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Wednesday, 2 November 2011
Page: 8032


Senator ADAMS (Western AustraliaDeputy Opposition Whip in the Senate) (18:24): I rise to speak on the Clean Energy Bill 2011 and related bills. To continue in Senator Fifield's vein, I too was very surprised when I sat down at my desk and found 'Labor and Greens shut down carbon tax debate'. Once again we are really being truncated, I guess you could say, and it looks as though 12 of our coalition senators who are very keen to participate in this debate will miss out. Where is this government going? The government refused to give the community a say on the carbon tax at the last election by promising not to introduce it. Once more the government is shutting down the debate. The government is desperate to ram through this legislation because it knows that it is electorally unpopular, as Senator Fifield just explained. I can certainly give many examples in Western Australia at the local shows where we had exactly the same reaction. I have never before had a petition that I have not had to ask people to sign, but they have come and asked me whether they can sign it, where do they sign it, what do they do and how do they go about it.

We have not even debated these hours but obviously it is a fait accompli. They want to limit the debate because the more the carbon tax is debated and more people understand how it will impact on their lives, the more they want to get rid of it. Instead of ramming the carbon tax through the Senate, the Prime Minister should take the bills to an election as a matter of urgency and decency. The coalition will make the next election a referendum on the carbon tax. If elected, the coalition will introduce legislation to repeal the tax as the first order of business. I am sure all those listening are fully aware of what the coalition government intends to do if they are successful in being elected at the next election. We will have a contract with the community to honour the mandate to scrap the tax as a priority, and we expect Labor to respect the mandate.

The tax is first and foremost an electricity tax, which is why it will not work. After $105 billion of taxes Australian firms, and through them the consumer, will still have to buy almost 100 million tonnes of foreign carbon credits at a cost of $3.5 billion a year by 2020. This is absolutely ridiculous and we are determined to ease the cost-of-living pressures on Australians and ensure that they will be better off under a coalition government rather than under Labor's carbon tax that will not even reduce Australia's emissions.

I will go back to my description of how all of this came about. If the Gillard government had been honest with the Australian people before the last election, we would not be here today debating these bills in their present form. The government was elected on a mandate of no carbon tax, and six days after the newly constituted Gillard-Brown government the carbon tax, funnily enough, reappeared. As the Australian people had not been consulted regarding the carbon tax, it was proposed to hold a community forum with 150 appointed delegates. These delegates were supposedly to advise the government on how to deal with the carbon tax. Of course, the forum did not eventuate and instead the government formed a new committee and held an inquiry into Australia's clean energy future. This inquiry had no terms of reference, which meant that all submissions were relevant to the inquiry. Of the 4,500 submissions that were received, it was interesting to note that only 70, two per cent, were published on the website and protected by parliamentary privilege. This means that the Gillard-Brown government listened to two per cent of Australians who had put forward submissions but the other 98 per cent have not been heard or were completely denied a voice. Is this representative of a democratic country? I think not.

This inquiry has been a farce and without the Gillard-Brown government releasing its modelling it means little to the Australian people. Without seeking the permission of the Australian community at either an election or a referendum, the government is taking billions of dollars out of our economy and giving it to foreign interests. At the same time it has ignored landowners' rights and has turned a blind eye while some of our best agricultural land is turned into a worthless landscape. It seems the Australian people have lost their basic right to democracy through this suite of bills. They have been misled by the Prime Minister's latest $25 million carbon tax advertising campaign. This advertising implies that the carbon tax will help clean up Australia's emissions profile. The shadow minister for climate action, environment and heritage, the Hon. Greg Hunt, said:

Under Treasury modelling, Australia’s emissions will actually increase from 578 to 621 million tonnes between now and 2020. The fact that the tax will raise $105 billion is not disclosed in the advertisements let alone the fact that emissions will go up.

There is no mention of the fact that in addition to the Carbon Tax, Australians will be sending $3.5 billion overseas each year from 2020 to buy foreign carbon credits. This fundamental plan is not raised anywhere in the advertising.

