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Wednesday, 9 November 2011
Page: 8640


Senator WILLIAMS (New South WalesNationals Whip in the Senate) (10:21): I rise to speak on the Steel Transformation Plan Bill 2011. The spending starts for the compensation for the carbon tax. There is no other reason this legislation is before the Senate. The government are well aware that the carbon tax passed through this place yesterday to the glee of many and the disappointment of others. They are well aware of the cost this carbon tax is going to have on our nation, including on the cost of doing business. I will say it again: if you strangle your business sector you strangle your economy. Business is where the nation's wealth is derived. Businesses employ people, those employed people pay tax and government, federal or state, gets the money to carry out their services, whether they be aged-care facilities or defence. It all comes from the business sector. The more we strangle our business sector here, especially those businesses that have to compete against competitors overseas where our exchange rate is damaging us, the cost of labour is far cheaper and the cost of energy is far cheaper because those countries have not decided to put a price on carbon and a cost on industries, the more we strangle our economy. Those businesses overseas do not face that; we do. Hence, that is why this legislation is before us.

I will turn to the cement industry. I am well aware that the cement industry is getting a 94.5 per cent discount on the carbon tax. I have raised this issue before in this chamber. We had 15 cement factories in Australia. One in Central Queensland closed up 18 months or so ago. A few months ago we heard the terrible announcement that Kandos was closing its factory, so we are almost back to 13. Kandos, I believe, employed 96 workers directly, and many of the truckies and the other businesses that survived and fed off the Kandos cement factory will feel that closure as well. In Australia we produce around 10 million tonnes of cement a year. When we produce a tonne of cement in Australia we produce 0.8 tonnes of CO2, that is around eight million tonnes of CO2 a year. China, that huge nation with its huge population, its huge growth of some nine per cent or 10 per cent a year and its exports growing enormously, produces in excess of one billion tonnes of cement a year. I said that we produce around 10 million tonnes a year; we actually import two million tonnes of cement as well. In China the average amount of CO2 produced in cement manufacturing is 1.1 tonnes of CO2 per tonne of cement. Comparing that to Australia: we produce 10 million tonnes of cement, with eight million tonnes of greenhouse gas, CO2, or whatever you want to call it. In China if you produce 10 million tonnes of cement you produce 11 million tonnes of CO2.

Here is the problem: if we shut down our industry in Australia, we will no doubt import from China our cement, those 10 million tonnes now being manufactured in Australia—of course, that production is on the slide as we have had one factory close and another announce its closure. We will see 11 million tonnes of CO2 produced in China, compared to the eight million tonnes that are produced in Australia. That is three million tonnes extra. I have said before that we do not have a tent over our nation. We are linked to the world in trade and in the atmosphere. Shutting down our industries and moving them overseas equals more CO2. If your goal is to reduce more CO2 that is simply not going to work.

The cement industry is going to receive a 94.5 per cent discount on the carbon tax. That will still cost the cement industry in Australia an extra $9 million. Industry cannot afford $9 million. I have met with the cement industry, I am sure people in the government have met with them, I am sure Senator Carr, the Minister for Innovation, Industry, Science and Research, has met with them. The cement industry cannot afford a tax of $9 million. Why? Mainly because of the exchange rate. I will take you back to why the Australian dollar is so strong. Look at the difference between our interest rate and those of most trading nations, those OECD nations, around the world. Most of their interest rates are almost at zero, while we have an official interest rate of 4.5 per cent. I welcomed the 0.25 per cent reduction on Melbourne Cup day. That was good news for battlers, for home loan borrowers, for small business and for farmers, although we have not seen any reduction in interest rates for small business or farmers yet. I have certainly been in touch with the four major banks to ask: 'What are you doing with your business loans?' We welcome the 0.25 per cent reduction from the Commonwealth and Westpac banks. It was only 0.2 per cent from the NAB, but that is still a reduction. Twelve months earlier when there was a rise of 0.25 per cent in interest rates, we saw the Commonwealth Bank raise its levels by 0.45 per cent and the NAB by 0.35 per cent. So we are getting some relief.

The interest rate differential is one of the reasons— it is not the sole reason—the Australian dollar is so strong. When people overseas are investing, are they going to invest and get 0.5 per cent or are they going to invest in Australia and get 4½ or five per cent? Sure there are exchange rate risks, and movements in exchange rates can turn everything pear shaped; I know that too well. However, this is a problem we are facing with industries. I will say it again: the cement industry—those 13 factories—cannot afford a $9 million tax if it is to survive. It cannot afford it. We will see more closures in this industry, just like in the steel industry.

