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Tuesday, 1 November 2011
Page: 7722


Senator COLBECK (Tasmania) (12:13): It is a pleasure to rise to make my contribu­tion to the debate on this package of bills, but the first thing that I would like to mention and reinforce is that we all know that this whole package of legislation is built on a huge political lie. That political lie is owned by every single member of the Labor Party, and that lie is, 'There will be no carbon tax under the government I lead.' Senator Singh, who has just preceded me, would be one of the key beneficiaries of that lie, having been narrowly elected at No. 3 on the Tasmanian Senate ticket on the basis of it.

Senator Bushby: She wouldn't have been there otherwise.

Senator COLBECK: You are right: she very well may not have been there otherwise. So Mr Sidebottom, Mr Lyons, Mr Adams and Ms Collins—all the House of Representatives members in Tasmania—own that lie just as much as Prime Minister Julie Gillard owns the lie, 'There will be no carbon tax under the government I lead.' Senators Sherry, Urquhart, Polley, Bilyk, Carol Brown and, of course, Senator Singh, who has just left the chamber, all own that lie just as much as the Prime Minister does.

That is one of the reasons that the Australian community is so angry with this government. They were misled by the Prime Minister before the election not once but twice: six days out and then again the day before, when the attraction of votes in a very close election was so crucial that the Prime Minister was prepared to come out and say, 'There will be no carbon tax under the government I lead.' We know there is some question as to whether she is actually leading the government—there is a strong perception amongst a lot of people that the Greens are really leading the government—but the Prime Minister wears the mantle. Every single member of the Labor Party and all of those Tasmanians I have mentioned are equally culpable. They all own the lie just as much as Julia Gillard does. There were plenty of signs and photographs of Julia Gillard at polling booths around Tasmanian during the election campaign. In fact, in some cases there were more photographs of Julia Gillard at polling booths than there were of the local members who were seeking election. So there is no question that they were using the image of Julia Gillard and her promise that there would be no carbon tax under a government she led as part of their election campaign last year.

I want to talk more broadly about the general investment message for this country that this package of legislation sends out. The government members all talk about certainty, but one thing that is quite clear is that, in the way this government has been managing its efforts over the last three or four years, they have generated something that I have not heard in the lexicon of Australian comment for a long time, and that is 'sovereign risk'. With their mining tax and their carbon tax there is such uncertainty about their financial management of the economy, the pink batts scheme, the school halls debacle. All of those things are combining to generate a real perception around Australia that it is a sovereign risk for investment. It was interesting to talk recently to a northern European company that was looking to invest in Australia. When they were told that we were opposing the carbon tax and would repeal it, it gave them much more confidence about the sensibility of what might be occurring in this country as far as policy was concerned. They, despite all the words that we have heard from other senators in this place—particularly those on the other side of the chamber—about what is happening in Europe, are not happy about additional cost and were much comforted by the fact that we might be considering repealing the tax, as Tony Abbott has quite properly promised to do.

When you look at the actual impact of the European scheme on their economy compared to the impact of the scheme that is being proposed by the government here in Australia, you get a strong understanding of why that company was comforted. The European scheme has a very minor effect on their emissions-intensive, trade-exposed industries. Their export industries are very minimally impacted. In fact, their scheme, as Senator Humphries said earlier, raises about half a billion dollars per annum. Our scheme will raise $9 billion per annum. Over the first 6½ years of the European scheme it raised $4.9 billion. Over the same period, Australia's will raise $72 billion. You talk about the impact on the economy and why countries are concerned about investing in Australia. You are having this huge hit placed on the economy that is not being imposed on other countries around the world. We heard the Canadians only last weekend saying that they are not going anywhere near this.

But we know—because the Productivity Commission report says so—that we are about the middle of the pack at this stage The government tries to give the impression, and the Greens certainly do too, that we are not doing anything. We know that we are already playing our part. The Productivity Commission report says that we are about the middle of the pack as far as our efforts in reducing carbon emissions are concerned. Then, when you bring it down to the price per taxpayer, the EU figure is $1.53, the US figure is about $6.50 and in Australia it is $391 per taxpayer per year. That is an extraordinary impost on the Australian economy at the taxpayer level. Even the raw numbers—half a billion dollars per year through the European scheme and $9 billion for the proposed Australian scheme—really say enough.

