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Monday, 17 March 2014
Page: 1139


Senator DASTYARI (New South Wales) (10:26): Let me reiterate from the start that, once an appropriate alternative is presented, Labor will support the repeal of the carbon tax. The former Prime Minister Kevin Rudd stated this clearly ahead of the last election. The Australian Labor Party has long argued for a fully flexible cap-and-trade emissions scheme such as the mechanism currently contained in the Clean Energy Act 2011 and associated legislation. We will continue to support the market based mechanism for pricing carbon that is contained in the existing legislation and scheduled to begin next year. We would also support bringing the starting date forward so an emissions trading scheme can commence this year. There may even be opportunities to improve the current model. But, as long as an effective market model for pricing carbon emissions remains in place, Labor is willing to work through the amendments that may be required with the Abbott government.

What we do not support is a shift away from taking action against pollution—doing nothing in the face of overwhelming evidence. What we do not support is a shift from evidence based policy to ideology and ignorance. Unfortunately, that is what the Abbott government has offered to the Australian people. Let us touch on what the coalition's approach has been. The Abbott government does not have an effective plan to replace an emissions trading scheme in the short term. And, beyond that, its policy of direct action contains serious and fundamental flaws. It is a policy that cannot even guarantee emissions trading reductions will ever be met.

The Emissions Reduction Fund, which the coalition describes as the centrepiece of its direct action policy, is still in development. Important questions in the government's green paper remain unanswered and the policy lacks both substance and detail. There current proposal amounts to nothing more than a slush fund for major polluters. It is an unnecessary gamble based on picking winners instead of guaranteeing our bipartisan emissions trading reduction target of five per cent below 2000 levels by the year 2020. It is an unnecessary gamble on our environment and on our future. A scheme that does not legislate to cap emissions really means the potential for future carbon pollution under their proposal is unlimited.

Despite these shortcomings, a budget has already been allocated. It is no wonder one coalition MP has linked Direct Action to 'a school project' and former Treasury secretary Ken Henry describes it as nothing less than 'bizarre'. It uses a command and control model that would involve ministers and public servants making these important choices, with significant bureaucratic overheads to evaluate and analyse bids for funding. It will cost the Australian taxpayer much more than if we allowed these decisions to be made by businesses themselves.

The science on climate change is clear. Over 97 per cent of published climate scientists agree that climate change is a real phenomenon driven by man-made greenhouse gas emissions. In a Fairfax survey of 35 economists, 86 per cent supported an emissions trading scheme, with only two favouring Direct Action. Rob Henderson, a senior economist at the National Australia Bank, has said:

If I had to make a choice between pricing carbon and having bureaucrats allocating permits, then I'm going to go for the market mechanism every time.

Treasury's blue book, prepared in the lead-up to the 2010 federal election, observed:

… a market-based mechanism can achieve the necessary abatement at a cost per tonne of emissions, far lower than other alternative direct action policies.

Even the darling of British Conservative ideology, the then Prime Minister Margaret Thatcher—and I cannot believe I will be quoting her today—told the United Nations in 1989 that action on climate change should be based on assessment of fact:

We must use science to cast a light ahead, so that we can move step by step in the right direction … But as well as the science, we need to get the economics right … On the basis then of sound science and sound economics, we need to build a strong framework for international action.

It will be the height of arrogance for a government that thinks it knows better than 97 per cent of scientists and 86 per cent of economists to go down this path, a path that not even Margaret Thatcher would approve of.

I suspect that Malcolm Turnbull, the honourable member for Wentworth, does not approve either. Let us not forget that in 2012 he said:

You won't find an economist anywhere that will tell you anything other than that the most efficient and effective way to cut emissions is by putting a price on carbon.

Action through a market based mechanism to reduce carbon emissions is supported overwhelmingly by scientists and by economists. I believe that the government can do better, as I am sure the member for Wentworth does. I would welcome a chance to work with coalition MPs on a proper emissions trading scheme that can be accorded bipartisan support in this chamber. Australia should not repeal a system that is reducing emissions and reversing the disastrous impact of climate change without having a strong alternative in place, and we should not be considering the coalition's ineffective alternative as being substantial enough.

