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Monday, 31 October 2011
Page: 7630


Senator BACK (Western Australia) (20:53): I rise this evening to contribute to this debate and to make the obvious point that, as we all know, history will judge this 43rd Parliament very harshly, but the worst and strongest criticism will be reserved for these so-called clean energy bills. I can see already the epitaph, which will be along the lines by the historians, 'Never through the decision of any Australian parliament have so many lost so much for so little.' Regrettably, what we see here is ideology replacing policy, and it was pretty poor policy to start with.

This is legislation based on a lie from a government which itself is here as the result of a lie. I quote the words of the Prime Minister, Ms Gillard, in the days leading up to the 2010 election, which will resonate around this country for many years to come: 'There will be no carbon tax under a government that I lead.' Given the fact that the new tax is not to be introduced until 1 July 2013 she was probably right, because with any luck there will have been an election and, therefore, a change of government by that time, or certainly her own side will have cast her aside as she and the other lot cast aside previous Prime Minister Rudd. It was bad enough that the Prime Minister came out with this lie in the days before the election last year, but let me quote the Deputy Prime Minister and Treasurer, Mr Swan, when he said: 'We certainly wish to reject the hysterical allegation of the Liberal Party in their advertising that we are leaning towards a carbon tax. We certainly want to reject that.'

Just in case truth might get in the way of the stories that we are hearing this evening, let me tell a few stories about carbon dioxide, because it is important for the wider community to know what we are vilifying. In the air what percentage or proportion is carbon dioxide? It is less than 0.04 of one per cent. It is one twenty-seventh of one per cent. What do the humans in the world produce? The easiest way for me to describe it to you is that all of mankind on this planet contributes one molecule of carbon dioxide for every 90,000 molecules in the air. But it gets even more interesting. In Australia, where we produce only one to 1½ per cent, the best way to describe it to the wider community is that Australians contribute one molecule of carbon dioxide for every nine million molecules of air. That is the effect we are speaking about. Carbon dioxide is being vilified as a pollutant. What have we always known? For the growth of plants carbon dioxide is essential. Carbon is essential for our own beings. We inspire and we expire carbon dioxide. When we want to stimulate plant growth we do it by using carbon dioxide.

Then there is the greatest myth of all. The fact is that with Australia's contribution of less than 1½ per cent of greenhouse gases in the world this legislation, if and when passed, will contribute absolutely nothing to the improvement of the environment. In fact, through what is called carbon leakage, probably it will have a negative effect. The best and easiest example of that is zinc. In this country, because of our efficiency, we transfer a tonne of zinc for three tonnes of carbon produced. When our zinc production in this country disappears as a result of this legislation, if passed, the best that the Chinese can do is a tonne of zinc for 10 tonnes of carbon—350 per cent less efficiency than Australia. That is the type of scenario we are speaking about.

I refer, as others have done, to the impact on business in this country should this legislation be passed. The normal trader in the street will be facing job losses. They will be facing competition and they will be facing added costs for no benefit. If per chance they should be producing a product for which there is competition from overseas, they will immediately be disadvantaged simply because their international competitor will not be saddled with this carbon tax in the country where it is produced.

But then we go a stage further, to our own exporters. Only last week was I speaking to a grain producer who adds value to grains in Australia—that is, rolled oats, barley, peas and others—and he exports around the world. He said to me: 'I can compete, Chris, with those in Asian countries who are paying $1 per hour for labour, and I'll tell you why: because I have invested richly in infrastructure, in high-efficiency equipment and in automation.' That is what has allowed that company in rural Australia to remain competitive. As he said to me, the very technology in which he has invested to remain competitive will now be the subject of heavy taxation because it is all energy intensive. Jobs will go, that company will close and Australia will be the poorer for the example.

