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Monday, 19 September 2011
Page: 10537


Ms MARINO (ForrestOpposition Whip) (18:15): The Labor-Greens proposal for an economy-wide tax on carbon is the wrong answer to the question of greenhouse gas emissions and climate change. Through the Clean Energy Bill 2011 and associated bills, the government is imposing a unilateral tax and costs on Australia's industries, businesses, families, local governments, hospitals, schools, community groups and sporting organisations. No-one will be exempt. It will cost Australians $9 billion in the first year alone. At the same time as the US is facing a double-dip recession and Europe is staring down the barrel of debt default, this is beyond irresponsible. This is just sheer, unmitigated economic stupidity. The Productivity Commission has stated that this will be the only economy-wide carbon tax in the world—described by US Republican congressman on climate change, Jim Sensenbrenner, as 'unilateral economic disarmament'. This is an indictment.

Australians have a great deal of common sense, and common sense tells us that we will all pay more under this carbon tax. Even Ross Garnaut has said that ultimately householders will pay. No matter what the compensation is, common sense tells us that we will pay more—pensioners, self-funded retirees and those who struggle to make ends meet. Common sense also tells us that taxing Australian business and industry in Australia and not in other countries will drive industry and jobs offshore. In fact, it is already happening, as businesses factor the carbon risk into their forward planning.

Australians understand that, while both the Liberal and Labor parties in Australia are committed to a five per cent reduction in our country's emissions from year 2000 levels, the major global emitters will actually increase their emissions up to fivefold over the next decades. World CO2 emissions are projected to rise by about 50 per cent—from 30 billion tonnes in 2010 to 45 billion tonnes in 2020—and nearly half of that increase will occur in one country.

Most Australians are already reducing their own emissions to help meet our five per cent reduction target. Individuals, families, businesses, industries and even those vilified by the Labor government as 'big polluters' have cut or are cutting their emissions. These are the same companies employing hundreds of thousands of Australians and are the major contributors to regional, state and national economies, often underpinning much of regional Australia. Their combined efforts to date have seen Australia's emissions intensity decrease by over 44 per cent since 1990. Australian industries and families have become more energy efficient and less carbon intensive without a carbon tax—a tax that is specifically designed to make their lives more difficult and costly.

Australians are addressing climate change. This is why Australia is one of the few countries in the world to meet its emissions reduction obligations under the Kyoto protocol. As a result, Australians do know that the Gillard government's unilateral, cascading tax on their homes, families and businesses is not the answer. In stark contrast, the coalition policy provides incentives to further reduce carbon pollution by targeting direct action, not through a Labor policy that raises the cost of living for families, increases costs for small business and industry and decreases our international competitiveness.

Even using the government's own figures, three million Australian households will be worse off. We know that over 400,000 families in Western Australia alone will miss out on any form of assistance. And the impact on regional Australia will be disproportionally high, given the impact that transport costs will have. And what for? Australian emissions will not fall under this tax. The government's own modelling states that their new carbon tax will not reduce emissions in Australia—in fact, they will 578 million tonnes to 621 million tonnes. So here we have a Labor government plan to raise costs for families and businesses through a tax that will not reduce Australia's total emissions and makes a negligible impact on world emissions. The government's own adviser and Climate Change Commissioner, Professor Tim Flannery, said:

If the world as a whole cut all emissions tomorrow the average temperature of the planet is not going to drop in several hundred years, perhaps as much as a thousand years.

And, as we know, emissions will in fact increase.

The Labor government carbon tax plan only works if billions of dollars are spent on purchasing overseas emissions reductions. Many of these reductions will be brought from in countries with higher total emissions than Australia. According to Treasury, well over half will come from the former Soviet Union and from 'other Asia'. Australians will be paying $57 billion, not to reduce emissions in Australia but to reduce emissions in other countries which may not be paying one cent to reduce their own emissions and may not even have the capacity to measure emissions or emissions reductions. So here we have a Labor government plan to raise costs to families and businesses through a tax that will not reduce Australia's total emissions and the government's own Climate Change Commissioner, Professor Tim Flannery, saying that it may perhaps take a thousand years to make a difference.

The carbon tax will cost jobs across Australia, including in my electorate of Forrest. Australian Trade and Industry Alliance data reveals that nine out of 10 manufacturing jobs are with companies that will face the full impact of the carbon tax and that less than nine per cent of Australia's more than one million manufacturing workers are employed by firms that will have any compensation from the Labor government. Some of these companies are in my electorate. Millennium Inorganic Chemicals Ltd is one of only two Australian titanium dioxide pigment producers. Together with the Tiwest Pty Ltd joint venture, which is also in Western Australia, they produce five per cent of the world's titanium dioxide. I ask members to note that Australia produces 20 per cent of the world's titanium dioxide feedstock but only five per cent of the processed product. The remainder is mined here but sent overseas for processing. According to the submission Millennium and Tiwest jointly made to the government on this legislation, this carbon price impact on titanium dioxide production, even with initial 66 per cent assistance, will very likely lead to carbon leakage with a net increase in global CO2 emissions. They said there was a real risk that potential expansions would be deferred or cancelled. In particular, Tiwest is considering an expansion that would likely be deferred or ultimately cancelled. The loss of this $150 million expansion would come at the cost of around 400 construction jobs and additional operational staff. Like many other trade exposed industries, Millennium Inorganic Chemicals needs to be supported, because this government's carbon tax creates an even more unfair playing field for Australian exporters.

