Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Energy and Resources) Share this | Hansard source

In rising to address the National Greenhouse and Energy Reporting Amendment Bill 2009, I note that it is another example of what was achieved by the Howard government in doing practical things, as distinct from just talking about them, to lower Australia’s greenhouse gas emissions. This bill makes minor amendments to the coalition’s National Greenhouse and Energy Reporting Act 2007. It aims to improve the functions of the act and to strengthen the audit framework of the act. Most importantly, it allows corporations to appeal to the Administrative Appeals Tribunal if they disagree with Commonwealth determinations.

As I said, the legislation in its original form was introduced by the coalition government. Yesterday at that dispatch box, the Prime Minister finally admitted that, in fact, the coalition had spent $3 billion lowering Australia’s greenhouse gas emissions—not talk; not setting up new institutes to duplicate old institutes; not strutting the world stage with new ideas but doing nothing at home. The coalition actually put in place structures and mechanisms to lower greenhouse gas emissions. By structures, I mean physical structures. We set up a process whereby Australia is well placed to meet its Kyoto target. There are those who sit opposite who repeatedly are loose with the truth and say that, for 11½ years, we did nothing. If $3 billion is nothing, perhaps I have now gained an insight into how $315 billion worth of national debt is not a concern to this government.

The previous government were very committed in a practical way to lowering greenhouse gas emissions and to ensuring that Australia led the world with a range of technologies. In the solar industry, we provided $75 million to build the world’s largest photovoltaic solar power station. We provided funds to coal fired power stations to lower their greenhouse gas emissions. We assisted the gas industry. We actually set up the mechanism and the legislation around the mandatory renewable energy target. We built the wind industry in Australia that we now have. None of that happened by accident; it all happened as a direct result of what the Howard government did during their 11½ years. The legislation, which is being amended in a positive sense today, is part of that process. It is part of the commitment that Australia’s government under John Howard gave to both Australia and the world that we would do our share.

The original act also provided for public disclosure of a company’s level of greenhouse gas emissions and energy production and use. That was the first time we had a process in Australia where companies were required to report their emissions. With that, we began a process of benchmarking and best practice. That saw companies lower their energy use and therefore their emissions and do so in a way which allowed them to recoup the cost of those efficiencies. In fact, it was the leading edge of driving energy efficiencies. Probably the world’s leaders in energy efficiency are the Japanese. We have much to learn from them. There are a whole range of ways that you can drive energy efficiency, and this legislation, as I say, was just part of it. We put it in place after extensive consultation with states and territories as well as with industry and other stakeholders. A streamlined National Greenhouse and Energy Reporting System was developed, aimed at minimising costs and red tape.

The National Greenhouse and Energy Reporting (Measurement) Determination 2008 provides methods and criteria to calculate greenhouse gas emissions as outlined by the National Greenhouse and Energy Reporting, or NGER, Regulations 2008. The coalition will support this bill in both houses. As I say, it simply builds and probably improves on the legislation that we introduced—but the goal is the same: to ensure that greenhouse gas emissions are reported.

The National Greenhouse and Energy Reporting Amendment Bill 2009 aims to better facilitate the administration of the act and also better reflects its original policy intentions. It focuses on establishing an audit framework under the act for the CPRS and is a response to consultants’ feedback. The bill imposes no burdens on industry beyond those originally intended by the act. Wouldn’t it be great if we could say that of all bills related to lowering greenhouse gas emissions that this government has introduced?

We are, of course, confronting a situation, but this government introduced legislation which is now in the Senate and has already passed through this House—with a much truncated debate, I must admit. I found no satisfaction in only being allowed to speak for 10 minutes during the debate on that legislation. I would have thought that legislation which represents the biggest fundamental reform in Australia’s economy would be allowed full debate in this House. Luckily, in the Senate we are going to see that. Senators are not as easily bludgeoned by this government. They are insisting that full investigation of the legislation, combined with a full debate, take place. The economic and social consequences of the CPRS legislation will be examined.