We see it all around the nation. Last week I was in Kalgoorlie talking to miners and others about the potential of that area. We talked about the potential of magnetite, which I heard my colleague Senator Johnston speak about this evening, and the absolute enormity that is required for energy consumption in magnetite processing and the value-adding of magnetite. The figure of 400 million tonnes of freight moved on Western Australian roads resonates when you look at the fact that we will be looking at a 10 to 15 per cent increase in fuel costs. Many of the operations are still using diesel-powered generators. They are using 5,000, 6,000, 100,000 and even up to one million litres a month to run their diesel-powered generators. They will simply not be able to survive this circumstance. We have been told by the government that there will be no impact on agriculture. Hello! The big inputs to agriculture—fertilisers, chemicals, fuels and other forms of transport—are all to be taxed as a result of this new taxation on the Australian consumer. All of it, of course, will be for no gain to the environment and a simple loss to Australian industry. We know that there will be significant increases in the cost of domestic air travel, and this in a country that relies, as we have come to see in the last 48 hours, so much on its domestic air travel.

I turn now to the impact on the community itself. The government has admitted a modest increase of up to 10 per cent in energy costs and nine per cent in fuel costs. I just say: where in the world do they think this is a modest impost? This increase is before—and I will come soon to the famous 500 polluters—we see the actual impact that will be borne by industry as a result of this tax. What has happened to democracy in this country? The surveys are telling us that 80 per cent of the community are opposed to this tax. Australian manufacturers have come out and said to the government, 'Not now,' because of the uncertainty in Europe. The union movement has come out and said, 'Not now.' The Australian Industry Group, no friends of our side, have come out and said, 'Not now.' But all we see is a government hell-bent on introducing legislation that will assist nothing when it comes to the environment.

What is interesting in the whole debate is the fact that compensation will be paid to low-income people, pensioners and other members of the community. Therefore, where is the incentive for these people to change their behaviours if they are going to be compensated? But we know the real truth. We know that the actual increases will far exceed the compensation to be offered. We also know, as is inevitably the case, that eventually this form of compensation will be wound back or wound out altogether. What then happens to people in the low socioeconomic sectors when they have been so richly cheated like this?

Why is it that we are saving more at the moment than we have since the 1960s? The reason is that people do not trust this government as an economic manager and they certainly do not trust this government to implement this legislation. We have heard this Labor government go on about the Howard government and the GST. I remind the chamber yet again of what Mr Howard did when he made the decision that a GST was appropriate for this country. He went to the people in an election and said, 'If I get a mandate I will introduce this.' This is what we call on the Gillard-Brown government to do. Go to the people and seek a mandate, particularly since she told us there would be 'no carbon tax under a government that I lead'.

I often reflect and ask others: why and how do people think it is that a country with such a large landmass as ours, the size of the United States, and with a very, very small population of 23 million people is such a wealthy country? Is it because of gold? No. Is it because of agriculture? No. Is it because of mining royalties and mining income? No, it is not. Mr Acting Deputy President Cameron, you know from your own industry that the reason Australia is in such a tremendous position in terms of per capita wealth is two words, and those words are 'cheap energy'. This country has been built on cheap energy. I am at an absolute loss to know why we are throwing this advantage away, why we are so hell-bent on getting rid of our coal and other products at ridiculously cheap prices, as seen by India, America and other countries—China included—so that they can enjoy the value and benefit that we have had in the past. I just do not understand where this comes from. This is an advantage which this country has been built on. This government is hell-bent on losing it.

Only recently the chairman of BHP Billiton, Mr Nasser, made this observation in public when in Melbourne: 'I have three strong principles for my company. The first is to maintain a strong balance sheet, the second is to invest in income-building assets and the third is to return a reasonable dividend to shareholders.' He then turned to the audience and said, 'It's not a bad principle for a government either.' If you have a look at the performance of the Rudd government followed by the Gillard-Brown government, you see that they fall very, very far short of those three principles.

Down at the household level, we all know that if a household is to survive over time it must always have its income exceeding its expenditure, otherwise that family goes into deficit. If it borrows and goes into debt, which indeed we all do, it ought to be for asset-building purposes and not for the wastage of liabilities. One need only look back over the history of this government, Rudd followed by the Gillard government since 2007, to see the squandering. There was a surplus provided to it by the last coalition government and now there is debt upon debt upon debt as a result of wastage through liabilities.