The entire system is based on the assumption that the United States will have a full national Carbon Tax or cap and trade system by 2016. This is both undisclosed in the advertising and utterly fanciful.

If this was a commercial advertisement, the ACCC in all likelihood would pull the Carbon Tax campaign from the air for being false and misleading.

It is interesting to look at the international perspective on clean energy and carbon tax policies. The United Kingdom climate change policy was recently reversed. They have radically reduced their commitment to cut emissions. George Osborne, a UK MP, said:

The United Kingdom will cut carbon emissions no slower but also no faster than our fellow countries in Europe.

The UK was committed to cutting emissions by 80 per cent by 2050. Europe is only committed to cutting emissions by 20 per cent by 2050. Mr Osborne continued:

We're not going to save the planet by putting our country out of business—

I wish this government would think the same way—

Britain makes up less than 2% of the world's carbon emissions compared to China and America's 40%. The renewables sector will never be a strong enough engine of recovery for the British economy.

Canada's Minister of Foreign Affairs, John Baird, in Perth for CHOGM, confirmed that Canada will not be introducing a carbon price. Clearly the Canadians have realised that such a scheme, which fails to reduce emissions and is a huge cost to the economy, is not the most effective way of addressing climate change. When they went to their last election, the government won in a landslide because they declared they would not introduce a carbon tax or an emissions trading scheme. Canada's rejection of a carbon model follows the United States, Japan and Korea distancing themselves from imposing similar policies.

The implications of this for Australia are significant as the government's modelling is predicated on there being an agreement between the major economies on an international carbon trading scheme. The failure of such an agreement will result in increased costs for Australian households and leave Australian businesses unfairly penalised compared to their international competitors. The carbon pricing mechanism is set at $23 a tonne. The carbon pricing scheme in Australia, a country which accounts for 1.4 per cent of global emissions, is going to generate more tax revenue in three months than the European scheme has in more than six years—and Europe accounts for 14 per cent of global emissions. How ridiculous is that?

As a Western Australian senator, I am deeply concerned about the impact of the proposed legislation on my home state, especially about the impact on rural areas. Despite not being in the top 500 big polluters and not being directly subject to the carbon tax, farmers face additional costs from the clean energy bills. These costs are estimated by the National Farmers Federation to be in the order of $16,000 per year for Western Australian grain growers. Tourism operators face 30 per cent higher energy costs, this coming at a time when the sector is struggling with a high Australian dollar and declining domestic tourism. Although the mining sector is expected to continue to grow under a carbon tax, conservative estimates for 2020-21 of employment forgone in existing coalmines due to emissions pricing are around 4,700 jobs in coalmines and 14,100 jobs in the Australian economy. More detailed modelling of the carbon tax by state governments shows that Western Australia will be significantly affected. The Kimberley will experience a reduction in output growth of five per cent by 2020—this is the largest reduction in growth of any region in Australia. The state government will need to find an additional $50 million in 2012-13 to fund the higher energy costs used in delivering services and more than half of Western Australia's households will be worse off under a carbon tax.

The National Farmers Federation, who are opposed to the carbon tax on the basis that it erodes the competitiveness of the agricultural industry in domestic and international markets, have estimated that the average Australian farmer will incur an additional $1,500 a year in costs under a carbon price of $23 per tonne with fuel excluded. That will erode their net farm income by 2.4 per cent. As a former farmer, I can assure you that farming incomes cannot stand up to that for very long—and of course as each year goes by, the cost of the carbon tax will go up. If the effect of the tax on transport costs is also taken into account, the impact is even higher. The NFF estimates that the average grain farmer in Western Australia will incur an additional $16,389 a year in costs, equivalent to a reduction in income of 6.5 per cent—that is adding the fuel on.

There is a lot of misinformation around relating to fuel and trucks. Trucks under 4½ tonnes are exempt from fuel tax, but once they go over that they are not. In Western Australian now, there are very few farm trucks, I think, apart from fire trucks, under 4½ tonnes and most of them have very large equipment. Road trains are now becoming part of the farming scene because with their equipment—the headers and the chaser bins—farmers can now take off grain faster than they used to be able to. The storage capacity therefore needs to be a lot greater. So there is the cost of fuel for all these trucks, and then there is the cost of electricity. The cost of diesel, especially when we get up into the Kimberley on the cattle stations, which have already had a huge hit with the live cattle export issue, is going to cause more problems as well.

