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Wednesday, 10 October 2012
Page: 11935


Mr EWEN JONES (Herbert) (22:00): Madam Speaker, may I pass on my congratulates officially on the Hansard. Congratulations on your elevation to the high office of Speaker of this parliament—and thank you for not throwing me out in the last couple of days! In rising to speak on these Clean Energy bills, I just go back to the beginning. This is a bad tax founded on a fundamental breach of trust with the Australian public. I will just go back over the history a little bit. Going into the 2010 election there was no way in the world anyone was going to have a carbon tax. The Treasurer said it was 'sheer opposition hysteria' and, of course, we had the Prime Minister's immortal line, 'There will be no carbon tax under a government I lead.'

But let us go back even further than that—back to John Howard. The government trots out the line that John Howard believed in an ETS. John Howard believed in an ETS in moving with the rest of the world. With all the trouble that we had going into Copenhagen—I was not here—nothing happened. The rest of the world has moved on, and we moved on. The government ditched their leader and we ditched ours. We formed different perspectives and we got new leaders on both sides of the parliament.

In 2010 I came into this place, so I have only been here for a little while. I am an auctioneer by trade. I have a fundamental belief that when a deal is done, it is done. When you shake a person's hand and you say, 'It's sold,' it is sold. You are only as good as your word. Since I was elected on 21 August 2010 I have been able to keep my word. But I would have to ask what this government has done to their new members of the class of 2010, what they have turned their new members into. You come into this place holding high ideals about yourself and where you stand. I will go through a couple of things. When the Labor members of the class of 2010 came into this place they would have spent their five weeks campaigning and saying, 'There will be no carbon tax; there is no carbon tax; it is just opposition hysteria.' Come the 17 days and suddenly they walk out and it is, 'There will be a carbon tax; it is the right thing to do.' It was a fundamental breach of faith with their electorate.

Then straight up we had pokie reform, when before the election it was not even raised as an issue. It is a state matter, but straightaway this government came in and did a deal on the side and made their members go out the front and practise their lines to say, 'I've had people in my office screaming at me and crying and telling me about people killing themselves over their pokie debts.' But then the government flipped it over again and they had to go back out and say, 'Well, it's not such a big deal anymore, and we are not going to do it.'

And now we have the floor price. The government has gone out there and said, 'The fundamental fact is that we must have a floor price.' Going into the 2010 election we had only one party that said that there should be a carbon tax and it should be at $23 a tonne—and that was the Greens. After the 17 days of negotiation suddenly we had a carbon tax at $23 a tonne.

So what does the government stand for? The government stands for 'whatever it takes'. That is what it stands for, and that is what has turned the class of 2010—those idealistic people who have come into this place—into 'whatever it takes'.

For the tax to work, it has to hurt. The Leader of the Opposition said that here today: 'For the tax to work, it has to hurt.' But it does not have to hurt everyone. I got an email just this afternoon from a constituent in Townsville. The AWU has started a major campaign where you email, saying, 'We've got to do more to help manufacturing.' But it was not the Leader of the Opposition who said that Whyalla would be wiped out; it was Wayne Hanson from the AWU. Paul Howes, from the AWU, said that, if one job was lost in the steel industry, out the carbon tax would go. So $600 million goes into the steel industry from the government—just a bit of hush money. That is what you have turned yourselves into.

Ford gets it and Alcoa gets it. We currently have a major issue with insurance in North Queensland. The Treasurer has taken a $400 million dividend from the Australian Reinsurance Pool Corporation. How much of that money is going to the insurers in North Queensland? 'Oh, that's right; sorry, no-one up there's in a marginal Labor seat. It can't be done.' We have been hung out to dry. There is chaos in this government.

I have previously said in this House that the problem with the government is that they know how to take a position. But taking a position is really easy. It is the holding of the position that makes you a government. It is the ability to articulate your argument and to bring people along with you. It is, to paraphrase Jerry Seinfeld, 'the ability to articulate an argument'. Anyone can hold an opinion or hold a position—you can do that anywhere. You can take a position, but it is about the holding of that position. It is holding the floor. But we have had eight fundamental changes in 100 days.

This carbon tax has to hurt. By 2050 we will be paying, in today's dollars, $350 per tonne for carbon. We are not going to be compensated for that. All the way through, $57 billion will be churned through to buy carbon credits overseas. The worst part is that it simply will not reduce emissions. We know that, even by 2019, emissions are going to increase to 635 million tonnes. They are going to increase. So there is all this pain for no environmental gain.

My problem with this whole idea of tagging our model to the European model is that, first and foremost, there is no-one else to tag it to, so they have to put a credibility thing out there to say that, somewhere along the line, it is not going to hurt so much. But if the floor price collapses so does the budget position. Those of you who remember the foreign currency loans in the 1980s when we floated the dollar will know that there were many farmers out there then. Because we had such a strong dollar and overseas currencies were so cheap, you could borrow money overseas using the strength of the dollar to leverage yourself there, making loans cheaper in Australia. At the moment we have a flourishing dollar. The euro is a floating currency. If the Australian dollar plummets and the euro goes up—which is a distinct possibility—instead of paying $23 a tonne we will be paying $46 a tonne.

What happens then? If you are tagging these things to floating currencies, there is decimation out there for just about everyone. There is a real problem out there for just about everyone if these things happen. How much thought has actually been put into that? Or are we just going to have this remarkably high dollar for the rest of our lives? Is it going to be set in stone that it is just going to be that way? My issue with the floor price and with this whole carbon tax is that it has a trickle-down effect.

