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Tuesday, 14 August 2012
Page: 8590

Mr BROADBENT (McMillan) (21:39): Today I have heard an enormous amount, on a different issue, about the Howard years. I will say one thing about the Howard government, particularly about the Prime Minister of the day. It did not matter what the issue was, whether it was running well or badly for the government, whether it was tax, defence or social issues, the man always came in here with respect for the parliament, stood at the dispatch box and explained to the Australian people and this parliament why he was taking the action he took—every time.

It was in that vein of thought that I wrote a letter to the editor, expecting a response from Greg Combet, after reading Greg Sheridan's article entitled 'High cost and nil effect: that's our carbon tax' on page 24 of the Weekend Australian on Saturday, 7 July. In that article Sheridan talked about the carbon tax, saying, 'Australia is out of step with the world except in our scheme's likely futility.' My letter read:

Is it time we sought some truths regarding the impact of the carbon emissions tax?

Perhaps your readers would like to read a most illuminating article by senior writer, Greg Sheridan, published in The Weekend Australian on Saturday 7/7/12.

Sheridan makes some very salient points, backed by some expert opinion provided by Warwick McKibbin and Nicholas Linacre.

Firstly, the Gillard Government's own Productivity Commission has revealed that no economy anywhere in the world has produced a scheme like Australia's carbon tax. Specifically at $23 a tonne.

This is despite the Gillard government continually quoting schemes, such as in the EU and the US States, (California—yet to start, and the one in the north east), as if they have been in operation for considerable time and are reducing emissions. However, an expert in this field, such as the ANU's Warwick McKibbin, maintains that the downturn in the US economy has done more to reduce emissions than anything else, as has also been the case in Europe.

In fact, the US does not have a national carbon emissions reduction scheme. Its neighbour, Canada, says it will never have one. Another major economy, Japan, is coping with its internal disasters, while South Korea is yet to establish a scheme and even New Zealand has modified its low price scheme.

Another truth is that in Europe, for example, where some carbon credit trading exists, prices are very low, (about E5). Why then is Australia imposing such a burden on the economy with a high price in the form of a tax ($23 per tonne), as well as maintaining a floor price of $15 a tonne when the tax moves to a trading scheme?

Given some constraints in the Gillard scheme, Australian companies will seek to purchase cheaper permits overseas—

and on and on it goes. It continues:

… World Bank expert, Nicholas Linacre, … suggests most low cost credits are coming out of China but are unacceptable to buyers due to the veracity of their schemes. Again, China, like the US, does not have a national scheme, but one restricted to a couple of provinces.

Little is also said about the developing world. For example, India, another looming economic giant, declared in March this year, it would not even consider scaling back more greenhouse gas emissions until after 2020—and then would do so only in exchange for Western dollars.

Finally, is there any truth to the notion that a market based system of trading credits actually reduces carbon emissions to impact on greenhouse gases?

Apparently not, according to Warwick McKibbin. The only evidence of this occurs in computer generated models supposedly replicating the real world, (and subject to numerous assumptions.)

The truth is, however, that through the Gillard Government's emissions trading scheme, a considerable burden is being placed on the economy in the form of a tax (to be followed by an elevated floor price), not replicated anywhere else in the world, not guaranteed to work, nor be effective in reducing greenhouse gases.

This scheme will have a serious impact on our future competitiveness in a free global market; and in the end, our standard of living.

This impost is a high price for Australians to pay for a political decision enabling the Gillard government to cling to power.

Having said that, I expected Greg Combet simply to respond to what was in the article by Greg Sheridan. That was a month or more ago. There was a response from the minister that did not address one of the issues in the Sheridan article. I am not here backing the Australian, Sheridan or anybody else, but I do think it is fair and shows respect to the Australian people that, when an article like this is written, the government of the day could at least respond to it in a way that we can understand. What is the minister's response to the Sheridan article? That is what I am asking tonight. We need an answer.