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Monday, 20 August 2012
Page: 9237


Mr CHESTER (Gippsland) (11:31): I appreciate the opportunity to debate this very important motion. Just because the carbon tax was introduced on 1 July it would be an absolute folly to think this government has addressed all of the issues in relation to it. With the short time that I have available to me today, I would like to address some of the key points of the motion before the House—in particular, the impact the carbon tax has already had in regions like Gippsland, the likely impacts it will have in the future, and the failure of this government to accommodate the impacts on regions like the Latrobe Valley while at the same time wasting more than $30 million on an advertising propaganda campaign.

The first big myth about the carbon tax is the repeated assertion from those opposite that only Australia's so-called biggest polluters will actually pay the carbon tax. That is about as misleading as the Prime Minister's original promise that there will be no carbon tax under a government she leads. Everybody pays the carbon tax. Our local football and netball clubs pay through increased energy costs to run their lights at night for training and matches; our local aged care facilities and hospitals pay the carbon tax through increased energy costs; and even the United Dairy Farmers of Victoria have estimated the increased energy bill for dairy farmers would be at least $5,000 per dairy farm, with no compensation and no capacity to pass those costs on to anyone else. You are simply making the Australian dairy farmer less competitive with international trading partners at a time when they desperately need every bit of assistance they can get.

Just one hospital in my electorate, the Latrobe Regional Hospital, has budgeted in this current financial year for a $200,000 increase in its energy bills as a direct result of the carbon tax. Government members like to claim that those energy costs, those increases in electricity prices, are not all related to the carbon tax. I will not even try to have the argument with them because the question is: why make it harder for a hospital? Why make a difficult situation even worse for small business? Why act ahead of the rest of the world and take away the clear competitive advantage for the Australian economy of a cheaper and more reliable form of baseload energy? I have examples in my electorate such as the Lakes Entrance fishing fleet based at the port of Lakes Entrance. It is a major fishing fleet. The general manager of the Lakes Entrance Fishermen's Cooperative contacted me. I have an email here from Dale Sumner outlining some of his concerns about the carbon tax. I would like to quote from his email. He said:

Without a doubt, the Carbon Tax will impact heavily on the Fishing industry.

Well, there is news: he is not one of the 500 biggest polluters but he is telling me that he will be impacted 'without a doubt'. But the government tells me that only the 500 so-called biggest polluters will pay the carbon tax. Let's read on. Mr Sumner said:

… the Co-op has a significant Power usage Bill as a result of the Cold Storage & Ice Production equipment, most of the plant is either new or built in a way to reduce power load, it's just energy intensive.

I am sure that is a news flash to the government as well: it actually takes energy to freeze the fish and prepare them for market. He goes on to say:

Our estimated increase in Power alone under the Carbon Tax is $24,000 pa, this will ultimately either lead to the end of the Co-Operative or increased costs to the fishers.

The majority of the 3500 to 4000 tonne of product landed here at Lefcol leaves via Road Freight, so we expect this to increase as costs further up the chain are passed all the way down to the fishers.

Fishers are in a poor position with increased costs as they are price takers, we don't set prices, our product sells for what it sells on any given day, we don't have the luxury to pass the costs onto consumers.

He then goes on to say:

For example, if Lefcol, as a result of increased costs, say to fishers that our charges are being increased by 10c a kilogram, they have two decisions to make—either walk away from Lefcol as they can no longer afford it or wear the costs as they can say that their fish are worth 10c more per kilo on the market. In the market system we operate, prices of fish are driven by demand and set in a market auction system.

He goes on to say further:

As I mentioned, the fishing industry is poorly placed under the carbon tax as they can't pass on cost increases like many other products can.

The simple fact of the matter is, everyone pays the carbon tax every day of the week. The report in today's News Ltd paper should come as no surprise to people on this side of the House. The carbon tax is killing confidence in the small business sector right across Australia, particularly the retail sector. Business owners are absorbing the higher cost because the market is flat and not in a position, just like the Lakes Entrance Fishing Cooperative, to pass on those costs. The report in the news today found that, in a survey of 186 small business owners, 75 per cent wanted the carbon tax scrapped because it was making a bad situation worse.

