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Thursday, 3 November 2011
Page: 8104

Senator RYAN (Victoria) (10:43): The incorporated speech read as follows—

I thank the Senate for being granted this opportunity to have these remarks regarding the Clean Energy Bill 2011 and related bills incorporated into Hansard.

These bills represent the most significant repudiation of the Australian people in generations.

Despite making a clear, unambiguous promise not to do so only days before the last election, the Labor Party and their Green allies, with the connivance of certain opportunistic and so-called independent members of the other place, are attempting to levy a new tax on all Australians.

There was no qualification when the Prime Minister stated, directly into the camera, 'There will be no carbon tax under a government I lead.' And no justification has been provided for this breach other than the excuse that circumstances have changed.

It is a statement of the obvious that circumstances had changed, that is why we have elections—to allow the people to bring about that very change.

So when the non-elected Prime Minister led the Labor government to an historic defeat, losing a majority on the floor of the House after less than three years, that change was the result of the people rejecting the Labor agenda.

Yet Labor claims this rejection as a justification to cut a deal with ideologues who brag about rejecting the results of elections and opportunistic independents to see the introduction of the a measure explicitly and unambiguously ruled out.

When the trust of the voters is so profoundly breached, no excuse, obfuscation or parsing of words will succeed in washing away the stain that remains with this package of bills.

These bills will be the focus of the next election, as they should be, for the people have spoken—but their voice has not been heard.

Despite the attempts of Labor and their Greens allies to prevent the people's voice being heard with unfounded scare campaigns regarding the constitutional status of these bills; despite the threats of the Prime Minister and Senator Brown to oppose that voice being reflected in this Parliament; the Opposition is happy to let the people judge this policy.

As every student of Australian political history knows, repudiating the right of the people to determine major policies will only end in tears for those who do so.

These bills truly do represent an attempt to transform the Australian economy. But not in the manner the spin merchants of the government, nor the rent seeking interests that comprise the Greens and the modern-day Labor Party portray.

These bills put into place the aspiration of the former Prime Minister and current Minister for Foreign Affairs—they put government at the heart of the economy.

Through the imposition of new taxes, redistribution to preferred individuals and groups, the granting of concessions and economic privilege to select industries—government is truly inserting itself into our most basic economic activities.

The government and Greens, although from this point I might just refer to the government as they march in lock-step on issues like this, pretend it is not a tax, claim it is merely a price on carbon. Yet it is a tax with all the dead-weight costs that entails, until it becomes a trading scheme, with all the transaction costs that entails.

This is not a market mechanism at all—this is a fictional market, created and administered by bureaucrats, based on a so-called property that is not property in any traditional economic sense.

There has been a trend in recent years amongst the progressive left, to use so-called 'market mechanisms' to achieve social or other objectives that their previous commitment to planned economies failed at. Especially amongst the Greens, this is no more a commitment to the market than the commitment of the long-dead eastern European people's republics was to the human rights outlined in their constitutions.

On this side we believe the market is not important simply as a tool to achieve the most efficient outcomes, but it is also an expression of individual will and preferences. Despite the alleged commitment of those opposite to so-called market solutions, although I doubt both the understanding and level of commitment, no government, no group of bureaucrats can capture the expressed preferences of millions of individual transactions.

Similarly, no government plan can truly capture technological development. There is an old economists' saying, 'The stone age didn't end because they ran out of stones.' With respect to these bills one could add that it didn't end because stones were made more expensive by a stone tax. New energy technology will not develop because of this tax on what is today more efficient and less expensive.

Technological development occurs as a result of human ingenuity, it then diffuses and proliferates through the application of capital and labour. Good ideas succeed; expensive, inefficient and poor ones eventually fail.

This is how a change in our energy mix will occur—not through the unilateral action of a nation that represents a tiny proportion of global emissions. And not through government fiat that somehow, things shall simply change.

This government no more has the capacity to limit global emissions growth than it does to alter the weather. Yet the proponents of this legislation lack the humility to see the limits of their own knowledge or capacity.

One of the furphies of this debate is that somehow Australia needs to be a 'first mover' in the field of renewable energy, that somehow we have to develop and own the technology. While this has an emotional attraction it lacks a serious economic analysis.

As a nation with cheap, abundant carbon-based energy, Australia has a comparative advantage in the production of energy as well as its use. This comparative advantage has been one of the bases of our economic success.

There is no evidence that being a first-mover in this field has a major advantage. The economic costs that these bills entail are enormous—the dead weight costs of the tax and trading scheme, the opportunity cost by directing capital to less efficient uses.

Despite the duplicity of the government refusing the release the modelling for comparative work, and failing to admit the obvious—it cannot be denied Australians will be worse off with this tax than if these bills do not pass.

Throughout economic history since the industrial revolution, cases abound where the diffusion of technology has provided much greater economic benefits than those delivered to its developers or inventers. It is through the application of new technology on a wide scale that the major economic benefits occur.

Consider the development of railways, electricity, the telephone and information technology.