The previous speaker, Senator Singh, spoke of Tasmania and its hydroelectric scheme. What she neglected to say was that the Tasmanian government no longer buys any of its energy from the hydroelectric scheme; it buys all its energy from a Queensland-based power company on the national grid because it is cheaper to do so. That is fine. But when you sit down to talk to that company and talk about the potential cost impacts of this scheme in that contested market where companies are buying larger chunks of power, often raw, and are therefore paying a lower unit price for the energy—somewhere around 9c to 11c per unit—the 2.5 base-price increase for energy that is going to come on across the country is a much larger percentage increase to your energy costs. You are talking a 25 per cent to 30 per cent increase in your costs. These are the sorts of energy increases the Tasmanian government is about to suffer because of this legislation, which their federal counterparts are about to support and put through. We all know the perilous budget condition that is occurring in Tasmania at the moment, so you wonder where the cuts are going to have to come from to compensate for this. We have just seen $100 million carved out of the health sector in Tasmania, with elective surgery lists cut in half and all of the concern about that running through the Tasmanian economy, but what about the additional cost that this is going to impose on the Tasmanian government because of the way that they are purchasing their energy at the moment?

Look at the general figures, where the government says that there will be a 10 per cent increase in the cost of power for general consumers. That is about right, looking at the numbers. The 2½ cents represents about 10 per cent of the 25.132 cents per unit that Aurora Energy advertises on its website today as the cost of general power to the home consumer in Tasmania. I can see that that 10 per cent is the general number which is going to impact the local consumer. What about the larger power users who buy their power through the contested market? They buy it raw. The percentage increase to a lot of them is going to be much, much bigger. A Queensland energy company told me that they have about 250 customers in Tasmania who they sell energy to. They are all going to be subject to a much higher energy price increase, and there is no compensation for them. So these medium sized businesses are going to pay a much higher energy increase. I have done a little bit of work this morning on a couple of them. One of them has an energy bill of about $1 million. At 10 per cent that is a $100,000 increase in their energy bill for nothing. There is no compensation or assistance for that business. They are a vegetable processor—part of the growing fresh vegetable processing sector in Tasmania—and they are starting to employ quite a few people. If it is 25 per cent, their bill goes up $250,000 because they are in that contested market. Another one, which is also in the contested market, has a power bill of $600,000 a year. At 10 per cent it is $60,000 and at 20-plus per cent it is over $120,000. There is no compensation for these businesses.

Another example is the large business Simplot, which is a major buyer of vegetables for processing in Australia and is based on the north-west coast of Tasmania. They are about to spend $17 million on a co-generation plant to convert from coal. Based on a promise from both the government and the opposition at the last election, they are getting $3 million to assist them with that co-generation plant. But, even after they have spent $17 million to convert their energy type, they still face an extra $1 million a year in energy costs after this piece of legislation is passed. They will spend $17 million but they will still have an additional $1 million energy bill based on this legislation.

Then, of course, we go back to the dairy and the farming sector generally. There are farmers in some of the irrigated dairy businesses who have power bills of $200,000. They will be adding another $20,000, $30,000 or $40,000 a year onto their energy bills. Of course we also know, because the modelling tells us so, that they are going to take a hit back from the processing sector. Dried milk powder is about 30 per cent energy. It is very energy intensive to manufacture dried milk powder and 30 per cent of its cost is energy. The modelling tells us that, on average, there will be about $10,000 per dairy farmer in costs back to the farmer from the processing sector—so they take a double whammy.

The government said that they put in the Carbon Farming Initiative to provide assistance to the rural sector, but the regulation and the design of that package is so bad that there is very, very little assistance to the rural sector. In fact, the National Farmers Federation said that you cannot even put in a windbreak under the Carbon Farming Initiative. That is one way you could actually sequester carbon—by planting trees in windbreaks on farms—yet, because it is 'common practice', you cannot undertake that under the government's Carbon Farming Initiative. So, despite what they say about their intentions, the practical application of this legislation is not going to do what the government claims.

