Mr ABBOTT (Leader of the Opposition) (3:30 PM) —It is very important that we debate the impact of the government’s carbon tax on the Australian economy because this is perhaps the biggest single tax change ever proposed for our economy and it is a tax change that has not been thoroughly scrutinised by the Australian people. It is the biggest change in years, yet it is not a change that this government had the guts to take to the Australian people at the last election.

It is very interesting that the Prime Minister apparently told the caucus today that she was very confident that she could win a debate about the carbon tax—that confidence I hasten to add did not actually lead to her doing this prior to the election—but one she presumably is not confident she could win is the debate we sought to have earlier today about her integrity. She shirked a debate about her own integrity. It is very understandable that she did not want to have that debate, because the words that are going to haunt this Prime Minister to her political grave are: ‘There will be no carbon tax under a government I lead.’ Those are the words that she repeated in one form or another before the last election and the words she has subsequently given the lie to by her behaviour.

There are two important things: first, we have a Prime Minister who would not defend her integrity before this House and, second, we have a government that did not actually want to have a debate on this matter of public importance. They preferred that this MPI debate not proceed, given the suspension that took place earlier today.

The impact of the government’s carbon tax on the Australian economy will be immense and it will ramify. The first impact of the government’s carbon tax on the Australian economy will be that no-one looking at our economy will believe anything that this Prime Minister says and no-one looking at our economy will trust this government with anything, given that you could not trust this government or this Prime Minister to tell the truth about their intentions before the last election. It is very damaging to have a government that has utterly lost any reputation for integrity. A Prime Minister’s word should count for something. A government’s word should be able to be believed. This government cannot be trusted, and this Prime Minister’s word can obviously be jettisoned as soon as it suits her political self-interest to do so.

That is the first impact of the government’s carbon tax on the Australian economy. It will damage confidence and it will damage the faith that investors have previously had in our economy. It will damage the reputation for being a low-tax economy that we used to enjoy under genuinely reforming governments in the years up to 2007. The main impact of the government’s carbon tax on our economy will be that it will drive prices up and it will drive employment down.

Over the last few days members opposite have claimed that we have no justification for our statements that the price of electricity will go up $300 a year per household on average and the price of petrol will go up 6.5c a litre, and that is just for starters. I tell the House and the listening Australian public that those figures are based on the $26 a tonne carbon price that was precisely the price on which the Treasury modelling was done to underlie the emissions trading scheme that this government was formerly committed to.

We are simply taking the figures that were good enough for the Treasury and were good enough for the government. If they were good enough for the government before the election, they are good enough for us after the election. We will keep using those figures because they are true. I tell you what: that is just the start; that is just the beginning. The price per tonne will rise month after month, year after year because the only way the government will be able to achieve its objectives and stop people from turning on their air conditioners and stop people from driving their cars is if the price becomes prohibitively expensive, so there will be a massive rise in prices and a massive cost in jobs.

I will give you some examples of the various estimates and forecasts that were made of the government’s former emissions trading scheme by reputable modellers such as ACIL, Access and IPART. There will be a 25 per cent increase in electricity prices, up to a five per cent rise in grocery prices, 126,000 jobs lost in regional Australia and 16 major coalmines closed, with 10,000 jobs lost in the coal industry. This increase in prices will be on top of the massive increase in prices that we have seen over the last three years, which were at least in part driven by the poor economic management of this government.

The struggling families of this country are hurting because this government cannot be trusted to manage an economy. This government cannot be trusted to prudently and frugally manage the finances of this nation. This government has turned a $20 billion surplus and an international reputation for prudence, frugality and fiscal responsibility into a $57 billion deficit. Last year it was a $40-odd billion deficit. This year they say that they will eventually get back into surplus on the basis of their mining tax and their carbon tax. They never will because they are addicted to spending. It does not matter how high the taxes are, they will never keep pace with this government’s addiction to spending.

