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Tuesday, 14 August 2012
Page: 5063

Carbon Pricing

Senator SMITH (Western Australia) (14:36): My question is to the Minister representing the Minister for Climate Change and Energy Efficiency, Senator Wong. Is the government considering any changes to the operation of the carbon tax that would increase the effective price paid by liable entities from 2015, compared with the prices they would currently expect to be paying after 2015?

Senator WONG (South AustraliaMinister for Finance and Deregulation) (14:37): I assume that the good senator by that question is referencing various newspaper reports rather than—

Senator Birmingham interjecting

Senator WONG: Actually, I think it was the Financial Review, but I am happy to say 'the Australian', if you want, Senator Birmingham!

The PRESIDENT: Order! Ignore the interjections, Senator Wong. Just continue on the answer.

Senator WONG: It is a very broad question, but certainly in relation to the floor price the government have made clear that we have undertaken extensive consultations. We have certainly received a number of submissions regarding the operation of the floor price. Earlier this year the government released a discussion paper on possible options for implementing the floor price, and no decision has been taken on this issue because we are still consulting with interested parties.

Of course, if the senator is concerned about high prices, we know that the highest carbon price that could be imposed on the Australian economy is that which would be imposed should Tony Abbott ever be in a position to implement his policies. We know what that would mean: a $1,300 a year tax on every Australian.

Opposition senators interjecting

Senator Brandis interjecting

Senator WONG: How sooky sooky la-la again, George! You don't want—

The PRESIDENT: Order! Senator Wong, resume your seat.

Senator Brandis: Mr President, I rise on a point of order. On the issue of direct relevance, it was, as the minister said, a broad question. But even the breadth of that question did not extend beyond asking whether the government was considering a particular measure. Where the senator is going now has no bearing on the question of what the government is considering.

The PRESIDENT: I do draw the minister's attention to the question. The minister has 52 seconds remaining.

Senator WONG: It was a broad question. I can tell the senator that the government is not considering imposing a $1,300 per year impost on Australian families, unlike his party. I can tell the senator that the government is not considering taking back the tax cuts that we have provided. The government is not considering reducing the pensions and the family tax benefits that we have put in place to assist with the carbon price. All of those things of course are being not only considered but committed to by the Leader of the Opposition and those opposite.

Senator SMITH (Western Australia) (14:40): Mr President, I ask a supplementary question. Does the government stand by its budget projections that under current rules the carbon price will be trading at $29 in 2015-16 and will generate $6.7 billion for the government?

Senator WONG (South AustraliaMinister for Finance and Deregulation) (14:40): The government undertook very extensive modelling which underpinned the budget projections. That modelling was, of course, very extensive Treasury modelling which was based on estimates of long-term developments and international carbon markets as well as the assumption, consistent with government policy, that we would link with markets from 2015-16. The fact is that we put out there the government's package, including the very extensive modelling, and that has formed the basis not only of the budget but of the policy costings. The government always updates its costings in the usual way, which is something those opposite do not do. The government updates its costings in the usual way in the budget and in budget updates, and that is the approach the government will be taking.

Senator SMITH (Western Australia) (14:41): Mr President, I ask a further supplementary question. Is it not the case that the carbon tax looks increasingly likely to plummet to its floor price when the fixed price is removed in 2015, and that the government is currently looking for ways to protect its revenue base from a major collapse? Why won't the government be upfront and honest with the Australian people about the major flaws in its carbon tax model?

Senator WONG: Taking a lecture on being upfront about their policy from those opposite, who will not even let me deal with their policy at all in question time, is really a little rich. The question is in fact a hypothetical. The government has laid out its policy, we have provided the Treasury modelling and we have been clear and upfront about the international linking that we are assuming in the budget and in the policy. We were upfront about that. Of course, the senator may not know that the party that opposes linking, thereby driving up the carbon price, is his party.

It is the sort of Barnaby Joyce approach—

Senator Abetz interjecting

Senator WONG: The Senator Joyce approach. 'Senator Joyce to me'—that's right! I will be very respectful, thank you, Senator Abetz! It is Senator Joyce's approach that the Liberal Party are adopting, which is that they so do not want to acknowledge there is a global economy that they do not even want to link when it comes to carbon, which will impose a great cost on Australians.