Scott Morrison (Cook, Liberal Party) Share this | Hansard source

The National Greenhouse and Energy Reporting Amendment Bill 2008 is to amend an act established by the former government to provide a critical component for the establishment of an emissions trading scheme. The reason I note this is that November 2007 did not mark ground zero in this country’s efforts to address the issue of reducing carbon emissions. Those opposite would have you believe that there was a new ground zero in November 2007 and that all that had gone before was of no consequence—nothing happened and there was no movement forward on any matters. They would deny that Australia was the first to establish a greenhouse office; that there was a reduction of 85 million tonnes of CO2, allowing Australia to meet its Kyoto targets; that leadership and funding for a global initiative on forests and climate had been put in place; and that there was the introduction of a renewable energy development fund to support emerging technologies. They would deny that there was support for individuals and community groups taking action through programs such as the solar rebate—something which is very dear to the hearts of those who are trying to get access to a solar rebate but no longer can as a result of the government’s decision to means test—solar cities; solar hot water rebates; community water grants, which have been reduced under this government; and green vouchers for schools initiatives. There is a record of practical measures that the previous government could be very proud of. One thing that the government have sought to highlight in putting forward the myth of there being a ground zero once the Rudd government was elected is that somehow it was the religious ferocity with which he pursued these matters that was the measure of their serious intent, rather than the things that they actually did.

It is interesting to review this bill, because it was introduced to amend an act introduced by the previous government to provide the framework—the basis—of a national reporting system to support the introduction of an emissions trading scheme. So work was underway under the previous government to establish an emissions trading scheme and there was a clear commitment to do that. There was not just a commitment; there were bills and acts that came through this place to make sure that we move towards that objective.

This bill seeks to enhance those arrangements introduced by the previous government to underpin the introduction of an ETS by mandating separate disclosure of direct and indirect emissions, addressing methodological issues, addressing publication and reporting requirements and dealing with some external audit matters. These are matters to be supported, and they are supported by the coalition. In particular, the bill enhances the purpose of the act to establish a single national reporting system. The object of a single national system highlights the need for us to consider further areas of national uniformity more generally, when it comes to our energy sector and, I would argue more broadly, in relation to our utilities sector. At a state level for far too long we have had the conflict of governments acting both as a regulator and a commercial beneficiary of the operation of the entities they regulate in the utilities sector—in particular energy and water. This conflict has led to what can only be described as chronic dividend stripping that has failed our community by blocking progress and investment by state government instrumentalities in the development of next generation infrastructure and services.

We hear a lot from those opposite about infrastructure. But the investments that have not been made in infrastructure, particularly in the energy and water utilities sectors, have been the responsibility of state government instrumentalities that have had their dividends stripped by state governments to fuel ill-founded programs that have run their states into chronic debt once again. Whether it is the promotion of water recycling or investment in renewable energy sources, all of these constitute a direct threat to the commercial return from state-owned public water and energy utilities. That is something we need to address in looking at national uniformity in these measures. We should start separating the regulator from the commercial beneficiary, and all of this occurs at a state level.

As we advance to a national emissions trading scheme—a national reporting system—it is worth considering how we can further the harmonisation agenda in relation to energy and water. As this bill addresses the foundation stones of an ETS, it is important to reflect on the scheme and the climate change debate. I contrast the climate change debate we have seen in the past 12 months with what we will hopefully see in the next 12 months. Hopefully we are past the Hollywood rock star phase of the debate, past the sloganeering, the rallies and the populism. We are now dealing with the detail of issues such as emissions trading schemes and all sorts of measures that are designed to further enhance our efforts to reduce carbon emissions.

This is a much trickier agenda for members opposite to engage in, because it is easy to buy armbands, to go to rock concerts and to issue slogans, but it is a lot harder to get the details of an emissions trading scheme right and to take the community with you on those issues. It is a lot harder to debate the government’s system line by line in the Senate than simply to try to bludgeon those sitting opposite into providing a blank cheque for the scheme. I want to see the Prime Minister and his ministers argue every single line of their system. I want to understand every single thing they are proposing and the impact on people in my electorate of Cook. That is how one debates change in this country, that is what John Howard did and that is what the member for Higgins, Peter Costello, did with the introduction of tax reform. They did not sloganeer; they debated every line and got their changes through with some compromises. That is the nature of this process.

