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Wednesday, 14 September 2011
Page: 10021

Ms JULIE BISHOP (CurtinDeputy Leader of the Opposition) (10:47): The opposition will be opposing the Clean Energy Bill 2011 and associated bills. We oppose a carbon tax. We do so not simply because it represents one of the most breathtaking cases of monumental deceit in modern Australian political history. Australians well remember that the Prime Minister promised during the last election campaign:

There will be no carbon tax under the government I lead.

We do not simply oppose it because the Prime Minister has trashed her solemn promise to the Australian people. It is not just because the Prime Minister has broken faith with the public. We oppose this carbon tax because it is bad policy.

The government's carbon tax is more about socialism than environmentalism. It is actually a massive redistribution of wealth, motivated by the need to raise revenue rather than to reduce emissions. Indeed, the tax itself will not even reduce Australian emissions. The extent to which that may occur at some point in the future would be due to other action taken, not because of the imposition of a tax.

We also oppose this policy because now is one of the worst times to introduce such a damaging economic instrument. This is not economic reform, as the government maintains; this is economic vandalism. Has the government even bothered to scan the world economic environment before proceeding with this reckless scheme? Has the government honestly and objectively assessed the Australian economic environment before proceeding?

Since 2008, Treasurer Wayne Swan has brought down successive budget deficits so large that he has been too embarrassed on occasions to publicly acknowledge them. Over his four budgets, the cumulative deficits total $150 billion. The government has borrowed to fund the deficits, and net government debt is now around $120 billion. Our debt ceiling has been lifted by this government from $75 billion to $250 billion. The current budget deficit is $49 billion, yet the Treasurer continues with the pretence of announcing a 'return to surplus' several years in advance.

This lack of fiscal discipline has made Australia more vulnerable to the impact of a second potential world downturn, and no longer as well prepared to resist external shocks as we were in 2007 and 2008. Australia should be wary of relying heavily on other nations to provide protection from global economic events without first ensuring that our own house is in order. This means cutting wasteful spending and reducing expenditure rather than embarking upon tax grabs from productive sectors of the economy.

The threatened increase in the cost of living from a carbon tax is sapping business and consumer confidence. The combined threat of the carbon tax and mining tax is raising serious concerns internationally about Australia as an investment destination. With an uncertain global economic environment likely to remain for some time, the government should abandon its carbon tax and do everything in its power to build greater confidence among consumers and businesses within Australia and those looking to invest here.

Let me turn to some other aspects of the government's carbon tax policy. A key element of the policy is designed to ensure that Australia reaches the target of a five per cent reduction in greenhouse gas emissions by 2020, not by cutting that volume in emissions from Australia but by purchasing carbon credit offsets from other countries. When asked about the purchase of offshore permits the Prime Minister said:

Yes, this is going to be an internationally linked scheme and so it should be.

It is alarming that the Prime Minister has given no indication that she is even aware, or has any understanding, of the recent history of the operations of international carbon credit markets. The World Bank reported recently that the international market in carbon credits has suffered a debilitating collapse, and expressed doubt about the ongoing viability of global markets. According to the World Bank, trading in credits commenced after the Kyoto protocol was adopted in 2005 and about $25 billion was generated over the years to 2009. However, that market collapsed to $1.5 billion last year due to ongoing concerns about the commitment of nations after the expiry of the Kyoto protocol in 2012. The United States withdrew from the Kyoto protocol in March 2001 and has indicated it will not commit to any replacement treaty. Russia, Japan and Canada have all stated recently that they will not continue with the protocol after it expires.

Last December the European law enforcement agency, Europol, issued a statement about extensive defrauding of the European Union emissions trading system. Europol reported that it had raided several hundred offices throughout Europe and had arrested more than 100 people. In one operation in Italy, the police conducted raids on 150 companies in eight regions as part of an investigation into huge volumes of suspected fraudulent transactions on the Italian Power Exchange. Europol reported that raids also occurred in Norway, Switzerland, Belgium, the Czech Republic, Denmark, Latvia, the Netherlands, the Slovak Republic and Portugal. After all these actions, trading volumes in Europe dropped by 90 per cent. It has also been reported that 90 per cent of trades in the European Union emissions trading system were fraudulent, resulting in a loss to European taxpayers of more than $6.6 billion. The Wall Street Journal concluded that the European Union emissions trading system was not actually a functional scheme at all but was a 'political smokescreen' to enable European politicians to claim green credentials while avoiding difficult decisions on reducing emissions.

A former correspondent for the Australian Associated Press based in Port Moresby wrote recently of the 'cowboys' who flocked to PNG in pursuit of carbon credit riches. He detailed the first arrival in 2009 of 'carbon cowboys' offering villagers 'sky money' for the right to use their land in international carbon trading schemes. This led to alleged corruption of local officials who also stood to gain from these get-rich-quick schemes.

