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Wednesday, 10 October 2012
Page: 11907

Mr CRAIG KELLY (Hughes) (19:59): I rise tonight to speak on the Clean Energy Amendment (International Emissions Trading and Other Measures) Bill 2012 and the raft of associated bills. These bills seek to link the complete insanity of Australia's carbon tax with the even greater insanity of the EU's ETS and abandon the current floor price. With this legislation, is it any wonder that the public think that this government speaks with a forked tongue and they simply cannot believe a word that it says?

Let us go back to the start. We all remember a week before the last election when the Prime Minister stared down the lens of a camera and said words that she will always be remembered for:

There will be no carbon tax under the government I lead.

Let us not forget the Treasurer's promise before the last election, when he said:

No, it's not possible that we're bringing in a carbon tax. That is a hysterically inaccurate claim being made by the coalition.

We know and the public know that the only 'hysterically inaccurate claims' are those made by the Treasurer about his budget forecasts. But here we are today debating amendments to a tax that we were told was not possible. Here we are debating legislation that seeks to abolish the floor price on the carbon tax, when this government has said over and over again that the floor price is absolutely critical to the carbon tax legislation. Just look at what the Prime Minister said on 13 September last year:

The bill also provides for a price cap and a price floor to apply for the first three years of the floating price period.

This will limit market volatility and reduce risk for businesses as they gain experience in having the market set the carbon price.

The Minister for Climate Change and Energy Efficiency said on ABC radio on 12 July last year:

Well we've put in a floor price and a price cap to provide some confidence over the first few years about the potential variability of the price.

Then, on 28 September last year, the climate change minister said, referring to the carbon price:

This will reduce risks for businesses as they gain experience in having a market set the carbon price.

Let us not forget the Minister for Finance and Deregulation, Senator Wong, who said on 28 February this year:

It is the case that our policy does include a price floor which acts as a safety valve for investors in low-emissions technology by establishing a minimum price for the first few years …

The list goes on. The member for Isaacs, on 1 August last year, said:

For the first three years of the flexible price stage, safety valves … will be built into the system to avoid price spikes or plunges. This will reduce risk for businesses as they gain experience operating in a carbon-constrained environment. This is particularly important in the early years when price uncertainty will be at its highest.

And let us not forget the Leader of the Greens, Senator Milne, who has said:

Establishing a floor price is critical to certainty, as is sticking by an agreement …

She has also said:

Getting rid of it—

the floor price—

would not only be a blow to business certainty but … blow a hole in the budget.

Senator Milne has also said:

If you allow the volatility that has occurred in Europe, you get … chaos in the system.

Chaos! We have seen complete chaos from this government from day one.

There are three possibilities with these statements: (1) the government do not have a clue about what they are doing, (2) they have been completely deceptive and misleading the public or (3) a combination of both. My money is on the last. It is no wonder that the Australian public thinks the government speak with a forked tongue, when you look at these examples. It is no wonder that the Australian public no longer trusts the government. It is no wonder that the Australian public does not believe a word that comes out of the mouths of the government. It is no wonder that the government are in complete chaos.

The entire carbon tax is built on an edifice of lies to deceive the public. One of those lies—

The DEPUTY SPEAKER ( Dr Leigh ): Order! The honourable member will withdraw.

Mr CRAIG KELLY: I withdraw. One of those misleading statements is that citizens elsewhere in the world are being subjected to and punished by a carbon tax like the one here in Australia. But the facts are, as the Productivity Commission research report noted:

… no country currently imposes an economy-wide tax on greenhouse emissions or has in place an economy-wide ETS.

We have heard another absurd statement tonight: that this carbon tax somehow creates jobs. It is a very dangerous assumption for members of the government to think that you create jobs by taxing. Taxes do not create jobs; they destroy them.

Let us look at the things that many of us on both sides of this parliament want to do in the next coming years. We want to fund things like the National Disability Insurance Scheme. We want to provide more resources for our schools. We want to pay for more hospital beds, to fund medical research and to clean up our environment. Doing those things depends on our ability to lift our national productivity and both sustain and develop our national competitive advantage. But this carbon tax is like firing a laser-guided missile to destroy our national competitive advantage. It seeks to promote the use of hopelessly inefficient methods of electricity production that will only lower our national productivity and lower our living standards.

Just have a look at what our competitors are really doing—not the spin that we hear from the other side. If you listened to this Labor government, you would believe that China is acting to reduce its carbon emissions. But the facts are that China's emissions are forecast to rise by no less than 500 per cent between 1990 and 2020. In fact, between 2005 and 2020, Chinese emissions will increase from approximately five billion tonnes of CO2 per annum to over 12 billion tonnes. The Prime Minister has tried to highlight in this parliament that China is closing some of its coal fired power stations, but she neglects that the ones they are closing are their small, inefficient ones and they are replacing them with much larger ones. Data from the World Resources Institute says that China has plans to build over 300 new coal fired power stations to produce electricity.

