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Monday, 19 September 2011
Page: 10451

Mr RIPOLL (Oxley) (12:06): I continue where I started—that is, by saying that there are three simple things about all these bills together: 1) climate change is real; 2) there are things that we can do about it; 3) the things that we can do about it are affordable. Given that we all agree in this place and, of course, much more widely—not only in Australia but also right across the globe—about climate change, it is just a matter of what type of system we should put in place to best achieve our goals. By far the best system is a broad-based carbon price. It is the most environmentally effective and cheapest way to reduce pollution. A carbon price puts a price tag on pollution. Through the carbon price, for the first time, an incentive will be provided for people not to pollute—in particular for our 500 biggest polluters, who will be required to pay for each tonne of carbon they release into the atmosphere in.

This scheme will start on 1 July 2012. Let us be clear that these bills will go through this place—there is agreement here for these bills to pass. There will be a fixed-price period for 2 years, and then we will move to a cap-and-trade emissions trading scheme whereby the market will set the price. A market based mechanism is by far the best way to deal with climate change. During the fixed-price period the starting price will be $23 per tonne, and during the next two years it will rise by 2.5 per cent. So, assuming inflation of 2.5 per cent, the carbon price will be $25.40 per tonne by 2014-15.

The flexible market, set-price period will commence on 1 July in three years time—that is, in 2015. During the flexible price period, the government will set the cap by issuing a fixed number of carbon units each year, and some of those units will be auctioned by government. This is the best way to move forward with the system. It means that the market decides and that business gets to adapt, to adjust, to evolve and to grow.

But we are not going to allow this to happen without accepting the fact that there is some cost and that that cost has to be abated in some way. That is why we have put together an assistance package for industry as well as for households. Over the first three years of the carbon price, the government will devote $9.2 billion to assistance for affected jobs in emissions-intensive trade-exposed industries. That is to provide with them a transition period to adjust, to adopt, to match what is happening in the rest of the world and an opportunity to continue to grow.

There will be $800 million in the Clean Technology Investment Program, which will provide grants to manufacturers to support investment in energy efficient equipment technologies, processes and products. Over six years there will be $150 million for the food processing industry and $50 million for the metal forging and foundry industries. The government will also provide $200 million in grants to support business research and development in areas of renewable energy, low pollution technology and energy efficiency.

The government is also ensuring that households, tradespeople, farmers and small businesses do not face a carbon price on fuel—because the will not be a carbon price on fuel. The government will reduce the fuels tax credits received by many large polluters so that they too pay an effective carbon price. Many businesses will be exempted from the reduction in fuel credits and shielded from the carbon price on fuel. Heavy vehicles such as semitrailers will also be exempt until 2014-15. While the carbon price will be paid directly by the 500 biggest polluters in this country, the government has designed a generous package to help small business grow and invest in energy efficient assets. Farming and other land-based activities will not be covered by the mechanism. However, the Carbon Farming Initiative will give farmers an opportunity to generate income by taking action to reduce their pollution.

I said earlier that these measures can be effective—and they are. The world is already acting on climate change; in every country there is something being done. It might be called something different and look slightly different in other countries, but every country is taking action on climate change. It is clearly in Australia's national interest to continue to work to achieve the international goal of limiting warming to below two degrees. In order to do this, it is imperative that we play a responsible role in the international arena by taking strong action at home. We have to act locally and think globally.

The government's plan will cut carbon pollution and drive investment in clean energy technologies and infrastructure. It will generate new jobs in these fields. The carbon price will see Australia's annual emissions reduced by at least 159 million tonnes by 2020 from where they would have been had we done nothing. By 2050, we will have taken over 17 billion tonnes of carbon pollution out of the atmosphere by saving nine out of every 10 tonnes of pollution we would have emitted had this plan not been in place.

