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Thursday, 3 November 2011
Page: 8100


Senator BUSHBY (TasmaniaDeputy Opposition Whip in the Senate) (10:28): What an appalling thing we have just seen. We have seen Labor and the Greens combine to put a gag on a gag and to shut down debate on these bills in this place. Some weeks, if not months, ago the government parties—Labor and the Greens—voted to put in place a planned guillotine on this debate. The hours for the various stages of the debate were set down in advance with a time imposed for votes on each stage regardless of the need for further debate or consideration of the consequences of the single most massive government intervention in our economy ever contemplated in this country. The impact of this on the ability of this place to do its job as a house of review by cutting off the legitimate examination of the bills and their impacts and not allowing full consideration of the proposed amendments and so on was bad enough. But today we have seen that that timetable is to be slashed on short notice. This means that many senators who have their names on the speakers list will lose their opportunity to speak on the second reading debate. It also means that the time for consideration of the details and to assess the need for amendments has been more than halved, again meaning that the prospects of these bills being improved and presenting as the best possible legislation that they could be has been severely curtailed. The legislation was expected to be put to a vote by 21 November. However, the government has brought forward the vote to next Tuesday.

The government refused to give the community a say on the carbon tax at the last election by promising not to introduce it. Once more, the government is shutting down debate. The government is desperate to ram through this legislation because it knows that it is electorally unpopular. It wants to limit debate, because the more the carbon tax is debated and the more people want to understand how it will impact on their lives, the more people want to get rid of it. Instead of ramming the carbon tax through the Senate, the Prime Minister should take the bills to an election as a matter of urgency and decency.

Yesterday, before my comments were interrupted, I was responding to the interjections of government senators about core and non-core promises. I was saying that after the 1996 election the new coalition government found that the Keating Labor government had misled the public about the state of public finances. The fiscal position was nowhere near as rosy as the then Labor government had presented prior to the 1996 election—so much so that many of the promises made by the coalition in the lead-up to that election based on their under­standing of the amount of money that was available simply could not possibly be delivered. This was not because the will was not there to do so but because the money was not there, a fact that only became apparent upon the coalition assuming the Treasury benches.

Accordingly, Prime Minister Howard had to prioritise those promises and identify those that were core to his program and those that were not. It was an agonising decision for a new government but one that was forced on them by misrepresentations by the previous Labor government. The promises were made in good faith but because of the deception of the previous Labor government could not in good faith be kept. There is very little good faith in either the promise made that there would be no carbon tax under a government led by the Prime Minister or in Labor's unseemly haste to abandon that promise in order to hang on to power after the election.

Similarly, the GST is a different case again. In that case, Prime Minister Howard went to the people to seek a specific mandate to introduce the GST, having released comprehensive detail on how it would work prior to the election. Compare this to the current Labor government's approach. The only mandate that they have is not to introduce a carbon tax, a mandate that they have blatantly rejected in order to do a dirty deal to hang on to power.

But let us set aside the incredible and blatant breach of public trust that this involves. What of the bills themselves? Will they solve the climate crisis? To what extent will they help reduce temperature- and climate-changing man-made emissions? Will they contribute to improved environmental outcomes? And can they do this without undermining the strength of our economy and costing Australian jobs? The reality is that these bills will not achieve any environmental benefit but will come at great economic cost and Australians—real people—will lose their jobs.

Proponents of the bills tell us that those who are opposed are wrong to object on the basis that Australia should not go it alone. They say that we should lead and show the rest of the world the way and that, as one of the world's highest emitters of carbon dioxide and equivalent gases per capita, we have a moral obligation to take action. Very noble indeed. But is it noble to take action that will simply shift emissions offshore at the cost of Australian jobs? Is it noble to take action that might mean Australia emits less than we might otherwise have done if it does not reduce the overall emissions across the world? I think not.

If the government is to be believed, the problem presented by climate change is clearly and without doubt a global one and only a global reduction in emissions can address it—that is, if there is no net reduction in global emissions to keep CO2 down to the specified parts per million, then the doomsday predictions of flood and pestilence will eventuate. So how noble is it to take action on Australian emissions that does not guarantee a net global reduction and, worse, that is likely to actually increase global emissions? It might help government and Greens senators to sleep better at night because Australia has done its bit, but has it actually contributed to addressing the problem? I think not.

I was very careful a minute or so ago to talk about how these bills are intended to reduce emissions from where they might otherwise have been. This was deliberate, as it is important to remember that, even under the government's own modelling, the implementation of these bills will not actually reduce our total emissions. Indeed, Treasury modelling shows our emissions continue to increase throughout the period modelled. The bills are intended only to slow the growth of those emissions.

Even with carbon pricing, the government's own predictions show our emissions going up from 578 million tonnes to 621 million tonnes, leaving an abatement shortfall of up to 100 million tonnes, which is going to have to be met by purchasing permits from abroad. That is right: the way that the government will reach its emissions reduction targets is by buying carbon credits from offshore at a cost to Australian taxpayers of billions of dollars. Australian businesses will have to spend more than $3 billion a year purchasing abatements from abroad and this is just when the scheme starts. The government's own modelling shows that the value of permits will rise to the value, in 2010 dollars, of $57 billion in 2050. Incidentally, these will need to be purchased by Australian companies, and the secretary of the Department of Climate Change and Energy Efficiency, Mr Comley, has acknowledged that the cost of these billions in international permits will be passed on to all Australians by those companies.