We see that BlueScope and OneSteel are getting compensation through this legisla­tion. My colleague Senator Bernardi highlighted the share market and what the carbon tax has cost those companies. This is where we have a serious problem with this whole plan: the cost of doing business. I know the majority of households are going to be compensated; there will be three million households that will not be compensated. That may cover some of their costs in increased electricity prices and in increased fuel prices, as electricity is used in much of the processing and delivery of fuel.

We now see that we are going to have under this proposal almost seven cents a litre on the road transport industry. Any truck with a tare weight of 4½ tonnes or more will face some $510 million of extra diesel tax. There was a 38 cents a litre excise on fuel. The coalition, driven by John Anderson, former Nationals leader and Deputy Prime Minister, brought in an 18½ cents a litre rebate for the transport industry. Consequently, they would pay just 19½ cents a litre, the road user fee, to contribute over the damage to the road. The government has already taken almost 3½c of that rebate off our truckies. On 1 July 2014, they plan to take almost another 7c off our transport industry. Where is the compensation for our transport industry? In regional Australia we need the trucks. Our rail system has been depleted. We should have invested in our rail system instead of pink batts and school buildings that are mainly the responsibility of state governments anyway. We could have put that money into the Brisbane to Melbourne train line, even up to Gladstone. We could have developed better infrastructure to make our country more productive and more competitive. But, no, we wasted so much of it.

Senators opposite have been laying very low on the diesel rebate, because, as I said yesterday across the chamber to Senator Sterle, there will not be a truckie vote for the Labor Party or the Greens come next election. You cannot put $510 million of extra cost on our truckies. I do not know if the transport industry would even make that much profit right across Australia. I do not know what the profits of Toll or Finemore or the smaller companies are, but I would doubt that they would make that much profit in total. I know that the transport industry is a tough industry with huge costs, and it has been since the seventies when I was driving in the transport industry. And we are going to put more costs onto our truckies. As I said, there will not be a truckie out there, especially an owner-driver, who will support the Greens or the Labor Party come next election, because they do not want that extra $510 million tax on their fuel.

Senator Polley: Is that from your crystal ball? Is that your prediction?

Senator WILLIAMS: I will take that interjection. That is what is in the plan that the Multi-Party Climate Change Committee came up with. It will add a tax of almost seven cents a litre come 1 July 2014, and our truckies will have to pay that. I am sure you are familiar with it, Senator Polley. There is only one way we can prevent that tax being put on our truckies: have a change of government at the next election, because the coalition will not inflict that extra cost on our transport industry. All that would do is add to the cost of getting our exports from regional areas to the ports. Where I live, we do not have a train line. Everything comes into the town by road. Everything goes out by road.

The next point that I wish to talk about concerns our abattoirs. We are so grateful to have an abattoir in the town of Inverell that employs more than 600 people. It is worth a huge amount of money, not only through wages being spent in local businesses but also through the transport that brings the cattle to the abattoir and the refrigerated trucks that take the meat to the waterfront and to domestic consumers as well. Further, the fact that we have Bindaree Beef bidding in the stockyards each week puts a floor on the cattle price, which then feeds into the regional communities. That puts money into regions to keep their local economies viable. And we are going to impose a $1.74 million cost on this abattoir in the first year. That was the evidence that our Senate Select Committee on the Scrutiny of New Taxes heard at Tamworth: a $1.74 million cost. And yet their competitors in America will not have that cost.

They are striving to compete against America. The home of subsidies for farmers is either in Europe or America, and our industries have to compete against them. Those abattoirs in America, which are pursuing our markets in South Korea, Japan and many other countries, do not have those costs. If you remove the competitive edge of our trade-exposed industries you remove the jobs in those industries. That is what of great concern about this whole tax proposal.

It is through this place now. For that we can thank the betrayal of the Australian people by those opposite and those who were complicit in that betrayal—namely the member for New England, Mr Tony Windsor, and the member for Lyne, Mr Rob Oakeshott. They were complicit in the break of the promises made by and the breach of the words given by the Prime Minister and the Deputy Prime Minister, Treasurer Swan. Those two Independents played a major role in this. When it comes to seats in parliament, those seats do not belong to the politicians but belong to the people and the people will have their say come next election.

I want to talk now about the issue of certainty. The reason for the carbon tax was to bring certainty so that business could invest. And I welcome Senator Conroy to the chamber. We know that the carbon tax come 1 July next year will be $23. I was hoping Senator Conroy would stay for this speech, because I know what a great fan he is of this carbon tax. We have not seen him speak on it; we have not even seen him vote on it. He is like Senator Collins and Senator Feeney: they were absent with leave, because they did not want to be part of this whole debate yesterday.