Australia has some of the best renewable energy resources in the world, including hydro, wind, bioenergy, geothermal, wave and tide—not to mention one of our most abundant resources: solar energy. By 2050, according to Treasury modelling, with a carbon price $100 billion will have been invested in renewable energy, and 40 per cent of Australia's electricity generation will come from renewables. Australia's renewable energy sector will have grown 17 times because of the changes that we are putting in place.

But, as I said earlier, all this does come at a cost and we acknowledge that cost—and it must be compensated for. So nine out of 10 households will receive some assistance through tax cuts or payment increases, and two in three households will get tax cuts or increased payments that will cover the expected average price impact on them. We have tried in this area to be a little bit more generous: we will give a little bit extra, because we would rather err on the side of assistance than on the side of not getting it quite right.

Over four million Australian households will get assistance that is at least 20 per cent more than the expected average price impact on them. Over one million additional Australians will no longer need to lodge a tax return. That is right—one million additional Australian taxpayers will never have to lodge a tax return again because of these changes. On average, the scheme will cost households $9.90 per week, but they will get $10.10 per week in assistance. The assistance is permanent and will increase over time in step with any expected increases caused by these changes. The government will review the adequacy of assistance each year and will increase it further if necessary.

We will go further than that—there will also be tax cuts. Everyone earning up to $80,000 will receive a tax cut. For most people, it will be at least $300. The tax-free threshold will triple in size: no one will pay tax on the first $20,000 they earn. This means that half a million people will go from having to pay tax to paying no tax at all. This is a major tax reform that will encourage people who only need part-time work only to join the workforce. It is an incentive to create jobs and an incentive for people to work.

Of course, pensioners and self-funded retirees will not be left out. Pensioners and self-funded retirees holding a Commonwealth Seniors Health Card will get a cash increase of $338 each year if they are single and $510 combined each year if they are couples. That means that, on average, 1.8 million pensioner households will come out at least $210 ahead of the expected carbon price impact on them. Around 150,000 self-funded retirees and part rate pensioners will also receive tax cuts in the order of over $300. We have not forgotten families either. They are an important part of what we are doing. Increases in family tax benefit A for each child will be up $110 per year. Single-income families with children will get up to $69 extra in each family tax benefit B plus up to $300 in additional supplement. Allowance recipients such as people on Newstart and youth allowance will also get up to $218 a year for singles and up to $390 a year for couples. These are good things for the nation across the board.

Specifically, people will want to know what will happen in my electorate of Oxley. Out of the 62,000 taxpayers in Oxley, around 54,000 will receive a tax cut and 45,000 of these will receive a tax cut of at least $300. More than 38,000 people in Oxley will receive household assistance through income support payments or family assistance payments. A typical family in Oxley will have expected cost increases of around $497 per year, but they will receive around $754 in tax cuts and family assistance. They will be about $257 better off per year. There are more than 3,000 single parents in Oxley who will also get an extra $289 per year and 17,100 pensioners in Oxley will receive an extra $338 per year for singles and $510 per couple—that is, extra after all their expenses. Pensioners will be better off, students will be better off and families will be better off but, most importantly, our economy and our economy will be better off. It is always difficult to make the big decisions in government and to take the next steps forward. It is always difficult to be able to see beyond the horizon, to look where the future takes us—not after the next election or the election after that but the next generation in this country. That is what this is about. This is about making fundamental change. This is about structural reform. This is about changing the way our economy operates. This is about ensuring that industries of the future have a future. This is about making sure that we do not get caught in old thinking, old traps or old ways, which mean that you cannot transition economies and then the jobs you are trying protect today disappear tomorrow because no government took the courageous steps it needed to ensure you could have a clean energy future. This is about making sure we are part of the global economy, the global village. It is a small planet. We are connected. We are a trading nation. Not only do we need to do these things but also we need to shield the impacts of some of these things locally, at a domestic level, and that is exactly what we are doing. We are talking about one of the biggest changes in this economy that has been seen, I would say, for well over 100 years. It is well thought out and well considered and it will be well delivered. (Time expired)