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Wednesday, 12 August 2009
Page: 4675


Senator JOHNSTON (12:19 PM) —The Carbon Pollution Reduction Scheme Bill 2009 represents for Australia the most significant economic upheaval in generations. The impact is by far more significant than any of the deregulating reforms of the Keating government and has more domestic impact than the GST reform of the Howard government. Indeed, this Carbon Pollution Reduction Scheme and its administrative, reporting and government revenue provisions completely dwarf—in fact, render diminutive—the costs and impacts of the GST and its implementation.

The government has, in pursuit of its climate change nirvana, set up a federal department, namely the Department of Climate Change. This department has cost Australians $2 billion. This department has no justification whatsoever without a world-class, credible and economically sensible cap-and-trade greenhouse gas reduction plan. The whole of the department is built upon the legislation that is currently before the Senate.

In furtherance of these objectives, the government has undertaken a green paper and a white paper and has retained the services of Professor Ross Garnaut, all at some considerable expense to Australians as taxpayers. The responsibility for this complex and very opaque legislation rests upon the shoulders of one person. The responsibility for the department rests upon the shoulders of this one person. That person, of course, is the minister, Senator Wong. Senator Wong also has national responsibility for water. Given the importance of this legislation—I pause to say that it is, as I have indicated, probably the most important legislation that will be before this parliament for this generation—and the value of the government and the taxpayer’s commitment to this plan, one would be entitled to expect that the responsible minister would engage stakeholders in a reasonable, courteous and engaging way, seeking to take those very stakeholders with her on this nationally very important journey.

The exact opposite has occurred. The minister has successfully established herself as the most dismissively arrogant of all ministers, not just in this government but in all state and federal governments. This is quite an amazing achievement and conforms precisely with her performance in the water portfolio. The minister has taken to new heights the alienation of industry, particularly the energy generation industry, the coal mining industry, the aluminium industry, the cement industry, the oil and gas industry and the agricultural industry. This is quite a crowning achievement for this minister.

The minister set about the task of initially disdainfully dismissing calls for a delay in the start date, branding those calling for a delay as sceptics and climate change deniers. She was wrong, and the start date for this legislation had to be put back, as we all have seen. She started out stating that the government would follow Professor Garnaut’s recommendations. She was wrong, and he has transformed to simply being one of a number of inputs. She started out saying there would be a 25 per cent 2020 target. She got it wrong again. Anyone with a concisely put, factual, contrary position is instantly dismissed as some form of heretic by this minister and as someone who is simply playing politics. We see this response, of course, daily at question time.

Broadly speaking it is crystal clear that this minister is not on top of this, the most important of briefs. That is not just my opinion; it is obviously the opinion of the Prime Minister. Why else would he have seconded Minister Combet, then just a mere parliamentary secretary, to hold her hand and provide a civil and courteous face to the implementation of this plan? The minister imparts no confidence in her capacity to deliver what is needed to achieve an effective legislative framework. Here we are today with a most important piece of legislation and she has not a friend in the world. The Greens are opposed to it, the crossbenchers are opposed to it and the opposition is opposed to it. The responsibility for that denial and the ultimate failure that this legislation will meet here and now is entirely due to one person, the minister. She has arrogantly thumbed her nose at everybody and taken nobody with her.

Keith Orchison, a former chief executive of the Electricity Supply Association, said:

It is the government—and especially Wong and her department—that, in the words of stakeholders trying to offer input, has been intransigent and arrogant, notably deaf to attempts to point out some of the biggest problem areas.

May I, Madam Deputy President, say this again: she has been intransient and arrogant, notably deaf to attempts to point out some of the biggest problem areas. Even ALP wordsmith Bob Ellis has said of the minister that she is ‘an Orwellian figure of comprehensive secrecy’. She has said to the National Press Club:

The Liberal Party can do this the easy way, or the hard way.

The only thing missing is the baseball bat accompanying that expression. This is not the politics, the ethics or the decorum of a minister entrusted with such an important responsibility. She has failed her party, the government and the parliament. That this important piece of legislation is the hotchpotch it is with not a feather to fly with and not a friend in the world is her responsibility, and she stands condemned for the failure that is about to befall that piece of important legislation. The minister is truly the only person playing politics with this legislation in this parliament, in this chamber.

The coupling of the RET with this legislation is just another example of this minister’s fixation on the politics instead of the national interest. The failure of this legislation is at her feet and she needs to go to her Prime Minister and apologise for its demise. And what of the minister’s scheme? The New South Wales Labor Treasurer Eric Roozendaal has written to the federal Treasurer setting out his ‘important concerns’ as to the minister’s legislative plan for the proposed emissions trading scheme in driving away investors in the electricity generation industry, damaging the value of coal-fired assets and posing significant regulatory risks. I pause to point out that the states have exclusive jurisdiction over the generation of electricity in our country and are in a position to know about investment and regulatory risks. Indeed, the New South Wales government has used the services, I pause to acknowledge, of Frontier Economics to assess the pain of Minister Wong’s scheme.

