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Monday, 21 May 2012
Page: 4800

Dr STONE (Murray) (18:18): I too will speak on the Appropriation Bill (No. 1) 2012-2013 and related bills. The elephant in the room on the night that the budget was announced was Labor's, or should I say the Greens', great new carbon tax. This is the tax which Julia Gillard promised would never be introduced on her watch. She knew the damage that it could do. The carbon tax became the price of the keys to the Lodge, but it comes at a terrible cost to the competitiveness of the Australian economy. Nowhere in the long and florid speech made by the Treasurer on budget night was there a reference to the 1 July commencement date, when a hefty carbon tax will be imposed on Australia's energy consumers and emitters. The extra cost will be embedded in all that we do. Food prices will escalate; energy bills will escalate; and our industry, largely grown on the back of cheap fossil-fuel generated energy, will reel, and much of it will buckle.

Just today, the Russian aluminium giant RUSAL condemned the Gillard government for kneecapping the once high-growth alumina industry of Australia. They are quoted as saying:

Australia now faces an almost impossible task of competing with new entrants to the industry.

RUSAL Australia Chairman John Hannagan has said that the design of Gillard's carbon tax would hand future global capacity increases to competitors in Asia, South America and other places where there is no carbon impost. This industry leader referred to the perverse outcome where Labor's carbon tax could actually stimulate even higher global emissions, as new competitors in less regulated markets scramble to take up the opportunities created as Australia's global share of production falls away.

This is particularly depressing when you think that Australia's aluminium industry is amongst the world's best in generating the most efficient and least carbon-dioxide-intensive production. Generations of industry research and investment will now be compromised, or made useless, because the Greens insisted that Australia introduce the world's largest and most all-inclusive carbon tax, even though there is no evidence that the globe's emissions will be reduced or contained as a result. Others less environmentally careful than the Australian industry sectors will simply take the place of the closed-down parts of our economy. Their people will take the jobs in their countries that will be lost from our cities and regions of Australia.

The big dairy companies of Australia are also in the media today begging the government to rethink their destructive carbon tax policy. In my electorate, one of the big 3 to pay the new tax, Murray Goulburn Cooperative, have already announced job losses and a shrinkage of their activity amounting to nearly a third of their workforce in two of my small towns. Murray Goulburn's costs will rise by some $10 million a year, they calculate, and it will be their dairy farmers, their suppliers, who will have to bear the pain, given that Murray Goulburn can rarely negotiate higher prices from their international buyers, who always have the subsidised alternatives, and in the domestic market Coles and Woolworths have over 80 per cent of the retail market sown up between them. That means they can simply squeeze their suppliers as hard as they wish; there are too many alternatives.

Bega Cheese expect to see a 20 per cent impact of this new tax on their costs. Fonterra, a New Zealand owned dairy company, only pays $7 a tonne as a carbon tax in New Zealand, compared with $26 a tonne and going higher to be paid in Australia. New Zealand is the major competitor with Australia for dairy produce in international and Australian domestic markets. So guess which country's market share will shrink in the very near future? There will be less dairy production in Australia; more in our near neighbour.

But it gets worse. We have another tax—the equivalent carbon price—to be applied to synthetic greenhouse gases from 1 July. This element of the new tax will apply to bulk refrigerants and refrigeration and air-conditioning equipment, including domestic, commercial and vehicle air-conditioners and domestic and commercial refrigerators and freezers. The new equivalent carbon price is to be based on Labor's new carbon tax plus the global-warming potential of each gas relative to carbon dioxide. In theory, the price per kilogram of these gases, collectively referred to as hydroflourocarbons, will more than quadruple. In reality, price gouging is already taking place, with the importers already hiking the price for the most commonly used HFCs from $25 a kilogram in January to between $50 and $90 a kilogram now. This is despite the fact that the new tax does not start till 1 July. A coolstore operator in my region told me of his shocking experience where he had to replace 1,800 kilograms of a synthetic greenhouse gas early this year at a cost of over $50,000. If he had to do this after 1 July, when the price will be over $100 a kilogram, this replacement would have cost him $180,000.

I have tried to find some assistance for this fruit coolstore operator from this government, which has imposed this new cost upon him. This government boasts that they will help those most cruelly impacted by their new policies. Unfortunately, those who manage coolstores cannot simply refill their equipment with a different gas; a whole new set of equipment is required at a substantial cost. But Labor's Clean Technology Food and Foundries Investment Program only offers some assistance to manufacturers—not to other essential parts of the value chain like coolstores which hold the fruit, cheese or meats on their way to the manufacturer or the retail markets.

This is typical of Labor. Labor fail to understand the interdependencies or complexities of an industry sector. It happens again and again. And by the time they work it out it is too late; too much enterprise has been lost. The business is buried; the jobs are lost; the regional economy shrinks; the manufacturers have had to pick up additional costs to make up for the lost local part of the value chain. And so we further suffer, and our economy, as I said, shrinks—and it is all due to this government's policies.