In all four cases the economic benefits flowing from the diffusion and application of those technologies across the world far outweighed the economic gain flowing to the initial inventers.

Indeed, it was often subsequent inventers that developed ways to diffuse the technologies and see them applied across communities.

This is not to dismiss the gains that can flow to inventers and developers—but it does mean that we need to determine the opportunity cost of directing resources into the development of preferred technologies.

It is at this point that these bills come particularly unstuck.

The idea that somehow Australia needs to 'own' new energy technology is based on an old mercantilist mindset. This is not to dismiss the efforts of those working in this field—they deserve every opportunity to do so. But it is 'opportunity' that is the key here. Weakening our economy, seeking to replace private effort with state effort, hinders rather than assists these efforts.

There is no agreement amongst economists that this is the best means to reduce carbon emissions. There has not even been a consideration of the opportunity cost of directing resources away from patently more productive activities.

In my maiden speech in this place I referred to the fatal conceit' that afflicted those with political power, a phrase not first coined or popularized by me but to which there has been no better application in this country in recent decades than the government opposite.

For through these bills this government is attempting to plan the economic development of Australia. For a government that could not organize roof insulation or the construction of school halls to claim a mandate and the credibility to undertake such a task requires a degree of hubris that would made Caesar blush.

Only a Labor government could boast about leading the world in the introduction of new taxes. The problem for the Prime Minister is that, if she looked behind her, she would realise no other countries are following. That may well be a parable for other political problems she is facing as well as she looks closer to home.

The Obama administration has shelved its plans for a cap and trade scheme. Despite some direct action on clean energy, China's coal-fired power production continues to soar, with a recent report finding that it is on track to exceed the United Kingdom in per capita emissions within a few short years. Yes, that's per capital

And the debacle of Copenhagen has shown us how absurd it is to hope for a binding global agreement on emissions reductions.

Ironically, by putting the Australian economy at a competitive disadvantage in relation to our competitors, the Prime Minister makes the prospect of a global deal still more unlikely.

Making energy more expensive through a carbon tax is not like free trade, where unilateral tariff reforms yield benefits even in the absence of reciprocal moves.

Any environmental effects of unilateral action are shared globally. Yet the costs are localised-only Australian businesses and households pay the tax.

The effect of unilateral action is thus to give our rivals a competitive advantage, one they would surrender if they joined us in taxing their businesses and citizens.

The only thing more absurd than wanting to be the lead lemming off the cliff will be our lonely, solitary descent when rival nations decide not to leap after us.

We know the Prime Minister understands how ridiculous this policy is. Indeed, it was the Prime Minister who persuaded her predecessor and putative successor, the Foreign Minister, to dump his own plan to price carbon. Why then does she pursue it?

Because the spin doctors of the Labor Party have told her that the real Julia needs to confect conviction, and the only way to do that is to champion an unpopular cause. Sometimes, however, causes are unpopular because they are wrong.

Like a drowning man grasping at driftwood, the Prime Minister is willing to latch onto anything. The carbon tax is wilful economic vandalism mimicking policy conviction.

Labor is bereft of ideas, bereft of governing philosophy and bereft of any reason for its very existence other than the retention of power and privilege.

It is willing to expend its political capital on a policy in which its leadership does not believe, simply because it has no genuine policy agenda to fill the political vacuum.

It is morally and intellectually bankrupt, so much so that it seeks to steal the wages and profits of Australian families and small businesses to bail itself out.

The modern Labor Party not only knows nothing about small business, it cares for it even less. I am passionate about my portfolio because small business is not just the heart of the economy, it is often the heart of our communities.

In the suburbs of our cities and in our regional cities and towns, it is the local small businesses that sponsor the footy and netball clubs, the neighbourhood watch programs, that provide the leadership of community organizations like Rotary and, in my home state, the CFA.

One of the various unfounded and misguided claims we have heard about this and the previous carbon tax is that somehow we have protected business, especially those who are export focused or import exposed.

But the truth is that this tax is another burden they must face.

How else could a minister simply telling small business that they must adjust to higher energy prices be explained? How else could billions be handed out to preferred industries, yet a paltry $40 million be allocated to fund what is basically an advertising campaign targeted at small business. This campaign is the equivalent of telling the frog in the slowly boiling water not to worry.

Thousands of small businesses will be hit by this, and all the government can say is 'deal with it.' How can a café on tight margins find the capital for new fridges, which will at best only keep its power bills from rising for a few years.

How can a small manufacturer, supplying components to a larger one, who is annually faced with imported competition face these additional costs?

The truth is that they cannot.

But this government does not care for small and family businesses.

They have no voice, they have no lobbyists to wander the corridors of power seeking favour. All they want is the opportunity to create, build and develop a business of their own. But Labor and the Greens do not understand this desire.

Despite Labor's attempts, and the threats of the Greens to ignore the people, the people will get to have their say on these bills.

Unlike the Labor Party, we will stick by our word—and as we promise to repeal this tax stained with dishonesty, we will do so.