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Thursday, 3 November 2011
Page: 8241

Senator WONG (South AustraliaMinister for Finance and Deregulation) (19:36): I think that anybody listening to this debate would not suggest that the opposition has not had a fair share of the debate tonight. Government senators have been very limited in their contributions. In relation to other senators, including Senator Milne, whatever Senator Macdonald's prejudices about the Greens, senators are entitled to participate in this debate. On fugitive emissions, Senator, I am just seeing what the case is in relation to other nations. What I do recall—and I will come back to you if I am wrong—is that you are correct that the European Union does not include fugitive emissions; however, they are regulated, which, as you know, is of course in itself the imposition of some sort of implicit price. I would also make the point that pollution from coal accounts for around one per cent of total emissions or less in the European Union and New Zealand, whereas I think it was around five per cent of Australia's carbon pollution in 2009. However, the government does recognise very clearly—and there was a lot of discussion about this—that there are a small number of gassy underground mines that have high-fugitive methane emissions. They will face an increased cost under a carbon price, and the government has allocated $1.3 billion to its coal package to provide assistance and to directly address the impact of the carbon price on these mines.

I emphasise that the vast majority of the coalmining industry is not emissions intensive and will not face materially increased costs under a carbon price. This is demonstrated in part, amongst other reasons, by Treasury modelling that projects that under a carbon price the coal industry will grow by 45 per cent. I would also refer the senator to the increased investment in the resources sector, which includes coal, over the last three years, and the $430-odd billion worth of investment in the pipeline. It is hardly an indication that there is a reduction in investment.

The Coal Sector Jobs Package is intended to directly address the impact of the carbon price on these mines. After taking into account assistance for gassy mines, the average impact of the $23 carbon price on all coalmines for their fugitive emissions is around $1.20 per tonne of coal.

I am also advised that recently Gujarat Mining released a statement claiming that their liability under the carbon price would be around $16 per tonne was a massively overstated amount and that the liability would be closer to $2.70 a tonne due to adopting strategies to reduce their carbon pollution. The company stated that this would not have a material effect on its future growth. There is plenty more information on that but I think I have responded to the senator's question.