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Tuesday, 28 February 2012
Page: 2187


Ms O'NEILL (Robertson) (18:20): I am delighted to rise today in this chamber to speak to these additional estimates bills. As the former Assistant Treasurer and current Minister for Employment and Workplace Relations remarked when he introduced these bills, these funds are sought to meet requirements that have arisen since the last budget as well as to take into account impacts on Australia's economic and fiscal outlook that have arisen as a result of the European sovereign debt crisis and instability in the global financial markets.

The total additional appropriation is around $3.1 billion. More than one-third of this appropriation for services is in the climate change portfolio. Indeed, there is an amount of $1.3 billion in appropriations across several agencies to support our commitment to a clean energy future for Australia. One billion dollars is earmarked for the Department of Climate Change and Energy Efficiency to provide cash to highly emissions-intensive coal fired power stations to assist their transition to a carbon price. Those coal fired power stations may not reside in my electorate but I know well the challenges they present. I know this because a local company by the name of Licella, at Somersby in the seat of Robertson, is steadily developing technology to make some of our dirtier power stations able to reduce their emissions quite significantly.

The Minister for Resources and Energy has taken a close interest in Licella's technology and its application, one of which is to add significant value to Victoria's brown coal resource. On 14 December last year, Minister Ferguson and I were at Somersby for the opening of the company's new biofuels commercial demonstration facility. As the minister noted on that day, this technology has the capacity to significantly reduce greenhouse gas emissions from burning brown coal. Industry confidence in the technology is such that four commercial agreements have been signed, based on this new Licella technology. One of those agreements is to locate a commercial demonstration plant at Yallourn power station in the Latrobe Valley towards the middle of this year.

This is certainly groundbreaking work, but it could not be happening without the continued investment by the Gillard government in a clean energy future. Just a little detail of the way in which this demonstration plant operates: at one end of the process there is a pile of fuel, leftover woodchips which, in this smaller plant, are ground down into sawdust. This is put in through the first phase of the process and heated to a very high temperature, then all the water in that biomass is extracted and then, through very careful management and the engagement of a wonderful technician who was formerly an employee of Shell, out comes a biofuel. It looks just like oil. Currently, they can produce that oil at $45 a barrel, which you can see is an incredibly significant price advantage given the current prices of other oils. But, in addition to that, the cleanness of the technology that that plant is using has a very small impact on the environment. Using water as an agent for change is an indication of the brand-new innovative ways in which those at the cutting edge of Australian business are helping the whole community around the world in providing them with options about how they move forward.

In relation to coal, another capacity of the same plant and the same process is to actually put brown coal in, which has an extremely high water content, remove large amounts of that water and massively increase the efficiency of the two by-products that come out at the end of the process, one being, again, an oil, slightly different in colour—it is a darker colour than the other biofuel—and the other being small particles of coal, which looks black, which can then be burned in a much more efficient way to produce energy without all of the carbon dioxide emissions.

This is the sort of innovation that is going on in small communities like mine. You can only wonder what the capacity of Australians is when the government invests in a future and enables us right here today to use our ingenuity, our determination and collective commitment to a great future for our kids by investing in this sort of technology. That is what the money that is being appropriated in this legislation will support. It is a very clear vision of a very positive and clean energy future not only for this generation but certainly for those who follow us.

But that is not all that we are investing in. Importantly, $222 million will be going to the coalmining industry through the Department of Resources, Energy and Tourism to assist the most emissions-intensive coalmines to transition to the new structure with a carbon price.

Labor's commitment to the working people and working families of this nation is the reason for Labor's clean energy future package, which includes not only household assistance but support for jobs. Earlier today the government released regulations to establish the Jobs and Competitiveness Program. Those regulations are now in place. That program will provide substantial assistance in the form of free carbon permits to the most emissions-intensive trade-exposed industries such as steel, aluminium smelting and cement manufacturing.

The most emissions-intensive industries will receive an initial average of 94½ per cent of their carbon permits for free, meaning that the effective carbon price will be reduced for those companies as they make this transition, from $23 a tonne to an effective $1.30 a tonne. The government have designed the assistance to support jobs in those industries because we are the party that understands the value, the power and the freedom that a good job gives you as an Australian citizen. We grow up, teaching our children to expect that they can have that and that they can participate in our economy. The Labor Party is committed to ensuring that that reality comes into being.

It is significant assistance, worth many billions of dollars over the next few years. If a business can reduce its emissions intensity, its effective carbon price may be less than the $1.30 per tonne of greenhouse gases. It may mean that business has excess free permits that can be sold for a profit. That is built into the design of this support and it is a tremendously powerful market-driven incentive for companies to reduce their emissions.

Any discussion about carbon pricing has to take these two vital issues into account: the competitiveness of our economy and the support for jobs in these important industries, not the nonsense that has been thrown about in this debate by the Leader of the Opposition. We need a serious, carefully judged, carefully planned and evidence based response to the challenges of managing carbon emissions in our time. Labor is leading the nation in delivering that.