Heading into 2012 and subsequent seasons farmers will face not only the ongoing challenge of variable prices, costs and seasons but also the consequences of the carbon pricing mechanism. Under the CPM Australia's 500 or so biggest emitters will have to pay for their emissions. The emissions price, as we have said, will be $23 a tonne of CO2 starting on 1 July 2012, increasing by 2.5 per cent in real terms per year until 2015, when a market based floating price commences. Directly affected businesses will investigate the feasibility of limiting their emissions. Some businesses will simply pay for their emissions and mostly pass on those payments to their consumers, while others will, in combination with restricting emissions and passing on costs, have to purchase credits, known as offsets.

The export oriented nature of the mixed enterprise farm businesses in WA causes those businesses to have a limited ability to pass on any additional indirect costs to their predominantly overseas customers. With no price cushioning, farmers will simply bear the additional small increases in indirect costs, leading to an erosion of their profit margins. Depending on what economists call the incidence of the tax on inputs affected by the CPM, for example electricity, a range of farm overhead and variable cost items may slightly increase. The end result is a possible reduction of around six per cent in the profit for a typical broadacre mixed enterprise farm business in WA. As I said, this reduction might seem minor to some people but I can assure the Senate that it is not a minor matter.

Also we have the impact on mining. The Minerals Council of WA considers that the carbon tax will erode the competitiveness of Australia's export and import competing sectors without any environmental benefit. The Minerals Council estimates that the minerals industry will face costs of $25 billion between 2012 and 2020 under the carbon tax package and believes that the decision to include emissions from coal mines is unique. These emissions are exempted under the European Union emissions trading scheme. Certainly as far as the export trade goes it is open slather and we have to cop this extra tax.

The Australian Tourism Export Council considers that the carbon price mechanism will impact significantly on the tourism industry, at a time when the high Australian dollar and declining domestic tourism are impacting on the sector. These businesses face electricity increases of about 30 per cent and there will be a significant impact on operators reliant on diesel or aviation fuel, who will face a reduction in their fuel tax credit of 18 per cent. The Managing Director of the Australian Tourism Export Council, Felicia Mariani, noted:

The bottom line is that the Government has left the tourism industry high and dry, providing little or no direct support or capacity for businesses to transition to a low carbon economy, or any compensation for the tour operators who are going to be hit hard by the increase in fuel costs.

Economic modelling commissioned by state governments examined regional impacts of the carbon tax. Such detail was not included in the federal Treasury's modelling. The Western Australian Treasury's 'preliminary assessment' of the clean energy package examined the impact on the Western Australian economy, the budget position and households.

Some of the key projected outcomes for Western Australia are: a 0.7 per cent projected increase in the consumer price index in the Commonwealth Treasury modelling which translates to an additional $50 million in additional costs in 2012-13 for state government agencies, growing to around $60 million by 2014-15; a combined impact estimated to be between $230 million and $280 million per year for state-owned electricity generation assets; and around 419,000 households in Western Australia out of a total of 810,500 households where the average cost of living impact of the carbon tax is greater than the Australian government assistance for the carbon tax.

The coalition will repeal the carbon tax legislation. The next election will be a referendum on the carbon tax. The 72 Labor MPs have betrayed their communities by voting for the carbon tax in the House of Representatives. The Prime Minister and the Labor government had no mandate for this legislation. The coalition will continue to fight the carbon tax. We will give the community a say on the issue that they were denied at the last election. If elected, the repeal of the legislation will be the coalition's first order of business. If Labor attempts to block the scrapping of the carbon tax, we will go to a double dissolution election. It will be a major attack on democracy if Labor then again rejects the voices of the Australian people. Australians are already facing substantial cost-of-living pressures and the carbon tax will only add to these pressures while doing nothing to reduce Australia's emissions. The coalition believes this carbon tax is absolutely the worst thing for Australia.