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Monday, 17 June 2013
Page: 2910

Senator SINODINOS (New South Wales) (10:59): Before I begin let me make the point in relation to this bill that the coalition has not sought, at any stage, to stall discussion, debate or passage of the bill. We are not seeking to create roadblocks, but we will not be silenced when it comes to our view about the unnecessary extra layers of red and green tape which this bill will add to what is already a very extensive area of red and green tape.

By way of background, one of the hats I wear is chairman of the Coalition Deregulation Taskforce. We have been looking at the issue of regulation and red tape across the country under this government. Kevin Rudd went to the 2007 election with a commitment: for every new regulation introduced, one would be taken out. One in, one out.

Senator Ian Macdonald: What a joke!

Senator SINODINOS: My colleague Senator Macdonald says, 'What a joke!' Indeed. It sounded so glib: one in, one out. It was very easy; it rolled off the tongue. Twenty-one thousand new regulations later and here we are with new layers of red and green tape. What is particularly galling for me is to have to acknowledge that people like Mr Windsor in the other place are adding to red and green tape, using their numbers in the House to add to red and green tape. They are people who should know better. They are people who claim to be in touch with their electorates and claim to understand the needs of small business, and here we are adding more red and green tape.

What is particularly galling is that we are doing this without even a regulatory impact assessment. This legislation is so important that it has been exempted from the process. So be it. If we were on the verge of nuclear war, we might not have a RIS about whether we go to war or not. We are not at war. Fortunately, we are living in a very peaceful country at a relatively peaceful time and we can take our time about these measures. But we are not being given that option. Industry is not being given the option of giving full advice on the costs and benefits of the legislation, and neither are other stakeholders.

I recognise that we are dealing with some very sensitive matters around the interplay between coal development, coal seam gas, the water table and the like. There are some very interesting scientific views about how that all plays out. Taken to their logical conclusion, those scientific views would essentially say that you would probably have to stop all industry. If we want to stop all industry in this regard, whether it is the coal seam gas industry or coal development, let's just be up-front about it and have a debate about all the consequences that flow from that, rather than have the debate we are having today, where people can use the power they have in the other place to impose on the government measures where the benefits have not been demonstrated to exceed the costs. It may be that the benefits do exceed the costs. We do not know that. There is no regulatory impact statement. The bill has been exempted from the possibility of that being done.

We are dealing with an act which both sides of politics fundamentally support. There is the Environment Protection and Biodiversity Conservation Act, which I have had some dealings with in the past, in a former life. Indeed, it was a coalition government that was involved in putting together the act in its current form. The whole purpose of the act was to recognise eight matters of national significance where the federal government had jurisdiction: World Heritage sites; national heritage sites; wetlands of international importance; nationally threatened species and ecological communities—and that does not include threatened species of Independents, Greens or others—migratory species; Commonwealth marine areas; the Great Barrier Reef Marine Park; nuclear actions. Get the drift? It has to have a national implication, a national consequence. That is why we have tiers of government. One tier of government is federal—that is us. There is another tier of government which looks after matters within the borders of states and is meant, subject to the Australian Constitution, to have sovereignty within the areas that are defined for the states. There are outside areas defined for the Commonwealth, and so on.

So, there you have it. This act is all about matters of national significance, and we are going to have a ninth matter of national environmental significance added to the act, which will apply to the actual—and this is where it has retrospective effect—or the likely significant impacts of 'coal seam gas development and large coalmining developments on a water source'. Why stop there? What is the logic of that? Why not any development that potentially has an impact on any water source or any other source in the communities, of one sort or another? It does not have to be water. Where is the rhyme or reason?

Ultimately, legislation has to have logic. This legislation in that sense has one logic—the logic of numbers or the logic of power: 'I can do this. I can impose this. I can show people that I can do this, therefore I will do it.' It is subject to no accountability, no cost-benefit test and no regulatory-impact assessment. People are right to say that these are controversial issues, but there also comes a point when you have to stand up for principle. The principle we used to have was one of subsidiarity, where we devolved power to the lowest level, whether it was local, state or federal government, depending on the significance of the issue. That is all out the window: 'That don't matter anymore; we do what is politically convenient, we 're seen to be doing it, and it doesn't cost us anything. And we can say that because we don't have a regulatory impact assessment to tell us what the costs might be.'

