it.

Having said that, what is in it? We warned that there would be a dodgy document. It is 1½ pages, with no modelling, with no assumptions, with words that are not finished and with sentences that are not finished. It is an embarrassment and a shame. We thought there might be 20 pages; we thought there might be something of substance. I have to say that I am disappointed; I thought they would do a better job. We spoke this morning with Frontier Economics, who are amazed at the way they were misrepresented by the Prime Minister yesterday.

Our policy—as opposed to what they produced—is capped, costed and credible. It is credible because we built our policy on a very simple proposition: least cost emissions reduction, paid for through a market system which provides for the government to purchase the lowest cost emissions rather than to rely on the highest cost emissions.

I want to take this opportunity to challenge Senator Wong to a debate in the Press Club next Wednesday lunchtime. Let’s do it. There is a free space in the Press Club. There is no reason not to do it. Senator Wong has gone missing in action, and is not defending the government’s policy, is not prosecuting our policy but is sending staff scuttling about the press gallery peddling dodgy documents marked ‘in confidence’. That is what is occurring. That is a government which is running from the truth.

So what will we be doing? Our proposal is very simple. After two years, Australians do not understand this enormous, complex, new tax of $114 billion—$1,100 per family, 19 per cent over the first two years in terms of electricity costs. All they know is that it will hurt them, it will cost and it will be a windfall for speculators, derivatives traders, bonds traders—anybody who operates a financial system. So I say sorry to those guys; we are not out there to help you. But the government is. They are setting up a fantastic subprime on steroids.

After two days, Australians understand our scheme. Tony Abbott’s scheme is very simple. It is direct action to reduce our emissions. The elements are: one million solar homes by 2020; 20 million trees and the prospect of replacing the enormous overhead transmission lines and towers which cut through the heart of our cities with underground cabling—and paying for it by using the land which would be reclaimed for a mixture of parks and urban infill within our cities. Mums and dads and pensioners and seniors and singles and young people do not want these massive overhead powerlines right through the heart of their cities, right outside their backyards. We are offering that prospect. Last night the Energy Networks Association of Australia put out a release endorsing this vision. They are excited about the fact that we are looking at underground cabling. Firstly there is the electricity saving and secondly there is the prospect of prodigious change in the quality of life in our cities. So we offer quality of life, we offer a chance of doing it in a cheaper way and we offer a chance of meeting the same target but with a sense of majestic vision where each and every Australian can be part of that solution as opposed to each and every Australian being the victim of a massive new tax.

There is more, though, to what we are doing: $100 million for solar towns and solar schools; $50 million for the great vision of geothermal and tidal towns to use microprojects right around Australia in remote areas, and we have already had great support from people such as Dr Donald Payne for a project and a vision such as that. Over and above that, we have an emissions reduction fund which gives us the chance at a once in a century replenishment of our national soils. This vision at this moment in time is what Australian farmers need. It is about replenishing our national soils, increasing their productivity and capturing carbon in the process. It builds on the work identified by Professor Garnaut, Tim Flannery, the CSIRO, the Wentworth Group, Dr John White and many other people—including, incidentally, your own government agencies—who have identified soil carbon.

That is the vision and opportunity: we will make Australia more productive by providing incentives rather than making Australia less productive by providing a massive penalty for existence on Australian mums and dads. This is a seminal moment during the course of these three years. It is the moment where we have two choices for Australia: the government’s scheme of a massive tax on every Australian mum, dad and senior, or a direct action alternative to achieve the same outcome of a reduction of 140 million tonnes of emissions, a five per cent reduction on our 1990 targets, which is a positive thing.

But do not take our word that the million solar panels, the 20 million trees, the great vision of repairing the hearts of our cities and repairing our landscape is a good thing. Who are the supporters? The Minerals Council of Australia, the Australian Food and Grocery Council, the Australian Retailers Association, the National Farmers Federation and ACCI have all said that there is great interest, and in many cases they have come out with enormous support for the coalition’s scheme.

One of Australia’s most respected business writers, Alan Kohler, writing in the Business Spectator only yesterday, endorsed, embraced and put great faith in the coalition’s system. Add to that the work of Frontier Economics and the enormous support we have from mainstream Australians who for the first time understand that that they can be part of the climate change solution. Irrespective of what you think of climate change, they can be part of improving our soils, our energy efficiency and the way Australia goes about cleaning up our oldest and least efficient power stations. It is a vision of participation in the future, rather than a vision of being a victim of a massive new tax from which they can never escape.

What we have is a choice. We have a government relying on a massive new tax of $114 billion, or $1,100 per family, and electricity price rises of 19 per cent over two years, according to the Prime Minister’s own words, while failing to address the subsequent years. These words were dragged out of him through gritted teeth yesterday after he said seven per cent the day before—almost a tripling of the price rise in 24 hours. Compare that system to the system of direct action that Tony Abbott has put forward. It will make real reductions through an emissions reduction fund which will reward only those people who make real savings, rather than the $40 billion picked from the pockets of mums and dads which will go, under Labor’s bill, only to the biggest businesses in Australia.

That is what is happening: the 750,000 small businesses will get nothing, mums and dads will pay $1,100 per year, and numerous other people will suffer. That is what will occur under the government’s system. We offer Australia a direct action alternative with real emissions reductions: a million solar homes by 2020, 20 million trees and the vision of cleaning up our cities, plus solar towns, solar schools, geothermal and tidal towns, urban forests and a re-greening of our cities. That is the choice facing Australia today and that is why we will be opposing this bill. (Time expired)