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Monday, 20 August 2012
Page: 9110

Carbon Pricing

Mr SYMON (Deakin) (14:50): My question is to the Minister for Climate Change and Energy Efficiency and Minister for Industry and Innovation. How have financial markets factored in the impact of the carbon price on inflation? How does this compare with the predictions that were made before the carbon price came in?

Mr Briggs interjecting

The DEPUTY SPEAKER ( Ms AE Burke ): The member for Mayo is warned.

Mr COMBET (CharltonMinister for Industry and Innovation and Minister for Climate Change and Energy Efficiency) (14:51): I thank the member for Deakin for his question, because underlying inflation is actually at a 13-year low, and the carbon price will have quite a small impact on inflation. We have stated many times in this place that the Treasury modelling found that the impact on the CPI would only be 0.7 per cent in financial year 2012-13. That is less than one cent in the dollar and certainly much less than the CPI impact of the introduction of the GST, which was 2.5 per cent. It is nothing like the hysterical claims made by the Leader of the Opposition of unimaginable price increases—far from it.

The carbon price has now been in place for approximately seven weeks, and during this time TD Securities' inflation gauge has shown that the overall inflation impact during the first month of the carbon price was just 0.2 per cent in July—one fifth of one cent.

There is certainly no unimaginable price increase in that, as claimed by the Leader of the Opposition, and nothing to support the ridiculous three-page beat-up today in the Daily Telegraph.

But we have also seen in the past week an analysis of inflation expectations on financial markets from financial markets. This confirms the Treasury modelling. Investors, of course, when considering these issues, back their predictions up with their money. They are saying that the impact of carbon pricing on inflation will be in the order of 0.6 to 0.7 per cent. That is bang on the Treasury modelling. In the face of all of these facts, in the face of all of this evidence that is mounting, what do the coalition resort to as part of their mendacious, ridiculous, hysterical fear campaign? They resort to exhorting people to price gouge.

Here is a classic example. A refrigerant company, Equipserve, has been pinged by the ACCC after it replicated a statement, in effect, made by the shadow industry minister, the member for Indi. She wrongly attributed increases in refrigerant gas prices to the carbon price—the entirety of the increase to the carbon price. They are the very same statements that were found to be in breach of the consumer laws and that led to the giving of an enforceable undertaking by that company to the ACCC.

This is the conduct the opposition engage in. They go around misrepresenting, making ridiculous, deceitful claims, encouraging businesses to price gouge. The meat industry has had to disown the silly leaflet that the opposition have put out. Their whole campaign is a fraud and their claim to repeal it is also a fraud. (Time expired)