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Thursday, 15 September 2011
Page: 10305


Mr GIBBONS (Bendigo) (12:44): I rise today to speak in support of these bills, which give effect to important parts of the government's Clean Energy Future plan. I would like to make four points about this plan. The first concerns the carbon price itself—who pays it, how it works and how the government will use every cent of the revenue raised to help households, support jobs and invest in clean energy programs.

The second is that we will be providing $13.2 billion for clean energy projects, including investing in renewable technologies, such as solar, wind, wave and geothermal. The third is about the energy efficiency measures for small business, councils and community groups that will help them to become more sustainable and reduce the costs of essential services like power and water. The fourth is the agriculture and land sector package, which will bring economic benefits to farmers and other land users who reduce pollution or can store carbon on their properties.

But before I go any further on this it is worth remembering why we need to put a price on carbon in the first place. We know that most Australians accept that climate change is real, and that human beings are contributing. In May this year the Climate Commission released a report called The critical decade, which provided the strongest evidence yet of these facts. It showed these things. Global temperatures are rising faster than ever before, with the last decade being the hottest on record. In the last 50 years, the number of hot days in Australia has more than doubled. Sea levels have risen by 20 centimetres globally since the 1800s, affecting many coastal communities. Another 20-centimetre rise by 2050, which the scientists warn is likely, would more than double the risk of coastal flooding. The Great Barrier Reef has suffered from nine major bleaching events in the past 31 years, where previously it had experienced none. And it is now beyond reasonable doubt that excess carbon dioxide in the atmosphere—caused mainly through the burning of fossil fuels—is triggering the changes we are seeing in the climate. Scientists also warn that a rise of more than two degrees Celsius in global temperatures will result in dangerous climate change and more intense weather events like droughts, floods and cyclones.

Of course, there is a strong economic argument too. Professor Ross Garnaut, who was commissioned by Commonwealth, state and territory governments, has advised that pricing carbon through a market based mechanism is the cheapest way to cut carbon pollution. It also is the most effective way to turbocharge Australia's renewable energy sector, creating new jobs and new business opportunities.

We have enormous potential to grow our solar, wind, wave and geothermal technologies because only about eight per cent of Australia's electricity is generated from renewable sources. This compares poorly to a country like Spain, which has similar amounts of wind and sunshine, where the figure is closer to 35 per cent. And just recently, China has announced a new feed-in tariff scheme designed to increase its solar generated energy ten-fold in the next five years. But, above all, a clean energy future is about protecting future generations of Australians—by ensuring we have a strong and competitive economy and a healthy environment in which our children and their children can live.

Currently, Australia produces more carbon pollution per person than any other country in the developed world. And while we are responsible for just 1.5 per cent of the global emissions in absolute terms, that still puts us in the top 20 highest carbon polluters in the world—with countries like the United Kingdom, Italy, France and New Zealand. We are also one of 89 countries, including China and the United States, that account for 80 per cent of the world's greenhouse gas emissions and which have pledged to cut emissions under the United Nations.

No country can do this alone; we all need to do our fair share. This is why British Conservative Prime Minister David Cameron recently congratulated our Prime Minister on the 'strong and clear signal' that our Clean Energy Future plan sends, saying it 'will add momentum to those, in both the developed and developing world, who are serious about dealing with this urgent threat'.

These are some of the reasons Australia needs to act now on climate change by putting a price on carbon. This is the most effective and cheapest way to cut greenhouse gas emissions. From 1 July next year about 500 of Australia's largest polluters will be have to pay for every tonne of carbon pollution they emit into the atmosphere. It is important to emphasise that this is a direct charge on polluters, not on individual households, small businesses or farmers. Therefore it is not a tax in the true sense of the word. Members opposite have been peddling this myth for months and months, but this is not a tax; it is a charge on the biggest polluters in the nation, who will be the only ones to pay.

The starting price will be $23.00 a tonne. This will rise by 2.5 per cent in real terms over the first three years before we move to an emissions trading scheme under which the market will set the price. Putting a price on carbon pollution sends a signal to these big polluters that they will no longer be able to pollute the atmosphere for free. And because these companies will want to find ways to reduce this new cost many will choose to invest in cleaner technologies, creating new jobs and business opportunities. So we will get less carbon pollution, a healthier environment and new jobs and investment in renewable and other clean energy industries.

The government has released Treasury modelling showing the average impact of a carbon price on everyday goods and services will be about $9.90 a week—a modest 0.7 per cent of CPI. By way of comparison, when the Howard government introduced the goods and services tax, CPI shot up by 2.5 per cent. A 0.7 per cent rise works out to be about 80 cents extra a week on the average grocery basket, and about $3.30 a week on the average electricity bill. And it is important to note that petrol for passenger and light commercial vehicles will not be subject to a carbon price.

Because we do not want low- and middle-income earners to bear the burden of these price impacts, we will be using more than half of the carbon price revenue to provide assistance to nine out of 10 Australian households—that is, to the people who need it most. This assistance works out on average to be about $10.10 a week, meaning almost six million Australian households will get help to meet any costs passed on by industry. This includes more than 50,200 people in my electorate of Bendigo who will receive assistance through income support payments, such as pensions, and family assistance payments, such as family tax benefit.