We have also put aside a $1 billion program to support investments in clean technology and low-emission technologies. We will continue to support jobs and we will take into account the competitiveness of our economy, while the opposition continues to talk down the economy and to undermine the strong economic management that we have shown, from the period of the global financial crisis right through to this very day. Labor are also investing $6 million in the Department of Climate Change and Energy Efficiency to assist in the delivery of information about the implications of a carbon price on small business and other community organisations. I am pleased to report that businesses in my electorate are rising to the challenge. I want to talk about another small business—which is not really a small business now, rather a medium-size enterprise—called Baltimore Aircoil. It is also based in Somersby, an industrial zone in my seat in which great innovation is happening. I visited this company's operation on Monday last week. I went there to see a student from the trade training centre in East Gosford that we fund. He has taken up a traineeship and goes to school, year 11, four days a week, Monday and Tuesday, Thursday and Friday. He spends Wednesday at Baltimore Aircoil. I know that the opposition are automatically going to hate the headline of last year's media release from this fantastic company, because it tells the truth of the business experience and it pops the bubble of the absolute misinformation that those opposite perpetuate. The headline of the media release dated 21 December 2011 goes, 'Local manufacturer supports carbon price'. It is worth putting the release on the record:

As the local arm of the world's largest manufacturer of evaporative cooling, thermal storage and heat transfer equipment, BAC Australia has congratulated the Australian government on its resolve to set a price on carbon. As one of Australia's leading manufacturers in the heating, ventilation and airconditioning and refrigeration industry, employing over 120 people at its Gosford manufacturing facility, Baltimore Aircoil Australia says a carbon price is an important step for a country which relies so heavily on airconditioning and refrigeration.

The Managing Director of BAC Australia, Craig Johnson, is also quoted:

The sector in which we operate is a major contributor to Australia's carbon emissions. Airconditioning, heating and refrigeration equipment services over 1 million square metres of non-residential space, while consuming 9 per cent of the nation's electricity resource. This equates to 21 megatonnes of greenhouse gas emissions, 3.6 per cent of the national total. We believe that without a price on carbon, these figures would continue to trend upwards. However, the Australian government has ensured our industry a prosperous future. Already many opportunities are presenting themselves in this clean energy space.

Mr Johnson goes on to say:

A price on carbon will further strengthen these credentials through green jobs and opportunities for the development of clean technology.

Baltimore Aircoil Australia has a long history of manufacturing on the Central Coast, an industry which we support. The company is marking 50 years of manufacturing in Australia. I cannot commend the work of Mr Johnson and his team at BAC highly enough. I look forward to marking that anniversary with Baltimore Aircoil later this year. Labor is committed not just to businesses who provide jobs but to ensuring careful regulation of the transition to a clean energy future. That is why we are also investing $37 million in the Department of Climate Change and Energy Efficiency for the establishment of a clean energy regulator which will administer the carbon price mechanism.

In the time that I have left I want to address the reality that we see. The changes that we are bringing in need to provide for assistance to ordinary Australians, particularly those who might need a bit of a hand as we make the change. We are going through this appropriation bill to provide the funding to assist households to meet the challenges of change that the 0.7 per cent adjustment to costs associated with the carbon price are expected to present. The assistance will be in the form of payments to families with children, payments to the aged, payments to pensioners and payments to people with a disability, all to ensure that those who are least able to absorb a 0.7 per cent CPI rise are supported as the change to a clean energy future occurs.

Assistance will also be provided to other income support recipients and low-income earners. This government policy and planning will see around 60 per cent of all taxpayers get a tax cut of at least $300 from 1 July this year. The top 23 per cent of taxpayers, with an annual income of over $80,000, will also get a slight tax reduction. The tax cuts will be delivered through an increase in the tax-free threshold from $6,000 to $18,200. This means that workers earning less than $18,200 a year will not have any income tax withheld from their pay. That is good news for small business—it is a decrease in paperwork and red tape for them—and it is great because it means more money in workers' pockets.

These tax cuts are permanent, not—as some opposite would have the community believe—temporary, and they are going to flow automatically into people's regular pay packets from 1 July 2012. More than three million Australian pensioners will receive household assistance to help them manage in the clean energy future. We are organising a response to climate change in a way which will see businesses grow and Australia prosper and ensure that every taxpayer who earns under $80,000 a year gets a tax cut.

Critically, the clean energy supplement is an absolutely new and permanent payment for pensioners. Under Labor, pensioners are going to receive a clean energy advance. The coalition completely opposes this payment and the legislation that enables it. Labor's clean energy advance will really assist pensioners, yet those opposite completely oppose it. The disability support pension, the carer pension, the service pension and the wife pension are critical elements of people's lives. Labor supports these people. We are committed to making sure that they are with us as we transition to a clean energy future. I commend the bill to the House.