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Wednesday, 28 October 2009
Page: 11337

Ms LEY (8:56 PM) —On 13 August this year, the coalition joined with all other non-Labor senators to vote down the Rudd government’s proposed version of an emissions trading scheme. The reasons for this were that, as designed, the Carbon Pollution Reduction Scheme was flawed and would unnecessarily harm Australian exports, jobs and investment. The scheme would simply lead to emissions being exported rather than reduced at the global level and the CPRS represented a tax grab, disguised by the fact that the government published only one year of estimates of the full fiscal impact of the scheme.

Today, with the Carbon Pollution Reduction Scheme Bill 2009 [No. 2] and the related bills, we consider important amendments, and I want to outline them: (1) placing Australian emissions-intensive trade-exposed industries on a level playing field with their competitors abroad, (2) excluding agriculture from the scheme and providing a mechanism for farmers to earn offset credits when they abate carbon, (3) ensuring Australian coal producers reduce their fugitive emissions as technology allows but are not unfairly financially penalised compared to competitors, (4) moderating the impact of higher electricity prices on small businesses, (5) providing assistance to coal fired electricity generators to ensure they remain financially viable and the lights stay on, and (6) encouraging complementary abatement measures such as voluntary action and energy efficiency in building.

My electorate of Farrer in southern and western New South Wales is very much in the spotlight as regards this legislation. So I want to particularly talk about agriculture and the Carbon Pollution Reduction Scheme. Whatever we do to this particular legislation it will still remain a dog. We went to the last election with an ETS policy—many have forgotten that fact. The coalition had a well-designed policy in 2007. Even if all of our amendments get through, the policy will still be a shocker. But when constituents approach me and ask, ‘Why are you supporting the amendments and not simply turning your back completely on the possibility of this ETS?’ I say to them, ‘While ever there is the remotest chance that Australia could finish up with Mr Rudd’s ETS, I and my coalition colleagues have to do all that we can to mitigate those effects and try to make the ensuing scheme less bad—because we cannot deliver from opposition what we once might have delivered from government.’

People who are naturally offended and shocked by this scheme—people who have worked out the sums and seen the effect it will have on their households, their lives and their farms—are coming to us and saying, ‘Please do something.’ I feel enormous frustration that my hands are tied and that we cannot implement the changes we know are important. But, in the amendments that we are proposing, we are doing the best we can.

I was at the Henty Machinery Field Days in my electorate a few weeks ago and a Riverina farmer came up to me and showed me a calculation that he had made from the website of the Australian Farm Institute. They are good people and they had put out a very well researched calculator about what the Rudd ETS would cost farming. Speakers from the government have said, ‘We are not putting the ETS on agriculture just yet,’ but in the same breath they are saying that they want agriculture to be responsible for its emissions. So we know that three years after this comes in in 2015 the full weight of it will land on Australia’s agricultural producers, and we do not accept that possibility. But I go back to the farmer at the Henty Machinery Field Days. He was able to show me how the Rudd government’s ETS would add $42,000 to his bottom line—$42,000 in a modest wheat-growing enterprise in the Riverina. I said to him: ‘I have got two choices. I can just say that this is awful, I am turning my back on it and I am not going to propose any amendments along with the Liberal and National parties, but I do not think you want me to do that. I think you want me to try and get the best deal for you.’ He agreed with me, and others I have put this argument to have responded similarly. None of us are happy with it, none of us like what is being presented to us, but we are not running the agenda, we are not in government and we are not trying to grandstand at Copenhagen, which is what Mr Rudd is doing. I certainly do not believe that anything needs to take place before Copenhagen because whatever Mr Rudd succeeds in passing in this place will not be the final design of the scheme we get in 2012 because that is just too far away. We have really little choice but to accept the argument that it is a grandstanding exercise.

I see in today’s media that Mr Rudd has been made one of the Danish Prime Minister’s special friends and has been given the imprimatur to work closely on designing an ETS and a global agreement. That worries me because I feel that that will give the government added impetus to push this through, not in Australia’s interest, not in the national interest and not in the interests of farmers. I often say that there is no such thing as a postagriculture economy. Think about it: if there is no agriculture, there is no food, there are no people and there is no world. But what we see from this government is a focus on an economy that does not depend on agriculture. The CPRS is not the answer, but do not look at farmers and agriculture as the producers of emissions. Look at farmers and agriculture as the producers of food.

Australia exports 65 per cent of its farm produce. Our food producers are exposed to global competition, which has critical implications for Australian jobs, economic activity, export markets, food supplies and net global emissions. What has this government done? It has placed agriculture in a position of increasing uncertainty leading up to the beginning of its scheme, not knowing whether three years after that it will come under the ETS and have to pay figures like the one I just quoted—$42,000 for a modest wheat-growing operation in the Riverina. Whatever we can do to make this ETS less bad, we as an opposition are bound to do.

I was horrified to hear earlier speakers talk about food industries, because under the government’s scheme food industries are not considered emission intensive and trade exposed. I appreciate that it was with some sympathy, but when the member for Eden-Monaro spoke about the biggest rice mill in the Southern Hemisphere that has closed down in Deniliquin and about other activities along the river—and he has a fair whack of the Snowy Mountains hydro-electric scheme in his electorate—and the importance of that to irrigation he failed to understand that because food producers do not make the EITE cut-off under the government’s scheme they get nothing; they get no help at all. So we quite neatly and cleanly export our food-producing industries overseas.

We heard shocking evidence to Senate inquiries from food producers, particularly in the dairy industry. The dairy industry, as we know, has been through tough times. Murray Goulburn Co-operative operates in Victoria and southern New South Wales and it had this to say:

… MGC will receive no assistance under CPRS even though we are highly trade-exposed.

MGC will not be able to pass on the cost of increases due to the CPRS because of the price setting nature of world markets.

Consequently dairy farmers will pay the costs of CPRS via reduced milk income. At $23 and $40 per tonne for CO2 this represents an average cost of about $5,000 and $9,000 respectively per farming family per year.

Why would you bother? Let me remind people that New Zealand’s emissions trading scheme maintains the link between farm and food processing, recognises the connected nature of the supply chain and its trade exposure and provides 90 per cent free permits to food producers. I have said before in this place that, if we are not careful, we will be airfreighting our milk in from New Zealand. Under Mr Rudd’s ETS, we will definitely be airfreighting our milk in from New Zealand. The CPRS does not cover imports, so of course our food-producing industries will be exported overseas and we will be importing our food. There might not be a world postagriculture economy, but it looks like we are heading for one here in Australia.

I want to mention the horticulture industry, because it is very important to my electorate. It welcomes the opposition amendments permanently excluding agricultural emissions from the CPRS, obtaining government agreement to introduce an agricultural offset scheme in line with similar offset schemes being introduced in comparable economies, such as the United States and the European Union, and our explicit recognition of energy efficiency and voluntary action. That is important.

Speaker after speaker from the government has talked about the impact of climate change on the Murray-Darling Basin, and I have a substantial part of the southern Murray-Darling Basin in my electorate. The horror stories that we have heard are all about reduced in-flows and no water for irrigation. I just point out that there is not any water for irrigation at the moment because the Minister for Climate Change and Water has bought it all and is storing it away for environmental flows that go straight past all of our food producers struggling with the drought in order to water wetlands—which may be important but not necessarily more important than food production. I do not want to hear another government member talk about the effect of the ETS in the southern Murray-Darling Basin and on irrigated agriculture as if they care, because they do not care. Members opposite really ought to realise the nature of farming and of food production and what that means, and develop, if they possibly could, a serious agrifood policy because at the moment they have absolutely no idea.