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Tuesday, 1 November 2011
Page: 7815


Senator BOSWELL (Queensland) (19:30): Let me first welcome Senator Wong. I know that she will be pleased to hear my speech on carbon tax. I am not sure we will share any great values on it, but maybe she can learn a bit.

We are debating 18 clean energy bills that are going to severely impact on Australia's business, regional areas, mining, household­ers and food processors by driving up costs, making business less competitive and forcing jobs offshore. This will all be a futile bid, because this is not going to achieve anything. The carbon tax is the greatest confidence trick ever perpetrated on Australia. I say it is a confidence trick because it is modelled on an assumption that the rest of the world will have some form of carbon reduction that will roughly equate to Australia's carbon tax by 2016—and there will be no less employment. Both assumptions are loaded into the GTEM model.

This model has only ever been seen by Treasury, despite the Senate Select Commit­tee on the Scrutiny of New Taxes pushing for the release of the model for months and months. Despite Senator Cormann and me being told time and time again that the modelling is available, the reality is that it has never been available. Last week, Meghan Quinn, from the Treasury, said that Henry Ergas, Brian Fisher and Warwick McKibbin had access to the modelling that would allow them to publish results of the impact of the carbon tax. That is blatantly not true. Neither Fisher nor Ergas nor McKibbin—Australia's most prominent economists—have been able to obtain the model. Dr Brian Fisher looked at Meghan Quinn's comments about the model being available, went down there and asked for it and was refused. After months of trying to get this modelling, some light was shed by Phillip Glyde from ABARES. When asked by Senator Cormann, 'Would an independent third party be able to have sufficient access to the GTEM model to run the same modelling scenarios as Treasury ran to produce the carbon tax?' Phillip Glyde said no, it was not possible. I find Mr Glyde to be one of the straight shooters.

Dr Brian Fisher wrote to Meghan Quinn, from Treasury, asking for the modelling after Ms Quinn said it was available. He said he was prepared to pay for it but he was told by Treasury to make further inquiries to Wayne Swan. I asked Ms Quinn whether we could get the modelling during a series of Senate estimates inquiries. Despite being told that it was available on a number of occasions, no-one has ever obtained the modelling. At Senate estimates last week, Senator Cormann and I again asked Senator Wong for the modelling. The minister weaved, ducked and dived trying to avoid the question. She tried to filibuster on how much modelling and how many hundreds of pages she had released, but the cat was belled when Meghan Quinn told the estimates committee that the most recent public release of the model carried by ABARES was in documentation in 2007. That would have been in the Howard government era.

Senator Cormann and I continued to ask for a commitment from Senator Wong to release the modelling, only to be told that she would take the question on notice. We asked Senator Wong five times, and she said five times that she would take the question on notice. We are still waiting. On 21 October, Henry Ergas said that it had taken three months and 10 hours to get an admission that the modelling was not available to anybody—not to him or anyone else. I asked Ms Quinn a number of questions:

Senator BOSWELL: So, if Professor Ergas were to go with a cheque in his hand and say, 'I want the modelling and I am prepared to pay for it,' it would be available to him? Is that what you are saying?

Ms Quinn: He would be able to pay for the models used by Treasury and, yes, he would be able to receive those models.

Senator BOSWELL: Comprehensive models?

Ms Quinn: Yes, he would be able to obtain them from the providers of those models.

This is blatantly not true, because he did try. Everyone has tried to get the models but no-one has been successful.

The government today is putting through a new series of clean energy bills which will apply if the carbon tax passes the Senate. This tax will cost the nation, to GDP, $33 billion by 2020 and $1 trillion by 2050. This is not a Boswell statement; this is from chart 5.13 of Treasury paper Strong growth, low pollution: modelling a carbon price. It is the government's own model. And we are going to spend $1 trillion by 2050 and $33 billion by 2020. This is a model that has never been seen by any third party. Economists have sought access to modelling and have been refused. They want the modelling, peak bodies want the modelling and business groups want the modelling, but it is the tightest secret in Canberra. This is a trillion-dollar carbon tax without any checks or balances and no scrutiny. 'I'm here from the government and I wouldn't lie,' is all they have on offer.

