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Tuesday, 9 October 2012
Page: 11609

Mr MATHESON (Macarthur) (16:48): I rise to speak on today's MPI because I hold great concern for the people of my electorate, Macarthur, and the people of Australia, especially families, pensioners and small business owners, who will suffer most as a result of the government's carbon tax and the changes that have been made to it. Today's MPI is about the adverse impact on the Australian economy of the government's changes to the carbon tax. I have many concerns about these changes, especially when so many people in my electorate are already suffering as a result of this tax.

It has been only three months since the government introduced the tax on 1 July. Since then, I have received many phone calls and letters from local families and small business owners in my electorate who have sent me their electricity bills to show the effect this tax has had on their cost of living. One example is a local high school which received a carbon tax charge of $447 in the first month of the carbon tax being introduced. If you take this first month as an average, that means the carbon tax will cost the school and similar schools around Australia between $5,000 and $6,000 per year. This is money which teachers say could be better spent on interactive whiteboards, textbooks, computer programs for design, music or art or urgent maintenance that is not funded by the government. The costs of electricity will also increase the costs of canteen food for students and staff, as most canteens are privately run. Last time this school's carbon tax charge was brought up in parliament, those opposite said these figures were not true. Well, I have this electricity bill right here if those members opposite would like to take a look. It is proof that this government has no regard for local students and families who are being forced to pay for this ridiculous tax.

Let us look at the tourism sector. The director of Quest Apartments in Campbelltown, Mark Drinkwater, has contacted me with his latest electricity bill. There is a carbon charge of $827.24 for one month, which will mean around $10,000 per year for his business. This does not include the $1,000 per month increase in the network service charges the hotel is also being slugged with. This means an additional $20,000 to $25,000 per annum in electricity alone compared to last year. Then add the carbon tax increases in the hotel's gas and other utilities expenses, and the increase in the expenses of dozens of creditors and suppliers, which will be passed on as well. Mr Drinkwater has told me that the hotel's target market is the corporate sector, which is looking to rein in spending, so, for this hotel, passing on the cost to its customers is very, very difficult. Mr Drinkwater made another good point when he asked me: 'If the plan is to encourage us to modify our operations to reduce our footprint on the environment, why couldn't they just legislate that, which would surely be a great stimulus for those industries and create jobs, as opposed to businesses inevitably putting people off?' Loss of jobs will occur in his business. Mr Drinkwater said that, like most businesses, his hotel was already trying to be cleaner and greener so it could be cost-effective and a good corporate citizen of this country. This business is run by a husband-and-wife team who are about to have their first child. This carbon tax has the potential to send them to the wall, and the government does not care.

Local schools and the corporate sector are not the only ones being affected by this tax. I have also been contacted by several seniors in my electorate who are outraged by their electricity bills since the tax was introduced. Mr Brian Ellis of Campbelltown has sent me a copy of his latest electricity bill, which has increased by 20 per cent, despite his usage decreasing during this bill period. Mr Ellis is 70 years of age and is not on the pension, so this increase of $100 per month in his electricity costs is simply not good enough.

Mr Ellis is not the only self-funded retiree facing these increased costs at a time in his life when he can least afford it, and with no compensation. I have been contacted by a couple in my electorate who have concerns about the financial implications of the carbon tax on their lives. The husband is a self-funded retiree living on a pension from his superannuation which is less than $45,000 a year. His wife, 59, has no income apart from a very small amount of bank interest. The husband is aged 60, is no longer paying tax and is not eligible for a promised tax rebate. He is less than 65 and yet not a pensioner, and so he is not eligible for a pensioner bonus. What is the government offering for people in this situation? Absolutely nothing. I have been contacted by a local resident in a retirement village who tells me that the carbon charge directly increases his general supply charges by 45 per cent—another example of the huge increases that the carbon tax imposes on some of the most vulnerable residents in my electorate.

And, if the past three months have not been bad enough for people in Macarthur, the government now want to make major structural changes to the carbon tax which will only do more harm than good. They want to remove the legislated floor price from the carbon tax and link the Australian carbon tax with the European ETS. They are also trying to increase the carbon unit auction limit from 15 million to 40 million for 2015-16. They want to alter the arrangements applying an equivalent carbon price for liquid fuels and synthetic greenhouse gases. They want to make amendments concerning the measurement of potential greenhouse gas emissions and make further amendments concerning natural gas liabilities.

