Greg Hunt (Flinders, Liberal Party, Shadow Minister for Climate Action, Environment and Heritage) Share this | Hansard source

Let me begin with words from the Minerals Council of Australia not one hour ago:

The Coalition’s climate change policy strikes at the real intent of pricing carbon—providing an incentive to reduce greenhouse gas emissions without negatively impacting on jobs, investment, exports and growth.

The Minerals Council of Australia welcomes the shift to a policy designed to use incentives as a driver to reduce emissions rather than an approach that is pre-occupied with penalising business to raise revenue.

The Carbon Pollution Reduction Scheme places a $120 billion impost on the Australian economy—returning about $75 billion to households and motorists in partial compensation for price rises in electricity and consumer goods—with not a single cent to be invested in the research and development of low emissions technology.

It is not just them; the NGF, ACCI and others have already spoken out today. This is the moment and this is the day Australia looks to an alternative to a $114 billion tax on the Australian economy that does not achieve real emissions reductions.

Let us run through how the government’s scheme operates. Firstly, between now and 2020 there will be $114 billion raised. That money is not coming from business, as is presented by the government. That money is coming from mums and dads, from pensioners, from small businesses and from farmers, because the costs of the government’s scheme will be passed through. Have no doubt about that. So by 2020 $114 billion will be raised. Over the next four years we will see $40 billion raised, as opposed to the coalition’s $3.2 billion scheme. That is a lot of money but it is not $40 billion, and that is the difference. In the single year 2012-13 there will be $11½ billion raised. It will be $16 billion a year by 2020. That $16 billion is designed to make savings of 140 million tonnes of CO2 and is, in reality, a carbon price of $110 per tonne. That is the problem. As one of Australia’s leading business groups today said, the real intention of carbon pricing must be to provide an incentive. We provide an incentive; they provide a penalty.

The costs of the ETS in Australia are $114 billion. Let us deal with what this means for Australian families. The government is in denial of its own figure of $1,100, which it fed to the Daily Telegraph, but that figure has been confirmed through a number of ways. Let us do the basic maths. In 2012 and 2013 the government’s own figures show that there will be $11½ billion ripped out of the pockets of Australian households. There are 8.7 million households in Australia. If you allow $1,100 each, that is $9.6 billion, and we will assume that business will wear the gap. There is no question that, with 8.7 million households at $1,100 a household, that is $9.6 billion before we even get to the real target of $11½ billion. So that is the problem for the government.

They must make it clear that they are charging Australian families a minimum of $1,100 for power and water. How do we know this? New South Wales IPART predicted price rises of electricity in the order of 60 per cent over the coming three years. The ETS is the major component of that. What we see all up is that the price of electricity—the price of heating and cooling—will go up. If you are a dry cleaner or a baker, all of these prices will go up.

The government are making a claim about the big polluters. They say that the big polluters will be punished under them. In fact the big polluters will get $40 billion for no action. The biggest emitting companies in Australia will get money taken out, they will claw that money back from the community and then they will get $40 billion for no further action. The Prime Minister’s claim today is that in some way they are hurting the companies, but they are giving $40 billion for not one iota of emissions reduction. Our system gives no money to anybody who does not make an emissions reduction. Compared with the government’s system costing $114 billion over the next nine years, which is about $1,100 to families and impacts on bread, milk and butter—things which the Prime Minister could not even cope with today—and is a system which offers $40 billion simply for business as usual as well as being a traders’ paradise and a derivatives market, what we have is a simple system of direct action which Australians want.

Again, it is not just our view. By the end of the day, I say to the Minister for the Environment, Heritage and the Arts, there will be many others who will have made it clear. What we are promising is to achieve 140 million tonnes of reduction, the same target in the same time frame beginning at the same time, but instead of $40 billion over the next four years we are talking about $3.2 billion. Instead of $114 billion over the next nine years, it will be $10.5 billion. We are up front. There are no free rides here but there are dramatically easier options.

What is at the heart of the flaw in the system that the government has? It relies on penalising normal operations for every unit of emissions. What it means is that, if there is a business that is producing 10 tonnes of CO2, it will be taxed on each of those tonnes even though we only want to get them down to nine tonnes. The government is going to make sure that electricity and gas price rises flow through to households. There is a better, simpler way: the European system has four per cent of business activity that is going to be dealt with, and our system is going to deal with incentives as opposed to punishing people by trying to drive the price of electricity as high as possible. The heart of the government’s system is to drive the price of electricity as high as possible. The problem is that it takes a lot of pain before people reduce their electricity consumption and for businesses that rely on electricity it also takes a lot of pain. On the other hand, we will provide incentives to power companies to reduce their emissions.

