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Monday, 17 March 2014
Page: 1156


Senator GALLACHER (South Australia) (11:41): I rise to make a contribution to the debate on the Clean Energy Legislation (Carbon Tax Repeal) Bill 2013 and related bills. I am with Senator Marshall: I do believe that we have a mandate to vote according to the people who sent us here. The South Australian election was on the weekend. I and, presumably, coalition, Labor and Greens senators and members of the House of Representatives met with hundreds of voters. I think 1,793 people come through the booth that I was on. The interesting thing was that not one of them raised the carbon tax. Not one of them said: 'Repeal it. Back the Abbott government's position.' In fact, to my recollection, it was never mentioned in the campaign. It is an invisible issue, if you like, in the electorate.

But what is not invisible is the fact that a lot of Australians travel. A lot of Australians have been to Mexico City, Los Angeles, Beijing, New Delhi and Rome—cities where lots of people live and where the effect of climate change and pollution are all too apparent to them as they go about their daily tasks and business or as they enjoy their holiday. What is not invisible is the impact of the economy on society and the places in which we live. I come from a background where coal was burnt every day. It went up through the chimney, obviously, and fell back down on the surroundings. If you visit those places now, you will find them incredibly clean and incredibly vibrant. They are a lot better off now compared to when they were basically remnants of the Industrial Revolution.

As Senator Marshall said, we cannot deny people to our north, in Asia, the right to advance their societies, to improve the lot of their people, to bring themselves out of poverty and to have good, useful opportunities in life. They will take that opportunity. We know that China leads the world in everything. It leads the world in nuclear power and in wind power. In some cases it is now leading the world in a lot of the science. It also has coal fired and gas fired generators. If they are to take 200 million people out of rural poverty and give them a chance in life, they will continue to do what is necessary to achieve that. If that means they put in a coal fired generator, they will do that. If they could put in nuclear, they would do that. Very clearly, we live in a place where the demographics are hugely challenging for all governments in this part of the world.

We have lots of young people who have aspirations. They have access to the internet. They want good jobs and they want the same things that we now enjoy. What I think is really disappointing is that Australia is not taking the lead on the climate change argument. And I understand all the arguments. I was chair of an investment committee long before the legislation passed this parliament, and there were people there supporting a carbon price mechanism—not a carbon tax; a carbon price mechanism—because it is abundantly clear, and this government, of all governments, should know that if you want to change something in the economy you price it. If you want to change anything in the economy, you put a price on it; you put it up or down. That is a proven economic way of changing behaviour.

To me, the Direct Action Plan, which I will refer to a little bit later, is counterintuitive for the Abbott government's market-driven economic rationale. How do you change things? You change things by pricing them. You price them up, you price them down and behaviour changes. You do it with road safety: you price speeding and behaviour changes. With drink-driving, you go to jail or you pay a fine, so behaviour changes. In the economy, if you price carbon, it will change behaviour. And behaviour has changed—maybe not as much as everybody hoped, maybe not as much as everybody wants, but it will change. Over time, it is the only proven mechanism for a successful economic strategy.

The background here is that the government are repealing the carbon price legislation on the grounds that it places an unfair cost burden on Australian businesses and households; it is allegedly inefficient and wasteful; it has not led to a reduction in greenhouse gas emissions; it is not matched by comparable action internationally; and the electorate gave the coalition a mandate to repeal the CPM. Essentially, the government have said that the election was a referendum on the carbon tax, but that does not really stack up.

The cost to Australian businesses and householders is one point I want to address. The carbon price directly applies to around 350 businesses. Clearly, costs incurred by those liable businesses in complying with the CPM may be passed on downstream to businesses and final consumers. But the expectation was that the CPM would only add 0.07 per cent to the CPI, or around $9.90 a week; and, in the context of significant expected increases in electricity, 10 per cent. So, for some, the cost of the CPM includes not only these direct costs but also maybe forgone production because they are changing. We have an example that in South Australia, where we have a brown-coal fired generator that basically only kicks in when there is a peak load in South Australia or Victoria and, through the National Grid, they can make some dollars.

