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Wednesday, 23 May 2012
Page: 5445


Mr HUNT (Flinders) (18:43): In addressing the budget, let me begin today with what is tragic news for families in the Hunter region, who had a sense of the future, a sense of opportunity and a sense that they could make through their work a pathway for their lives and their families with security. Yet we see that the heart of this budget is a $36 billion carbon tax. What was that carbon tax intended, designed and constructed to do? It was to destroy jobs and production in areas which are deemed to be high emission. Most particularly, the government's own Treasury modelling predicts that as a consequence of the carbon tax the aluminium sector will be 60 per cent smaller than it would otherwise have been. The variable there is the carbon tax. This is not the opposition confecting; this is not the opposition asserting; this is a direct finding within Treasury's own modelling based on a comparison between what would be the case without the carbon tax and what will be the case with the carbon tax. This day, Norsk Hydro—otherwise known as Pacific Hydro—made it absolutely clear that the Kurri Kurri plant in the Hunter would be wound down, at a cost of 344 jobs, and that one of the critical long-term factors was the carbon tax.

In question time today, the Prime Minister and the Minister for Climate Change and Energy Efficiency, Mr Combet, denied that this was a factor in the company's decision—they denied that the carbon tax was a factor in the loss of 344 jobs today and 150 jobs earlier this year. I read directly, clearly and in an unedited form from Norsk Hydro's press release of today:

Following a thorough review, it is clear that the plant will not be profitable in the short term with current market prices, while long-term viability will be negatively affected by a number of factors including increasing energy costs and the carbon tax.

Let us unpick that.

Dr Jensen: Explicit.

Mr HUNT: What we see, as the member for Tangney said, is explicitness. There is no equivocation and no doubt; there is an express, clear, explicit reference to the carbon tax as one of only two long-term factors. This should not be a surprise, because the nature, the purpose, the operation, the being, the meaning, the structure, the approach of the carbon tax is to close down heavy-emitting businesses and to send them offshore. That is its design and its intent.

Dr Jensen interjecting

Mr HUNT: This is exactly what it is intended to do, and it is precisely because of my historical work that I make that assertion. So I say to the members of the Labor Party—to the members of the government that brought this $36 billion tax into being: face the consequences of the policy you bring to this House.

When you look at what the company said, you see that they acknowledge that there are short-term difficulties. We have never denied that—the dollar and the metals price are critical issues. But, most significantly, what they say is, 'We may have been able to ride through these issues; but then there are fundamental long-term issues around viability, all relating to electricity prices.' These are the elements: the carbon tax is first and foremost an electricity tax; it is also a tax on additional emissions where they occur outside of the electricity cost process.

The government has tried to say, 'It is only a minor impost on the aluminium sector.' That is false, because these businesses have to plan for the capital costs and the return on capital over a period of decades, and a carbon tax, as the Aluminium Council has indicated, will quadruple its impact on the aluminium sector over a decade. This is not some minor erosion or decay of permits or some incremental increase in price; it is the combination of those two factors, which, as the aluminium sector's own work shows, will result in a quadrupling of the burden on that sector.

There are only six aluminium plants in Australia. We have Boyne Smelters in Queensland; we have Kurri Kurri, which, as of today, is gone; we have Tomago, which shed jobs in the Hunter earlier this year; we have Point Henry in Victoria, which is under review; we have Portland in Victoria; and we have Bell Bay. What we see is this: there is a difficult international environment, and the worst possible thing you could do is impose a unilateral hit on the competitiveness of that sector in Australia. There are real pressures on each of these six plants. What the aluminium association warned me of earlier this year is a fear that three of them could have announced a pathway to retirement and closure by the end of this year in the light of the carbon tax. The warnings were expressed and the government was notified. Then, when that of which it was notified, that of which it was warned, came to pass it denied the causation. It denied the link.

This day we begin to see the real and profound impact of the central measure of the budget. The government tried to present this as some redistributive budget. The central measure of the budget was the carbon tax. The single biggest change between last year's budget and this year's was the $36 billion of revenue included in the forward estimates from the carbon tax. That is an enormous burden on Australian industry and Australian families. It is an enormous burden on Australian councils.