When the government say that we would be leaving power companies alone, there are two great fanciful statements in that. Firstly, they will be rewarding business with $40 billion for doing nothing. We will only be dealing with emissions reductions. Secondly, there are real incentives. What we have is letters from business which say, ‘We will reduce emissions, we will take up this opportunity and we can do it at a dramatically lower cost than that which is offered by the government.’ There is a big difference here. We are making the guarantee that our system will not change prices because it is going to incentives that businesses adopt voluntarily for which there is an incentive payment. The difference here is that on 16 November 2009 the Treasurer was asked whether he would give a guarantee that no low-income family would be worse off and his statement was very simple. He said, ‘We cannot guarantee that no-one will be worse off.’

Let us look at what the government have said about our system. They have said it is not a market and the Prime Minister brandished around my thesis from 20 years ago. I know a little bit about markets in this space. What we have created is the lowest cost abatement market. There is no question. If they understood how their own water purchasing scheme works, they would understand that the same principles are in place here. The government buy back the entitlement to water by seeking bids for the lowest cost water. We will be buying back entitlements to emissions by seeking the lowest cost bids. They may have messed it up royally, but let us be clear: they do not even understand that they have a water market. We are adopting the same principles in the same format. That is also what is done under the New South Wales GGAS system; it is also what is done in other jurisdictions around the world. So we have a very different approach. It is a system which we have seen support for from ACCI today. The Australian Chamber of Commerce and Industry has said:

Given the uncertainty now existing after Copenhagen over what other nations will do, a domestic policy approach that provides more carrot than stick tends to reflect the temper of the times.

We have a market that complains about the big polluters. There will not be one dollar from us for people who do not take action. There is $40 billion from the government for people who do business as usual. Picking winners—again, false. We will use lowest cost abatement, so picking winners is just a sheer, absolute falsity. We will use lowest cost abatement in the same way that the water market operates. No caps—again, false. There are penalties for businesses that breach their caps. Let us be absolutely honest here: you can challenge our system but you cannot fabricate elements of it.

What are we bringing to make this happen? We are bringing an emissions reduction fund. It is a fund of $2.5 billion—$2.55 billion to be exact—over four years and approximately $10.5 billion over the nine years. It will be complemented by an additional $700 million of other activities. What does that give us? A once-in-a-century replenishment of our soil carbon; a chance to clean up the oldest and most inefficient power stations in a way that protects the jobs of workers and the price of electricity for consumers; and one million solar homes by 2020, one million solar roofs—whether it be from solar hot water, from solar panels or from the emerging technologies such as ceramic cells—capped, accounted for and costed. We have 20 million trees to be planted by 2020 to be involved in the great challenge of regreening our urban areas. We also have the extremely interesting proposition of looking to see whether we can use the new technology, the high-voltage DC underground cables of the future, to replace the transmission lines which cut through the heart of many of our cities. That will free up dead land right in the heart of our cities. It will give us a chance to use that land for parks and housing and to use what we can reclaim from the dead land in the heart of our cities. If we can free that up, that will make a difference to the policy of people’s lives.

What else do we have? We have a solar towns program and a solar schools program on top of that, which is in place. We have renewable energy changes, which provide opportunity for emerging technologies and larger renewables projects, which have been frozen under the mess-up that this government has made of the renewable energy target. We are offering 6,000 gigawatt-hours—two out of the 20 per cent of the renewable energy targets—to give certainty and a future to the great solar mirror fields, to geothermal, to tidal and wave and to other emerging technologies, to give Australia a real solar sunrise in the renewable energy future. The last thing that we have is the idea of green corridors through our cities, of working to return the greenery to our cities as opposed to what we see in Ku-ring-gai, as the new member for Bradfield will give testimony to: the ripping apart of many of these things under a state Labor planning system which has been a disaster.

Ultimately we have a choice that is facing Australia. As the business groups are already beginning to say, what we see here is that this is a system of incentives. This is a system of carrots, not sticks. This is a system of incentives, not penalties. We compare the $114 billion tax, which will come from mums and dads and from pensioners, with a system that will cost $10.5 billion over the next nine years, and we look at what that will mean for ordinary families—$1,100 per family. In the first full year alone this system will cost $11.5 billion—for 8.7 million Australian families, $1,100 each. That is $9.6 billion and still leaves $2 billion to be made up from businesses. There is no doubt that, if anything, our figures are low. The government’s system will hurt mums and dads in a much greater way. At the end of the day there is a better way than a great big tax: it is direct action to reduce our emissions—one million solar homes, one million solar roofs, 20 million trees and a vision of an Australia which is productive, which is clean and which is built on a clean energy and green energy future. (Time expired)

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