As for households, the impact of rising prices on most households was largely offset by the compensation package that we paid, which consists of increasing the tax-free threshold to $18,000 and making additional transfer payments to eligible persons and households. Our government claimed that households would receive a combination of payments or tax cuts worth an average of $10.10 a week, and that nine out of 10 Australian families would receive assistance.

There you have it, Mr Acting Deputy President Sterle. It is a price on carbon for 350 businesses—sure, that changes their behaviour, the way they do things, but they are allowed to pass it on downstream—and we paid a compensation package to households.

This has all been wrapped up in an entirely cynical political argument led by Tony Abbott. Let us not forget he only got in by one vote. Let us not forget it was carbon pricing that delivered the leadership to the opposition and, ultimately, the prime ministership. Carbon pricing is in his blood because it has actually put him where he is. In is ruthless pursuit of power, he has essentially put up a position which does not stack up when you take into account what scientists are saying, it does not stack up when you take into account how you change behaviour in the economy and it does not stack up against the behaviour of the voting public.

The coalition have been very clear: 'We have a mandate. We have a mandate.' Well, let us have a look at some of the polling that was done on 5 September 2013. Essential Research polling asked voters on 5 September, 'Which of the following are the main reasons you will vote for that party?' For the totality of respondents, the three top answers chosen were: 'They are better at handling Australia's economy', 'There are more likely to represent the interests of all Australians' and 'They are better at looking after the interests of people like me'—well, that would probably apply to most Liberal voters; that is why they vote Liberal. Out of the 13 options, 'having better policies on things like the environment and climate change' ranked 10th when all respondents were included. For coalition voters, 'better policies on things like the environment and climate change' ranked last, after 'Don't know' and 'No reason'. Only one per cent of coalition voters ranked climate change policies within the three top reasons for voting for that party. However, it could be argued that many respondents might not consider the repeal of carbon pricing a real issue.

Clearly, carbon pricing is a political football. This was the 'great big new tax on everything'—which clearly it was not. It was a tax on 350 businesses and it was adequately compensated for in nine out of 10 Australian households. We all know that the only ones who have ever put a great big new tax on business are the coalition, with the GST—because that does go on just about everything. The carbon pricing mechanism is not a great big new tax on everything; it is an attempt in a proper, well-thought-out way to change behaviour to ensure that our children and our grandchildren have the same quality of air and the same quality of life wherever they live in this great country of ours. It is to ensure that we are a beacon of leadership in this part of the world. As I said earlier, we do not have the pressure of 200 million people coming out of rural poverty into our cities but we can see on our TVs that people in Beijing and other major cities in China virtually cannot breathe, and doing hard physical or manual labour in that sort of climate is problematic. The human cost of all of that must be enormous. The human cost of people living and choking to death in a polluted environment must be absolutely enormous. Surely no-one can argue that nothing is happening.

In a previous contribution on this matter, I pointed to the reinsurers of the world. The reinsurers of the world are the people who pick up the tab. We all pay our insurance and, when things happen, they pay the bill. We get paid by our insurer and our insurer then claims back from a global reinsurer. The global reinsurance market is worth trillions of dollars. Since 1977, the big reinsurers have been saying that natural disasters are happening a little bit more frequently and impacting a little bit more severely. The planet is becoming more heavily populated, so you could argue that a storm 30 years ago might cause less damage than a storm today. But it is difficult to argue with the frequency change—the fact that these things are happening more often.

Ultimately, we pick up the tab for climate change. You cannot hide from it. We insure our dwellings, our businesses and all those sorts of things. If we are afflicted more often by severe natural disasters then, ultimately, insurance premiums go up. People in Queensland know all about that, as do people in places where there have been extreme bushfire events. As Australians, we band together and get people through those events. In the Queensland floods, the then Premier and the then Prime Minister did a fantastic job. Eventually, however, insurance premiums will go up—so we are going to pay. One way or the other, we are going to pay. When we introduced the carbon pricing mechanism, we included a package to compensate people for any price effects. In the absence of a carbon pricing mechanism, however, consumers will be paying—because that is the way the system we all live in and enjoy works.