So it is that Premier Bligh has registered her concern as to the ongoing competitiveness of the Queensland coal industry. So it is that Mr Brad Page of the Electricity Supply Association says that the $3.5 billion in free permits is inadequate in the face of government modelling showing asset value losses of at least $10 billion. Of course the obvious follows, as Mr Page notes in the Australian:

What happens is that you inject enormous sovereign risk and undermine the confidence of debt and equity providers—the very people you want to invest in the low emissions future.

The minister has achieved the precise opposite of the objectives of this legislation. It is truly an amazing feat. Even Treasury officials have said that its modelling ‘doesn’t capture all the transitional elements’. What this classic piece of Canberra-speak really means is that Treasury does not know how many jobs will be lost as victims of this, the minister’s scheme. It should be noted that the livelihoods of Australians are reduced in the ice-cold reference of these Treasury bureaucrats to ‘transitional elements’. What a disgrace.

This government and particularly this minister simply take no prisoners. So what of the mining industry—the industry upon which all of this Canberra bureaucratic Disneyland is built and, more importantly, paid for? It is the mining industry of Queensland, New South Wales, South Australia and Western Australia that pays for this nirvana here in Canberra. Mitch Hooke, the Chief Executive of the Minerals Council has said that this scheme will shed 23,510 jobs in the minerals sector by 2020—mostly in my home state of Western Australia and in the state of Queensland—and more than 66,000 jobs by 2030. He said back in March:

We would much prefer that you adopt the same kind of approach that every other country in the world is adopting, that are introducing emissions trading scheme and that is a phased approach to full auctioning. That way you avoid the unseemly scramble over who’s in and who’s out and who’s carved out and who has and who hasn’t.

Ralph Hillman from the Australian Coal Association said:

Yes, people were very frank and saying the sort of things that I’m saying to you now, that the introduction of an emissions trading scheme posed major issues for the competitiveness of many Australian industries.

Woodside CEO Don Voelte said of the minister’s scheme:

It puts in jeopardy the industry’s LNG plans in Australia, depending again, let me say ... how the final outcome of this legislation comes out.

I pause to say that he was quite optimistic about some changes—a forlorn hope.

I want to quickly add that Woodside is all for an emissions trading system, but it has to be very carefully implemented to not make us uncompetitive, ’cause Australia’s going alone.

Frank Jotzo, an economist with the ANU, said:

And in a world that efficiently reduce carbon all over the world, you would actually see aluminium smelting going to those locations where you can use hydro electricity or perhaps gas right. You wouldn’t see aluminium smelting remaining in locations where it relies on coal.

The coal industry is our biggest export. To reduce the people working in the coal industry and their livelihoods and jobs to, in the words of Treasury officials, ‘transitional elements’ is, as I have said—and I repeat—a disgrace. The work, the employment, the livelihood, the bread and butter on the tables of these people should never, ever be reduced to the expression ‘transitional elements’. These are jobs; these are people. The minister has ignored all of that.

Ralph Hillman of the Australian Coal Association says:

Eighty per cent of Australia’s black coal is exported and we are competing with countries that are unlikely to take on targets for the next say 15 years. Our competitors are South Africa, Indonesia, Mongolia, Mozambique, Columbia, a range of countries like that that are not going to be taking on targets.

So we will be taking on a cost impost to the coal industry not borne by our competitors. That means that we become a less attractive place to mine coal and that means fewer jobs in coal mining in Australia.

Mitch Hooke, as I said, the CEO of the Minerals Council, says:

The big risk will be carbon leakage, in other words we will encourage investment offshore or activities business offshore to regions or countries where they don’t have the disciplines that we’re trying to invoke here in Australia and that we’re trying to get the rest of the world to follow our lead.

So here we have it: a government hell-bent on pushing ahead, hell-bent on proceeding with a scheme that does not have a friend in the world. Why would the minister not sit down with people who have taken the time and trouble to look at what is important and to look at the mitigation of the effects—to try to preserve the employment in this industry yet move to a cleaner, greener, cheaper outcome? Why would the minister simply say, within minutes of seeing the opposition’s proposal, ‘It’s a mongrel.’? The reason is that it fits perfectly with her conduct to that point: disdainfully rejecting every informed input, every complaint, in the most high-handed and arrogant of ways. I repeat: this very, very important piece of legislation, this important reform for Australia, will fail and the responsibility for that failure lies entirely with this minister, who herself has failed. She has failed her party, the government and this parliament in the way she has handled and brought forward this legislation.