In Gippsland, and the Latrobe Valley in particular, the uncertainty and the drop in confidence directly associated with this government's carbon tax—remember this is a carbon tax that the Prime Minister promised we would never have—is also exacerbated by another policy, the government's flagship policy called 'contract for closure'. I am not surprised that we do not hear much about contract for closure from those opposite. In fact I have not heard a backbencher sprouting the benefits of contract for closure. I do not even hear any dorothy dixers in question time on this particular policy issue. The reason for that is it is a dog of a policy. The government remains determined to shut down 2,000 megawatts of coal fired power stations in the Latrobe Valley, or in Australia more generally, and negotiations are supposedly continuing today with the Latrobe Valley based power generators. I do not think there has ever been a more poignant example of public policy stupidity than contract for closure.

We have the stupidity of using taxpayers' money to compensate generators for the closure of their assets—assets which would close anyway within about 15 to 20 years. Then we have the stupidity of using taxpayers' money to compensate households for higher electricity prices because we will not be using the cheapest available form of baseload energy that is available to us. In addition to that we have the stupidity of using taxpayers' money, again, to pay unemployment and other benefits to people who have been displaced by this policy.

In fact this policy is so stupid that I do not think it will actually happen. The minister for industry and resources knows that it is stupid because he is out there at the same time talking about exporting Latrobe Valley brown coal. If we follow the minister's logic, it is okay to burn Australian coal in China, India, Korea and Japan but it is not okay to burn it in the Latrobe Valley. It is okay for a Chinese, Indian, Korean or Japanese power station worker to have a job burning Australian brown coal but it is not okay for our Morwell, Moe, Traralgon or Churchill power station worker to have a job burning Australian brown coal. The billions that are going to be wasted if this contract for closure policy continues could be better spent on a whole range of better public policy issues, in particular the National Disability Insurance Scheme. The government has no plans in terms of how it is going to pay for that.

Time is against me going through all the details that are raised in the motion. I would like just to point out the hypocrisy in the government's claim that the carbon tax impacts have been exaggerated. I would invite any member opposite to come to the Latrobe Valley and tell the 30 Energy Brix workers, who were made redundant a week before the carbon tax was implemented, that our claims have been exaggerated. I would invite any member opposite to come to the Latrobe Valley and try selling that story to the engineering workshop owners and to their staff who have seen jobs dry up as the power generators have announced a reduction in maintenance contracts. You can try telling that to the construction workers in the Latrobe Valley and to the young apprentices in Gippsland who have been put off in the last three months due to the lack of new projects, which is directly linked to the lack of confidence in the future as a result of this government's carbon tax and its destructive contract for closure proposals.

I do repeat my offer earlier to simply answer this question: at a time when business is doing it tough, why make it tough for Australian business owners? As for the government's repeated promises to assist the adversely impacted regions, let me tell the House what a farce that has become. All talk and no action would sum up the government's efforts in regard to this. In the Latrobe Valley we have had various ministers come down many times and they have not agreed, yet, to even fund the socioeconomic impact study to actually measure the true implications of the carbon tax and the contract for closure policy.

There are no guidelines in place for the $200 million under the regional structural adjustment systems package, and the minister confirmed that after the budget. We have the tax in place, the impact is already being felt and there are no guidelines for the government's flagship program of assistance.

Let's put that $200 million into perspective. If you shut down Hazelwood Power Station, the loss is about 550 to 600 direct jobs, and their salaries alone are worth $100 million per year. So the $200 million the government is talking about in terms of structural adjustment is meant to be shared right across Australia, but shut down Hazelwood and you would not even compensate the Latrobe Valley for two years worth of wages for the workers at the Hazelwood Power Station.

I stand here bitterly disappointed with the performance not only of this Prime Minister but also of those opposite who used to stand up for the blue-collar workers in regional areas like the Latrobe Valley. This Prime Minister promised there would be no carbon tax under the government she led, and it is only the grubby deal with the Greens which has forced this government into this position. I call on those opposite who are genuine in their passion for the blue-collar workers in places like the Latrobe Valley to stand up and start representing the heart and soul of the Australian Labor Party, which used to be so proud of its representation of those workers in my region.

There is an absolute crisis of confidence in my community directly linked to the uncertainty this government has created through its reckless decision to legislate for the world's biggest carbon tax. I commend the motion to the House.