Doing nothing—taking the low road on carbon pricing—is not really a sensible option for this country. Given our pre-eminent status in this part of the world, we should be showing leadership. Western society has had its industrial revolution. We have been through the stage of having coal fires in every household, with all the pollution that entailed. In our little city of Adelaide, a nice big country town, there used to be incinerators in everybody's backyard. We just burned the rubbish. It went up, hit the hills and dropped back down on us again. We know these things are wrong and we can take action to change them.

The government's position on this is entirely political. The Hon. Tony Abbott, the Prime Minister of this country, got into the job of opposition leader by just one vote. One of the most divisive issues in the Liberal Party was climate change. People like Malcolm Turnbull were on one side of the debate, but others took the opposite position.

We know the Prime Minister is wedded to abolishing carbon pricing. But this is a really bad look internationally, a bad economic decision and bad for our children and grandchildren. We do not want Sydney, Melbourne, Adelaide, Brisbane, Hobart and Perth to become like the cities a few hours flight to the north of us. We want Australia to be, as it is now, clean and pristine. We want all Australians to have the opportunity to enjoy a reasonable economy whilst making advances—making the place cleaner and greener.

Part of the coalition's strategy is a large range of initiatives to boost renewable energy. They have missed the boat. South Australia under Mike Rann led the renewable energy debate in this country. We have wind power. We have made significant changes. We have the most solar panel systems per capita in Australia—a huge investment. The scheme has been oversubscribed. I am not a great fan of solar power because I do not understand how we can avoid passing the cost of the input credit onto more vulnerable consumers—pensioners on $250 a week, for example. So I have that one concern about solar power. But South Australia has made great progress in renewable energy. If the Hon. Tony Abbott is going to pick up South Australia's mantle and charge away with it, good luck to him. I doubt if he will write to Mike Rann to thank him for having been prescient in pushing renewable energy so vigorously and so successfully.

The Direct Action Plan says we are going to plant another 20 million trees. On the weekend, though, I think I heard something about more trees being pulled down in a place called Tasmania. That is fine—I am not anti-forestry. But apparently we are going to plant an additional 20 million trees. If the Prime Minister comes to Adelaide and wants a hand to plant a few trees, I am up for that—because I like trees and I think we should have plenty of them. The history in South Australia is that we cut them all down for things like the copper mines at Burra and other places. I agree that we should plant more trees—great. But is that a genuine, internationally recognised, well-thought-out economic strategy for dealing with carbon pollution? I am not sure that it is not just intended to be a vote winner rather than a clear and prescient mechanism for dealing with what is a very important 21st century issue.

This issue goes to the heart of why a lot of people are in politics. As Senator Cameron pointed out the other day, even Robert Menzies said that occasionally you come across an issue you have to advocate for. If you believe in it and people are against you, you have to advocate for it. If you still face opposition, you have to advocate for it again. You have to do what is right. At the end of the day, it is incumbent on every senator in this place to do what is right. It appears to me that there is overwhelming evidence that a carbon-pricing mechanism affecting 350 businesses, with appropriate compensation to nine out of 10 households, is capable of changing behaviour for the better.

It is not a great big tax on everything. It has been portrayed as that quite deceitfully and quite erroneously. The reality is that most of the increase in electricity prices is out of poles and wires. It is out of the privatisation of those poles and wires, which have now been gold plated. In South Australia, we probably have a minimum number of days where our peak of electricity is used; we have three to 10 days where we need the gold plating of our electricity. I accept that, politically, that has got to be copped; I do accept that. I saw in the Northern Territory the other day that that government has done nothing about electricity, and they shut down schools, hospitals and the Public Service. My daughter said that, at 1.30 in the morning, she was finding new friends—the ones in the street that had generators.

That is the result of not investing in electricity. But that was never articulated. It was all bagged up as 'carbon price: a great big new tax on everything', avoiding the fact that most of the increase in electricity prices has been driven out of the investment in poles, wires and generators, and that most of our state governments sold those things off. It is natural that the person who bought them wants to maximise their investment, and they have done very well. The Australian consumer may also benefit in the long term. But in the short term they got whacked severely, with an increase in electricity prices of up to 50 per cent in some states, which this government said was due to the carbon tax. That is absolutely wrong.