Since the election, the Australian community has seen the flip side of the climate change coin. We are now starting to understand the costs and the true sacrifices that will need to be made to move forward. The debate is not about belief, faith, moral challenges, heresies or any other religiously loaded terms, which I would argue should never have been part of the debate in the first place. I am genuinely surprised that members opposite—the great defenders of the intelligentsia—would condone the use of such terms as ‘heresy’ in the context of scientific debates. We do not need that religious fervour to understand or believe in the need to reduce carbon emissions. It is obvious to any of us who turned on our televisions in the past few weeks and saw the situation in Beijing and who have seen it in many other cities around the world. That is why we must move forward, and the coalition is keen to do so.

With the release of the green paper, the imminent release of a white paper and the introduction of a bill, we are now at the details stage of the debate. Both the coalition and government are at one in agreeing with the decision to proceed with an emissions trading scheme. Where we differ is when—that is, when it is reasonable and prudent to introduce such a scheme. We have already seen design flaws during the debate on the green paper. The LNG sector falls below the emissions revenue threshold and as a result will miss out on the free permit system—the 80 per cent all-or-nothing line in the sand. As a result it will be disadvantaged, particularly in terms of trying to provide liquid natural gas to some of our biggest trading partners, in particular China, and to provide clean-burning fuel to what will be the world’s largest emitter of carbon.

Businesses have noted that the government’s plan to auction 80 per cent is well in advance of the European Union model. Prior to the election, we heard about all the virtues of the EU model and how Europe was moving forward on this great crusade. However, in debating the detail we have learnt that the EU will not introduce 60 per cent auctions until 2012—and we are considering introducing 80 per cent auctions in 2010. That gives us a sense of where we are sitting as the world moves forward. The EU is also yet to definitively nominate the full list of activities that will be unable to pass on the cost of their emissions and where they will sit in the trading scheme post 2010. A lot of work is still to be done in the EU system, and those who hold it out as being light years ahead of this country either have not read the information or are gilding the lily. The clean-driving LPG sector, to which excise does not apply, will not benefit from any compensating rebate as proposed for other fuels. It is common knowledge that the solar sector is reeling following the imposition of the government’s means test. The government has confused climate change policy with old-fashioned wealth punishment.

More generally, a Business Council of Australia study of 14 companies highlighted the cost of getting it wrong. An article by Lenore Taylor in the Australian of 22 August reads:

A “real world” analysis of the impact of the Government’s plans—based on 14 companies that opened their books for the Business Council of Australia—revealed that even with the Government’s proposed compensation, three firms would face a carbon cost so high they would close.

…         …         …

… on average, the companies’ pre-tax earnings would be cut by 22 per cent. The worst affected would suffer a 136 per cent reduction in earnings.

BCA president Greig Gailey is quoted in the article:

“Our research tells us the Government’s plans would have significant and—

and he is generous here, I note—

unintended consequences for business … we don’t believe the Government intended to design a scheme to achieve the outcome of businesses and jobs moving offshore—

I certainly hope not—

… but that would be the outcome of the Government’s plans ...”

All of this highlights the reason to proceed with caution and to proceed on the basis of sound research and evidence based policy to make sure we get this program right. The government would have us believe that if an ETS is not up and running by 2010—and you would have seen the ads that say this; it would be pretty hard to miss them—our reef will bleach, our rivers will dry up and our coasts will submerge. Those ads are not talking about whether or not we introduce an ETS, because both the coalition and the government have the same policy about going forward with an ETS. Two years is the difference between us on this matter. In fact, in parliament yesterday the Prime Minister even had the temerity to imply that the mere release of the green paper somehow had a material impact on the Murray. With due respect to bureaucrats, I think that only bureaucrats could possibly conceive that the existence of a committee or a report could have such a magical influence.