It is not just the coalition who are concerned with the impact of the tax on our economy and trade industry. In March this year, the Australian Chamber of Commerce and Industry's director of economics, Greg Evans, told the media that Australia should not impose a carbon tax before a confirmation of international agreement on emissions cuts. He said that the carbon tax would have a negative impact on all trade-exposed industries, which actually cannot pass on the costs associated with a carbon price, because they are competing internationally either through import or through export competition.

It is quite clear that the government is making policy changes relating to the carbon tax on the run, and each of these changes represents uncertainty, instability and consequences for all Australians. Removing the floor price of the carbon tax and linking it to the European carbon price leaves the Australian economy in the hands of Europe. Australia's electricity price will be largely set by European bureaucrats. The regulation impact statement published by the government shows us that having the price set by a completely different economy on another continent would create additional administrative costs for some small businesses due to the potential change in treatment of international units.

The government is also proposing to increase the carbon unit auction limit from 15 million to 40 million. This change means a potential extra $725 million in revenue from forward permits to help prop up the budget for 2014-15. In addition to this, the Energy Supply Association has said that forward-selling permits will lead to higher electricity prices. When is the government going to start to listen? I can tell you that further hikes in electricity prices are not going to go down well with the people of Macarthur, and I doubt they will be welcomed by any family, pensioner, school or small business across the country.

These changes show a great deal of unreliability in relation to the government. On 11 occasions, senior members of the government have expressed to us that the floor price was crucial to the stability of the carbon tax. We simply cannot trust that the government will follow through with what it says. Yet, despite making eight changes to the carbon tax before it had its three-month anniversary, the government says it still stands by its Treasury modelling. Some forecasts doubt that the European price will reach Treasury's forecasts, meaning a budget black hole for Labor—nothing different. The current Treasury modelling relies on all forecasts falling 100 per cent into place in one of the world's most volatile economies.

What also concerns me is that the government is moving full steam ahead with this policy despite not having it formally agreed with the European Union. The negotiations to form a one-way linkage will happen in July 2013, and negotiating an agreement for the full link will occur by July 2015, over 2½ years away.

I must also share my concern for Australian farmers, as we have many farming families living in Macarthur. The government's amendments are a bad deal for our farmers. In relation to the Carbon Farming Initiative, Australian farmers have been excluded from selling carbon credits to Europe until 2018. The deal the government negotiated allows Europe a virtual monopoly in selling carbon credits to Australia, while Australia is locked out of Europe until 2018.

Mr Tehan: Only this government could do something like that.

Mr MATHESON: Magic policy! The carbon tax is obviously in a mess. Since the tax was introduced three months ago, there have been eight major changes. No wonder the people of Australia are so confused by this tax and fed up with this government. If you look at the changes in detail, it is obvious that the tax and this government are in chaos.

The government bailed out major companies using taxpayer funds on the eve of the carbon tax being introduced, including funding to Energy Brix and Alcoa. They decreased the share of Clean Technology Investment Program grant funding for small businesses so as to further increase funding for big businesses. The Clean Energy Regulator added more businesses to the big polluters list, taking the total now to 315. The government changed the regulations so as to increase real emissions from pipelines and landfill by one million tonnes. They abandoned the Contract for Closure program to shut down power stations, which will mean that the carbon tax will have to increase to achieve the same emissions reductions.

They scrapped the floor price, which was to have been $15 from 2015. The government had said the floor price was needed for business confidence. They are looking very confident out there at the moment! They linked the scheme to the European system, which does not allow a two-way trade on carbon credits, putting Australian businesses at a disadvantage and resulting in Australia's carbon tax being set by the EU price. They halted the green technology investment grants. This came just weeks after the grants were announced then changed.

Mr Deputy Speaker Symon, these changes show that the government has lost control of its carbon tax and is making changes on the run, which I am sure you would agree is a very dangerous thing to do. This is simply not good enough, especially when we are talking about an economy-wide carbon tax which is already having such a negative effect on families, seniors and small business owners across Macarthur and Australia.

I come from a local government background. We are not even seeing the impacts of what is happening at local government. I know that for the Campbelltown City Council there is about a $600,000 impact to their budget in relation to the carbon tax, and they have not even begun to pass on the operational costs like street lighting and the electricity in the buildings. The associated costs of running the council are not being passed on to local residents, and this will be reflected in the direct loss of services. Their rates will go up. There has already been a $20 increase this year. They are going to go up and up and up under the carbon tax policy. This government should be ashamed of itself.