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Wednesday, 22 August 2012
Page: 9558


Mr HUNT (Flinders) (12:28): It is a great pleasure to speak on behalf of the coalition on the Greenhouse and Energy Minimum Standards Bill 2012 and to offer our support for it. Our points in relation to this bill are very simple. With regard to energy efficiency, the environment and reduction of greenhouse gases, there are three critical points: (1) we agree on the science, (2) we agree on the targets and (3) we disagree on the mechanism where it involves a carbon tax, which is in effect an electricity tax. We propose an incentives based scheme which does practical things, rather than one which, in the end, requires having to purchase $3½ billion of foreign carbon credits each year, every year. That figure will increase from 2020 onwards.

Where does this bill fit in? It fits in against a background of long coalition support for practical action to do real things such as ensure that we have energy efficiency measures in place in our country that are not about imposing a massive electricity tax. This bill is part of the positive agenda, which we support, but it stands in stark contrast to the carbon tax, which we do not support.

Let me begin by dealing with the negative side, which we cannot and will not support and which we will repeal. The problem with the carbon tax, first and foremost, for all of those concerned with greenhouse gas abatement, is simple: it does not do the job. Our domestic emissions will go up rather than down. They will go up from 578 million tonnes in 2010 to 621 million tonnes in 2020. That is almost 43 million additional tonnes—about two tonnes per person right across Australia—more than was the case a decade earlier. So throughout the period of the first eight years of the carbon tax our emissions will go up, not down. The tax will not do its job.

We have ventilated elsewhere our absolutely clear concerns about electricity, gas and refrigeration prices that will rise on a truly astronomical scale and about the impact that will have on small businesses, farmers, families and seniors. That is something that is well and clearly constructed, and I think the public knows that. But what is of surprise to me and to others, on both sides of this House, who want to see an improvement in efficiency and a reduction in emissions, is that it does not do its job. That is the extraordinary part about it, and that is where the relationship to this bill is so fundamental. Emissions will go up, not down; electricity prices will go up, not down. At the same time, nothing will happen; our emissions will simply continue to increase. People may well ask: 'Why is that the case? Surely that is counterintuitive?' The problem with taxing electricity is that it is a singularly ineffective mechanism. Electricity is an essential service and therefore is a largely inelastic good. It is not perfectly so, but in terms of pure price responsiveness it is largely inelastic. We will see that electricity prices will go up but that demand will not be affected in any significant way. Other elements can affect demand. I spoke with the head of the Australian Energy Market Operator yesterday. There is no doubt that the provision of solar panels has helped reduce demand for grid based electricity and that other elements, including the hollowing-out of the Australian manufacturing industry, have had a significant impact. There have also been seasonal impacts. But price alone has been a wildly ineffective mechanism. Work from around the world shows that, in a developed economy, electricity is an essential service and therefore significantly price inelastic. That is why driving up the price of electricity will not decrease our emissions in any significant way. That is the tragedy of the carbon tax: all of this pain with no fundamental or apparent gain. Those are the problems.

Let me move from the fact that we know—we believe, we are convinced—that the carbon tax is not going to achieve its objective to this bill. This bill builds on a set of national standards for the energy efficiency labelling of products in Australia. It is quite a practical measure. It is in line with our approach of direct practical initiatives. It allows the government to ensure that there is a set of uniform national labelling standards that will replace existing state and territory labelling that fulfils the same purpose—in other words, it consolidates into a single, national set of standards. That is what we want. That is what we believe in. That is what we want to occur. It is a very positive outcome.

The bill delivers a national expanded Equipment Energy Efficiency Program that enables Australian governments to ensure that, among other measures, there are common product types and standards—products that use forms of energy other than electricity; products, such as window glass and air-conditioning ducting, that affect energy consumption and standards for the identification of the greenhouse gas intensity of particular products. That is all practical information which is not overly onerous. It builds on the agreement of the Council of Australian Governments and the steps taken by it. The scheme was designed to accelerate energy efficiency efforts and to streamline roles and responsibilities across different levels of government. Those are all positive elements.

I am pleased that the responsible member of the executive, the Parliamentary Secretary for Climate Change and Energy Efficiency, the member for Isaacs, is in the chamber. Our senators, in their inquiry into this bill, raised concerns about the treatment of the lighting sector. They were worried that there would be issues about the confidentiality of sales data and that the bill was overly onerous in its imposition of reporting requirements. Whilst we have many disagreements with the government, I thank the parliamentary secretary and his office for directly addressing the concerns, knowing that what we say in this place has an impact under the Acts Interpretation Act on the interpretation of the legislation. I thank the government. They have made commitments which we regard as adequate, significant and important. I will trust that the parliamentary secretary will deliver on those.

Against that background, we agree on the targets and on the need for practical action; we disagree on the mechanism. But this is one point where we can happily provide agreement. On that basis, I am delighted to offer support for the Greenhouse and Energy Minimum Standards Bill 2012.