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Wednesday, 10 October 2012
Page: 11871


Mr ROBB (Goldstein) (17:21): I rise to speak on the clean energy amendment bills, which are designed primarily to remove the price floor of $15 per tonne on carbon and to link Australia's carbon tax to the European emissions trading scheme. In coming to a response to these bills, I read the minister's second reading speech. Essentially, in amongst all the fantasy, the minister outlined the government's so-called underpinning principles of its carbon tax policy: (1) to be environmentally effective, (2) to be economically efficient and (3) to be socially fair. So it is not unreasonable to put those principles and the attempt to abide by those principles to the test, which is what I would like to do—to look at how environmentally effective, how economically efficient and how socially fair this might be.

Senator Penny Wong, in her capacity as climate change minister in the previous parliament, said on 6 February 2008 at an AiG luncheon:

The introduction of a carbon price ahead of effective international action can lead to perverse incentives for such industries to relocate or source production offshore. There is no point in imposing a carbon price domestically which results in emissions and production transferring internationally for no environmental gain.

I was the shadow minister for climate change for 12 months in the lead-up to the collapse of the CPRS. We were lectured and we were hectored in this chamber and all around the country for three years over the notion that you cannot go it alone, that you have to be part of a global scheme. This principle was at the heart of everything that the Rudd government sought to do with the introduction of an emissions trading scheme. They said endlessly: 'We have to be part of a global scheme and a global scheme is coming. That's why you've got to vote for this. We can't be left behind. We've got to be part of it.' We all know now what happened at Copenhagen, and it cost the member for Griffith his job. He preached this so vehemently with all of his colleagues. After Copenhagen there was no global scheme; in fact, the world fractured in the face of the global financial crisis and saw that what was proposed was a monumental waste of money that was not going to deliver environmental outcomes. But we got lectured on this endlessly for three years. And now they dare come into this chamber and say they are acting on the principle of being environmentally effective. Let us have a look at it.

The EU, which we are now irrevocably linking ourselves to on carbon pricing, is dictated to by the bureaucrats in Europe. No-one has disagreed with that. No-one has contradicted the fact that now and into the future the design of the carbon tax, the price level—all of these things—will be factors determined by bureaucrats and politicians in Brussels, over which we will have zero impact. Talk about handing over our sovereignty to another nation—in this case, to 30 other nations. It is inconceivable.

Nevertheless, the EU accounts for less than five per cent of world emissions. So it is not that we are linking ourselves to carbon markets that are particularly representative. It is not a deep market, it is not a robust market and it is not a reliable market. It is almost a pilot scheme when you compare it with what has been introduced in Australia. The most striking feature of the market in the European community is its persistent instability, so much so that the price has collapsed to around $7 a tonne. There is absolutely zero incentive for investment in lower emissions technology. The price to produce a megawatt hour of coal is $35, for gas it is $55, for wind it is $90 and for solar it is $330. So can you tell me that $7 a tonne is going to have any impact on investment? It will have zero impact. What will a market that goes up to $50 and back to $7 do to potential investors? What are they going to think? The market in Europe is not working to encourage low-emissions technology.

The price will ultimately be set by countries without any base in natural resources. The European community is not exactly a resource powerhouse. They might make glass and a few high-technology products, all sorts of things, but they are not a resource powerhouse. Our competitors, the countries that we compete with on resources and energy, are not European countries. They might be trading partners in other respects of some consequence, but they are not competitors. So we are putting a price on our product and looking to compete with countries which have no carbon price. Yet the minister stands in this chamber and tries to make out that we are now part of a world movement. I am afraid nothing happened at Copenhagen—in fact, it fell apart—and nothing has happened ever since, which gives no prospect of anything taking place in a global sense. There is no need for the Europeans to worry about what carbon prices, if any, are charged by Australian resource competitors. They will not worry about that. They are not going to sit there in Brussels and agonise over the terms and conditions they apply and the assistance they provide to industries because of the effect those things will have on us. We will have to compete against countries such as China, Brazil, Uruguay—South American and African countries—and Canada, none of which have a carbon price in place. The Europeans are not going to worry one whit about that. Yet we should. The EU exempts virtually all its export industries from emissions trading schemes. We do not exempt ours.

