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Tuesday, 7 February 2012
Page: 15

Carbon Pricing

Mr ABBOTT (WarringahLeader of the Opposition) (14:57): My question is to the Prime Minister. I refer her to Treasury modelling that shows that the carbon tax will cause a $32 billion hit to the Australian economy and a $600 a year cut in real wages by 2020. I ask: why did the Prime Minister break the promise she made to the Australian people at the last election—namely: 'There will be no carbon tax under the government I lead'?

Ms GILLARD (LalorPrime Minister) (14:57): In answer to the Leader of the Opposition's question: it is clear that he means to go on as he did in 2011, with misleading claims and continued negativity, as we ready our economy for the future, including for a clean energy future. The figures referred to in the Leader of the Opposition's question are another attempt by the opposition to mislead the Australian people. Treasury modelling shows—and the opposition is aware of this—that, under a carbon price, our economy will continue to grow. Jobs will grow, with employment to increase by 1.6 million jobs by 2020. Real wages will grow by 20 per cent by 2020 and 50 per cent by 2050. Incomes will grow. Gross national income per person will be $9,000 higher in today's dollars in 2020 with a carbon price in place. Vitally, carbon pollution will fall. By 2050, carbon pricing is expected to reduce Australia's domestic emissions by nearly half of what they would have been projected to be without a carbon price. The price impacts will be modest—a one-off increase of 0.7 per cent in CPI—and of course we also know that the carbon-pricing package comes with the benefit of tax cuts for working people earning less than $80,000 a year, many of them receiving a tax cut of $300.

Mr Pyne interjecting

The SPEAKER: The Manager of Opposition Business will remain silent.

Ms GILLARD: Then of course there will be Australians around the nation who no longer pay tax anymore as a result of us increasing the tax-free threshold. There will be increases in pensions and there will be increases in family payments. Behind this debate, Mr Speaker, is the essential question of whether or not you want our nation to stand still or be ready for the future. It is a fundamental choice. We have made it. We are getting our nation ready for the future and that future will require us to have a cleaner energy economy. In getting that cleaner energy economy, we are determined to do it at the lowest possible cost and the lowest possible price. The Leader of the Opposition stands for a policy which would impose a burden of $1,300 on working families—a policy that will not work. He stands for ripping tax cuts, family payment increases and pension increases out of the hands of Australians who need that money. This is more of the reckless approach we have seen the opposition take to all of its economic settings. Whenever it faces a choice between getting ready for the future or standing still, it says: stand still. Whenever it faces a choice about running the economy in the interests of working Australians, it says: let's help the privileged few. Whenever it faces a choice about making sure our economy is clean and ready for the future it spreads fear and distortion, and today's question is just more of that.

Mr ABBOTT (WarringahLeader of the Opposition) (15:01): Mr Speaker, my supplementary question is to the Prime Minister. It is a very simple question: does she accept that the imposition of a carbon tax will reduce economic growth as the Treasury modelling clearly shows?

Ms GILLARD (LalorPrime Minister) (15:01): I accept that the Treasury modelling which I have just relied on and the figures which I have given to the House are the Treasury modelling and should be relied on. I also accept that the carbon pricing package of the government is the cheapest possible way of reducing our carbon pollution. When you want to talk about a drag on our economy, when you want to talk about a burden on working families, you would endorse the policy of the Leader of the Opposition. Let us have a look at the policy of the Leader of the Opposition, seeing he invites the comparison. If he wants to get it modelled, if he actually wants to tell Australians the truth about it, we will happily assist. What we know is that, because the Leader of the Opposition is in the business of subsidising polluters, he would make carbon pollution reductions at a far greater cost than carbon pricing; that is, he would do the most economically reckless thing—a thing that would certainly have a huge impact on economic growth and a huge impact on jobs.

Mr Pyne: Mr Speaker, I rise on a point of order on direct relevance. The Prime Minister was asked a very direct question about the Treasury modelling. She was not asked about the Leader of the Opposition's position.

The SPEAKER: I would counsel the Prime Minister to be directly relevant to the supplementary question.

Ms GILLARD: Mr Speaker, what I would say on comparisons of economic effects of carbon pricing packages is that we are determined to do it in the most efficient way. That is what the Treasury modelling shows. It shows economic growth. It shows income growth. It shows our economy growing. What the Leader of the Opposition is determined to do is do the most costly approach, wrecking economic growth with an impact for jobs and taking benefits off working families.