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Tuesday, 11 October 2011
Page: 11329


Dr EMERSON (RankinMinister for Trade) (09:47): This is a historic week in which we are debating a vital economic and environmental reform, the government's policy to limit carbon emissions into the atmosphere. My own association with this issue goes back to before 1989. Indeed, in 1989 the Hawke government released a statement titled 'Our country our future'. That statement included expressions of concern about and commitment to address the problem of global warming. It was one of the very first statements that was made and certainly the first by an Australian government. I was proud to have been associated with the preparation of that document. Then, in the lead-up to the 1990 federal election, I was asked by the Prime Minister to make recommendations as to the expenditure of a modest amount of money—my recollection is that it was $30 million, but in today's terms that would be a significant amount of money—and I recommended the establishment of a national greenhouse office. So my own interest in and concern with this issue date back more than 20 years.

I come to this debate now in 2011 as both an economist and the Australian Minister for Trade. The Labor Party in government have a proud tradition of not waiting for other countries to implement economic reforms before we do so ourselves in our great country, Australia. I refer to the policy to implement comprehensive health insurance for all Australians, originally in the form of Medibank and then subsequently in the form of Medicare. Medibank having been created by the Whitlam government, the coalition government between 1975 and 1983 then announced seven different health policies in seven years, and it took a Labor government to re-embrace reform in the form of Medicare.

I refer to national superannuation, which was opposed root and branch by the coalition in opposition. It was to destroy the Australian economy, if you were to believe the coalition: business could not afford it, it was a bad reform, it was a bad idea and should never be implemented. Indeed, the coalition voted strongly against a national superannuation guarantee. Today we have around $1.3 trillion in funds under management, a great savings effort on behalf of our country, as a result of those reforms. It was, again, an example of a reform that was implemented by a Labor government without waiting to see what other countries did in respect of national savings through national superannuation.

It was a Labor government that recognised the wonderful opportunities of the Asian century, going back to Gough Whitlam, who recognised formally the People's Republic of China as one of his first acts in government in 1972, and then to Bob Hawke, who foresaw in a visionary way the Asian century and set about fashioning an open, competitive economy—again, very much against the wishes of many in the community, many in the business community and many in the coalition, though I do acknowledge that the then Leader of the Opposition, John Howard, lent bipartisan support to a substantial part of that program. But it actually took Labor to do the hard work in creating an open, competitive economy through a floating of the currency, something that the coalition never did; through liberalising the financial services sector, which the coalition never did but was always going to do; and then through liberalising product markets and, in the labour market, creating enterprise bargaining as the central organising principle. This takes us to today's debate on the Clean Energy Bill 2011 and the related legislation. Today's debate is based on an argument about science. I have been following the debate through the scientific community for years. Yes, there are alternative views, and I was interested in those alternative views, but those alternative views have not succeeded in overcoming the compelling argument, based on science, for action on climate change. I have approached those issues with open eyes and an open mind. I have come to the conclusion that we cannot wait; we need to act on climate change, because it would be highly irresponsible and highly damaging to Australia's national interest not to do so.

The scientific evidence assembled and summarised by the opposition leader says a great deal—all of it adverse—about the science, because the opposition leader said in July of this year, very recently, 'See, one of the things that people have not quite twigged to is that carbon dioxide is invisible; it's weightless and it's odourless.' This was not just one of those off-the-cuff remarks that the opposition leader says he makes from time to time and should not be regarded as gospel truth, because he repeated it in the same month more than a fortnight later when he said, 'This is a draconian new police force chasing an invisible, odourless, weightless, tasteless substance.' It beggars belief that the Leader of the Opposition, who says he is a Rhodes scholar and has an economics degree from Sydney university, has committed to reducing by 140 million tonnes a substance that he describes as 'weightless'. I think this is the most ridiculous proposition that has ever been put to the Australian parliament. The coalition, led by the opposition leader, has come to the view, after this entire scientific debate, that carbon dioxide is weightless and yet the coalition is committed to reducing the incidence of this 'weightless' substance in the atmosphere by 140 million tonnes by 2020. Go figure.

The coalition's plan says that this is consistent with its target of reducing carbon emissions by five per cent on 2000 levels by 2020. This is a bipartisan target—that is, a five per cent reduction on 2000 levels by 2020. Yet, on the day that the opposition leader affirmed the five per cent bipartisan reduction target, he also described it as 'crazy'. This tells you about the true motivation of the opposition leader. He does not care about the future of this country; what he actually cares about is his own political interests.