It is not the government's money, Senator Wong; it is the people's money. Senator Wong, if you are ever in business and it is a public company and on 30 June the books have to be audited and you do not comply, then you are in very serious trouble under the companies act. The government does not want the modelling to be scrutinised because it is frightening. There is absolutely no reason why this modelling should not be made available. The government is costing Australia $1 trillion but will not let anyone look at the modelling. The press should be demanding that there be a check on the modelling. The government has got away with highway robbery on this. Over $1 trillion loss in economic output in 2050 equates to $40,000 for every man, woman and child. These are the government's own figures, Treasury's Strong growth, low pollution chart.

On top of the loss of revenue, the Department of Climate Change and Energy Efficiency is supporting the old adage that if you give a public servant a piece of paper and a pencil then they will build an empire. Already 1,027 people are employed in the climate change department at a cost of $48.9 million and we have got a year to run. Goodness knows what it is going to cost.

Both Senator Cormann and I have been in relentless pursuit to obtain the modelling so that the cost of this expensive tax can be audited. The government asked us to accept a loss of $1 billion on the word of Treasury without intervention by third parties. I do not believe we will ever see the modelling. I do not believe the modelling will ever be available, certainly not until the legislation goes through. If the government were so sure that the modelling would support their arguments, they would have released it months ago. In fact, they would probably have sent it out to householders in the form of a letterbox drop. If they were convinced that the modelling was sound, why won't they release it now? That is the question that should be asked.

Senator Wong, why won't you release the modelling? Why won't Greg Combet release the modelling? Because they know the modelling is based on the assumption that all countries will be on board by 2016. This is an official explanation given to us by climate change officers, that all countries will have some form of carbon restriction by 2016. I asked the climate change officials to give me the restrictions and the commitments made by the other countries to reduce carbon emissions, but what I was given was misleading. We were told Brazil would have a target—and Canada, China, Indonesia, India, Mexico, the Republic of Korea and the United States. These countries do not have anything like a carbon tax. The statement I was given is misleading and wrong. None of our trading partners have proposed the level of action Australia is proposing with the carbon tax. Just a couple of days ago the Canadian foreign minister, Mr Baird, said Canada would never introduce a carbon price. He described it as pyramid selling. Mr Baird is in a government that just won a massive election campaigning against a carbon tax. New Zealand is backing away from a carbon tax.

By 2020 carbon emissions will have risen in China by 496 per cent and in India by 350 per cent. Third World countries will never impose a carbon tax on their already depress­ed economies, and why should they? Why should they penalise their own people that are living in poverty? It is just impossible for a Third World government to impose a carbon tax. Unless there is world involve­ment, carbon tax just cannot fly. There are many countries walking away from this, and yet we are told by zealots in the climate change department that the world will have the equivalent of a carbon tax by 2016. The government's own modelling shows that emissions will not decrease in Australia. Emissions will increase from 2012 to 2020, from 587 million tonnes to 621 million tonnes, yet we are going to spend $71 billion to get an increase in carbon emissions.

The government knows that, if the model is released and independent modellers put the facts—that the rest of the world will not have a carbon tax by 2016—into the equations, the modelling will show that the Australian financial exposure will be far worse than what the government is stating at the moment. Genuine modelling will show that the cost will be higher, damage to our industries will be more severe, unemploy­ment will rise and falls in incomes will be higher. Loss of GDP will be greater, even more than $1 trillion. In fact, if the GTEM modelling were released, the modelling the carbon tax was based on, it would show a much worse set of figures. If the model were not loaded with assumptions that we would all be there by 2016, an independent modeller could place a more realistic scenario and come out with a totally worse set of figures. The government wants to avoid that like the plague. There is also loaded into that model the assumption that there would be no unemployment. It is loaded into the computer. Unemployment would be picked up by people getting less money. The world is running away from a carbon tax. No-one in their right mind would enter into a carbon tax comparable to Australia's by 2016, and that is what we are being asked to accept.