It is absolutely clear now that major economies like the US, India, China and Canada are unlikely to introduce as far a reaching carbon pricing scheme as the one we are debating here today, if at all. Recent statements by international leaders, like the Canadian foreign minister, confirm this as fact. Lightweight arguments posed by the government and its senators in this place that other nations have a price on carbon—a shadow carbon price, I think Senator Wong has called it—without a specific carbon tax or ETS are 'own goal' arguments that just serve to bolster what we are saying, which is that there is more than one way to reduce emissions. Despite that, given the lack of equivalent carbon pricing and trading schemes in our competitor nations, it is difficult to imagine where all these carbon credits are going to come from. If, by implementing a carbon pricing scheme in Australia that goes so much further and harder than anything even contemplated elsewhere—and that includes the European Union, New Zealand and individual states in the United States—we cannot reduce our emissions enough to domestically meet our targets without buying credits from elsewhere, how are other nations going to produce surplus credits that they can sell and still reduce their emissions? How will their approach to carbon dioxide and equivalent reductions deliver them enough abatement to meet their targets and have surplus when our heavy, comprehensive scheme still allows our emissions to go up? It may add up on the unknown but apparently highly favourable government assumptions in the Treasury modelling, at an Australian level, but it just does not seem to add up at a global level. I remind you, it is ultimately irrelevant how it adds up in Australia: it is at the global level that the problem exits and at the global level that the problem must be addressed.

That fact highlights again the main problem with the scheme proposed through these bills: in the absence of coordinated global action—at least amongst those nations with whom we compete on imports, exports and import and export substitution—adding extra costs onto the cost of doing business in Australia can only make Australian businesses less competitive compared with those located elsewhere. This may mean that Australian businesses choose to up stumps and set up in lower-cost alternative locations. It may mean that Australian companies can no longer compete against cheaper imports. And it may mean that Australian goods and services exporters can no longer compete against competitors from other nations.

The potential for reduced comparative advantage as a direct result of this tax, and the flow-through of the higher costs it imposes on everything that has an energy or transport cost, is real. It will add costs that would not otherwise exist and which are not imposed by our competitor nations. It will be the straw that breaks the camel's back for many of our businesses and will force cost savings in other areas for many others just to survive—cuts leading to losses of jobs that will be replaced magically by 'green jobs' in Australia but will be replaced by even higher-emissions jobs in our competitor nations.

The net effect on emissions will be like squeezing a balloon—and the bit that is squeezed is comparable to Australia. Emissions might be less than otherwise; but they have just been forced into another part of the global balloon—so, for the production of like for like, emissions will increase. I have heard examples in this place and across Australia of how the production of a given amount of aluminium, zinc, steel, cement clinker and so on can be achieved with far less carbon dioxide and equivalent emissions in Australia compared with elsewhere, particularly compared with nations where they are likely to be produced when the carbon tax shifts that production offshore.

The fact is that Australian industry has become very efficient over the past 10 to 15 years at doing what it does in terms of its carbon dioxide emissions. I have seen evidence of massive improvements in all sorts of industries. As such, we are world leaders in emissions efficiency in many emissions-intensive industries. For example, we can produce a tonne of aluminium with fewer emissions than anywhere in the world except for Japan. But if it that tonne of aluminium is shipped from Japan to Australia then, by the time it arrives here, the emissions involved will exceed the emissions that would be produced if that tonne had been produced in Australia. This makes Australian-produced aluminium, if it is used in Australia, the most globally efficient in terms of emissions.

Clearly, to address the emissions challenge at a global level, it is better that we produce that tonne in Australia. But this tax will make that far less likely and may well render it impossible. And it is not like we do not need aluminium, or steel or concrete or zinc. They will all still be produced, just elsewhere—employing people other than Australians and with the consequence of higher emissions at a global level.

I have said in this place before, and I say it again: if we are serious about addressing the climate change challenge at a global level—where, I remind you, it must be addressed, we should be looking to attract more high-emissions-intensive industry to Australia because, in many cases, every extra tonne produced here means lower emissions released into the global atmosphere. We should be looking to set our policy settings at a level that encourages emissions-intensive industry to set up in the location that leads to the lowest possible emissions per unit of production. If that means setting them up in Australia, we should not shy away from that fact. Of course, chasing more emissions-intensive industry because we can produce here with lower emissions would increase our emissions per capita—and that would not be a look this government would want. But it would make sense in terms of reducing global emissions and actually tackling climate change head-on.

The approach taken in these bills is simply not the answer to the challenge of climate change. If Australia is to do its bit—if it is to lead the world and show the way—it must come up with a scheme that will effect an absolute reduction in emissions in a global sense. The coalition's direct action plan does just that: it delivers an absolute lockup and reduction of harmful greenhouse gases, not just a token slowing down of growth of emissions at the expense of higher emissions elsewhere. The government's plan of shifting emissions out of Australia just does not cut it, especially if Australian jobs go with them.

When members of this place are considering a set of bills that will have such a far-reaching impact and consequence as these purport to do, it is vital that we have full disclosure of all information available to be able to make fully informed decisions, properly understand intended and unintended consequences and be able to prudently test the contentions of the government. The government has failed dismally to provide senators in this place with the information to be able to do that. The bills should be rejected.