Mr Robert: Mr Deputy Speaker, I rise on a point of order. With the greatest respect, the minister cannot actually infer a motive of the Leader of the Opposition; it is against standing orders.

The DEPUTY SPEAKER ( Hon. Peter Slipper ): There is no point of order. But I would advise the minister to be very careful.

Dr EMERSON: We now need to address this question: is Australia a first mover? On the various reforms that I have described, Australia was a first mover and has benefited greatly from being so. The then Prime Minister, John Howard, embraced the notion of Australia being a first mover in this area of reducing carbon emissions into the atmosphere. Indeed, he described the benefits of Australia being a first mover. Coalition speakers in this debate will say that Australia is a first mover; in fact, that is untrue. Australia is not a first mover. Around 89 countries, accounting for more than 80 per cent of global emissions and more than 90 per cent of the global economy, have pledged to reduce or limit their carbon pollution by 2020, and around 32 countries and a number of US states already have emissions trading schemes in place. Those countries include New Zealand, led by a conservative Prime Minister, and the United Kingdom, also led by a conservative Prime Minister. So much for the desire to reduce carbon emissions into the atmosphere being some extreme left conspiracy. You would hardly describe former Prime Minister Mr Howard, the Prime Minister of the United Kingdom, Mr Cameron, or the Prime Minister of New Zealand, Mr Keys, as extreme leftists. They are conservatives and they supported introducing a scheme to reduce carbon emissions—indeed, an emissions trading scheme.

China has been identified as a country that purportedly is doing nothing to reduce emissions; in fact, it is introducing an emissions trading scheme in some of its larger cities, including Beijing and Shanghai and is reported to be preparing a nationwide emissions trading scheme for 2015. It has also the world's largest renewable energy generation capacity.

The coalition contributors to this debate and in question time have asked questions of this government along the lines that reports have claimed that for every green job created three traditional jobs have been lost and would this be the case in terms of the emissions trading scheme that the government is determined to implement. What that actually betrays to the Australian people through the parliament is a belief that renewable energy should not be supported, that we should not be creating jobs through wind energy, solar energy, wave energy or geothermal energy, that we should remain totally committed to coal and LNG as energy sources well into the future and that any embrace of renewable energy will cost three jobs for every job created.

There is an important role for LNG and coal in a low-emissions future. LNG is regarded as the transition fuel to a lower emissions future, to a clean energy future, and we have loads of it. Businesses are voting with their wallets by investing in LNG in an environment where they know that a price will be put on carbon. So too with coal production; we hear that the destruction of the coal industry is nigh. Well, why is it that one of the first commercial decisions made after the announcement of the emissions trading scheme was that Peabody, a major coal producer—I think the largest in the world—made a takeover bid for Macarthur Coal amounting to $4.5 billion?

Why is there a massive pipeline of coal production and investment coming through? It is because there is a future for LNG and coal in a low emissions economy. But, of course, the emissions intensity of coal will have to be reduced.

There is a debate about the two plans. He has said that the science of climate change is 'absolute crap' and declared that carbon dioxide is weightless and odourless and tasteless and therefore completely harmless, but if we were to believe just for a moment that Mr Abbott—

The DEPUTY SPEAKER: The Leader of the Opposition.

Dr EMERSON: sorry; the Leader of the Opposition—has any commitment to reducing emissions, then we would need to examine the government's emissions trading scheme juxtaposed against the direct action plan. The irony—though it is no great irony in my experience—is that Labor is embracing a market based solution to reducing emissions whereas the coalition is embracing a centrally planned solution. This is not the first time this has happened—I have already referred to the creation of the open competitive economy, which was a market-based approach to policy by the previous Labor government—and the direct action plan would be a very expensive way of reducing emissions by five per cent. Indeed, the cost per household would soar if the coalition were to be elected. If Mr Abbott were to carry through on his commitment to that five per cent reduction—

The DEPUTY SPEAKER: The Leader of the Opposition.

Dr EMERSON: sorry—then the cost per household would go from $720 to $1,300, because the opposition leader has ruled out linking any scheme in Australia to the purchase of permits through low-cost solutions overseas.

In rescinding the emissions trading scheme, if the opposition leader were to become Prime Minister, he would be announcing the rescinding of the trebling of the tax-free threshold as well as an increase in taxes and a reduction in pensions. The fact is that Labor's compensation package is more than adequate for most Australians. For most Australians, the average increase in the cost of living is $9.90 per week, and the compensation is $10.10 per week. This is a very important reform, and carried with it is tax reform. It is based on science and a commitment to Australia's economic future, and as trade minister and an economist I am absolutely delighted to be able to recommend these bills to the House.