That brings me to the second great deception we have witnessed today. We have seen this view that councils will not have to pay. Yesterday the then Acting Prime Minister said councils will not have to pay the carbon tax next year on their landfill. Let me go to something which was received by 104 councils. This letter was sent to the Chief Executive Officer of the Gold Coast City Council. It is a letter from the regulatory implementation branch of the Clean Energy Regulator, dated 17 May, 2012:

I am writing to you as we have identified your council as possibly operating a significant landfill which potentially could mean that you will be liable under the Clean Energy Act 2011. You may also operate other facilities such as water treatment plants that could mean you are a liable entity. If you consider that you will be a liable entity please advise us in writing by 31 May 2012.

It then went on:

Under section 184 of the Clean Energy Act, where the Clean Energy Regulator has reasonable grounds to believe that a legal person, including trusts, local governing bodies, corporations sole and bodies corporate is or is likely to be a liable entity for the 2012-13 financial year that entity will be recorded in the liable entities public information database.

What does it mean? It means that councils are about to be hit. The government's pretence that these councils are not about to be hit is that they will not have to pay anything immediately.

But councils have to start collecting with higher landfill fees immediately. That is why a senior official from the City of Manningham publicly declared that the city will be raising its landfill fees on the advice of the Commonwealth Department of the Treasury. That is why the City of Wyndham, in the Prime Minister's own electorate of Lalor, has put in place a contingency revenue raising through higher landfill fees of $13.02 million for the financial year commencing on 1 July 2012. That is why 104 councils around Australia have just received 'please show' letters from the Clean Energy Regulator to say whether they will or will not be in for the coming year. These councils will have a liability for all waste contributed after 1 July 2012 if they fall within the system—and the vast majority of them will. And that liability could be for up to 40 years. They must start collecting now, otherwise they will never be able to recover the costs because they will never know who will have deposited that waste. That is why, around Australia, 104 councils are now trying to determine two things: what will their actual waste, landfill and gas liability be—

Mr Stephen Jones interjecting

Mr HUNT: Actually that is completely false. I want to put on the record that the member for Throsby has said that most councils will have a zero liability for their waste landfill gas when 104 councils have just received show-cause notices from the Clean Energy Regulator as to why they should not be included on the list of liable entities, and it is absolutely certain that they will all have obligations if they are included on that list.

What we see here is that the councils are next in line to be hit. Around Australia, in small-town newspapers, these stories are being recorded, that a government which had indicated this was about the top 500 polluters has deceived them. People are discovering that their waste-tip fees are going up as of 1 July this year. The biggest problem for councils is to understand what their liability is. With five weeks to go, they still do not know for certain whether they are on the list and they still do not know for certain how much they will pay.

That is the essence of this carbon-tax budget. We see the impact on workers and we see the impact on families. Electricity is the third great limb. It will go up on the government's estimates by 10 per cent and on the Electricity Supply Association estimates by 20 per cent. The great deception in what the government is saying is the pretence that the first bill is the only rise. The Electricity Supply Association is expecting a second 10 per cent rise in early 2014 when, under the government's own system, companies are going to have to buy forward permits to hedge their prices. That is what the Electricity Supply Association estimate. They were right about part 1 and they will be right about part 2, so we are talking about a 20 per cent price rise. We have already seen one firm talking about a 25 per cent price rise.

Those are the elements of the budget, the carbon-tax budget, and its central features. Jobs for working Australians; council tip fees as an example of the deception for 104 councils trying to deal with the letter that is a week old which warns them that suddenly they will be hit with this liability on 1 July. Then there is the cost of living for families through electricity price rises of up to 20 per cent in two main stages.

Then we go to other failures that have been identified in this legislation. I want to single out two of these failures. Firstly, the solar hot water industry was deceived out of $44.7 million. On 21 March 2012, just after the government had cancelled the solar hot water rebate, the Parliamentary Secretary for Energy Efficiency wrote to the Greens that the government never intended to make any savings from the closure of this program. What we found once this year's budget papers came out, of course, is that and there was a saving of $44.7 million. That money was taken directly from the industry in direct contravention of a public pledge. It is an example of what the government said would never happen.

The second is that the Home Insulation Program, the most disastrous of all programs, has costs which amount to almost $2 billion. We had a cost blow-out last year of $59 million compared with what was pledged a year ago was the cost of fixing the roofs. This government cannot fix the roofs, cannot be trusted on solar and its members are the last people you would want to put in charge of an economy. (Time expired)