Do you know why they want this carbon tax? It is really crystal clear. They want a great big new tax to give them a great big new slush fund so they can provide great big handouts to politically favoured groups and buy their way to an undeserved victory at the next election. The households of Australia are struggling. The families of Australia are struggling, and if members opposite were not so cocooned in their political closed shop they would understand better. Electricity prices are up 44 per cent since December 2007. Gas prices are up 29 per cent since December 2007. Water prices are up 46 per cent. Health costs are up 15 per cent. Education costs are up 17 per cent. Bread is up 12 per cent. Groceries are up 10 per cent. Rent is up 19 per cent, and it is all going to get worse.

Mr Hartsuyker —Much worse.

Mr ABBOTT —Much worse under the government’s carbon price, because making electricity more expensive makes everything more expensive. Making fuel more expensive makes everything more expensive, because a modern economy simply cannot work without electricity and fuel. Power and transport are the foundations of a modern economy. Power and transport are the foundations of our standard of living. Power and transport are the foundations of our way of life, and they want to undermine those foundations. They will make everything worse.

It is no wonder that the chief executive officer of one of Australia’s largest manufacturing companies, BlueScope Steel, said that this government’s carbon tax is nothing short of economic vandalism, and he told the truth when he said that this government seems to hate the manufacturing industry. It does not understand the manufacturing industry of this country and it is trying to destroy it by driving jobs offshore, by destroying employment in this country, by sending jobs and employment to countries where they are not guilty of the kind of economic vandalism of which this government is so obviously guilty.

Why does this government hate the coal industry so much? What is wrong with the coal industry? Why does this government want to ensure that so many regions of this country—the Illawarra, the Hunter, Gippsland, the Bowen Basin, Central Queensland—are destroyed? Why does this government want to destroy the economic foundation of those communities? Why does this government want to take away the livelihoods of those struggling families? Why suck the life out of the economy of regional Australia by putting the coal industry under a handicap that will surely kill it? Why does the government want to do this?

This government must explain, and this opposition will make this government explain day in day out, moment in moment out, all the time until the next election, because this change should not be happening without the opportunity for a full consideration by the Australian people. The most shameful thing about what the government are now proposing to do is that they have tried to hoodwink people, to hide this from the Australian people. That is the only possible explanation. There is no other possible explanation for the statements of the Prime Minister, who said, ‘There will be no carbon tax under any government I lead; I rule out a carbon tax,’ and the statements of the Treasurer, sitting opposite, who said, ‘It’s just a hysterical allegation.’ Well, Deputy Prime Minister and Treasurer, I am afraid that it has come true and, if you want to have any shred of integrity left, you have got to explain to this House, to the people and, above all else, to yourself why you made that statement. Come on, Treasurer. Are you a man? If you are, give us the explanation.

And while you are dreaming up the explanation, let me tell the House that there is a better way. Let me say it, lest it be questioned by members opposite: climate change is real; mankind does make a contribution; we should take sensible precautions against the risks of climate change. And that is exactly what the coalition are doing with our practical and effective plan to take direct action. We will actually reduce emissions. We will not make our way of life prohibitively expensive in the hope—the vain hope, I suspect—that people will suddenly decide that they cannot drive and cannot use their air conditioners. We will not whack a $13 billion tax on the economy, and that is just for starters. We will spend up to a billion dollars a year; we will plant more trees; we will get better soil; we will use smarter technology; and we will make our industrial processes, our power generation and our farming more efficient and more effective. We will reduce emissions in sensible ways that will provide all sorts of additional environmental benefits. That is what we will do. That is a better way and, above all else, it is a more honest way.

That is the plan we had before the election. That is the plan that we had after the election. That is the plan we have. That is the plan we will continue to have, because the most important thing of all is the trust that the Australian people should be able to repose in their leaders. I understand—we all understand—that sometimes people change their minds. But, if they are honest and they really have changed their minds, they should take the new position to an election. Have a bit of guts, have a bit of honesty—and that is what you should do, Deputy Prime Minister.