I ask the question: who are these so-called 500 big polluters who will be required to buy carbon permits issued by the government? Why the secrecy? Why can we not find out who these 500 companies are? Why are they being vilified? In any other country of the world they would and are being welcomed with open arms. Why be so secretive? Might these in fact be the companies that are the biggest employers in the nation? Might there be represented amongst them companies who are investing the most in exploration for the future asset building of this country, in line with Mr Nasser's comments? Might they be the companies that are creating new wealth for Australia—those who are participating in international trade or who have offshore operations and have every capacity to expand the Australian operations? I simply cannot for the life of me understand why this government is vilifying the very companies that we should be praising and helping. The obvious question is: to what extent will they be passing on these costs to the consumer?

I come now to part of the discussion that has been shared by others in this chamber this evening—that is, the activities of other countries. I will quote to you the thoughts of the foreign minister of Canada when asked, in the joyous outburst of praise and happiness over CHOGM, what his country's attitude was going to be. He said that neither Canada nor the United States would ever introduce an emissions trading scheme. Perhaps they did not look after him well enough in Perth. He went on to say that the ability to trade greenhouse gas emissions or carbon credits is something that is not going to happen in his economy. He said there is only one member of the parliament in Canada as a result of the last election who still supports this particular move and that is a Green member. He then went on to comment that, whilst President Obama of the United States had massive majorities in the House and the Senate, he could not get an emissions trading scheme through. His comments, as I report them, are not good for Australia because 'if the US and Canada do not go down a market road for cutting greenhouse gas emissions, it is impossible that anything remotely resembling a global market could emerge'. Asked if Canada would participate in a carbon trading scheme, he replied:

There's nothing to participate in. Where is it going on today?

That is the opinion of the Canadians.

In response to the comments made some minutes ago by a previous speaker with regard to the renewable energy scheme, I refer to evidence given to the United States House Select Committee on Energy Independence and Global Warming in September 2009, when we were debating the CPRS in this very place, by a Professor Alvarez, who is a professor of applied economics at the environment science faculty of the King Juan Carlos University in Spain. This was his summary of Spain's attempt to lead the world in green and clean energy transformation. For every one green job financed by Spanish taxpayers, 2.2 jobs were lost. Only one out of 10 green job contracts were in maintenance and operations of already installed plants. The others were only sustainable in an expansive environment related to high subsidies. He said that since 2000 Spain had committed €571,000 for each green job and that this had resulted in the destruction of 110,500 jobs. He went on to talk about the bursting of the bubble:

In Spain, we are witnessing the logical conclusion of an unsustainable policy of government subsidies and mandates of uneconomic forms of Energy.

He then went on to quote former British Prime Minister Lady Thatcher:

… "the problem with socialism is that eventually you run out of other people's money." That is what is happening in Spain's renewable energy business today.

In 2011 where is Spain in the overall European economic circumstance? It is facing the possibility of bankruptcy. If I can give you any advice at all for the Melbourne Cup tomorrow from another field, it relates to investment and picking winners. It is simply this: the good ones do not need it and the bad ones do not deserve it. We have seen in the United States in the past year or so the failure of solar energy companies backed by the Obama government. Governments of all persuasions cannot pick winners. If they are good enough to survive in the commercial world, they do not need a subsidy. If they need a subsidy, it is because they cannot survive. Examples can be given of companies that have failed to the tune of $400 million and $500 million simply because they had the wrong economic model. Who on the Labor government side is going to pick these winners? Who is going to spend the taxpayers' money to try to pick winners which industry, business and commerce nationally and internationally cannot?

Is it the case that the Rudd government was the worst in Australia's history? Was it even worse than the Whitlam government, with its failed promises, its pink batts, its school halls and its CPRS legislation, which we fortunately voted down in this chamber so as not to make a fool of Australia in Copenhagen? It is obvious that the Labor government thought it was as bad or worse because they got rid of him. Now we are faced with the prospect of the Labor government removing the current Prime Minister and either reinstating the last Prime Minister or finding another one. We exist in a democracy. If there is any doubt, particularly doubt based on the lie that 'there will be no carbon tax under a government I lead', then this Prime Minister has got no option but to do what her predecessors have done—that is, to go to the people and let the people decide at the polls whether or not they want the form of legislation that we are being asked to look at and to debate at the rate of one minute per senator per bill. It must be voted down.