What matters is that we are committed to an ETS. The global issues are significant and if they are not addressed then we will not be able to save the Murray, we will not be able to stop the reef from bleaching and we will not be able to avoid the impacts of climate change. It requires global action and the commitment to go forward with an ETS as a signal of intent that genuinely allows us to put pressure on other countries and other economies around the world to move forward and secure a meaningful, comprehensive global agreement. The collapse of the Doha Round, I think, highlights the challenge that is before us with something like climate change. But that is the main game in addressing a global problem. We must do what we need to do and as we have been doing. Unless we can achieve that global agreement then the prophecies, if you like, may come true. Unless China, India and Brazil, in particular, and the like are part of the solution then we will make insufficient progress. I am not saying we will not make progress, but we will make insufficient progress to avert what Professor Garnaut has described as diabolical consequences. We still must proceed on an adjusted path, if that is the case. The world, I believe, will wake up on this issue at some point. At that time, I believe we must be the world leaders in the technology, services and expertise that will then be in high demand. So we must move forward on developing all of these areas and we must move forward regardless of what other economies do but on a sensible trajectory.

The reason I appreciate an ETS is that it is a market based system. It puts a price on carbon to change the investment fundamentals and to redirect capital where it must be placed to secure advances in technology and in other developments that we need in order to move to a low-emissions future. An ETS is all about balancing economic and environmental interests. It is not a punitive measure. It is not an ‘I told you so’ tax, which is the impression I get from reading the commentary from some who say that this system ‘cannot let these people get away with it’. It is not about that; it is about balancing economic and environmental interests to get an outcome in the nation’s best interests. There should be no talk of pernicious and retributive punishments on industry. They have done business under a system and a set of regulations that have allowed them to operate this way. We should look closer to home at what we need to change to ensure that we can move towards a better system.

The coalition wish to address climate change in hope not fear. The earlier speaker made mention of the importance of fear. The only fear I see being peddled on this issue is the fear of destruction—the fear that it is all going to come to a grisly end and the fear that is used to bludgeon people into decisions. I am far more hopeful about the future. We want to work with and for our community to help us make the changes that are needed. We need an optimistic view so we can face and meet the technological challenges. There are some who believe we must crash our economy and depopulate to find a new balance. I do not share this view. The environment is not the only legacy I wish to leave to my daughter and future generations.

In that context, we must deal with the elephant in the room—that is, coal. Discovering the answer that provides a low-emissions future for coal will enable us to both meet our commitments and lock in Australia’s resource advantage in the global marketplace. We must address the use of coal. You simply cannot ignore it as an inconvenient alternative. The issue of coal in our future requires us to rethink in the national interest the concept of exclusively renewable energy targets. Given the importance of coal to Australian jobs and to our economic advantage, we must seek to include in our goals not just renewable energy but what the shadow minister for the environment calls clean energy.

There is also the need to reward those who are opting to invest in the next best currently available alternatives. In advance of better technologies coming, we should give them the support and assistance they need to make those decisions. With an ETS we must ensure that it is at the centre of our new universe of regulation. All these other measures that have existed before now need to be reconsidered in the context of an ETS. The ETS is the centrepiece and whether it is mandatory renewable energy targets, systems of buying back solar energy from residential homes to go into the grid or cogeneration and generators in the bottoms of buildings, all the regulation and the issues must sit around and complement the operations of an ETS. We cannot allow this to be another accretive form of regulation that clogs up our economy and fails to meet its environmental objectives.

We need to move forward with a range of these measures. There is a need to reward those who are opting to invest, as I said, in the next best technologies. There is a need to have incentives for investment in solar, wind, geothermal and tidal and all of these sorts of things. For the record, I am not one who believes that nuclear energy will provide Australia with the answer. I believe there are other alternatives that should fill our agenda to the brim before anything of that nature should ever be considered in this country.

We must ensure that the mandatory targets do not confound our ETS and we must ensure that the balance of measures is always tipped towards incentives—for example, by supporting developing countries to retain their forest and establish viable economies. It is about harmonising our state laws to ensure an effective national approach on everything from standards of new homes and buildings to ensuring that there are sufficient incentives to retrofit the 300 million square metres of existing commercial space and the 8½ million existing homes that are out there. This is an approach that is all about hope, not fear—believing that we can have a lower emissions future without crashing the car and causing the destruction to jobs and economies. I guarantee you that if we crash this economy in an attempt to satisfy some zealous objective and in the process fail to even meet that objective then all we will have as a result will be wrecked families and wrecked communities as a result of a wrecked economy. That is not something that any of us in this place can sensibly embark upon. My thoughts on this bill are simple: it provides the next step in a path already commenced by the previous government, and we will work together to find the solution to an ETS that works, that protects our economy, that protects jobs and that protects the future of our environment for all Australians.

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