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Wednesday, 12 August 2009
Page: 4643

Senator FIERRAVANTI-WELLS (9:48 AM) —I rise to make a contribution to this debate on the Carbon Pollution Reduction Scheme Bill 2009 and related bills, with a particular focus on their impact in the Illawarra. In complex debates such as the one we are currently facing, careful scrutiny is vital. It is vital because we face what is without doubt the biggest deliberate structural change ever to be considered to our economy. I find it deeply concerning that the government is desperately rushing to legislate such a complex scheme in a manner which suggests an utter disregard for jobs and Australian industry. Even by the government’s own assessment, the cost to the economy and employment will be significant. Other nations have acknowledged the full consequences of introducing emissions trading schemes and are treading with noticeable caution. The Labor government appears to be leading us on a path which will export jobs and emissions because of the massive tax on electricity, which will make key regional industries uncompetitive.

As those before me have suggested, by definition we are dealing with an issue of global significance which can logically only be solved with a global solution. As Mr Turnbull explained in his second reading speech:

… we have to recognise that, because of the global nature of this problem, if we reduce emissions in this country but in doing so cause emissions to increase somewhere else, there is no environmental benefit.

At the very core of this debate we must acknowledge that the scheme alone is not conducive to a global reduction in emissions. The timing of the government’s approach is concerning in itself. However, what is more significant is the fact that this ill-conceived plan will achieve no net gain while resulting in significant job losses right across Australia.

I will not seek to reiterate many of the points already uttered by my colleagues. I feel it is crucial that we frame this debate on an emissions trading scheme around its potential impact on jobs, the economy and the regions. As a senator based in the Illawarra region of New South Wales, I am constantly reminded of the important role that export industries play in our economy. The Illawarra is a region built around an industrial port that supports tens of thousands of jobs. Wollongong and the Illawarra will bear the brunt of any emissions trading scheme, a fact not lost by the Illawarra Mercury, which has been giving prominent attention to this debate and adequately expressing residents’ deeply held concerns over prospective job losses.

As was discovered through the Senate Standing Committee on Economics’ inquiry into this bill earlier this year, BlueScope Steel, the main employer in the Illawarra, has identified that the scheme threatens to erode tens of millions of dollars from the company’s books within the first year and has the potential to threaten the viability of the 12,000 jobs that its operations support. It is no wonder then that many Illawarra residents—and let me remind you that this is a region traditionally considered a Labor heartland—are now crying foul that the one-time party of the workers appears to have lost touch.

As one person commented in response to an Illawarra Mercury article in April this year: ‘Champagne socialists the lot of them—they are not the working person’s party anymore.’ Many other residents have uttered similar sentiments. It is evident that this government is creating a climate of fear amongst Illawarra residents, whose livelihoods are so reliant upon these crucial trade exposed industries. A closure of the steelworks would mean the loss of 4,700 jobs at Port Kembla amid the loss of 12,000 jobs supported by steelmaking activities within the region. It is concerning that the government has embarked upon such a complex scheme without addressing the concerns of so many vulnerable Australians such as those living in fear in the Illawarra. It is as if in this government’s haste those people’s legitimate concerns and questions go unanswered. As the Illawarra Mercury editorial of 2 April posed:

The question now for the Federal Government is whether throwing 12,000 people in the Illawarra onto the unemployment scrapheap is worth the price of what is likely to be only a notional gain for the environment.

Under the Howard government, in June 2006, we experienced a smaller-scale problem when global operations and demand led to the unfortunate closure of a plant at Port Kembla resulting in 250 job losses. Fortunately, we were able to immediately announce a $5 million Port Kembla industry facilitation fund to assist structural adjustment of the Port Kembla area economy. This program was without a doubt a success. It was able to foster industry growth and minimise unemployment in the region. Nevertheless the stark reality is that any prospective job losses from this proposed CPRS will make it immensely difficult for many of the people who lose their jobs to move into other employment. As we found in June 2006, these people possess specific skills and often find it difficult to move into other employment. The problem is compounded by the fact that this scheme is being proposed amid a global financial crisis and rising unemployment whereby there are few employment opportunities for these workers to transition into.

I would like to raise some of the deep concerns that have been expressed by Illawarra residents through letters to the editor. For example, Phillip Motbey wrote on 2 April 2009:

Australia only produces 2% of the world’s carbon emissions and to introduce this radical scheme in the middle of a global recession would be economic suicide because the Carbon Pollution Reduction Scheme creates an enormous impost on industry, throwing hundreds of workers onto the dole queues. This is the government whose mantra is ‘jobs, jobs, jobs’ and yet the very nature of the CPRS destroys jobs because it creates an unwanted tax on industry just when they are trying to maintain their quotas in productivity for the sake of the economy and full employment.

Dave Cox wrote on 6 April 2009:

It is all right to come up with ideas about ways to save the planet but someone had better give serious thought about ways to save the livelihood of the people that live on it as well.

I believe this proposed scheme and the manner and timing in which it is being introduced will export jobs overseas. The fears and apprehensions felt by the people of the Illawarra are justified as they know full well that they stand at the forefront and will face the full brunt of this job-destroying scheme.

The coalition has given careful consideration to an alternative to this flawed scheme. The Frontier Economics report commissioned by the coalition and Senator Xenophon demonstrates that the Labor government’s scheme will unnecessarily drive up electricity prices, destroy jobs and expand the size of government in Australia. It is now time that the Labor government pushes its ego aside and sits down at the negotiating table with opposition and minor party senators and other stakeholders to design a more effective scheme. This is vital not only to provide certainty to those workers in the Illawarra but also so that the government can confidently say that they are acting in the interests of all Australians.