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Wednesday, 21 September 2011
Page: 10963


Mr ANDREWS (Menzies) (10:22): I rise to speak on the carbon tax legislation, euphemistically named the 'Clean Energy' bills by this government. Can I say at the outset that, apart from the Prime Minister's broken promise—'there will be no carbon tax under a government I lead'—there is a gross deception at the heart of this legislation. Time and again, day after day, week after week, month after month, Labor members proclaim that this is a tax only on the 500 biggest polluters in the nation, the implication being that the financial penalty of this legislation will only fall upon these companies—500 companies, of course, that the government cannot, or refuse to, actually name. They do not know which 500 companies they are. A company could be No. 499 or No. 501 and they would have no clue at the moment as to which one they were.

But, leaving that aside, let us tackle this proposition from the government that this is a tax the financial and fiscal impact of which will only fall on the 500 biggest polluters in the nation. Let us assume for a moment that that is true. If that were true then why is there a need for a vast compensation package in these bills? The fact is that the claim that only the 500 biggest polluters will pay is political spin. It reminds me of George Orwell's quip: 'Political language … is designed to make lies sound truthful and murder respectable, and to give an appearance of solidity to pure wind.' That is about the reality of what we hear coming from this government.

The fact is that this tax will be passed on by the companies that are taxed and it will cascade through every transaction associated with the product of that company—of course, that is what it is designed to do. But we have this political obscuration by the Labor government in the hope that ordinary Australians will think otherwise. The reality, however, is that they increasingly recognise the deception and are opposed to this package. In particular, power and transport prices will increase. The government hopes that Australians will ignore this as it blames other factors. At least President Obama in the United States, who has now abandoned his plans for a similar scheme, was more forthcoming. He told the San Francisco Chronicle in 2008: 'Under my plan of a cap and trade system'—the equivalent of what we are getting here—'electricity rates would necessarily skyrocket.' That is what President Obama was prepared to say in 2008 about what he was then proposing for the American economy—namely, under his scheme, 'electricity rates would necessarily skyrocket.' But do we hear any such truthfulness from this government? No, we just hear more spin that somehow only the 500 biggest polluters will pay. That is, frankly, a joke.

What we have seen with energy prices so far has been a substantial spike over the last few years. As any Australian can tell you, electricity prices have gone up. It does not matter which state or territory in Australia you reside in; the reality is that electricity prices have gone up on average by more than 40 per cent across the country. Gas prices have gone up by something like 28 per cent. The cost of food has gone up. The cost of health care and pharmaceutical products has gone up. All of these things have gone up substantially. The reality is that many Australians are facing cost-of-living pressures the like of which they have not faced for some time. In fact, in my journeys around the country, talking to family service agencies in the honourable member's state of Western Australia recently, family service agencies, whether in Perth or any other part of Australia, are saying that they have more people turning up to their doors in necessitous circumstances than any time in a generation. That is what the family service agencies are saying. So the reality is that, for many Australians, cost-of-living pressures are hitting them in a way that they have not before—and yet, on top of that, we have this tax that the government is proposing to impose over and above all these increases in costs in energy, transport, food et cetera.

Look at what is going to happen. In my state of Victoria, Deloitte Access Economics did a survey, some analysis, of what the impact would be, just in Victoria alone. And they said, after their analysis—one of the leading accountancy and financial firms in the country, employed not only by governments but by a whole range of private sector organisations from time to time to provide analysis of the economic impacts of certain measures and policies—that the carbon tax will make Victorian households $1,050 a year worse off, cost 35,000 jobs and hit the state budget bottom line by $660 million by 2015. That is just in Victoria alone. You can multiply that right across every state and territory in Australia, with the compounding impact that that will have across this country.

There is something else I want to address in relation to this legislation—and that is what I describe as the 'green jobs myth'. A consequence of this legislation, following on from what the honourable member for Indi was speaking about earlier, will be the destruction of Australian industry and jobs. As she pointed out, in the last 12 months, in manufacturing alone, we have seen the loss of 54,000 jobs in Australia. And you can see that that has been compounding over the last few months—49,000 manufacturing jobs gone in Australia in the last six months; 30,000 manufacturing jobs gone in Australia in the last three months.

We hear now and again about the closure of some major manufacturing business. But the reality is that day after day and week after week we see, in the eastern suburbs of Melbourne, which I represent in part, and in those sorts of areas in this country, the closure of small manufacturing operations, plants and businesses—often simply closing because they can no longer remain competitive or moving offshore because that is the only way they can keep their business alive. This is happening day after day, week after week, not just the headlines that come up when a major business closes now and again. The reality is that this is happening all the time and that of course is borne out by the data that 54,000 jobs have gone in manufacturing in the last 12 months alone.

With manufacturing already suffering, businesses closing or moving overseas and jobs being lost, Australians are naturally worried about their future and their employment future. When studies indicate that significant additional job losses occur, particularly, to take Victoria again, in places like the Latrobe Valley, the power hub of the state, then they rightly question the indecent urgency of this Labor government to impose a scheme in the absence of similar schemes elsewhere around the world. Nor are they mollified by glib assertions of Professor Garnaut that new jobs will be as numerous as the old jobs that have been lost.