This Labor government could increase their assistance to this industry to the 94.5 per cent level or provide a separate special assistance package or, the best solution of all, scrap its plans for a carbon tax that will drive Australian jobs and industry offshore. Then Millennium could just get on with the job of employing people and generating export dollars for our nation.

Collie is the industrial hub of my seat of Forrest, and it faces a major threat from Labor's carbon tax. Collie has three power stations—Muja, Collie and Bluewaters—with total annual emissions of 9.8 million tonnes of CO2. However, the government is refusing to compensate any of these power stations for the cost of their carbon tax They will be facing a cost of $225 million. These costs will have to be passed on to Western Australian power users. There will also be businesses which cannot pass costs on and there are nearly half a million families in WA who will receive no assistance at all. Some of those businesses and families live in Collie and work in and with the power stations.

There is a broader concern for Collie. The Labor government plans to change Australia's electricity base to just 10 per cent coal generation by 2050—down from 80 per cent now—this is the government's plan—it is in their document. As well, this tax devalues every existing coal fired power generation asset—an issue for finance or refinance. It also impacts on new and proposed businesses, such as the proposed Perdaman coal to urea plant which will face a residual tax liability of $25 million a year.

Worsley Alumina is one of the largest and most efficient alumina refineries in the world. It produces over $1 billion worth of exports every year, and directly employs over 1,500 workers. This is about to rise with the completion of a multibillion dollar expansion. Australian alumina production is part of a highly competitive global market, and making production more expensive here will risk the next alumina project or expansion. Worsley is a part of the Australian Greenhouse Gas Challenge, and has committed to reducing its emissions for each tonne of alumina produced. Over the last five years Worsley has reduced its emissions intensity by 6.25 per cent. This has been achieved without a carbon tax. As a reward for this the government is planning to tax Worsley millions of dollars every year.

Cement is a critical commodity for the Australian building industry, for community development and for the our economy, in the south-west particularly. The World Business Council for Sustainable Development says that 'after water, concrete is the most consumed material on earth—cement is the glue that holds it together'. In my electorate John Hovey runs Australind Premix, and his business is now at the mercy of this government's carbon tax. John has to work out whether he has a carbon tax liability, what that liability might be, and what that means for his business—but of course he will have to pay to find out. And right now neither he nor his accountant can answer those questions.

He, like thousands of others, has no direct measure of his current emissions, so he has to work out if his businesses emit more than 25,000 tonnes of carbon dioxide equivalent. Even if he falls under the 25,000 tonne limit he will, like many others, still be hit by the carbon tax. A major part of his business is transport—all of his inputs have to be transported to him, and then the products transported to his customers. He is also a high user of electricity. All this means that John will be paying considerably more to run his business with no compensation, and he will probably have to absorb the additional cost.

At a time of economic uncertainty the government has imposed even more uncertainty on John Hovey, his workers and his business. John is another business owner who has taken environmental responsibility and invested in new low-emissions technologies. His new trucks meet the European standards, but that is ignored by the government. They are in limbo with this tax—he has no clear idea of where his business stands and he is going to have bureaucrats crawling all over his business for years and years. He, like every other business, just wants to get on with what he does best: having a go, hard work, investing his own money, employing local people and offering service and products to people in the south-west.

In agriculture, some of the biggest input costs are fertiliser, feed and electricity—all affected by the carbon tax. We know about dairy farmers, apple orchards, abattoirs, butchers. Australian farmers are at the frontline in the delivery of environmental outcomes—they have collectively spent $3 billion on natural resource management on their properties, and reduced emissions by 40 per cent from 1990 to 2006—that is 94.3 per cent of farmers actively undertaking NRM. Two million Australian small businesses will face higher input costs and receive no direct support, including the nearly 14,500 small businesses in the south-west.

The statement that only 400 businesses will be affected by the carbon tax is a complete fabrication. The transport costs will impact very seriously on regional areas. We know that at least 56 per cent of small businesses may pass on the carbon cost to consumers but, because of restrictions and competition, 44 per cent will have no choice but to pay the costs themselves. This is a real issue in regional areas and right around Australia.

One in three small businesses surveyed expect to have to sack staff as a result of this Labor policy. This policy is expected to cost jobs; common sense again tells us so. We do know about the transport costs; it will apply to transport from 2014. Regional people will feel these costs. It will have a greater impact. In 2007 Australian trucks transported 277 million tonnes of food and animals around the country, and the carbon tax is designed to add costs to every tonne.

In its analysis of Australia's climate policy, the Wall Street Journal concluded that the Labor-Greens proposal was as much about social engineering as environmental stewardship. It noted that 'this is in part a scheme to redistribute income from energy users to Labor voters'. The Labor government's proposal is to raise the cost of living of every Australian who uses energy and the cost of doing business for millions of Australian businesses, for the net result of a small increase in Australian emissions and a massive increase in world emissions. I would counsel the House to remember the very wise words of Winston Churchill, who said that for 'a nation to try to tax itself into prosperity is like a man standing in a bucket trying to lift himself up by the handle'. That is what we see with this Labor government carbon tax. As I said at the beginning of my speech today, common sense tells Australians that, irrespective of what they are offered, they will all pay.