The Prime Minister of Australia is proposing in her carbon tax policy that an estimated $57 billion of Australian taxpayer funds will be sent offshore to buy carbon offsets to enable Australia to reach Labor's new target of an 80 per cent reduction in emissions by 2050. The logic of her proposal is that Australians should pay people overseas tens of billions of dollars for the right to burn our own coal so as to meet her commitment that the coal industry has a 'bright future'. This is apparently to be achieved through a nonexistent international trading system. It is naive at best for the Prime Minister to assume that such a scheme will emerge given the clear signals internationally that major emitting nations are moving away from trading in carbon credits, and the minister in the House at the table knows this.

Of more concern is that the Prime Minister appears blithely or wilfully unconcerned about the fraud and criminal activity that has beset trading in carbon credits in developed countries of the European Union, let alone what is taking place in developing countries. Deloitte Australia has warned that carbon credit fraud is 'the white-collar crime of the future'. The Prime Minister must explain clearly, before there is a vote on this legislation, why it is that her carbon tax on what she terms 'the big polluters in Australia' will not meet the emissions reduction target by 2020 and why billions of dollars in taxpayer funds need to be sent offshore in order to do so. How on earth can this Prime Minister ensure that the tens of billions of Australian taxpayer dollars committed to purchasing international carbon credits will not end up in the clutches of carbon cowboys? So we oppose this bad policy because it is full of flaws. We also oppose it because it will cripple the mining sector, which contributes so much to Australia's prosperity.

The government accuses the opposition of a scare campaign, but it is the government's shameless scare campaign that should be condemned. The Prime Minister has spent months attacking the 1,000 big polluters—or is it 500 big polluters? Then it was 400 big polluters, and yesterday it was back to 500 big polluters. Tomorrow it could be 1,000 big polluters. She has demonised these Australian companies by claiming that they are causing 'more bushfires and drought', 'agricultural land in the Murray-Darling Basin no longer being able to be used for agriculture' and 'icons like the Great Barrier Reef being threatened'. These examples of her scare campaign run into reams of paper.

But the reality is that the government's policies will massively damage the coal sector. In order to meet Labor's latest target of 80 per cent reductions in emissions by 2050, the coal industry cannot continue to operate in this country. Yet the Prime Minister seeks to con coal workers into believing the government wants to support the coal industry's 'bright future'. Given that the vast bulk of our electricity is generated by coal-fired power stations and that coal is by far the largest contributor to Australia's greenhouse gas emissions, the Prime Minister is either unaware of the contradiction in her two positions or being deliberately dishonest. The Prime Minister cannot have it both ways. Either coalmining has a future in this country under her Clean Energy Future or it does not. Her power-sharing partners in government, the Greens, have no such difficulty. Greens leader Senator Bob Brown was asked during an interview on 26 June this year whether the carbon tax will close down mines overnight, and Senator Brown, the co-prime minister of this country, said:

But that has to be the outcome. You know the coal industry has to be replaced by renewables.

Further, the Prime Minister conveniently ignores the fact that the challenge of reducing emissions is a global problem. The atmosphere does not differentiate between emissions released in Australia and those in other parts of the world. Australia is responsible for just over one per cent of global greenhouse gas emissions, and as a developed country we should play a responsible role in the global context. However, Australia could reduce emissions to zero yet produce no discernible environmental gain if the major emitters such as China and India continue to increase emissions. Adopting the Prime Minister's flawed logic, companies mining coal which is burned to produce electricity in Australia are big polluters here and must be punished to prevent damage to the environment, yet simultaneously companies mining coal to be burned in power stations overseas and for steel production overseas have a bright future in this country. What the Prime Minister is deliberately trying to conceal from the Australian people is that her carbon tax is designed to make electricity generated from coal increasingly expensive to the point where it virtually guarantees the shutting down of the coal-fired electricity sector in this country. There can be no other way to meet the target of an 80 per cent emissions reduction by 2050.

According to the Productivity Commission, Australia is the only country on earth seeking to introduce an economy-wide carbon tax or emissions trading scheme. Despite the glowing references to the European scheme by government ministers, it should be noted that European steel companies recently wrote to the European parliament warning of the competitive disadvantage that would come from unilateral action on carbon pricing and that it could 'increase global emissions as market share is off-shored to non-EU countries with inferior emissions standards'. If other nations such as China, India and, indeed, the United States do not impose an economy-wide carbon tax, Australia is handing manufacturers offshore an enormous competitive advantage over Australian manufacturers.

The Prime Minister is wishing and hoping that her leadership will encourage other nations to follow suit. The arrogance behind this policy on a wing and a prayer ignores the lessons that should have been learnt from the Copenhagen climate change conference. Most countries in the world are focused on their own economic development and improving the standard of living for their citizens. Australia's so-called leadership seems hell-bent on destroying the standard of living our country enjoys. The government has been unable to implement the simplest of concepts—pink batts in people's houses, building school halls—without disastrous consequences.

We have no faith that this government can competently implement good policy. Imagine what it will do with bad policy and with legislation that runs to 2,065 pages. History will judge this Prime Minister and, even if it is only a footnote rather than a chapter in Australia's political history, it will begin with her broken promise to the Australian people that there would be no carbon tax under a government that she led.