I recognise that there are some important scientific issues caught up in all of this, but what science teaches us is that there must be rigor around what you are hypothesising and how you test it. The policy equivalent of that, in this context, is the regulatory impact assessment—and we do not have that. That process also applies another logic to these circumstances. It provides for a more extended process of consultation, with affected stakeholders, whether they are industry or other. That sort of consultation is important if you want to take the community with you. Now, one section of the community, using its numbers, imposes its will. We do not get a settlement of the issues, we just get this pendulum back and forth depending on who is in power and has control. These matters never get looked at properly.

It is a pity that we have found ourselves caught in such a situation. Various stakeholders say various things. The Minerals Council of Australia said in its press release the legislation:

… shows that the Federal Government is more focused on increasing the bureaucratic constraints on the coal sector rather than creating the right regulatory environment to expand the industry; creating more jobs and national income.

There are some of you here who do not want to expand the industry or increase national income—and I am not looking at the opposition benches when I say that. That is understood. The Minerals Council of Australia also said:

The proposed changes will do nothing to enhance Australia's reputation as an investment destination. Project approval times in Australia are already well in excess of the international average and the plan put forward today will simply add to those delays for no environmental gain.

It is simply another layer of regulation.

The Prime Minister was very much alive to this duplication of Commonwealth and state processes in the environmental space. Indeed, it appeared at one stage that she had come to an accommodation, particularly with stakeholders in the business community, through the Business Advisory Forum attached to the Council of Australian Governments. It looked like we were going to get a streamlined process, but that was scuppered at the 11th hour through the influence of shadowy backroom figures, potentially of a green tinge—we do not know for sure; it was never quite made public. There is not much transparency around that process. Here was one sector in the community asking for a more transparent process, a greater streamlining of the approval process, and it was scuppered at the 11th hour.

The National Farmers' Federation has expressed deep concern about the potential for this bill to be extended to agriculture in the future—the thin end of the wedge—and it is the farmers who are picking this up, a constituency that some of the supporters of this legislation claim to speak for. But what does a peak body like the National Farmers' Federation have to say? The federation said:

Water is a critical factor for our farmers, and our strong concern is that this bill could actually have perverse negative outcomes for our agricultural sector. What may, on first glance, look like a win for farmers in the short-term could actually have long-term unintended consequences for our current, and future, farmers.

That is right. You create the trigger. You create the weapon and it can be used against you, because you have no guarantee, in a future parliament, who might do what deal that may affect agriculture or farmers.

People too caught up in the current controversy around coal seam gas do not seem to understand that you are dealing here with systemic issues around how our parliament makes laws to effect these things and the relationship between federal and state parliaments in these sorts of areas. The Australian Industry Group, the Australian Petroleum Production and Exploration Association, the Clean Energy Council and the Energy Supply Association of Australia joined forces with concerns on this bill that non-evidence-based policies which are restricting the development of new energy sources may have significant negative consequences for the broader Australian community. Knee-jerk policies continue to undermine the development of energy projects within this country. This comes at a real cost and this cost is borne by the Australian community in jobs, economic growth and, ultimately, higher energy bills.

But, no, wait—we are not going to worry about the resource sector. We are not going to worry about the energy sector. We do not worry, because isn't there a pipeline out there and isn't it easy just to pick this stuff up, take it to market and sell it? We are so advantaged in this regard that we can do this without having to worry about the competition or our national competitiveness. It does not matter how much it costs to do something in Australia—we will be okay; we are insured; we are the lucky country. No, we are not. The terms of trade are falling. We have to raise our productivity. The Secretary of the Treasury, Martin Parkinson, at the last Senate estimates made the point: in the period ahead, as our terms of trade come off from the historic highs where they have been, our productivity has to almost double to potentially make up for the shortfall and the impact that will have on our living standards.

So we do not have a choice; we have to be productive and we have to be competitive. Through energy policies, already we have imposed quite big increases in energy costs across the community. That has had an impact on the cost of living. It has had an impact on the competitiveness of projects. We have to recognise that, whatever the merits of any individual piece of legislation that people in good faith may put up, it comes on top of that mountain of regulation and costs we have already—and that is the mountain that has to be tackled. So we cannot just argue about the merits of an individual piece of legislation; the challenge that serious policymakers face is how they deal with the mass of regulation as a whole. It is a cop-out to say, 'We don't have to worry about that. If those fossil fuel sectors and those resource sectors go down, we can make it up through renewables.' We are making it up through renewables, but we are having to pay a cost for that and we cannot make up 100 per cent of our energy supply through renewables, whether cost wise or in a reasonable time frame. My colleague Senator Ludlam says, 'Yes, we can.' Yes, we can, but only by immiserising growth and imposing lower living standards on Australians as a whole.