Let us look at India. Again this government has come into this parliament and made the claim that India is taking national action on carbon pricing with a clean energy tax on coal. But what the government failed to mention is that that tax is $1—one single dollar—a tonne. A recent article from Scientific American titled 'India has big plans for burning coal' details how India, as it lifts its population out of poverty, is poised to become the world's top consumer of coal and has plans to build no less than 455 new coal fired power stations.

In the USA we know that there is virtually no prospect of a cap-and-trade system being adopted. We know that Korea have deferred the introduction of their ETS until after 2015, and even then 95 per cent of the permits will be free. Our nearest neighbour, Indonesia, has no plans for a carbon tax. Canada has an economy that is probably closest to ours in design, shape, population and industry. Yesterday I had the opportunity to put three questions to the Canadian ambassador. The first question was, 'How much is the carbon tax in Canada?' The second question was, 'How much will it increase over the next three years?' The third question was, 'How are you planning to link it to Europe?' The answers were, 'No,' 'Nothing,' and, 'You must be joking.'

Tonight we heard the member for Throsby talk about New Zealand. What he neglected to say is that Australia's carbon tax is 15 times higher than the New Zealand equivalent. The Australian carbon tax is $23 a tonne. In New Zealand, the carbon tax is—wait for it—$1.85. And New Zealand's business, community and parliamentary leaders have made it very clear that they are not going to impose a further increase and a further electricity tax on their people.

Our global competitors are laughing at us. We are becoming the laughing stock of the world. That brings us to Europe. Firstly, the European emissions trading scheme does not even cover the whole economy. It provides many industries with free permits. And the European ETS only raises about $500 million a year, while Labor's carbon tax here in Australia will raise more in the first three months than the entire European scheme has done in five years. In fact, the European scheme works out at about A$1 per person per year, but in Australia the equivalent is $400 per person per year.

Linking our carbon tax to that of Europe—the economic basket case of Europe—illustrates the complete insanity of this proposal. Just look at what is happening in Europe at the moment. In Spain, the unemployment rate is over 25 per cent. There are riots on the streets. In Madrid, people have resorted to stealing from trash cans. The supermarkets in Spain are having to put locks on their rubbish bins to stop people scavenging for leftover food. The government health system is collapsing. We have read in recent days of police throughout Europe firing tear gas and stun grenades to break up protests, all because of failed socialist government policies. And yet this is what the Australian government want us to copy. They want us to head down that disastrous track that has destroyed the European economy.

If it is such a brilliant idea to link Australia—to hogtie us—to the carbon tax at the same rate as Europe, why wait? Why not do it straightaway? We know the reason for that: it is complete insanity when our carbon tax is $23 and the equivalent carbon tax in Europe at the moment is less than $10. This puts our entire industrial base at a competitive disadvantage and makes us all poorer as a nation.

Mr Baldwin: Reverse tariffing.

Mr CRAIG KELLY: A reverse tariff is exactly what it is. We need to look at what will happen unless this carbon tax in Europe rises. We know it is $10 at the moment. What will this do to the budget, because our budget forecasts are based on the carbon price, that European price, rising to $29 a tonne by 2015-16? Nine point four billion dollars of revenue is written into the forward estimates in the budget based on that $29 price. So what happens if we do not get to that, if it does not rise, if it stays where it is? Henry Ergas has done the sums, and he has worked out that, if that carbon tax stays at $10 by 2015 and rises at four per cent per annum for the next five years, it is going to create a $25 billion black hole in the budget forecasts.

But the government tells us: 'Don't worry. We predict that the EU carbon price will recover. It's three years away. We stand by the Treasury modelling.' This is from the same government that stuffed up the budget so much in the last financial year. It originally predicted the outcome for the 2011-12 budget. When the Treasurer came in here, he forecast that it would be $22 billion in deficit. The sums have come in: $43 billion. He is only $21 billion out—and that is a year. Now the public is expected to believe that this government can forecast, that it has a crystal ball to see, in three years time, what the EU carbon price will be. It is just a sham.

The complete lunacy of this scheme goes on the fact that we are contracting out our taxation policy to bureaucrats in Brussels, but the real lunacy of this is that we actually will be sending Australian money, money raised in this country, to foreign carbon traders. Words cannot describe the insanity of this scheme. By 2050, we are going to have to send away $58 billion that will be raised from Australian consumers, families, pensioners, aged people and children—$58 billion will be raised, and that will be packed up and sent off to overseas carbon traders. In return, we will get glossy pieces of paper that say, 'You are permitted to emit a unit of carbon dioxide.' This is insanity. If the Nigerian scamsters came up with this, you would think that only the most stupid and gullible people would send their money overseas and get in return a glossy piece of paper, but that is what this government plans to do.

The next election will be a referendum on the carbon tax. The public will finally have their say. The coalition will get rid of this carbon tax. The floor price will be zero. It will be gone after the next election.