Getting back to the idea of certainty, what will be the price of carbon in 2016 or 2017? Will it be $8 a tonne? Will the scheme have been shut down around the world, seeing that other nations are not taking up emissions trading schemes? Will it be $80 a tonne? We do not know what the price of carbon trading around the world will be in five years time. And that is supposed to deliver certainty? That is what is so uncertain about the whole policy: no-one knows what the price will be. It is a bit like asking what the Australian dollar will be trading at in five years time. You can have a guess. It will probably be somewhere between 40c and $1.40—a big range—but we do not know for sure. No-one knows for sure: it depends on the sentiment of the market, the buyers and sellers. What will be the price of carbon? We do not know. This is the certainty that was supposed to be delivered to Australian businesses and investors: we will not know what the price of carbon will be. That is why this whole scheme is so crazy.

The bill that we are debating is about the steel industry and compensation for only two companies. Where is the compensation for the states? Where is the compensation for the state of New South Wales? As people would be well aware, in New South Wales the coal fired generators are owned by the state. I still say that it was against the Constitution to introduce this tax, when section 114 clearly states:

... nor shall the Commonwealth impose any tax on property of any kind belonging to a State.

To me, that is black and white in the Constitution, but they will weasel their way around that, I imagine. I do hope the states take a challenge to the High Court on that very issue.

But when you consider companies like Macquarie Generation, owned by the New South Wales government, which produces 40 per cent of New South Wales' electricity, they are going to be up for about $550 million in carbon tax a year—their profit is gone! Their profit is currently $125 million, which goes to the state of New South Wales to help run our Police Force, our hospitals, our schools; and to build our roads and those other services that people depend on. But that money is going. So where is the compensation for New South Wales? Is it any wonder Mr O'Farrell, the Premier of New South Wales, announced an increase in royalties in the mining industry to make up for the money the state is going to lose? New South Wales this year has a budget deficit of $1 billion in their forecast, and then into the black at last. I know how tight it is for state governments—and for local governments—to run their budgets, to have enough money to deliver their services, to maintain their roads and everything else we insist on. But where is the compensation?

We have compensation for the steel industry, for two companies. What about the cement industry? What about the abattoirs? They would receive some $150 million over six years, but most abattoirs will not qualify for that anyway.

And where is the compensation for local government? If their landfills exceed the emissions of 25,000 tonnes, look at the cost to local government. Already, Tamworth Regional Council have announced an extra $300,000 for electricity. But in New South Wales we have rate-pegging, so they cannot increase the rates. They can increase the rates on their water and sewerage, and perhaps make a bit of a windfall there to compensate them, but it just means that people pay again. It is back to the people; it always comes back to the people to pay. The cost of living will go up—more than what the predictions say, I can assure you.

That is why this whole package has just been one big mess. You think you are going to reduce carbon dioxide. What are we on—386 parts per million? I would like to know what this carbon tax will do to the atmosphere. How many parts per million of CO2 will we have in the atmosphere in 10 years' time? We will have a lot more than 386 million. Just take China: they will produce 10.3 billion tonnes of CO2 this year. Under Australian Treasury's forecast—not opposition figures plucked out of the sky—China will produce 17.9 billion tonnes of CO2 by 2020. They will go up by 7,600 million tonnes a year. We are going to go up by 43 million tonnes. I wonder what the actual parts per million of CO2 will be by 2020? We are on roughly 386 million now. It is not going to be less than 386 million.

And the Greens are claiming now that it is carbon dioxide that has caused the cyclones and the floods. Well, there are going to be more later on—cyclones and floods have been around for thousands of years, just like climate change has. The climate has been changing for thousands and thousands of years—and will continue to change, regardless of what we do. But now, of course, here is a money-grab by the federal government with this carbon tax, handing out the gifts to try to keep industry alive. We have lost 105,000 jobs in manufacturing in the last three years. We will lose more.

But now, of course, some of the money might even be to pay for the advertising campaign coming up, which is going to convince everyone that the government has done the right thing, being led by the Greens and the Independents—that what the government has done is correct. It is crazy. If the government were to come up with a decent environmental policy I am sure it would be supported all around this chamber.

The biggest asset we have, and the greatest asset to nurture in this country, is our land, our soil, that grows our food—not only feeding millions of Australians but millions of people around the world. That is the greatest resource we need to look after. That is why our direct action policy is solely directed at incentives to the farmers, working with the farmers; not like the Kimberley Maxwell Yeadon stage of the early days of the Carr government. One of his staffers, by the way, was none other than Senator Penny Wong! That is where she learnt her hatred for those on the land: from the infamous Kimberley Maxwell Yeadon. Remember John Laws? He would be up him every day—Kimberley Maxwell Yeadon, the jumped-up shop steward. That is where this comes from: the Left of the Labor Party and the hatred for the man on the land and the families who work it. So now you understand why Senator Wong thinks like she does and where it comes from. This is a bad policy. If we win the next election, it is going.