Wilson Tuckey (O'Connor, Liberal Party) Share this | Hansard source

It is a great pleasure to participate in the debate on the National Greenhouse and Energy Reporting Amendment Bill 2009, particularly in the presence of the responsible minister, who might, if he bothers to take the time, listen to some of the arguments I will put forward on this issue. To begin with, this is a reporting process—in other words, it is a bureaucratic process to which many businesses will be subject. It will be costly to them, and it would be of some value if the end purpose of the process was to deliver emissions reductions in Australia. Considering those facts, I am anxious to speak today. There has been much debate in the last week or so regarding the misnomer of the Carbon Pollution Reduction Scheme. It is quite easy to see why the government chose to rebadge their emissions trading scheme with that particular label, because they know that the emissions trading scheme is not a scheme to reduce emissions; it is a scheme to license people to pollute.

It is quite peculiar, as far I am concerned, to think that the Prime Minister recently wrote a 7,000-word attack on the evils of the marketplace and yet he stands up here day after day telling this parliament and, through this parliament, the Australian people that he has a scheme to reduce carbon emissions in Australia when in fact, when one looks at even the compensation scheme, one sees that it is a process by which people are paid to buy the certificates to pollute and to continue to pollute.

I will take as an example the electricity generators—with whom I am totally sympathetic. They, like another circumstance I will mention in a minute—using coal to produce fertiliser for Australian farmers and to produce cheaper food for the world—will be severely disadvantaged by this legislation. The generators are unable to raise the necessary finance to maintain their business and to roll over existing loans because the financial institutions to whom they would normally apply for this money or to retain this money have told them, ‘Mate, you’re not viable under an emissions trading scheme as proposed and, as such, we’re not going to lose our money when you go broke.’ And, of course, we have had reports already of major generators refusing to commit the hundreds of millions of dollars necessary to maintain their generating capacity.

There is a question on the ETS, the emissions trading scheme—though I prefer to follow Terry McCrann, who referred to it as the ETTS, the emissions trading tax scheme, which is what it is—that needs to be answered by the government. We have not heard a word from the relevant and responsible ministers on this important question—and the Minister Assisting the Minister for Climate Change, who is at the table, is paying no attention whatsoever at this stage of the game so he clearly does not believe that he has to answer. The question that needs to be answered by the government is this: is Australia going to reduce its emissions as a response to this scheme? The answer is no. There are certain reasons relevant to its capacity to do so—for instance, to continue to supply Australians with electrical energy.

A letter from the electricity generators was, I think, circulated to probably all members of parliament. As I say, I am totally sympathetic to their case. Included in that letter were the words: ‘Unless we can get more compensation, we fear we will be unable to pass on the full cost to us—the generators—of the emissions trading scheme.’ The government then says, ‘Oh, don’t you worry about that; we’re going to give poor and middle-income earners compensation for passing on that money.’ So that confirms it: the government admits that the electrical generators will pass on as much as they think they can get away with—if I can use those words—to the community and of course to industry. Industry does not get any help; the consumers do because they vote. What does that say? Does that say that emissions will therefore reduce? No, it does not; it says that generators will pay to go on emitting. How does that work? Where is the purpose?

The downside of a market response in this arena is simply that you can buy your way out of the problem. If you have got a captive market—like those working-class families we do not hear of much these days—you just put your price up. It is happening all the time. Take alcopops, for example. The government put up the price on alcopops. The response of this government to every problem is to put a tax on it. And what do we read in the paper now? We read that people have got over the price increase and they are going back to drinking them. Under an emissions trading scheme, people simply pay to pollute. But it goes one step further. In light of the fact—a fact also recognised by the government—that there will be little capacity for a reduction within the Australian industry groups, they will have to buy certificates. And the government says—and let me say that the process that was put to the coalition party room yesterday made the same admission—that you will have to buy certificates overseas.

The Chinese are too smart to have an emissions trading scheme. There would be some difficulty in their managed economy to have a market based outcome, one would presume, anyway. But are they doing that? No. There are some of us within the coalition who believe the solution to this problem is for the government to invest money in renewables and, I might add—and I wish to touch on this somewhat—the improvement of the generating sector, particularly in transmission, so that you get positive reduction in emissions within the borders of Australia. That is what the Chinese are doing.

We had a seminar which was attended by 10 different groups promoting the means by which they could reduce emissions in Australia—each recognising a cost and each recognising and complaining that the government has no policy for emerging technologies. All the government wants to do is have a RET that is going to promote wind power, which is recognised universally as having no purpose unless it can be backed up by a renewable like hydro or tides, simply because if you back it up with coal—considering the lack of responsiveness of that sort of generation—you burn the coal anyway. There is not one scrap of evidence around Australia that all those wind generators have actually reduced the consumption of coal. They are burning it. If you were to talk to a couple of middle managers at one of the Victorian power stations, they would tell you that they have to burn the coal because they cannot otherwise meet the drop-off in wind generation, which might be for seconds.

With other responsive mechanisms you can get away with that, but the fact of life is that the emissions trading scheme concept does not reduce emissions. It creates a process where you can pay to emit. But then it is suggested by the government and that wonderful Treasury modelling that you can save a lot of money by buying certificates offshore. One can only wonder what has happened with the politicisation of Treasury for the first time in my history in this place. The Chinese will have certificates for sale because their government is investing in high-voltage DC transmission lines, in massive hydro projects et cetera. China will get reductions in emissions and Australia is going to buy them.

