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Thursday, 11 October 2012
Page: 8008

Carbon Pricing

Senator WILLIAMS (New South WalesNationals Whip in the Senate) (14:12): My question is to the Minister representing the Minister for Climate Change and Energy Efficiency, Senator Ludwig. I refer the minister to Grain Products Australia, a Tamworth business that employs 68 people and has been crippled by the government's carbon tax. Over the last three months the electricity bills of Grain Products Australia have had carbon tax charges of $27,000, $28,000 and $29,000 respectively and, in the words of the owner, 'are making life very, very difficult'. Given that Grain Products Australia faces competition from cheaper Chinese imports that do not have a carbon tax imposed on them, how is this regional Australian business, providing employment for working families, expected to survive with this business-stifling tax?

Senator LUDWIG (QueenslandMinister for Agriculture, Fisheries and Forestry and Minister Assisting on Queensland Floods Recovery) (14:13): I thank Senator Williams for his continued interest in at least parts of rural Australia. One of the important parts is that I do not accept the premise of the question. If Senator Williams has those figures then I always encourage senators to table them. Provide them to Minister Combet's office so that Mr Combet can look at the actual figures, otherwise we end up with a scare campaign again in support of that. I would have thought Senator Williams was above that, quite frankly. I think highly of him.

Treasury modelling has shown that the carbon price will increase issues around electricity prices by 10 per cent and—

Honourable senators interjecting

The PRESIDENT: Order! When there is silence on both sides we will proceed.

Senator LUDWIG: The Treasury modelling and the recent analysis by Big Switch Projects on larger business users demonstrated an average price rise of around 11 per cent due to the carbon price. That is why it is very important to get the facts on the table. That is why it is very important to analyse this so we do not have statements in the public arena which are unsupported and which could mislead the public about the impact of generator costs and the carbon price on electricity prices.

They found that the impact of the carbon price for most businesses is at or just over 2c per kilowatt hour, which is what the Treasury modelling predicted. What is also happening to large businesses is that many network companies have been increasing demand charges by as much as 75 per cent, which is resulting in overall bill increases of up to 53 per cent. So it is very important to unpack that and separate that out. If you look at that issue, you will see that the network costs are by far the greater component of the electricity price. These increases have nothing to do with— (Time expired)

Senator WILLIAMS (New South WalesNationals Whip in the Senate) (14:16): Mr President, I have a supplementary question. I refer the minister to the fact that without the carbon tax, Grain Products Australia paid 18.4c a kilowatt hour and the carbon tax has added 2.1c per kilowatt hour. This has resulted in an 11.5 per cent increase in their electricity charges. Can the minister explain why Grain Products Australia is already suffering an increase that is greater than the 10 per cent increase predicted by the government?

Senator LUDWIG (QueenslandMinister for Agriculture, Fisheries and Forestry and Minister Assisting on Queensland Floods Recovery) (14:17): I thank Senator Williams again. I do not accept at face value what you are saying. It is very important that you provide that and that you table it. It is important to make sure that we get this accurate. Quite frankly, it is time that those opposite acknowledged that the massive increases in network prices are the main reasons for higher electricity prices and they should ask state governments why they are not assisting households and businesses with these increases. I bet that Senator Williams's state counterpart has not heard one peep from him on electricity prices—he could nod to confirm that if he wanted to. We know that they want to slice electricity bills and pump up that issue to support their scare campaign over the last 100 days. It is falling flat and now they are staggering around trying to find something new to grab hold of. (Time expired)

Senator WILLIAMS (New South WalesNationals Whip in the Senate) (14:18): Mr President, I ask a further supplementary question. With the carbon tax to go up and up under your government's estimates, will you finally admit this economy-wide carbon tax is an impediment to business in Australia and will reduce their ability to be internationally competitive?

Senator LUDWIG (QueenslandMinister for Agriculture, Fisheries and Forestry and Minister Assisting on Queensland Floods Recovery) (14:18): I am pleased Senator Williams now talks about business certainty. The biggest threat to business certainty is those opposite saying that they are going to withdraw it and rule out a carbon price into the future. That will create the biggest uncertainty for business. Quite frankly, it is extraordinary that Senator Williams raises the issue of business certainty when the biggest risk is the coalition ripping away business certainty because of the attitude it has adopted in relation to the carbon price. Those opposite are not going to protect business. Businesses have more certainty now than ever before with the introduction of this carbon price and with it moving to an emissions trading scheme after a fixed price period. Let us not misunderstand the significance of this announcement. We have negotiated linking in a scheme which covers 530 million over 30 countries. (Time expired)