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Thursday, 1 November 2012
Page: 8782


Senator CORMANN (Western Australia) (13:13): Over the past couple of years this Labor government, aided and abetted by the Greens, has done everything it can to push up the cost of electricity. By pushing up the cost of electricity, it has pushed up the cost of living and the cost of doing business across Australia. That is exactly what the carbon tax is designed to do. The whole purpose of the carbon tax is to make electricity more expensive so that people use less of it or so that other energy sources which are not as competitive become more competitive. Once it actually dawned on this government that what they had done was to impose a massive new tax which would push up the cost of electricity, push up the cost of living and push up the cost of doing business, they got frightened of their own shadow

That was because they realised there was another election coming. In the lead-up to the last election they said there would be no carbon tax under a government led by Prime Minister Gillard—but of course there is one. It manifestly has had an impact on the cost of electricity. In fact, the largest reason for electricity price rises now and moving forward is the carbon tax, according to evidence by this government's own department in front of Senate estimates. So here they were, having come up with a cynical distraction. Of course, the cynical distraction that the Prime Minister had sought to jump on was: 'Let's try and pick a fight with the states because it is really all the states' fault that electricity prices are going up because they are gold-plating their electricity networks.' The problem for the Prime Minister was that there was one truth teller left in this Gillard government. He is not very popular with his own people, by the sounds of it, but the federal minister for energy and resources, Mr Ferguson, was quite explicit when he said on the record, only vaguely hiding that it was actually a direct rebuke of the Prime Minister's assertion:

'The states do not control the regulatory authorities that set prices and any suggestion that they do has no basis in fact and is a cheap shot …

To be fair to Minister Ferguson, he was responding to some claims, assertions and arguments put forward by the Independent member for Lyne, Mr Oakeshott, but I am sure that it did not escape Minister Ferguson's notice that what he was saying was in direct and sharp contradiction of the politically motivated assertions and erroneous and false assertions made by the Prime Minister when it came to the question of who and what are responsible for the increases in electricity prices. He went on to say:

… the states might be getting good dividends but they do not determine the price setting rules …

Here is truth teller Minister Ferguson saying this. This would have stopped the Labor government in its tracks, because all of a sudden they would have realised this: 'Gee, we have got one of our own ministers in our own government, the minister with direct portfolio responsibility for these issues, saying that what the Prime Minister has claimed is the case is in fact not the case.' That would have slowed the enthusiasm of the government members on this committee—and of the members of the Labor government—from coming up with some more outlandish recommendations and findings, because they could not run away from the truth as it was put forward by Minister Ferguson. Let us be very clear: the whole point of Labor's carbon tax was to push up the cost of electricity and consequently reduce demand and the government's own carbon tax modelling stated:

Electricity demand is an important source of abatement in the early years, comprising over 40 per cent of the cumulative abatement to 2020.

Everything is happening according to expectations. The government's carbon tax modelling claimed that the carbon price leads to an average increase in household electricity prices of 10 per cent over the first five years of the scheme. That is not actually happening. We have had the 10 per cent increase and more but that has been in the first couple of months of the carbon tax. There is still more than four years to go, given that five years over which the carbon tax was supposed to have a 10 per cent impact. I refer you, Mr Deputy President, to the data released in the TD Securities-Melbourne Institute inflation gauge for the month of July where they stated:

Due to the introduction of the carbon tax from 1 July, the price of electricity rose by 14.9 per cent …

What is important to note here is that the carbon tax will continue to go up and up and up—at least if you are to believe the government's own modelling, because that expects what nobody else expects: in the last year of the current forward estimates the carbon tax will rise about $29 a tonne. In fact, Treasury officials and climate change department officials have said it is conceivable that it could be $50 a tonne. Overseas anybody who knows anything about this knows that the carbon price across Europe, which represents 95 per cent of the carbon market, has actually collapsed.

Let there be no doubt that this committee was set up as part of a cynical political strategy of the Prime Minister to try and divert attention from her direct responsibility for significant increases in the cost of electricity, the cost of living and the cost of doing business across Australia. She was trying to point to somebody else who was to blame. But, of course, the minister for resources and energy belled the cat when he did make it very clear that what the Prime Minister was now saying was not right. In fact, the Prime Minister has not always said this. Only a few years ago, back in 2010, Prime Minister Gillard was encouraging further investment in networks, observing that 'the current price rises in a number of states have been principally caused by a sustained period of underinvestment'. So what the Prime Minister was saying two years ago was that we should have more investment in network infrastructure. This government is all over the place. They know that people blame them for significant increases in the cost of electricity, and people are right to blame them because that is what the Labor-Green carbon tax was all about in the first place.