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Tuesday, 9 February 2010
Page: 856

Ms OWENS (5:15 PM) —The International Energy Agency predicts that it will cost an additional $500 billion to cut global emissions for each year that effective action is delayed. We on this side of the House make no apology for wanting to act or for stressing some urgency. We know that there will be a cost of action. Even if we use the most cost-effective mechanism, which is an emissions trading scheme, we know that there will be a cost of action. That is why, in putting our plan together, we were mindful of making sure that the vast majority of households were compensated for areas where prices will rise.

The costs associated with action are different to the costs of inaction. Inaction will cost the future through lost jobs in tourism areas and result in increased health costs, more extreme weather events and declining agricultural production. And those costs are imposed on our children and grandchildren. They are the costs of a declining economy, and the children in primary schools and the young adults in my electorate know it and will hold us to account if we do not meet our election commitment in this regard. The costs of action, on the other hand, are the costs of growing a clean economy and reducing pollution. They go to reducing the damage to the environment, investing in a new, cleaner industry and preparing for change we cannot avoid. It is true that most of the costs will be borne by us now; but, then again, we are the ones that have benefited from not having to pay for cleaning up our waste all those decades.

Some of that cost in the government’s plan will be felt by families as modest price rises, and those projections are in our papers. Treasury estimates that price rises will be as much as 1.1 per cent by the end of 2012-13. But a significant proportion of money paid by polluters for permits will go back to families to compensate them for those modest price rises. Of Australia’s 8.8 households, 8.1 billion will receive direct cash assistance—that is around 90 per cent of Australian households—and all low-income households will be fully compensated. Contrast that with the opposition’s so-called policy, which will slug taxpayers $10 billion without reducing emissions. And it will exclude Australia from the world debate on emissions trading schemes, the preferred model for governments around the world. The world has decided that emissions trading schemes are the most efficient way to go. So did John Howard, the Rudd government and, until very recently, the current opposition. We cannot stay in the carbon age while the rest of the world moves into a new, clean energy age. Innovation and research is what we do well and this continent of ours is superbly placed to benefit from new ideas on generation of power—wind, waves, geothermal and solar. Compare the capacity of Australia with others—some small European countries, for example, have minimal spare land, little coastline and a relatively cold climate. This country should lead the world on the development of new technology. We should already be doing so. Again, we will live to regret the wasted decade.

When we took office at the end of 2007, we started with a blank page. In spite of some 30 years of debate around the world on the need to act on climate change, there was still no modelling. There was no history of significant investment in renewables. There had been no real consultation on the structure of an emissions trading scheme. We very much started from scratch, and it has been a very busy two years to get to the position that we are in now. Let us hope the opposition’s wish for a brawl—no matter what the consequences—does not result in more wasted years. They have had their time in office, and now it is time for them to meet their own election commitment and allow us to meet ours and meet our obligations to future generations.

There are also great opportunities for developing new jobs in clean industries if we use the market mechanism to stimulate the tens of billions of dollars in investment that Australia needs to position itself to benefit from a move to a cleaner environment. Labor’s plan will move us down that path; the opposition’s plan will not. Treasury predicts that even throughout the introduction of a CPRS—which the opposition chooses to fear—average income is projected to increase by at least $4,300 per person over the 12 years from 2008 to 2200, with a strong trend in real GDP and GNP growth. Treasury modelling also projects that by 2050 the renewable energy sector will be 30 times larger than it is today.

A 2009 Climate Institute study showed that $31 billion worth of clean energy projects are already underway or planned in response to the government’s climate change policies. These will generate around 26,000 new jobs, mostly in regional areas, around 2½ thousand permanent jobs, 15,000 construction jobs and 8½ thousand indirect jobs in supporting sectors. This does not include the thousands of jobs that will be created by the government’s $4 billion energy efficiency programs and over $2 billion investment in carbon capture and storage. Only an emissions trading scheme will unlock the tens of billions of dollars in investment that will drive the move from a carbon economy to a clean economy. And only by taking that path with the rest of the world will our businesses be able to benefit from the massive growth in the international clean technology market.

In contrast, the opposition’s plan will freeze our economy in the carbon age, and I know that is not what our community wants. We all remember that, going to the last election, the community was looking for action after a decade of inaction. They knew we were late. They wanted action on Kyoto. They wanted action on climate change. Both parties went to the election on a policy of introducing an emissions trading scheme. So the opposition might like to reflect on the last hour they have spent accusing us of not meeting our election commitments and get out of the way and let us meet this one. The opposition have had considerable time to consider their position—their several positions—now.

It has been more than 30 years since the first World Climate Conference when governments were called to act and guard against the consequences of dangerous climate change. It has been 20 years since the Intergovernmental Panel on Climate Change was formed and produced its first report. It has been 17 years since the international community acknowledged the importance of tackling climate change at the Rio earth summit and created the United Nations Framework Convention on Climate Change. That is where the global consensus has been emerging over the last 20 to 30 years.

