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Wednesday, 27 June 2012
Page: 4671

Carbon Pricing

Senator WILLIAMS (New South WalesNationals Whip in the Senate) (14:33): My question is to the Minister representing the Minister for Climate Change and Energy Efficiency, Senator Wong. Minister, given the Gillard Labor government said agriculture would be excluded from the carbon tax, I refer the minister to a report released yesterday by business analysts IBISWorld, which finds that the carbon tax is set to increase the cost to Australian farmers by $3.7 billion. IBIS concludes that intense global competition among food manufacturers will make it difficult for our farmers to pass their rising production costs on to consumers. Given our farmers already face an unlevel playing field due to the huge subsidies and tariffs granted by overseas governments to their farmers, why is the government making it even harder for Australian farmers by introducing the world's biggest carbon tax?

Senator WONG (South AustraliaMinister for Finance and Deregulation) (14:34): I did not catch the first part; I think it was the IBIS report. I will make a couple of comments in terms of the advice I have from Minister Combet. This is modelling which overstates the impacts of the carbon price. It does not consider the impact of government assistance programs and it assumes no improvement in the emissions performance of farms or downstream processes. We would refer you, Senator Williams, to the modelling undertaken by the Australian Treasury, which takes into account changes in the prices received for Australia's agricultural exports as well as cost changes. When these important effects are taken into account, Treasury modelling shows that output from Australian agricultural industries will continue to grow by 12 per cent between now and 2020 and by over 130 per cent by 2050.

The senator would probably also be aware—I think he might have asked me about it previously—of the detailed modelling and the impacts for carbon pricing by the Bureau of Agricultural and Resource Economics and Sciences released late last year, which shows that at most the carbon price would have a 0.37 per cent impact on the cost of dairy farmers per unit, about 0.9 on wheat farmers and 0.26 per cent on sheep farmers. These numbers do not take into account the benefits of the Clean Technology Food and Foundries Investment Program, which I spoke about yesterday and which is there to leverage the productivity benefits and cost reductions to food processors across the country. I would suggest to the senator that he would do well for the people he represents if he were not part of making claims which are not backed up by facts and referred people to the assistance that the government is also providing.

Senator WILLIAMS (New South WalesNationals Whip in the Senate) (14:36): Mr President, I ask a supplementary question. Given the IBISWorld report finds that dairy farmers will face the biggest impact from the carbon tax because they will pay more to operate their milking sheds and refrigerate their milk, why is the government making life tougher for Australian dairy farmers by introducing the world's biggest carbon tax?

Senator Nash interjecting

Senator Brandis interjecting

Senator WONG (South AustraliaMinister for Finance and Deregulation) (14:37): Yes, apparently you did not quite get your line right—Senator Brandis is correcting your line, Senator Nash, so you might want to have a little caucus meeting, because we know what doormats the National Party are.

Opposition senators interjecting


Senator WONG: Tell us about preselection in the seat of Hume, Senator Nash.

Opposition senators interjecting

The PRESIDENT: Order! Order! Senator Wong.

Senator WONG: Tell us about what is happening in Hume. Are they going to roll you over again?

The PRESIDENT: Order, Senator Wong.

Senator Brandis: Mr President, on a point of order: Senator Wong is a serial offender when it comes to avoiding addressing the question by abusing senators who were not even the questioners.

The PRESIDENT: There is no point of order. I was about to draw the minister's attention to the question. The minister needs to answer the question. Minister.

Senator WONG: As I said, ABARES estimates that electricity is about two per cent of dairy farm cash costs. This means the carbon price impact on electricity prices would be about 0.2 per cent of farmers' cash costs. Some dairy processors will be directly liable under the carbon price, but the government is also assisting businesses to lower emissions and improve efficiency. I again refer the Senate to the $200 million Clean Technology Food and Foundries Investment Program. The program has received significant interest from the sector, and I am advised that, on Thursday, 17 May, Dairy Australia was named as one of the recipients of an Energy Efficiency Information Grant. I would also refer the senator to comments from Fonterra—and I might come back to that—about the preparations that that company has been making to reduce its carbon footprint. (Time expired)

Senator WILLIAMS (New South WalesNationals Whip in the Senate) (14:38): Mr President, I ask a further supplementary question. Given that the Labor government will impose a $3.7 billion hit on Australia's agricultural sector, how much does the government expect the temperature of the globe to change in exchange for making life tougher for Australian farmers?

Senator WONG (South AustraliaMinister for Finance and Deregulation) (14:39): Firstly, the $3.7 billion figure that was given is not correct, for the reasons that I think I outlined in my first answer. Secondly, if the senator does not believe that action should be taken by this country on climate change, he should wander down to the House of Representatives and have a chat to the Leader of the Opposition, who has committed to the same reduction as the government, only his plan will cost more. It will cost the people who are left—you—and every household in Australia $1,300 every year. Same objective, higher cost—

Senator Brandis: Mr President, I raise a point of order. There was only one question: by how much does the government expect global temperatures to change? The minister has not even approached that question.

The PRESIDENT: The question was broader. The minister is addressing the question and has 25 seconds remaining.

Senator WONG: It is the same amount as your policy, but our program will cost less. I know the National Party probably did not pay attention, but you are signed up to the same environmental outcome except you have signed up for more tax for your constituents: $1,300 for every Australian household every year. Worse than that—and the National Party should care about this—it means the Liberal Party have imposed on you a tax hike for all income earners. (Time expired)