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Wednesday, 14 March 2012
Page: 1743


Senator GALLACHER (South Australia) (15:06): In the short time I have been in this chamber the opposition has been consistent in their fear campaign with respect to carbon pricing. Despite the fact that it is alleged they have some believers, deniers, and backflippers in the ranks, they are consistent about trying to scaremonger in my home state and across the whole of Australia with respect to the impact of carbon pricing.

The fact is, quite simply, that the government stands by the Treasury modelling. It is one of the most extensive and robust economic modelling exercises ever performed in Australia. Treasury modelling confirms that, with a carbon price, growth in the Australian economy will be decoupled from growth in carbon pollution. It projects that under a carbon price strong economic growth will continue. Gross national income is projected to grow at 1.1 per cent per year to 2050. Incomes will continue to grow, despite assertions from the other side. Real income per person is projected to increase from today's levels by $9,000 per year to 2020. Employment will continue to grow, despite assertions to the contrary, with 1.6 million new jobs created by 2020.

Pollution will fall, and who does not want a bit of that? I do not think any voting Australian or any person in the parliament does not want to leave a better environment and society for their children and grandchildren. By 2020 carbon pricing is expected to have reduced Australia's domestic emissions by nearly half of what they would have been without a carbon price. The price impacts will be modest—a one-off increase of 0.7 per cent to the CPI. This compares with the 2.5 per cent increase that was the result of the GST—which was going to bring the world to an end but never did. Gross state product for all states continues to grow strongly.

It is important to emphasise that the price impacts on households are modest and that tax cuts, pension increases and other benefit increases will assist nine out of 10 households to meet these modest impacts. We also know from Treasury analysis that the economic cost of the coalition's policy is at least double that of a carbon price.

Firstly, the opposition are attacking the assumptions used. The opposition know that they are wrong on this. They have had detailed briefings at Senate estimates and yet they still make these outrageous claims. The Treasury modelling makes two key assumpt­ions about international action: firstly, that countries meet their low-end pollution reduction targets by 2020 and, secondly, that countries have access to international abate­ment. Given the significant international efforts that exist to reduce carbon pollution and the size of the carbon markets already in operation, these assumptions are more than reasonable.

Senator Edwards: In your view.

Senator GALLACHER: In my view—yes. Thank you, Senator Edwards. In your view, the world would come to an end with the introduction of a carbon price. I do not agree with that and neither do many of the Australian voting public, fortunately.

Secondly, the opposition are attacking the Treasury for refusing to release further details. This ignores the fact that the modelling has been the most extensive in our history and is far more transparent than any we have ever seen from the coalition. For example, the introduction of the GST was not accompanied by analysis as comprehen­sive and transparent as the Treasury reports on the economics of carbon pricing. The only assumptions left relate to the highly technical modelling code. The economic mechanisms used in such models are well known to economists without seeing a model code, and all relevant assumptions used in modelling have been published.

Unlike the policy of those opposite, the clean energy future plan is a genuine economic plan which will underpin the growth of new industries, provide investment certainty and allow the economy to remain competitive in a carbon constrained world. In comparison, subsidies for polluters and $1,300 per household— (Time expired)