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Wednesday, 12 August 2009
Page: 4757

Senator MARK BISHOP (6:14 PM) —Before recommencing my contribution to this debate I should very briefly acknowledge the remarks of the Minister for Defence, Senator Faulkner. They were indeed considered and thoughtful remarks and I look forward to reading the more lengthy statement when it is tabled and available in Hansard. I have two principal reasons for offering congratulations to the Minister for Defence: firstly, because of the intrinsic importance of the topic under discussion—that is, our continuing role in Afghanistan—and, secondly, because it is my view, more generally, that the more that matters are put into the public domain concerning defence outlays and expenditure and its roles the more there will be continuing public support for government activity in this area.

Returning to the topic under discussion before I was interrupted, I was developing an argument that there is huge interest in this bill. It is intrinsically different from a whole range of other legislation we have been discussing in this place for many years. The government is about reducing the level of emissions put into the atmosphere in this country and around the world. In the context of the debate, community concerns are of great consequence. I made the point that reform to date of a regulatory nature has been ad hoc. Key areas that have been attended to in the past and will be critical into the future are air, water and soil. I was about to turn to the issue of cost as part of the reform process and how this bill is centrally part of that ongoing reform process.  As I was about to say, the nub of the issue now is one of cost.

We acknowledge at the outset that the cost with climate change is indeed very significant. It is well accepted around the world that the basic policy is the polluter pays. This is a simple discipline which has its basis in the need for the cost of goods and services to fully reflect their real costs. We know that its operation is highly imperfect and that often the subsidies, real or intangible, are hidden, often deliberately so. For the consumer, most goods and services already contain some of these costs.

As the application of that discipline is gradual, it is barely noticed. The most obvious is the rapidly increasing cost of waste disposal. Even the humble car tyre incurs a cost after use. The difficulty however, is one of scale, and in the case of the scale is absolutely enormous.

Looking back some of us may remember the controversy over the introduction of lead-free petrol. It was billed as a means of clearing the atmosphere in our major cities and it was indeed, at that time, a significant cost to industry. Those costs included more sophisticated refinement of fuels, new distribution facilities and changes to the engineering of all the internal combustion engines which drive our motor vehicle fleet. The oil industry was aghast —notwithstanding the experience overseas in Europe and the United States. The motor industry complained about it too, even though they knew then that the technology existed. The consumer of course battled with the allegations of these vested interests.

In the end, we weighed up the costs and the benefits and accepted that the obvious benefits, which we currently enjoy, were worth paying for. The economy successfully absorbed the cost and now it is not even remembered. The effect is we see blue skies again in our cities. The arguments brought by the vested interests, understandable from their narrow business point of view, now seem trivial. That is exactly where we are currently on the bill before the chair. Additionally, the reform proposed is more than a simple regulatory approach focusing on specific emissions. It is a scheme which is systemic, all-embracing and integrated into the economy, consistent with the sound principle of user pays. It accepts there is strong global and domestic consensus and indeed many governments are heading right down the same track.

The real questions, as many have alluded to, are ones of timing and scheme design. With respect to timing, when there is radical change, there is never a good time—except, of course, that prevarication and procrastination, which are the key tools of the nay-sayers opposite, are simply not tolerable any longer. Even the convenient excuse of the current state of the world economy does not look much like it is going to continue holding up. The scheme design in fact recognises the need for industry and the community to adjust to the new regime. The targets set are modest—deliberately so. Equally, the pricing regime is flexible. The whole scheme is designed to establish the basics with minimal threats and then to progress over time to a more robust model. By then we will have gained our own experience and be able to learn from the experiences of others. We can come to better understand these costs, the practicalities of implementation and the need, I am sure, for ongoing research. That should include the links between carbon releases, global warming and climate change.

This evidence needs to be bolstered because the risk is, if Australia is relieved of serious drought, the matter might disappear off the radar. That is a possible result of standard, short-term thinking to which governments must not succumb, particularly in this difficult area of public policy. For some this is a brave new world. I have tried to show today that it is not. It is simply nothing more than a continuation of past policy, in a more holistic and integrated form than we have previously known and, of course, on a larger scale.

It does not preclude in any way continuing ad hoc regulatory reform of the kind I referred to earlier. In fact, I suspect some of that is going to be essential. We need to recognise a market model such as this scheme will have its own imperfections, as market models do. We do not know all the possible impacts, domestically and internationally, as our predictive capacity is somewhat limited by experience. However, the consensus around the world is that a start must be made. The time for procrastination is over, and leadership is demanded.

For my own part, the issue of most concern is the comparative disadvantage new costs might impose in the short term on our international competitiveness. We need to make sure that the developing world, as well as China and India, realise quickly that they too must invest as we propose to do. If they do not act as good citizens of the world their own environmental circumstances and their own populations will indeed mandate that they do act in such a way in due course. China, it must be said, is at least already showing some recognition of this domestically, and other external pressures will obviously shortly come to bear. So the critical matters for me are: firstly, to ensure that the scientific rigour continues to be applied to the basic propositions underpinning this scheme, simply for its own internal credibility; and secondly, to ensure that the cost structures are closely monitored so that Australian industry is allowed to adapt without losing its competitiveness. Ultimately, this model has to be self sustaining. For those who prefer procrastination, the burden will be theirs. And, may I add, it is excruciating to watch the sheer stupidity of those opposite, who after all this time and through this continuing debate still prefer not to offer any real alternatives. At least the National Party understands what straddling a barbed wire fence means. I commend the bills to the Senate.