As I have previously discussed, the Howard government was responsible for commissioning the Shergold report, chaired by former Secretary of the Department of the Prime Minister and Cabinet Peter Shergold. The report recommended the establishment of an emissions trading scheme, a policy that John Howard supported during the 2007 election campaign. Releasing the report, Dr Shergold said:

Australia should commit to an emissions target … ahead of any comprehensive global response, and it should do that with an emissions trading scheme based upon cap and trade.

An emissions trading scheme provides incentives for business to innovate as the market will determine how they address the costs of lowering carbon emissions as opposed to a command-and-control model. The only way we are going to reduce carbon emissions is if all polluters change their behaviour. Picking the winners to receive government subsidies is obviously only incentive to the lucky company involved and only reduces emissions to the extent that the subsidised project allows. It will not change behaviour across the entire economy.

The Shergold report also concluded that not choosing an emissions trading scheme would impose a far heavier burden on economic activity and, as a result, picking winners 'will increase the costs we impose on ourselves'. It then goes on to describe the potential cost of measures such as direct action as 'nothing less than enormous'. John Howard's initial response to the Shergold report led to carbon pricing being a bipartisan issue in the lead-up to the 2007 election. Both Labor and the coalition were committed to act through an emissions trading scheme. Unfortunately, in recent years that spirit of bipartisanship has been lost for reasons that are nothing more than politically opportunistic rather than in the national interest. The coalition's current approach involves higher costs for outcomes that are much worse, and the absence of an alternative policy which has been barely drafted creates an environment of uncertainty as to what any emissions framework might look like decades from now.

To outline the basis of this debate we must look at what the Clean Energy (Carbon Tax Repeal) Bill 2013 will achieve. It will abolish the current legislative framework for an emissions trading scheme, but it will not replace this system with an alternative method of addressing climate change. When factoring in the bipartisan commitment to ending the carbon tax, the most important mechanism contained in the Clean Energy Act 2011 is the cap-and-trade emissions trading scheme. Labor supports bringing this market mechanism forward to commence this year. Friends, let's put a cap on emissions and let the market determine what the price on pollution should be. Capping carbon pollution is essential to this model. This is the way in which the current legislation can guarantee we achieve our emissions reduction targets.

Pollution caps are determined on the basis of advice given by the Climate Change Authority, an independent expert agency that this government has attempted to abolish in other legislation. If the government does not have objective, factual, accurate, rigorous information available when making a decision, what are they going to be basing their decisions on? As I have said previously in this chamber, ignoring the evidence on climate change and abolishing independent advice to government is an attack on good science, on good public policy and on the truth. Pretending this expert evidence does not exist and preventing future scientific inquiry is grossly negligent.

We in the Australian Labor Party cannot allow ideology to undermine the evidence on climate science. The Clean Energy Act 2011 provides for Australia's carbon pricing scheme to coexist with credible international initiatives to reduce carbon pollution. The Australian Labor Party also recognises the bold progress that many other countries are making to address climate change. Thirty-five countries currently have a national emissions trading scheme, and it is expected that by 2015 this number will rise to 38. Almost a billion people currently live in a jurisdiction with an emissions trading scheme. By 2015 this number could rise to two billion people as China, Korea and other countries are planning to introduce their own models. Australia remains the largest per capita polluter in the developed world and one of the world's top-20 polluters in absolute terms. We have a significant opportunity to be a global leader on emissions reduction efforts.

Instead the Abbott government has taken a great leap backwards. Under Direct Action the coalition's policy successes will be dependent on three things: firstly, the quality of emissions reductions proposals offered by polluters; secondly, how much they will cost; and, thirdly, how much cash the government is prepared to stump up. The outcomes are variable, there is no guarantee the proposals will be good enough or cheap enough to meet our emissions reduction targets, and there is huge potential for the budget to blow out. The current legislation, on the other hand, gives certainty of outcomes, encourages innovation in the market to achieve emissions reductions rather than bidding for a pool of government funding, and is more measurable in terms of costs and benefits.