Senator Ludlam interjecting

Senator SINODINOS: That has not been made up. That is backed up by all sorts of rigorous studies across the country. Senator Ludlam, you should read more widely than Green Left Weekly.

What I will say is that you have, out of their own mouths, this recognition of the costs—because, at the end of the day, the Greens do not believe that the GDP numbers reflect the actual resource base of the country or our happiness or anything else, so they are quite happy to see GDP going down. My point is this: in a rational society, where you have to sell these policies, in the suburbs, in the outer parts of the country, in regional and rural Australia, where people have to think about the costs and benefits of these things, they know that too many costs that impede great trading industries come at the expense of all of us. That is why we have rigorous processes like regulatory impact assessments to look at the costs and benefits of doing all of this.

The Queensland state government has some strong views through its Department of Natural Resources and Mines and the Coal Seam Gas Engagement and Compliance Plan 2013, a key part of their overall strategy for the responsible oversight and regulation of the coal seam gas industry. According to that document:

The Department of Natural Resources and Mines (DNRM) is fully committed to the sustainable use of Queensland's natural resources …

The Queensland government demands an already high level of compliance obligations which it always evaluates and improves upon. The federal Labor government through these measures is making it difficult for the Queensland government to boost the state's economy and to keep it strong. The federal government is overriding the state's sovereign rights for its own political agenda.

The issue here goes to something else. If we want to convince the states to do better, then just taking it out of their hands and riding roughshod over them by having a further process is essentially just saying that you cannot trust sovereign government. My view is this: a sovereign government, if it is subject to popular and democratic election, will face the sanctions of the people. The same people in New South Wales who vote for a federal government vote for the state government. What this legislation says fundamentally is that other tiers of government cannot be trusted. As I said before, I think the real basis of this legislation is a view that if you have the numbers and you can do it, why not do it, why not respond to a perceived political demand to do so, and let principle go out the window.

The ALP, the Labor Party, the Labor government have made very sympathetic noises to business and industry when it comes to cutting green tape but have failed at every measure when challenged to put it into practice. Six months ago Tony Burke, the minister for environment, rejected an amendment to regulate coal seam gas, claiming the Commonwealth had no constitutional powers to make such laws. Prime Minister Julia Gillard, after a COAG meeting in April 2012, said: 'Look, what we want to work towards here is a streamlined system so that projects don't go through two layers of assessment for no real gain.' That was the view after the COAG meeting. Then in November 2012, Tony Burke, in a press release entitled 'Environmental standards a priority for the federal government', said:

This is about lifting the States up to the level of environmental protection provided by the Commonwealth, not letting Commonwealth standards drop. We can keep stringent environmental standards while simplifying an overly complex process—and we are.

Tony Burke introduced an expert panel on coal seam gas in 2012 to address the concerns the community had with coal seam gas operations, which the coalition supported. This bill simply adds further regulation on top of that. It goes against all the rhetoric of the government about streamlining process. Even the independent review by Allan Hawke, commissioned by this Labor government, considered the use of a water trigger under the EPBC Act previously and ruled it out, concluding that:

… including water extraction or use as a matter of NES under the Act is not the best mechanism for effectively managing water resources.

There used to be a time, particularly when Mr Rudd was the Leader of the Opposition in the run-up to the 2007 election and he would have said or done anything to be elected, when he promised to bring in a new era of evidence based policy making. Here you have Allan Hawke, an experienced public servant, who has worked with both sides of politics, who has run major departments like Defence, who understands public policy and the processes of public policy, who is saying that 'including water extraction or use as a matter of national environmental significance under the EPBC Act is not the best mechanism for effectively managing water resources'. This is evidence based policy making. We pay these experts high consultancy fees, which they are worth because they are all brainy, experienced people, and then, of course, when it suits us, we systematically ignore their advice. It is called politics overriding policy.

My experience, over a long period of time, is ultimately that good policy does trump bad politics, because, at the end of the day, the public will always respect an outcome which has been achieved as a result of a process. One of the reasons this government is in so much trouble today and faces the existential dilemmas around its leadership is that, on the way through, it has systematically trashed policy and processes. It will say or do anything to get a vote. Today it is your friend, tomorrow you are the enemy, as convenient. One day it is friends with Andrew Wilkie, the next day it is friends with Peter Slipper. That is not a way to do policy. The coalition do not support what Mr Windsor has proposed. (Time expired)