Almost 30,000 pensioners in Bendigo will receive an extra $338 in their pension payments per year if they are single, and up to $510 per year for couples combined. More than 1,700 self-funded retirees holding a Commonwealth seniors health card will receive the same as pensioners, and may also be eligible for tax cuts or the low-income supplement. More than 5,000 Bendigo jobseekers will get up to $218 extra a year and $390 a year for couples combined. More than 3,400 students will receive up to an extra $177 a year. More than 2,800 single parents will receive an extra $289 a year. And everyone earning up to $80,000 a year will receive a tax cut, including 47,000 people in Bendigo. Of these, 39,000 will receive a cut of at least $300 a year. We are also lifting the tax-free threshold from $6,000 to $18,200, meaning an additional one million people will not have to fill in a tax return after this financial year. When this is combined with the low-income tax offset, people will not have to pay any net tax until their income exceeds $20,542.

The rest of the revenue coming from the carbon price will be used to support jobs in high-polluting industries that are exposed to international competition and also to support clean energy programs. Many businesses and unions, including those in steel and aluminium manufacturing, have welcomed the $9.2 billion of help we are providing to trade exposed industries. We have reassured coalminers that their industry will continue to grow under a carbon price and we are supporting those gassy coalmines that emit much more carbon pollution than other operations with a $1.3 billion support package. This will provide the financial assistance necessary to help these industries transition to cleaner energy production.

The second element of the government's plan is a significant investment in cleaner energy projects. We support a price on carbon because it is a market based mechanism that will change the behaviour of companies that currently rely on high-polluting energy production. When making investment decisions, companies will look to cleaner energy technologies to pollute less and get their operating costs down.

The government will also establish a new $10 billion Clean Energy Finance Corporation to drive private investment in clean energy technologies. This will operate in a similar way to the UK's Green Investment Bank by providing loans, guarantees and equity to help commercialise renewable and clean energy technologies. The corporation will be independent from government and be run on a commercial basis, with each project going through a rigorous assessment process.

An Australian Renewable Energy Agency will also manage another $3.2 billion in research and development of clean energy technologies such as solar and wind. This new agency will bring together programs and funding from several government departments and will help in making early-stage projects more commercially viable.

The government will also be calling for tenders to close 2,000 megawatts of high-polluting electricity generation, but, importantly, no generator will be turned off until alternatives are in place to ensure the continuation of power supply and the right support is in place for affected workers and regions.

The third element of our Clean Energy Future plan is about helping local communities cut their own pollution levels and reduce energy costs. Many households, businesses, local governments and community organisations in central Victoria are already doing great things to reduce their energy use. Under our plan, there will be $330 million for competitive grants for local councils and communities under the Low Carbon Communities program. It includes a Low Income Energy Efficiency program that will offer up to $100 million in grants to consortiums of local and state governments, community organisations, energy retailers and energy service companies to help low-income households reduce their energy costs, and a $30 million Household Energy and Financial Sustainability Scheme that will help about 100,000 low-income households better manage their energy consumption. Small businesses with turnovers of less than $2 million will also be able to get immediate tax deductions for new assets costing up to $6,500—up from the current amount of $5,000.

There will also be an additional $40 million of funding under the Remote Indigenous Energy Program. This will build on the successful Renewable Remote Power Generation Program by giving Indigenous communities access to cleaner, more affordable and reliable energy sources such as solar, rather than the heavily polluting diesel operations on which they have been relying.

By adopting more energy efficiency measures, households will be able to cut their energy bills, which will also help reduce the impact of any price flow-on from energy retailers.

The fourth element of the Clean Energy Future plan is the agriculture and land sector package, which will bring significant benefits and opportunities to people living in rural and regional Australia. First, carbon emissions from farming have been excluded entirely from the carbon pricing scheme. This means farmers, forestry operators and other land managers will not pay a direct price for the carbon pollution their activities generate. Second, farmers and other landowners will be able to access commercial opportunities through the Carbon Farming Initiative—a new scheme that will provide economic rewards for those who cut pollution or can store carbon on their land.

This initiative will allow land managers to earn credits, from which they can generate income, for taking action such as reforestation and revegetation, reducing methane emissions from livestock, reducing fertiliser pollution, and native forest protection. A new biodiversity scheme worth almost $1 billion over the first six years will also be established for projects that protect the outcomes of carbon farming.

These, then, are the four primary elements of the government's plans to move Australia from an economy reliant on high-polluting energy production to one ready to embrace a clean energy future. And these plans are in stark contrast to those proposed by the Leader of the Opposition. Under the government's plans, big polluters will pay and individual householders will receive assistance. Under the opposition's plan, ordinary taxpayers will be asked to subsidise big polluters so they can buy credits to offset their pollution levels. This means the big polluters can keep on polluting.

Under the government's plan, around 160 million tonnes of carbon pollution be cut from the atmosphere by 2020—the equivalent of taking 45 million cars off the road. This means we will reach our five per cent reduction target. Under the opposition's plan, emission levels will be higher in 2020, meaning they will have no chance of meeting their reduction commitment.

If we are to see real action on climate change, if we are to be competitive in a low-carbon global economy, if we are to provide a future for our children and grandchildren that will enable them to prosper in a healthy environment and with a strong economy, then we need to pass this legislation. I strongly support this bill and urge every other member of the parliament to support it.