That might not be too bad, because there might be some integrity in those certificates, judging by the presentations we got the other day showing just what is going to happen in China with high-voltage DC transmission—which just happens to halve the amount of line loss over long lines. It is an interesting fact. I made some inquiries. We have 25,000 kilometres of natural gas lines in Australia. The one that runs between the Pilbara and Perth produces just less than 700,000 tonnes of emissions a year in the process of pumping the gas from the Pilbara to Perth. What do we use the gas for when it gets to Perth? Thirty per cent of it goes into electrical generation. But if that generation had been established at the wellhead or, in the case of offshore, on the beach or as close as possible to the point of production, and if that energy had been transmitted to Perth by high-voltage DC lines, of which the Chinese are building about 10—one of them under construction now is 2,000 kilometres long—then that particular amount of emissions would be considerably reduced. I put a question to Minister Ferguson on this matter. He told me in a written answer that there are only about 800,000 tonnes of emissions associated with pumping this gas around Australia, but I have it on absolute authority that 700,000 tonnes are attributed to one pipeline. I do not know if that is misleading the parliament or not—I will seek further information—but it is a classic example of how investment in the right transmission system would reduce emissions. That is measurable.

We are apparently going to have a world trade in certificates. That will be under the Kyoto principle, because at the moment Australia is the only country that is coming up with an emissions trading scheme. They say they have one in Europe, and everybody knows that is a farce. But where are these certificates going to come from? Romania? Eastern Europe has a great capacity to do so because, when they broke up the Soviet Union, competition closed down all their rust bucket industries—and that was within the first 12-year period of Kyoto. And who is going to guarantee the integrity of these certificates? When I questioned a presenter on this new scheme yesterday, he said, ‘They’ll be very noticeable because the dodgy ones will be less valuable—will sell at a lower price—than the good ones.’ I had a leading businessman tell me that the best investment in the world at the moment is Indonesian forests because you can sell the certificates three or four times for the same bit of forest. Where is the integrity in that? Where is the guarantee that Australia’s emissions will be reduced? If the minister wants to put a bit of time into it maybe he would bet me a year’s salary that there will be significant reductions resulting from this scheme. It is a scheme to pollute. You pay to pollute. The generators are going to pay to pollute, but they tell us they cannot afford it.

We just had a briefing, from which I came immediately to this place, by a fellow who wants to spend about $3 billion in the area of Collie, a good Labor-voting area on the fringes of or just outside my electorate, to create hundreds and hundreds of full-time jobs making urea and, for the first time, on his advice to us, selling that urea to Australian farmers at the price that will be attributable to his exports. That will create a very significant drop in the price of urea fertiliser, make farmers more viable and continue to maintain Australia’s food security, but he has not got the money yet, because the banks are cautious of how he is going to be treated under the emissions trading scheme. Notwithstanding what I heard the minister say yesterday about the two-year process, the answers he needs are not available.

I note Bob Brown was on the radio this morning. It is quite an interesting thing: I am closer to Bob Brown on this issue than I am to some other people I know, because I have a genuine interest in reducing emissions. I know this scheme is not going to do it and so does Bob Brown. We get all this rhetoric about the national interest. The national interest is apparently going to be served by creating a new balance of payment problem when businesses are unable to purchase certificates within Australia. Of course, the government might accommodate them by selling a few more, because that is going to be a wonderful revenue stream for them, but the reality of the situation is that every certificate sold is a certificate to pollute. The market has the option. You either pay or you reduce. We have a party that criticises the market, saying, ‘That’ll drive everybody into investment in better and less-emitting technologies.’ All the emerging technologies with the best chances of doing anything are excluded; they are not going to get any assistance.

The alternative to that is to look at the priorities of government investment. Government built all the coal-fired power stations around Australia, practically. State governments flogged them off to get some money. Government have the responsibility to fix this problem. But government say, ‘We’re going to find $40 billion to improve the speed at which Australians can download movies.’ Very few people need the sorts of speeds that are necessary under the national broadband initiative. Tasmania is so excited about it that a big political push had to be cancelled because nobody was going to turn up. On a scale of one to 10, considering the rhetoric of this government, what is most important for Australia and the world? Is it the convenience of a faster broadband system, which the private sector is willing to provide on the normal terms of business, or investing significant amounts of money—not a few hundred million here and there for a bit of research—to reduce emissions? Most of the money is going into carbon capture and sequestration for the coal industry, which will not work and will be hugely expensive. The generators have made it clear that they are about to pay the 20 bucks, or whatever it might be, because they know they are not going to have the money and no-one is going to lend it to them to invest in changes. The fundamental of the ETS is, ‘We’ll take the money off you and if you have any left, you might invest in fixing the problem.’

The alternative is for government to invest the money and invest it where it will deliver emissions through energy efficiency. I do not mean little plug-in fluorescent lights; I mean the big-ticket items. High-voltage DC current transmission is accepted around the world as being the means by which you shift electricity with least loss in the lines. AC is extremely inefficient—you are burning up electricity, burning up coal and creating emissions, and creating excessive emissions by pumping gas around the countryside. They are things that government can fix and should fix, and you do not necessarily get the right response by taxing people. Australians have got a habit, as I said—and the alcopops example is one of them—of paying the money while they have it, and often by forgoing some other discretionary expenditure. The ETS will not reduce emissions in Australia. It will generate significant job losses, increase costs and, of course, increase the balance of payments as industry struggles to keep afloat by paying the Chinese and others, because they have worked out how better to manage this issue. (Time expired)

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