In 1999, over 10 years ago now, the Australian Greenhouse Office released six discussion papers on climate change and emissions trading. That was within the Howard era. In 2000 and 2002 two further discussion papers were released on how we could bring about an emissions trading scheme. That was still within the Howard era. In 2007 the then Secretary of the Department of the Prime Minister and Cabinet, Mr Shergold, produced the report of the Prime Ministerial Task Group on Emissions Trading. And, of course, at the last election both sides of politics committed themselves to introducing an emissions trading scheme.

Since the election the government has sought to make this election commitment a reality. We began in June 2008 when the CPRS green paper was released, the Garnaut review was released in September 2008, the CPRS white paper was released in December 2008 and then in March last year, nearly nine months ago, we produced draft legislation for the Carbon Pollution Reduction Scheme. It went through the House of Representatives and it was rejected in the Senate. It went through a Senate inquiry and it came back to the House. There was considerable negotiation with the opposition and an agreement was reached. Then they decided that they had not been given time to consider the issues and launched a leadership challenge over their internal problems.

This is an election commitment. While you are running around the country accusing us of not meeting them, you might consider who is actually standing in the way of this one. I get the impression—I could be wrong—that the opposition think they are on a winner if they can invoke the big scary T word: tax. They think that if they can convince people that an emissions trading scheme is a tax, which of course it is not, then they will frighten people so much that they will all swing over to their side. Again, I have the impression—and, again, I could be wrong—that they want people to think it is not just a tax but a great big tax. I think I am right on that.

Clearly, they do not like the idea of a tax. Neither do we and neither does the world. That is why the option of a carbon tax was rejected by the world and by Australia many years ago. The world rejected the idea of direct action as the principal mechanism to reverse climate change and has since chosen emissions trading schemes as the way to go. We did as well and so did the Australian people at the last election. The opposition know we are not introducing a big tax on everything. They just like saying it with gusto and aggression, some of them with a bit of embarrassment, some of them threateningly and some of them with fierce expressions that certainly make me quake in my boots, because it reminds me of their great big new tax on everything: the GST in 1998. It was a great big new tax on everything.

Opposition members interjecting—

Ms OWENS —I can see you guys are still living in the past. We in Labor are not the opposition. We make sure that families are looked after. We have made sure that if there is an increase in the CPI a compensation package will be in place, in full, for low-income families and to support the vast majority of families.

This new world of climate change with all its new acronyms—RETS, ETS, CPRS—is very hard economics. Its sophisticated and simplified explanations do not do it justice, but I am going to attempt today to explain the basics because I do know that there are still many people out there who are not familiar with the basics. For 200 years through the industrial age, manufacturers and electricity producers have spewed their waste into the atmosphere. We all know that. In fairness, for many years they probably did not know they were causing a problem, but they were. It has now reached a stage where the whole world will bear the costs of the damage done by the waste. If it is not borne by us, it will be borne by our children.

All the economic theories say that if those businesses had been required to pay for the cost of cleaning up their waste when they were producing it they would have found ways to reduce it, and cleaner forms of manufacture would have become more competitive and consumers would have looked around for cheaper options. You could say that, because they have not had to pay for the cost of waste removal, their prices have been lower than they should have been and we consumers have been paying less than we would have if waste removal was in the price.

The CPRS does two things, and that is why it is called a cap-and-trade scheme. First, it sets a cap on the amount of emissions that we as a nation can make. It does that for the biggest polluters—not for everybody, but for the biggest polluters. That cap reduces over time. It has to do that because we have to stop increasing our emissions and instead reduce them in order to have an impact on climate change. Without a cap and without reducing emissions, temperatures will continue to rise. That is why our plan will be effective and the opposition’s plan is pure nonsense.

The carbon price, as we call it, is actually the price of the permit. The polluters can use the permits themselves or they can sell them or buy more if they choose. The additional cost to production will encourage companies to reduce their emissions. If the price of permits is high because the demand is high, that will encourage even more businesses to find ways to reduce their emissions, to reduce their costs or to free up permits for sale at a high price.

Meanwhile, the government will use some of the money from the permits to compensate families and to ease the transition for industries that are exposed to international markets. But the real advantage of the price on carbon is that it encourages innovation to reduce emissions, which is necessary. It stimulates investment in alternative technologies. Government, through the kind of direct action suggested by the opposition, simply does not achieve that. Climate change is a problem that needs real action and only the government plans that action. (Time expired).

The SPEAKER —Order! Before I call the honourable member for Bradfield I remind the House that this is the honourable member’s first speech. I therefore ask the House to extend to him the usual courtesies.