We all want to see synthetic greenhouse gases substituted for something more environmentally friendly in the future. It has been the object for nearly a decade now. The European Union, however, has taken a very different approach to the Labor Party's punitive price regime. Labor's regime will simply drive businesses to the wall. The EU's regulations aim to improve leak-proof equipment, encourage better labelling of equipment containing hydrofluorocarbon gases, and have better training and certification of personnel and companies handling these types of gases, their containment and recovery. The EU will end up with a reduction in the impact of these synthetic greenhouse gases. We, instead, will simply kill our industries with a sudden impost of punitive prices—prices that cannot be clawed back by higher charges to those downstream. Those are two different approaches based on very different understandings about how industries can best adapt and survive.

But let me turn to another very serious problem now confronting us as we scour the world for skilled tradespeople who will be our next generation of technicians. We are also now seeing an avalanche of parents choosing to take their children out of state owned education systems to put them into private independent schools. And we are now seeing a generation of young people turning their heads away from apprenticeships and away from becoming skilled tradespeople. It is much more attractive to leave school and go and work in a fast-food chain than to be dedicated to years of training to become an electrician or a plumber.

Labor has presided over the biggest collapse in educational standards in this country while it boasts of the biggest investment in buildings. The problem is that bricks and mortar—or, more commonly, cement tilt slabs and composite panelling—do not in themselves address the chronic problems of teacher competency, teacher morale and curriculum deficit. Labor has the Gonski review, which identified the need to invest in individual students according to their needs. But that comes at a significant cost. Sadly, Labor will spend at least $8.7 billion over government earnings next year, and it is so heavily in debt that halting the slide in educational outcomes is simply beyond its reach.

And so we have the obscene NAPLAN, a joke to parents, who see their children coached all year to pass a test that is an instrument which cannot and does not show real changes in children's educational development. All it does is name and shame on a very popular website. Imagine the despair of Indigenous parents in remote and regional Australia whose children are given this NAPLAN test in Standard Australian English when these children do not speak this language at all. I have recently been talking to the teachers and parents in such places, and they are deeply frustrated at the negative labelling and useless statistics generated by this national test. According to the outcomes, all the Indigenous students—all their children—are dumb. Labor places great store in NAPLAN, however, trumpeting it as one of its great educational outcomes.

As for our apprenticeship training, it once produced master tradespeople, who were amongst the most skilled, compared to those anywhere. Our tradespeople could work anywhere internationally. Their qualifications were highly regarded. Our current system, presided over by Labor, means young people or mature-aged candidates must somehow survive on about $6 an hour. They are no longer required to spend some four years or so gaining on-site instruction as well as education—leaving their workplace to attend theoretical and other training in a TAFE. Instead, in the interests of cost savings and expediency an apprentice can be fast-tracked through his or her training, becoming eligible for full qualifications, or at least a bit of paper, in only two years. They achieve this with so-called competency check-offs where a registered training organisation sends someone to, for example the building site, who says: 'I can see a bit of scaffolding up there', 'I can see a bit of plumbing' or 'I can see a bit of frame. Did you do that? Great, let me take a photo. I now can tick a box saying you are competent in that element of your training.'

I have complaints from skilled tradespeople, master tradespeople, as well as the apprentices and their parents, who are now in despair at the decline in the value of their qualifications and in the decline of their real skills development. I have young apprentices who are being used as cheap labour, who are not being released to do training at a TAFE institution at all and who are being ticked off in the competency list. At the end of their two years or so, they are let loose on a workforce where they can very rarely gain any respect or work as a skilled tradesperson. This is a serious problem and I ask this government to look closely at it.

I do not know why it is that we have sacrificed real outcomes in the education sector, whether it is in our primary or secondary education or in our trades training. We have no reason at all to now be falling away in the OECD tables showing the outcomes for our students in maths and science. The results from NAPLAN—that flawed instrument—are even now showing that our literacy and numeracy standards in the years that are tested are falling away. This is a disgrace. It is happening on Labor's watch and I ask them to seriously get back to the knitting.

Stop worrying endlessly about trying to sell a carbon tax, which is indefensible. Like us, why don't you address a very real revolution and abandon the carbon tax right now. I do not understand how a country with the prospects of Australia can beggar itself through bad policy. I do understand that the lure of the Lodge was great. I do understand that we have a minority government and that the Greens made this a condition of them giving their support to the Labor Party.

However, there is a much greater issue at stake, and that is the contraction of an economy. I have job losses now in my electorate that have never been seen before, the like of which have not been known before, even in the days of the Great Depression. There are over 100 shops empty in the city of greater Shepparton, the big city of Shepparton itself, where before there was nothing but a great sense of opportunity and expectation given we are being the greatest irrigation region in Australia. We were proud to call ourselves the food bowl of Australia. Now each day we live in dread of what the Murray-Darling Basin Authority, under the guidance of this government, might do as it seeks to buy even more of our irrigation water out of the hands of drought-stressed irrigators. It wants to put it into the Commonwealth environmental waterholders' bucket, so that again the Greens can be placated, so that the Greens can be told: 'We promised you a very big bucket of gigalitres of irrigators' water. We have delivered.' At the same time they turn their backs on the fact that dairy, fruit and fibre production cannot recover from the drought if the security of the water is no longer there. I beg this government to look harder at what they are doing. Sometimes there are more important things than staying in the Lodge. Sometimes it is more important to go to an election and give the people a chance to reset the clock for Australia.