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Tuesday, 11 October 2011
Page: 11373


Mr BRENDAN O'CONNOR (GortonMinister for Privacy and Freedom of Information, Minister for Home Affairs and Minister for Justice) (12:46): I rise to support the Clean Energy Bill 2011 and related legislation before the House. This House has been discussing these issues for some time, and some would say for decades. It is true to say that leaders of major political parties have held the view, primarily, that we do need a market based approach to dealing with carbon. Former Prime Minister John Howard had that view. Former leaders of the opposition Brendan Nelson and Malcolm Turnbull had that view. Prime Minister Gillard has that view and former Prime Minister Rudd had that view. Indeed, Tony Abbott had that view when it suited him, and when it suited him not to have that view he opposed the market based approach to pricing carbon.

That is a dreadful shame for this country because this is fundamental reform that is required. This is the reform that governments should be embarking upon. Fundamental reform is always made easier where there is a responsible opposition taking a bipartisan approach. Of course, checking and challenging assertions made by governments is entirely proper, but to turn against the facts, to turn away from the science and to turn away from what is in the interests of this nation is not something, in my view, that a responsible Leader of the Opposition would do. It is unfortunate that to that extent we are not one on the view that carbon pricing is absolutely critical for this country.

This policy package is based on good science, good economics and good administration, and I would say it is good for the nation. I want to say a few words about each of those things. The good science tells us that we human beings—of which we Australians are a part—have a problem. We Australians are part of the cause and we are part of the solution.

On the good economics: this package of bills implements a tax which reflects fundamental, basic, widely accepted economic principles. Let us start at the start of that economics. If you let people do a bad thing like polluting and you let them do it for free, they do it too much. You have to price the bad in this world. That is the elementary idea of externalities. But the carbon tax is not to be a permanent feature of the Australian fiscal landscape. This is a temporary tax designed to take us to a full market for carbon emissions. That unleashes a slew of powerful market forces: market forces economising on carbon and market forces innovating.

To put it in terms that might be familiar to some in this place and possibly comfortable to the opposition, this is about tax avoidance, a subject I would have thought dear to some of their hearts. This is about a tax which governments want to be avoided. We want the big polluters, who have been having a free lunch at the expense of the rest for too long, to be engaged with the idea of avoiding this tax by economising and innovating. This is not an impost for the sake of placing an impost on large polluters; this is about changing the dynamics of our economy and ensuring that fundamental restructuring takes place.

The economics underlying this tax is very simple indeed. If you let the market rip and do not price pollution, you get too much of it. You get way too much of it. If you price pollution in the right way and then let the market rip, market forces are ignited to produce less pollution. That is the fundamental essence of a market based approach, and that is why economists across the country—indeed, around the world—would argue that the most efficient means to deal with carbon emissions is a market based approach. And I would argue that that is indeed what the government is doing with the legislation that is before the House.

Of course, if you attack pollution in the wrong way, the way in which I would argue that the opposition is proposing—this week, at least—big polluters are better off and householders are much worse off. If you price pollution in a better way, householders on average are no worse off. If you price pollution in the best way, our way, the way that is being proposed by the government, householders are overcompensated.

The government have recognised that it is important that we get these fundamentals right. But, as I said, of all the leaders of major parties in the last decade, Tony Abbott is the only leader to argue against the science and to argue against the economics of a market based approach. That, of course, is fundamentally a concern for this country because in the end we will be judged, in years to come, about where we stood on a fundamental reform for our economy and for dealing with environmental challenges like carbon emissions. I believe that this government, like Labor governments before it, is on the right side of history. Indeed, we were on the right side of history when we enacted the compulsory superannuation legislation, opposed by those opposite. We were on the right side of history when we supported the principle of universal health coverage and introduced Medibank and then Medicare; the opposition opposed providing health services to citizens of this country. They appear on this occasion to again be on the wrong side of history, as they oppose the most efficient means to reduce carbon in our economy.

I guess it is not entirely surprising that a coalition opposition would oppose superannuation and health in public policy; they are not enamoured with supporting working people and they certainly have not been ones to believe in a public health system for ordinary punters in this country. But the one area I am completely confounded by is their opposition to a market based approach, because the one brand, the one element, the one essence, of the Liberal Party is that that they are supposed to believe the market is the best mechanism to deal with fundamental reform.

It seems to me that, in order to be opportunistic and to put politics ahead of policy, the opposition—and Tony Abbott in particular—has chosen to turn Liberal Party philosophy on its head, to turn its back on a market based approach, to turn its back on the wisdom and counsel of economists and scientists, to support funding polluters at the expense of householders and to have the most inefficient means to bring about reform in this area. That is a shame.

I support the legislation and call upon this House to pass the legislation as soon as possible.