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Monday, 1 December 2008
Page: 7706


Senator JOHNSTON (4:06 PM) —by leave—I move:

That the Senate take note of the statement.

I will respond to the minister’s statement on behalf of the opposition. I note that the Minister for Climate Change and Water has begun to follow the coalition’s approach of waiting to see where the rest of the world is going before deciding targets for greenhouse gas emission reductions. Why do the government continue on their rush and haste in their introduction of their own emissions trading scheme without waiting to see what is going to happen with respect to the outcome of the meeting of all countries in Copenhagen late next year and the detail of what US President Obama will do and what line he will follow?

The coalition has long warned that the government’s rushed 2010 deadline will lead to a flawed model that will damage Australian industry and, more importantly, damage employment. Likely to greatly influence the impact infrastructure can have in the years ahead is the design and timing of the government’s planned emissions trading scheme. Without doubt climate change is best tackled from a position of economic strength. I think that is a fundamental plank from where the opposition is coming on this subject. To this end, an effective emissions trading scheme must be designed to protect our export and import competing industries until the rest of the world has signed up to a course of action. As it stands today, the government’s preferred design for an emissions trading scheme would effectively impose billions of dollars of tax on those Australian export and import competing industries which are high users of energy, ahead of any commitment by our major trading competitors to sign up to such a scheme. This makes no sense.

The coalition believe that we need to give the planet the benefit of the doubt. We therefore support action on climate change. For that reason we have a policy of both protecting the planet and protecting Australia. We support in principle an emissions trading scheme as part of a three-pillars approach to climate change which also includes a clean energy revolution and unrelenting international pressure for reduced world emissions. The situation is that we consider that an emissions trading scheme should commence when it is ready, in an orderly, methodical and responsible manner which enjoys the broad support of Australian industry and protects vulnerable Australian households, not before 2011. The carbon price must be set at a level that reflects action by the rest of the world, and if no action is underway Australia must start an emissions trading scheme with a very low price and a slow trajectory. Australia must have an emissions trading scheme that will achieve carbon reductions without compromising Australia’s future economic sustainability. Last year’s Shergold report warned that excessive haste creates great risk.

We have seen some very interesting developments in recent times. The minister makes a statement in a very timely way given the shifting of the goalposts here. Notwithstanding the fact that she is going to Poznan and has said that she is going to tie down interim targets thereafter—I think her announcement is due on Monday, 15 December—I want to pause to say that this government in its design of this scheme has committed to a dreadfully flawed scheme. When you look at the amount of energy we are supplying to particularly East Asia, to not include liquid natural gas in a scheme such as this, when we are exporting a reduced emissions technology effectively through the gas, is utterly crazy. The best thing we can do for China, Japan, Taiwan and South Korea is to give them an energy source that is emissions reduced. But, no, LNG has been left out of the scheme. LNG will be rendered marginally competitive under this scheme. It will be damaged.

I pause to say that there is a lot of concern in this chamber about the car industry. The car industry is going through a period of enormously stressful economic strain at this moment. On top of what it is going through, we are going to impose an emissions trading scheme upon that industry and the amount of energy it uses, particularly in the southern states, which rely on coal-fired generation. I might point to the Tasmanian refinery and the Port Pirie refinery. That is a microcosm of an example where the government appears not to be listening. Alcoa’s $3 billion expansion project has been put into mothballs while we wait to see some certainty. The minister talks about certainty; she has created uncertainty. She has over 1,000 submissions. We know what they are saying: they are saying that this policy is an anathema to economic stability and to economic certainty. When is the minister going to wake up to the fact that the global financial crisis has added to the problems of implementing this policy? It is a dangerous policy. If she were seeking bipartisan support, she should come into this chamber and say, ‘We are pausing to have a good look at what everybody else is going to do and to rework our original position and go forward low and slow.’