Then we come to the forestry sector, which is the one sector in our whole economy that can play an important role in sequestering carbon. The blind prejudice against forestry that exists, particularly among the Greens, cuts out opportunities for this sector to provide positive prospects. Biomass, for example, can create energy at the rate of only four per cent of the emissions of coal. You could generate an extra 3,000 gigawatt hours of energy in this country today using biomass without touching another twig; without harvesting another tree. But, because of the blind prejudice of the Greens, this has been struck out of this package of legislation. It is just absurd. The government say they want to reduce our carbon intensity. Here is an opportunity to do that. Biomass is recognised as a renewable energy.

The WWF and the European Biomass Association have a target for all OECD countries of 15 per cent of their entire energy being produced from biomass. So the WWF is on board with Europe. European countries will have 15 per cent of their energy coming from biomass. The last time I looked we fitted into that OECD category, yet here we are completely ruling it out. The lifecycle figures show that biomass produces energy at four per cent of the emissions of coal. The government's decision is absolutely absurd and is based on the blind and ridiculous prejudice of the Greens. So I go back to the comment that I made earlier about who is actually leading the ship at this point in time.

In regard to the impact of this legislation on regional Australia, the government's broad modelling says that the impact on the economy will be less than one per cent. When I recently spoke with some constitu­ents on King Island, where the Prime Minister visited on her way to a conference in Hobart recently, they did not believe the impact on their economy would be less than one per cent. They know that their energy prices are going to go up, and they already have higher energy costs than anyone else. They know that everything that comes on and off the island has to be shipped or flown in. If you talk to a small airline that operates into King Island, Flinders Island or any of these remote communities, that 10 per cent increase in the cost of aviation fuel represents 30 per cent of their overhead costs. So there is going to be a much more significant impact in these remote and regional areas, yet the Prime Minister expects these communities to believe that the impact will be less than one per cent. She is talking from the city perspective. Last week we had the revelation that the Minister for Agriculture, Forestry and Fisheries spends more time in the city than he does in the country. Perhaps that is a demonstration of the regard the Labor Party have for regional Australia. They run out into regional Australia and say that the impact of this tax will be less than one per cent, yet they are using broad based modelling which has no feeling at all for, and which gives no recognition at all to, the impacts on regional communities. They dumb everything down to that broad number so they can go out and quote that the impact is less than one per cent. But I can tell you that the people on King Island understand. They do understand that the impact on their community is going to be greater and they are not happy about it.

Recent polling released in Tasmania shows that only 17 per cent of Tasmanians support the carbon tax; 51 per cent do not support it. The government cannot even get the support of half of Tasmania for the carbon tax and that is because there is one thing Tasmanians remember—they remem­ber the lie. They remember that Mr Sid Sidebottom, Mr Geoff Lyons, Mr Dick Adams and Ms Julie Collins all went to that last election behind a Prime Minister who said, not once but twice—six days before and then the day before:

There will be no carbon tax under the government I lead.

They said, along with Senators Sherry, Urquhart, Polley, Bilyk, Carol Brown and—one of the key beneficiaries—Senator Singh, that there would be no carbon tax under a government led by Prime Minister Julia Gillard. They are all just as culpable. They all own that promise just as much as the Prime Minister does.

When you go around and talk to small businesses about the impact of the tax on their operations, they all know that the promise they were made at the last election was that there would be no carbon tax. Even when I was talking to a small rhubarb processor and grower in the north-east of Tasmania, it was clear that they knew, along with everyone else, that as their business grows so too will the cost of energy and inputs to their business—because of the carbon tax. All of these elements I have been talking about are only for the first year. We know that this cost will go up each and every year, because the government tells us that the carbon tax is going to be indexed. They all come back to the promise. They all remember the lie: 'There will be no carbon tax under the government I lead.' That is what the Prime Minister said to the nation six days before the election and she repeated it the day before what turned out to be a very tight election. Mr Sidebottom, Mr Lyons, Mr Adams and Ms Collins all own that promise. All are equally culpable, as are Senators Sherry, Urquhart, Polley, Bilyk, Carol Brown and Lisa Singh. They all know that they went to the last election promising that there would be no carbon tax. (Time expired)