It is in this context that I wish to examine the claim that tens of thousands of jobs will be lost—what Professor Garnaut refers to as structural change. I am sure if you lose your job, you do not refer to it as structural change and that somehow they are going to be replaced in this country in the coming few years by new green jobs. Professor Garnaut acknowledges that:

All Australians want to know where the new jobs and new incomes will come from…

But his response from everywhere to quote him again is 'hardly convincing in the light of overseas experience.'

Let me turn to some recent developments overseas. In the United States:

A $38.6 billion loan guarantee program that the Obama administration promised would create or save 65,000 jobs has created just a few thousand jobs two years after it began.

According to a report last week in the Washington Post:

The program—designed to jump-start the nation’s clean technology industry by giving energy companies access to low-cost, government-backed loans—has directly created 3,545 new, permanent jobs after giving out almost half the allocated amount;

half almost of $38 billion, 3,545 jobs.

President Obama made green jobs a showcase for his recovery plan, vowing to foster new jobs, new technologies and more competitive industries, but the loan guarantee program came under scrutiny after the collapse of Solyndra, a solar panel maker, whose closure will cost taxpayers as much as $527 million. Indeed last year President Obama visited this company in Northern California and hailed it as the future of clean energy. According to a Washington Post report:

Obama’s efforts to create green jobs are lagging behind expectations at a time of persistently high unemployment. Many economists say that because alternative-energy projects are so expensive and slow to ramp up, they are not the most efficient way to stimulate the economy.

Even claims by the US Energy Department that a green jobs program saved 33,000 jobs at the Ford Motor Company have been queried. Several economists said they doubt the loans program saved these jobs. Josh Lerner from the Harvard Business School said:

I always take these job estimates with a big grain of salt.

There tends to be a lot of fuzzy math when it comes to calculating these benefits…

Or Mark Muro, from the Brookings Institution, who researches the clean-tech industry, said:

…the agency appears to be counting every employee working in upgraded plants, when the more relevant question is how many workers would have been laid off without the loans.

Solyndra, the first company backed under the greens loan scheme, has now declared bankruptcy and closed its doors just two weeks ago. In fact it has been raided by the FBI since. The failure of the solar panel manufacturer, which got a $535 million government loan guarantee and later direct government loans, led to the lay-off—not the putting on—of 1,100 workers.

Energy Department officials claim the program will create or save 60,000 jobs. But, if the 20 companies that have won loans so far deliver all the new jobs they have promised, they will hire a total of just 8,050 new workers for permanent positions. According to the same report in the WashingtonPost report, half of those 20 companies have neither created nor saved any permanent jobs yet; several won their loans only recently.

If the revised 60,000 target is reached, it will work out at about $640,000 in loan guarantees for every job created or saved. If the companies do well they will not draw down on the guarantees but if, as what happened with Solyndra, it collapses and declares bankruptcy then of course the American taxpayers will pay the bill.

This comes on top of President Obama's claim that his stimulus bill created or preserved 225,000 clean energy jobs. That is $355,000 per job. However, the reality is that when this was analysed in further detail that much of this money went not to firms and businesses in America but to China. Despite the claim of green jobs, the overwhelming majority of stimulus money spent on wind power went to foreign companies, according to a new report by the Investigative Reporting Workshop at the American University's School of Communication in Washington, D.C.

According to a report recently on the American ABC WorldNews, nearly $2 billion in money from the American Recovery and Reinvestment Act has been spent on wind power, funding the creation of enough new wind farms to power 2.4 million homes over the past year. But the study also found that nearly 80 per cent of that money had gone to foreign manufacturers of wind turbines.

The third largest maker of solar panels in the US, Evergreen, is closing—not opening, not expanding—its main American factory, laying off the 800 workers and shifting production to a joint venture with a Chinese company in central China, despite having received more than $43 million in assistance from the state of Massachusetts.

Michael El-Hillow, the chief executive, said in a statement that his company had decided to close the factory in response to plunging prices for solar panels. World prices have fallen as much as two-thirds in the last three years, including a drop of 10 percent during last year's fourth quarter alone. This is reflected in their share prices. If you look at Evergreen stock, it traded at just over $100 per share in 2007 and had dropped to just $3.00 per share by the start of this year. This follows First Solar, another American company and one of the world's largest solar power vendors, whose products are already made overseas. Reeling from this experience, the US administration announced last week that it is again delaying a plan to curb greenhouse gas emissions from power plants.

This overseas experience, real data of what is happening, points to two consequences; first, it is a myth that green jobs are being created in large numbers, and, secondly, every job created comes at an enormous cost to the nation. This reflects the experience in the United States. A similar study in Spain found that for every green job created there were two or three other jobs lost in the economy. Not only will families pay the extra costs for energy and transport; the so-called green jobs are a myth. It is no wonder that workers in places like the Latrobe Valley are worried about their future. (Time expired)