As I said, the AWU has launched a campaign at the moment favouring manufacturing and saying that we should do more for manufacturing. I back that 100 per cent; I think we should be doing more for manufacturing. If manufacturing is strong in Townsville, we have a good, strong diverse economy. We have engineering works, we have manufacturing works and we do a lot of stuff in Townsville, but we are energy intensive. The problem with the carbon tax is that when it starts to hurt and people start to lose their jobs—because, for the tax to work, it has to hurt—what happens to the guy driving the pie van, the guy running the corner store or the microbusinesses that run off those businesses? What happens to the people who put emblems on shirts? What happens to those businesses if big business continues to shut down because it is just too hard to stay in Australia?

We have two major private employers in Townsville—well, it is three at the moment, but Xstrata is still unsure what is going to happen with the copper refinery. The other two are Sun Metals and Queensland Nickel, both massive users of energy. Sun Metals have a billion-dollar set-up cost. If they cannot get access to cheap power, they will have to shut down and move somewhere else; it is that simple. Queensland Nickel are in the top 50 carbon emitters. They know that. But, having known that, what they have done since 2007 is to lower their emissions. They have gone out there and worked with the James Cook University environmental scientists. They have used their own environmental people there, and they have lowered their carbon footprint by over seven per cent from 2007 levels already. They have done that off their own bat.

There are three places in the world that process nickel as Queensland Nickel does. One is in Cuba and the others are in Brazil and Australia. There is no carbon tax regime in Brazil or Cuba. You cannot get to see the one in Cuba, and apparently the last time the guys from Queensland Nickel went to the one in Brazil it was shut down. The pollution from those things is apparently so bad that you can almost walk on the smokestack. That is how filthy the places are. Queensland Nickel are 100 per cent import-export. They get their ore from New Caledonia, the same place Brazil and Cuba get theirs. They bring it into Australia. They put it through the port and on the rail, and it goes out to Queensland Nickel. They sun-dry it, they process it and they sell their product 100 per cent on the export market. They are up for about $30 million worth of carbon tax. Brazil and Cuba are not. So, if Queensland Nickel are forced to shut down and are hurt so badly that they cannot do it, Brazil and Cuba will still do it. So we will actually have a worse environmental game by shutting down what is happening in Australia.

Queensland Nickel is owned by a friend of mine; his name is Clive Palmer. Clive loves a good conspiracy theory. There are three places in the world that do nickel processing in the same way as Queensland Nickel; it is called the Caron process. There are two other nickel refiners in Australia. One is owned by BHP. Neither of those two come to the threshold. There are six different classifications in the carbon tax for paper, but there is only one classification for nickel. The Department of Climate Change and Energy Efficiency has acknowledged that it is a different product and a different process. The refineries buy from different markets and they sell to different markets. It is a completely different product, yet they have lumped them all in together.

So the end result is that BHP get about $30 million worth of carbon credits because they do not hit the threshold, whereas Queensland Nickel pay $30 million for the privilege of processing in Australia. They could just shut down the operation and send it across to Brazil or Cuba, where businesses are state owned and where they do not care about the environment. But that is what this government does—six classifications for paper, one for nickel.

Clive Palmer was famous for holding lavish Christmas parties for his staff and for buying a Mercedes-Benz for people who had done 20 years and all that sort of thing. But that was when the nickel price was around $14 a pound. It has now dropped to below $7 a pound. Eight dollars is about your break-even point, where you are doing it for turnover and, as I speak, the price is $8.19. So that business has to keep going. You cannot just shut down and start up whenever you want. You must continue to process and must carry this cost.

The problem with the carbon tax is that it does not worry about whether you are making a profit. It does not care about whether you are doing the right thing; it does not care about whether you are doing the wrong thing. It does not care about whether you are being efficient. It does not care about anything. All it cares about is making you pay.

So when the carbon price is $23 a tonne—everyone can afford it if the price of nickel is $20 a pound; they do not care—and when the price of nickel gets down to $8 a pound, that is still $30 million off their bottom line in cold, hard cash. I think $6.50 was about as low as it got. They are losing serious money and people will lose their jobs. You have to dip into reserves, you have to change your business plans and you have to do a lot of things when things like that happen. That is what is wrong with this carbon tax. It does not work for innovation, it does not do anything to make your do your job better—it does not do anything. We should be using the James Cook University scientists out there and the scientists around Australia to make us do better. We should be using science to help us do what we do best and to keep jobs in Australia.

The carbon tax, by its very nature, will make it dearer and dearer and dearer to perform your basic tasks in Australia. It has forced people to think about where they do it. It has forced people to think about where they process their stuff. It has forced people to think about whether they should get it done in Australia. It is cheaper to get steel prefabricated in China, cut to measure, and shipped to Australia than it is to have Pacific Coast Engineering in Townsville cut it for you and take it 100 metres down the road. That is what the carbon tax will do. That is the folly of what this government is doing. The government is unable to set a course, unable to stay on message and unable to hold a plan for more than an average of 12½ days. We have had eight major changes in 100 days to a policy they did not take to an election. They have sent young first-time parliamentarians out and made them say this is a great idea. They really should hang their heads in shame. It is a terrible thing that they are doing to their people.