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Tuesday, 11 August 2009
Page: 4555


Senator FISHER (9:49 PM) —I am no expert on what, if anything, is happening with our climate—nor am I any expert on, if something is happening, what might be the cause of it. There are plenty of others who do profess to be so expert. But the particularly interesting thing is that those who do profess to be so expert are unable to agree on what, if anything, is happening in respect of our climate and unable to agree on, if something is happening to our climate, the causes thereof and, in particular, the extent to which man is contributing to those changes.

We have a Prime Minister who is a self-professed policy wonk, a self-professed expert at developing policy, and he promised to deliver the Australian electorate evidence based policy. In the context of the government’s CPRS, that means, pretty simply, identifying the problem that his policy will supposedly fix, proving the cause of the problem and proving how his policy solution will fix that problem. That means, if he wants to introduce his CPRS, the Prime Minister must prove what is causing the problem that he says exists and show that his CPRS will fix it. He is not doing that.

Instead, the Prime Minister is proposing a CPRS that will cost jobs. It will export carbon without making any meaningful contribution to a global solution  Through his CPRS the Prime Minister is asking the Australian people to choose between lower wages and higher unemployment. It has been a little-debated point that, in order to maintain constant employment—which the government says its CPRS will do; it is saying that the Carbon Pollution Reduction Scheme will not jeopardise jobs—the modelling underpinning constancy in employment will assume a reduction in real wages over time. It assumes that real wages would be less than they otherwise would be were it not for the CPRS. Has the government told Australian workers that they will essentially take a cut in real wages over time in order to maintain jobs constancy across the economy? I think not.

Under questioning in the Senate economics committee inquiry hearing into the CPRS bill on 29 May, respected economist Dr Brian Fisher, formerly of ABARE, now of Concept Economics, said:

… what the Treasury has done is to make an assumption that, if we take the full economy, for every job that is lost in one place there will be another job of some description elsewhere.

He went on to say:

… to make that work what both the Treasury and I have done in the national modelling is to allow the real wages of workers to fall. We have held total employment constant, but to allow that to occur we have allowed real wages to fall.

What is happening here is that real wages have to be lower than they otherwise would have been to maintain everybody in a job. Nobody is being very forthcoming about that particular assumption.

So, in response to my question, ‘Both you and Treasury are saying that in order to stop job losses you are going to have to incur pay loss?’, Dr Fisher responded, ‘Yes, reduce real wages.’ Under questioning in Senate estimates, Treasury officials essentially confirmed this. Ms Quinn from Treasury, in response to questions on Wednesday, 3 June about the effect on real wages of the CPRS, said that real wages would ‘grow slightly slower than they otherwise would’. She went on to say, ‘but in all scenarios real wages continue to grow’, but the point is that Treasury have confirmed that real wages will grow slower than they otherwise would under the government’s CPRS in order to maintain jobs. Hence the choice for Australian workers is between keeping their jobs and having lower real wages.

The indirect costs of the scheme on business, especially agriculture, are significant and have been commented upon by others in the chamber tonight. They include the impact on dairy farmers, who could see their incomes falling by 1.9 per cent as early as 2011. By 2015 the effects on Australian broadacre agriculture could see falls in income of between 9.1 and 14½ per cent. So why is the government rushing ahead of the United States? Why is the government intent on rushing ahead of the Copenhagen negotiations? We are not a big carbon emitter. We emit a total of 1.4 per cent of global emissions. Yet it would seem we are intent on risking our economy by rushing.

Even if we accept that there is a risk that we should manage—because it does make sense to do what we can to improve the environment and lessen what might be man’s negative impact on the environment—it does not make sense to manage that risk by creating a CPRS certainty, a certainty that will cost jobs and export carbon without making any meaningful contribution to a global solution. It just does not make sense for those like Australia, who contribute amongst the least to global emissions, to sally forth and sacrifice the most domestically for negligible gain globally. It does not make sense for a small global player to go big or to go early. Indeed, we would be going so early that we could almost be going it alone, because there is no guarantee that the big emitters would ever join us—and, certainly, there is no guarantee that they would join us in the short term. The Rudd government’s CPRS is all Australian pain for no significant global gain. I will be voting against the bills.

Debate (on motion by Senator Conroy) adjourned.