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Wednesday, 14 March 2012
Page: 1727

Carbon Pricing

Senator BIRMINGHAM (South Australia) (14:00): My question is to the Minister representing the Minister for Climate Change and Energy Efficiency, Senator Wong. I refer the minister to page 29 of the Treasury document Strong Growth, Low Pollution: modelling a carbon price, which states

World carbon prices are expected to range from A$29 to A$61 in 2015-16—

in nominal terms. Will the minister confirm that, with world prices below the range assumed by Treasury in its modelling, this will result in less revenue to government than expected. Is this the case, Minister—yes or no?

Senator WONG (South AustraliaMinister for Finance and Deregulation) (14:01): I thank the senator for his question. I again make the point that he may have a crystal ball as to what the world will look like in 2015, 2016, 2017 and 2018, but I doubt it. What I would say is that we will update our budget figures in the usual way in the budget, just as we did in the midyear review and just as we did in the budget handed down last year. We will do just as Peter Costello would in the same circumstances: update the budget figures. But I can tell you this: the one difference—there are a number—the one very important difference between our plan and yours is that we can pay for ours and we can fund it, but you have a plan which will double the effective carbon price. I know you do not want to hear this, Senator Birmingham, it is absolutely embarrassing.

Senator Birmingham: Mr President, a point of order going to the matter of direct relevance: the question was a very specific and carefully worded question. The question was about what the impact on government revenue would be from a lower than assumed world carbon price. It did not go to any other policies, it did not go to any of the material that the minister is canvassing. I ask you to draw the minister to the question.

The PRESIDENT: There is no point of order at this stage. I am listening closely to the minister's answer. The minister still has 59 seconds remaining in which to answer the question.

Senator WONG: I again remind the opposition that our entire carbon price package, the clean energy future package, is factored into the budget bottom line, which shows the budget returning to surplus in 2012-13. That is something you have walked away from. Senator Birmingham, I can understand your taking a point of order when we remind Australians that your policy would cost them more. Your policy would cost them more—$1,300 per family, per household, every year, being taken from working families and given to those businesses that emit carbon. Yes, of course you will take a point of order!

Senator Birmingham: Mr President, you have reminded the minister that she had 59 seconds left, at that stage, to address the question. She now has 23 seconds left to become directly relevant to the question. I do ask you, please, to ensure that she is directly relevant to the question about the impact of a lower world carbon price on government revenue.

Senator Chris Evans: Mr President, on the point of order: Senator Wong is directly trying to deal with the senator's question. The fact that she is engaged in beating him around the ears may be cause for him to complain, but it is not a point of order.

The PRESIDENT: That is not a point of order, Senator Evans. I do remind the minister of the question. The minister has 23 seconds to address the question.

Senator WONG: Thank you, Mr President. As I have said now on a number of occasions, the carbon price package, the clean energy future package, is reflected in the bottom line. We have funded it. We will update our figures for the outer year, which is the 2015-16 year, in the usual way in the coming budget. One thing I can say for absolute certainty is that ours will add up; yours will not.

Senator BIRMINGHAM (South Australia) (14:05): Mr President, I ask a supplementary question. I refer the minister—

Senator McEwen interjecting

Senator BIRMINGHAM: I will. I refer the minister to the statement in the House of Representatives by the Treasurer yesterday. Far from the Treasury modelling being a crystal ball, as Minister Wong seems to wish to put it, he said:

… there is not a hole in the modelling … The government has full faith in the … modelling …

Does the minister have full faith that the core assumption of Treasury modelling, that world carbon prices are expected to range from A$29 to A$61, is correct—yes or no?

Senator WONG (South AustraliaMinister for Finance and Deregulation) (14:05): I have been asked now on a number of occasions by this senator and others a number of questions in relation to the Treasury modelling, and I have consistently said that we stand by the Treasury modelling. The reason we do is that we have faith in the competence and professionalism of the Treasury, the same people who advised those opposite in government. Those people advise us and through us the Australian people that putting in place—

Senator Ian Macdonald: Then they're clearly wrong.

Senator WONG: The senator says, 'They're clearly wrong!' Isn't it wonderful! Senator Macdonald knows more than all of Treasury, apparently. Oh my goodness, why is it that you are not the shadow Treasurer if you know so much? The Treasury modelling—

The PRESIDENT: Senator Wong, ignore the interjections. Come back to the question.

Senator WONG: The Treasury modelling shows that incomes rise, jobs grow and the economy grows with a carbon price. That is something those opposite simply cannot countenance.

Senator BIRMINGHAM (South Australia) (14:07): Mr President, I ask a further supplementary question. Given the minister's failure to give straight answers to very straight questions, why should Australians believe this government over independent modelling that indicates Labor's imposition of the world's highest carbon tax would lead to a multibillion-dollar budget blow-out? Why is the government afraid of updating the Treasury modelling to reflect the real-world scenario where world carbon prices are around one-third of those assumed in the modelling on which the government so greatly depends and relies?

Senator WONG (South AustraliaMinister for Finance and Deregulation) (14:07): Why is the opposition so afraid of telling the truth when it comes to their carbon policy? That is the real question. I am not sure which so-called independent modelling the senator is referring to. Is he besmirching the reputation of Treasury by saying that these modellers, the best modellers in Australia, and the largest modelling exercise ever undertaken in Australia, are somehow not independent? Is he saying the same people who worked for Peter Costello are not professional and are not doing the right thing? We have had question after question on modelling in this place over years now. The fundamental problem is that the opposition do not accept Treasury's advice because they want to run a scare campaign on this issue. That is why they asked these questions. But they will not tell Australians that their policy will mean higher taxes for working Australians and that money being given to polluting companies in the hope that they might do something good with it. (Time expired)