So the real facts have been hidden from the Australian people. This is a most serious situation which places government officials in a terrible position where they must defend their government's hiding of the modelling. The business community, the mining community, food processing, heavy industry like cement, steel and aluminium, farmers and graziers and working families deserve to have an honest independent assessment done on this modelling of the carbon tax. But the government are protecting that modelling as though their life depended on it. They know what will happen if the real cost of the carbon tax comes out. It will make them even more unpopular, if that is possible. I do not make unsubstantiated claims in the Senate but I will say this: the deliberate, continuing refusal of the government to allow their modelling to be scrutinised by independent modellers misleads and is very close to fraud. Where else in the world would a government spend $1 trillion and not open its model to scrutiny? ABARES always released the full model when we were in power.

After July next year, when the first carbon tax bill comes in, there is going to be an unbelievable backlash from the business community. As the government has said, the carbon tax will cause prices to rise by around 10 per cent for householders. It will cause the price of power to rise by 30 per cent for industry. Last night I was talking to a guy from Queensland who has a lot of generators up there, and he said, 'When this hits it is going to hit like a rocket.' My advice to industries that use a significant amount of electricity is to go and get some advice from the electricity consultants, because your electricity bills are going to be a lot higher than most people think. Business needs to be prepared for this. People should be forewarned that their household bills will go up by 10 per cent and business costs will rise by 30 per cent—and going north.

This is the world's biggest carbon tax. In fact, apart from the EU, it is the world's only carbon tax. In the six-year period between 2005 and 2011, carbon tax in the EU collected $4.96 billion. Over a six-year period in Australia the carbon tax will collect $71 billion. The carbon tax will hit Australia at $391 per person per year. Less than nine per cent of Australia's 105 million manufact­uring workers will receive compensation for the carbon tax. Where is Paul Howes when you need him? He was going to pull the plug if the carbon tax cost one job, but it is going to cost thousands and thousands of jobs, and the few miserable bucks that they have thrown into the steel industry and in paying Peter Beattie a thousand bucks a week, or whatever he gets, is not going to fill that gap.

The modelling assumes a miner loses a high-paying job—say around $100,000 a year—and he may get a lesser paying job of $50,000 a year. Ipso facto, there will be no unemployment. These are the assumptions made in the modelling. What a nonsense! If you load into the modelling no unemployment, that is the answer you are going to get back: there will be no unemployment.

There is another reason the model should be tested. All Australian industries are going to be under the pump. The high Australian dollar is making it easy to import and hard to export. The aluminium industry, the cement industry, the steel industry—all of these industries are going to lose their competitive advantage. Australia has a high standard of living. People in factories have generally had good working conditions. Australia's comp­etitive advantage has been cheap electricity, but the carbon tax is going to take care of that. It will bring us right back to the field. This is already driving businesses overseas.

Is anyone aware that Rio Tinto have put their aluminium smelters up for sale at Gove, Bell Bay in Tasmania and Tomago in Newcastle? Then there is the Kandos cement plant—that has gone. When factories are not maintained and become run-down, they will be replaced, and they will be replaced by overseas industries. Most of the big industry players are international and it does not matter to them whether the manufacturing plant is in South Africa or New Zealand or Australia. It is just as cheap, probably a lot cheaper, to manufacture overseas. Heinz are reducing food processing in Australia. Food processing has been threatened by this carbon tax. We are already starting to see the rot set in and we have got 12 months to go until it even takes effect.

A couple of years ago the Yabulu nickel-processing plant was going to be closed by BHP. One thousand jobs were going to go, were going to be lost. A friend of mine, Clive Palmer, went in and spent a huge amount of money and turned that business around and made it profitable again. Last year you may have seen in the papers that he shared his wealth at Christmas time. He bought a number of Mercedes Benzes for his workers. The Yabulu mine will now be up for a $28 million carbon tax. It will rob the refinery of its entire profit. You can pick abattoirs, you can pick any industry: they are going to get hit. The proposed compensation to householders will not be much good. If you do not have a job, compensation does not help you a great deal.

People are going to shift to those places where there is no carbon tax. Industries will be dirtier and carbon emissions will grow higher. The carbon tax has not an ice-cream's chance in hell of working. Canada's foreign minister called it pyramid selling. But I believe it is closer to a Ponzi scheme. It is the closest thing I have ever seen to a Ponzi scheme. This is going to hurt everyone. (Time expired)