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Wednesday, 12 August 2009
Page: 4765

Senator RYAN (6:43 PM) —I appreciate the Senate’s time is precious and I will not recite all the arguments that have been so eloquently explained by my colleagues, including my predecessor here, Senator Heffernan, with his discussion of the impact of the Carbon Pollution Reduction Scheme Bill 2009 and related legislation will have on agriculture. There are several issues I wish to highlight that go to the heart of the reasons as to why this is the wrong legislation at the wrong time, and it contains the wrong approach to dealing with this problem. I would like to state at the outset that this is a debate about this particular legislation; it is not a debate about climate change or the science underpinning it. The government’s constant attempts to confuse these issues only signal their own insecurity and their lack of faith in their own proposal.

First and foremost, these bills are a massive tax grab. The budget papers show that in 2011-12 in cash terms this government will collect just under $2 billion in extra taxes as a result of this legislation, rising to just under $12 billion a year later. In simple terms, this is a new tax. This is a new impost and it is not being undertaken in a revenue-neutral way, as previous tax changes have been. The government will use only half this revenue—or approximately that—in providing assistance to households. Apart from undertaking a massive churn of funds from the private to the public and back to the private sectors, with the associated economic dead-weight cost that that involves, this represents a huge new revenue stream for government. As we have seen this week, such a tax grab is not necessary to achieve these ends. It is the choice of this government to undertake it and it is consistent with this government’s approach: if it moves, regulate it; if it does not, tax it. This government sees the ETS as an opportunity for a dramatic and historic expansion in the role of government in the lives of all of us across Australia.

Secondly, this tax grab is directly related to the second major flaw in this legislation. Sadly, it is an issue all too familiar to the Labor Party and to those who have lived under their governments. For all the wrong reasons, it provides a massive opportunity for patronage. I thought that the governments had learnt from decades of misadventure and miserable failure that they should not try to pick winners in our economy. Governments are terrible at predicting the fruits of human innovation. But, with a third of the funds from this revenue stream going to industry assistance, the government is trying to do just that. And, as Senator Heffernan pointed out, the regulations that underpin the detail and the operation of these bills are also missing and we are apparently meant to await those.

But failing to pick winners with taxpayers’ money is not the worst of this patronage. That, I fear, underestimates Labor’s potential to use this very opportunity for its own sectional ends. When government has been granted the power of life and death over economic activity, over particular industries or particular businesses, this temptation has sadly proven to be too great, especially for the Labor Party. We only have to look up and down the eastern seaboard and at those Labor state governments to see what the opportunity for such patronage leads to, and it has been in the press lately: Labor ministers, Labor connections and Labor mates all having a covert influence over policy and decisions at the expense of the public interest. This legislation is unnecessarily interventionist. It taxes too much and it dramatically increases the role of the state in our economy. Whenever the government has the ability to make or break an industry or company, that is simply too much power. We have seen the changes the government has made to its own proposal over the last six months, and these very changes illustrate the power that the government is trying to accrue to itself to direct economic activity.

There is another concern I have with this, and it is about one of the justifications the government uses for this legislation. It is the saddest part of the legislation. It represents its betrayal of working Australians. It is the false hope of green jobs. Just like its Centre Left brethren around the world, the Labor government and Senator Wong recite the mantra of so-called green jobs as if this washes away the job losses that this legislation directly causes. Repetition and spin, however, will not wash away the broken dreams that this unemployment will lead to. It is this farce of so-called green jobs that lies at the heart of these claims. There may well be jobs created—and they may be created in new industries, including renewable energy—but at what cost will these jobs come? How many jobs will be lost as these jobs are created? The evidence is beginning to show that green jobs are a furphy. They may well be developed, but they will come at the expense of other jobs and they will provide no net benefit. A job that exists purely as the result of a public subsidy or that comes at the expense of another job is not a new job. Government created and funded jobs do not add to our economic wellbeing. They may benefit the select and lucky few, but they come at the expense of everyone else unless they add to overall jobs. So we need to be very careful about such claims.

Indeed, recent research out of Spain paints a very worrying picture. A study of the effects on unemployment of public subsidies of renewable energy sources by Gabriel Calzada Alvarez PhD from King Juan Carlos University in Spain outlined this in gruesome detail. In a chapter titled ‘The economics of artificial job creation: a calculation of the cost of green jobs on the rest of productive activity’, he outlined exactly how the creation of these green jobs has come at the expense of other jobs. Indeed, they depend upon the destruction of those other jobs. In the Spanish example, there was a cost of US$774,000 since 2000 for each green job that had been created through renewable targets and mandated targets. It is a cruel hoax to rely on the promise of green jobs as a basis for this legislation without being entirely frank to those in our community who will lose their jobs, to the cost of the rest of the economy and to the cost of thousands of families and individuals.

Debate interrupted.