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Monday, 7 November 2011
Page: 8303

Senator WONG (South AustraliaMinister for Finance and Deregulation) (13:05): First, in relation to the business sector. Let us come back to some economics. Most businesses will pass on the price. That is why we are assisting households by giving them more income—

Senator Williams: Abattoirs can't do that!

Senator WONG: Senator, let me go through this. I listened to you in silence. Most businesses will pass on the price, and that is why there is assistance being provided to households—to reflect the 0.7 per cent CPI increase, which I must say is significantly less than the price impact of the GST when it was introduced. There are businesses who cannot pass on the price. Businesses in what I used to call the emissions-intensive trade exposed sector—I do not know if we still use that term—are provided with a very substantial amount of assistance. I think it is $9.2 billion over the forward estimates under the Jobs and Competitiveness Program directly to deal with those issues. If the senator cared about business costs, he would care about two things: he would care about the fact that he is imposing a higher cost to achieve the same environmental outcomes through his policy—

Senator Williams: That is absolutely wrong!

Senator WONG: I will take the interjection that that is wrong. He is basically telling the Treasury and the Department of Climate Change and Energy Efficiency—apolitical public servants—that their advice is wrong and that he, Senator Williams, the National Party senator for New South Wales, is right. You are imposing higher costs on businesses through your policy, including your refusal to allow international trading. You would not do that if you did care about costs on businesses.

The second point on that I make is that you would support the MRRT because that actually will provide a tax cut to companies and small business. The Liberal Party is opposed in a multispeed economy to miners paying more tax and other companies, including the agricultural sector, paying less tax. You want to come in here and lecture us about business costs? Have a look at your own policy position.

Senator Williams: I asked you questions.

Senator WONG: I am going to come to those questions. I am just responding to the point on the business sector. In relation to section 114, the government's advice is that the provisions do not contravene that provision of the Constitution.

In relation to local government, as I said, the impact, which includes the impact on council rates, is 0.7 per cent of CPI. You might recall that the GST introduction was a 2.5 per cent CPI increase. The government provides ongoing financial support to local government through the financial assistance grants. That is a pool of funding indexed to the CPI, so obviously that indexation of itself captures the carbon price impact.

A question on landfill was raised with me. Landfill operators who take action to reduce pollution from waste before 2012 can secure carbon credits under the Carbon Farming Initiative. If landfill operators use methane from landfill to generate electricity, they may be eligible for renewable energy certificates under the Renewable Energy Target. I am advised that legacy waste emissions are excluded from any liability and, therefore, it is expected that carbon farming credits from landfill waste will in fact exceed liability on landfills in the period to 2020.

The government also made some changes in the other place to landfill liability to further ease the burden on local councils. There will no longer be a liability on landfills that emit between 10,000 and 25000 tonnes. Landfill operators will be able to meet 100 per cent of their obligations using carbon farming credits. Regrettably, Senator, I think your party opposed those amend­ments. The Australian Local Government Association welcomed the outcome of this and the introduction of a market based approach to carbon pricing. They said:

The amended legislation addresses local government's concerns about the impact of a carbon price on small landfills, many of which are owned by councils.