This brings me to the next significant part of the current suite of laws, household assistance. It is undeniable that pricing carbon will result in some consumer prices increasing. That is why an essential part of the carbon pricing legislation was to fund tax cuts, pension increases and higher family payments. The coalition promised to keep these, regardless of repealing carbon pricing. But, with the secret Commission of Audit report expected to recommend expenditure cuts, the government is not ruling anything in or out.

For industry the Clean Energy Future package recognised that moving to a low-emissions economy will take time. Emphasis was placed on ensuring energy security while working towards a transition in the energy market away from emissions-intensive forms of electricity generation. By retiring high-polluting generating capacity and fostering investment in new sources of energy and infrastructure, the package was designed to permanently reduce the environmental impact while maintaining a reliable energy base. The jobs and competitiveness program provided additional support, and the independent Productivity Commission was given the ability to review the impacts of carbon pricing policy. There was also a tremendous opportunity to invest in low-emission and clean-energy technologies. These helped prepare Australia for future jobs and future opportunities in emerging industries.

Abolishing the Clean Energy Finance Corporation has removed one of the very effective means of mobilising significant private sector capital. It will damage government revenue and cut jobs in the low-emission sectors. John Howard was right when he said in 2007 that 'being amongst the first movers on carbon trading in this region will bring new opportunities and we intend to grasp them'. Those opportunities still exist and Australia cannot afford to miss out.

The bills before the Senate will destroy the entire framework for delivering a cap and trade mechanism and, with it, any incentive to meaningfully reduce carbon emissions in Australia. It is one thing to support improving and refining the current approach—there have been a lot of criticisms of the fixed price component on this side of the chamber as well; and that is why we want to abolish the carbon tax, as it currently stands, and move to a market mechanism sooner—but we do not want to stick our heads in the sand, deny climate change exists and remove any way or mechanism for research and independent advice that might dare to tell us otherwise. That is the effect of this trove of bills and that is why these bills should not be supported by the Australian Senate. The bills will limit Australia's ability to respond to climate change for years to come.

I call on the government to show leadership in this area and work across the chamber on a bipartisan approach to climate change that stands up on the basis of both scientific and economic evidence rather than, in the words of Malcolm Turnbull, producing something that is 'a con, an environmental fig leaf to cover a determination to do nothing'.

In introducing the clean energy future package into the parliament in 2011, the then Prime Minister, Julia Gillard, noted:

Nothing hard ever gets easier by putting it off.

And if you do not do what is right for the nation then you should not be in this parliament.

I know that from time to time politics is one thing and good public policy is another, and sometimes there is a great temptation to capitalise on that. But this issue is far too important. It should not fall victim to opportunistic partisan politics. I believe that acting on the evidence of climate science and following the economic advice which points to an emissions trading scheme is the best way to respond to the real and current phenomenon of climate change. I would not judge the coalition if they were willing to work with me and my colleagues on this basis. In fact, I would be the first to welcome it as a sign that they do, after all, support policy based on fact and evidence. To me, this is the right policy for the nation—an approach based on evidence rather than on cheap politics or crude ideology. I am proud to stand here today advocating that as the way forward.

How we vote on the Clean Energy Legislation (Carbon Tax Repeal) Bill 2013 will be remembered in decades to come. Prime Minister Julia Gillard also made this observation about votes in this place when first introducing the carbon pricing legislation:

There is a reason these matters are decided in an open vote.

It is so every member in this place can be judged.

Judged on the decisions they make here … judged on where they stand on the great issues of our national debate.

…   …   …

Because the final test is not: are you on the right side of the politics of the week or the polls of the year?

The final test—

on this issue and other issues—

is: are you on the right side of history?