Let us take dairy processing—no exemptions, no assistance. It is one of our strengths. It is one thing that we do better than just about anyone in the world, apart from the New Zealanders. A lot of our prosperity has been built on these sorts of industries. There is not one whit of assistance here for the dairy industry. What about in Europe? Ninety-three per cent free permits. We are linking ourselves to Europe and their industry will have that sort of advantage. I could give you endless examples. We hear from the minister that these sorts of facts are a baseless fear campaign and that the rest of the world is in lockstep on all of this. In fact, he said in the most disingenuous component of his whole speech that, from 2013, 850 million people will live in a place where polluters pay for their pollution. That is rubbish.

You cannot say that the European emissions-trading scheme bears any resemblance in terms of size or impact. The amount that will have been paid by Australians through this carbon tax, since July, by October and November this year will be equivalent to all the tax raised through all of Europe, with a population of 200 million people, over the last five years. Is that comparing apples with apples? This is madness.

The UK have predicted that over the next five years, through until 2015-16, the European emissions-trading scheme will cost the UK population £5½ billion—that is, A$8.6 billion. In that same period, through until 2015-16, the Treasury has estimated that Australians will pay $25 billion. Our friends in the United Kingdom will pay the equivalent of $8.6 billion and our taxpayers will pay $25 billion. The trouble is that there are 66 million people in the UK and only 22 million people here in Australia. So when you compare apples with apples on a per capita basis, or per 22 million people, the UK will pay $2.8 billion compared to Australia, which will pay $25 billion. In other words, the European scheme will have an impact nine times less on the community than the emissions-trading scheme/carbon tax brought in by the Australian government. Yet the government seek to pretend that we are comparing apples with apples.

I fear that we are in fact linking up to a scheme which is costing us nine times more than what it is costing our counterparts in the United Kingdom. Yet we are told that we are all part of a global collegiate—that everyone is in it. That is a nonsense. It was a very disingenuous contribution to this debate, to try to give Australians the impression that we are following the world. We are ahead of the world, we are acting alone and we have a price which far exceeds the price of any other country. We are the only country that has a global price—a price across our nation—which is much greater than anywhere else in the world.

What is economically efficient about a carbon scheme whose entire purpose, as the Minister for Climate Change and Energy Efficiency repeatedly stressed, was to provide a predictable long-term signal which investors in renewables and other emissions technologies could rely on? That was the whole purpose. That is what he said. Of the carbon scheme that the government introduced, he said:

Moreover, the floor price was essential to achieving that goal, as it ensures "stability and predictability" and avoids "the risk of sharp downward movements in the carbon price, which could undermine long-term investment in clean technologies".

Where is the predictability now, just two months after the introduction of the carbon tax? This is the eighth major change in two months of their scheme. The government are all over the place, just making it up on the run. The minister for climate change, just two months ago, said that this was irrevocable, immutable and that you had to have a carbon floor if you wanted predictability. Now we are linked to Europe and now we have decisions made by 30 countries—politicians and bureaucrats in Brussels—where we will have no influence. Our sovereignty has been totally removed on this matter and yet Europe does not compete in the markets that we compete in. Yet our prices will be set by them. This is just incompetence on a large scale.

Let us call this what it is. The carbon tax is nothing more and nothing less than a grubby political decision to keep this Prime Minister and this government in office. That is all it is. That was the inspiration for the decision. It was the reason that this Prime Minister said one thing one week and three weeks later said the absolute opposite. She deceived the Australian people, only because of a grubby political deal to stay in office. It is environmentally ineffective. In fact, it is already pushing business offshore, it is closing down businesses in Australia, investments are not being made and it is not encouraging investment in low-emissions technology. It is environmentally ineffective, it is grossly economically inefficient and we are paying six times the tax over and above what is needed to fund that sort of emissions abatement. And it is socially unfair because it is costing jobs, it is increasing taxes and it is increasing electricity prices, yet it is doing nothing for the environment. (Time expired)