Madam Deputy Speaker, that will be crucial because what we are seeing in terms of the effects of the CPRS—legislation which will rely on this legislation that we are debating—is an enormous impact on Australia’s energy industry and energy consumers. We will see an impact on the electricity producers, starting with power stations in the Parliamentary Secretary for Health’s own state. Power stations in Australia are facing closure under the CPRS. That closure may not take place in the first five years. There will be an enormous increase in the cost of electricity, and I will explain that in a moment, but in terms of power stations, the first brown coal power station may close as early as 2015. I hope not. Where do you generate 1,000 megawatts of baseload electricity in Victoria when you will have a requirement in Australia for 1,000 megawatts a year to be added to our generation grid between now and 2020? How do you replace 1,000 megawatts of generation if it does close in 2015?

For a completely different reason, four years ago, when I was the minister, I suggested that if we did not continue to invest in electricity generation and distribution in Australia, we would see the lights go out in Melbourne during the Commonwealth Games. We did not know until afterwards just how close we got to that, but that was with all power stations functioning at full capacity. If we start taking power stations out of the grid as a result of an ill-thought-through CPRS then we are putting at risk not only the economic development of Australia, but also the very safety of Australia’s communities in both a physical and an economic sense.

If I go onto the LNG industry, which again will be affected by this legislation that we are debating today, and consider the impact of the CPRS on that industry, we see a situation of sheer lunacy. The liquefied natural gas industry exports gas primarily to Asia. When it exports a tonne of LNG to China, it saves between 4½ and nine tonnes of CO2. So what does this government do? It taxes the LNG industry under the CPRS. I say ‘tax’ because even though they say it is a carbon price, when you are using the world’s best technology you cannot lower your emissions any further. And Australia’s LNG plants use the world’s best technology, so they have nowhere to go but to effectively pay a tax. So we are taxing, we are disadvantaging the competitiveness of Australia’s industries by introducing a CPRS which will actually save global emissions. We are taxing the industries that can lower greenhouse gas emissions globally. Australia’s emissions will go down, but not by the factor that the world’s emissions will go up. The world’s emissions will go up more as a result of ours going down. Of course the same argument applies with aluminium and other energy-intensive industries. The aluminium smelters in Australia are among the most efficient in the world. In fact, they are in that part of the cost curve that denotes the fact that they use electricity in a highly efficient way. And as well as that, they have introduced technologies to lower other emissions such as chlorine and fluorine. There is no future for those industries in Australia—certainly no future for expansion—under the CPRS.

I could go on and on, but before I leave the issue of the CPRS, I draw to the House’s attention a couple of issues that need to be dealt with that have come to light this week. As a result of reporting their emissions through this legislation that we are debating today, and then complying with the CPRS, we are now seeing that not only will the aluminium industry be affected, not only the LNG industry, not only the cement industry, not only the copper smelting industry and not only the refining industry, but as a result of some work done by the Australian Chamber of Commerce and Industry that small businesses will be affected as well. The very engine room of employment in Australia, where people go out and have a go and mostly make money but sometimes lose it, and maybe their house with it, but mostly make money and then employ people, the very heart of employment in our economic community is going to be attacked by the CPRS. It is going to be attacked in a way that means the small business community, if it is to survive, will have to lower its employment.

We are in a global situation, in a global financial crisis, where Australia and its best economists are predicting that we may go into a recession; we may in fact see unemployment double over the next 18 months. The government’s response to that, through the reporting process of this bill we have in front of us, is to introduce legislation which will increase unemployment—not just in the aluminium industry, not just in potential new industries that will no longer come to Australia, but in the industries that are at the very heart of Australia’s employment growth. Reading from the ACCI release:

As a consequence—

of the CPRS—

trade-exposed SMEs—

small and medium enterprises—

have limited opportunities to pass the costs on to their customers, but are not eligible for assistance under the proposed CPRS transition package.

Increases in energy and transport costs will impact directly on SME employment and profitability.

So the very heart of the economy will be attacked to the core. The release goes on:

The study finds that the CPRS in its current form will generate additional costs that would erode firm profitability by between 4 and 7 per cent on average. In order to compensate for the erosion in profitability, the study shows that firms would … need to reduce labour costs …

That means lay people off; that means let them work less hours. It says SMEs would need to reduce labour costs by between 4.4 per cent and 8.1 per cent for the food processing industry and between 7.4 per cent and 12.9 per cent for the plastic manufacturers. The Parliamentary Secretary for Health, sitting opposite, should be very interested in that and the member for Wills should be very interested as well, because in Victoria we have—

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