Bob Baldwin (Paterson, Liberal Party, Shadow Minister for Defence Science and Personnel) Share this | Hansard source

With all the rhetoric being delivered by the Prime Minister and his spin doctors on the issue of climate change and the need for an ETS, you would almost believe that he is in fact the oracle or that he is the font of all wisdom when it comes to the issues of climate change and an emissions trading scheme. There are two very different proposals being put forward with identical outcomes. The coalition’s proposal seeks to reduce carbon emissions by five per cent. Labor’s emissions trading scheme—or ‘emissions taxing scheme’—or CPRS, seeks to reduce carbon emissions by five per cent. That is where the similarity ends. The coalition’s proposal, over the four years of forward estimates, will cost $3.2 billion. By stark comparison, the Labor government’s emissions trading scheme, the tax that they wish to impose on industry and everyday Australians, will cost $40.6 billion. That is $3.2 billion versus $40.6 billion.

I need to explain, as you do in a debate, the analysis of each of the systems. Under the Prime Minister’s emission taxing scheme, you have a system in which everyone and everything will be taxed. Industries will be taxed, major emitters will be taxed, businesses will be taxed, farmers will be taxed, motorists will be taxed and plumbers and builders will be taxed. Everyone in the community will suffer at the hands of an emission taxing scheme—not forgetting the pensioners.

The Prime Minister has asked: how can you have a system that does not penalise the major emitters? Yet, when I look through the government’s emissions trading scheme proposal, there is a whole raft of free permits for major emitters. So he is not directly affecting them from day one—there is a phase-in period. They get free permits to start with.

But there is one thing which needs to be understood—and it is probably problematic for people in the Labor Party to understand. In business, when costs are put upon you, you work out the costs of your production—the cost of producing whatever it is you sell or trade in—and, if there are more costs, they go onto the bottom line and then you divide by the number of products, add in a margin for profit and that is what you sell your product for. The Prime Minister has been trying to hoodwink the community that, if businesses have these costs, this tax, imposed upon them, they will absorb it. That just does not happen. The costs are passed on.

Whilst the energy industry might get hit with a tax, with all these costs, it is not going to sit back and absorb the costs. It will simply pass them on. And, if the coal industry in the Hunter Valley gets hit with all these taxes, it will just pass the cost on. All industries will simply pass the cost on. The aluminium industry, a major employer, will simply pass the cost on. In fact, everything and everybody affected by this tax will not absorb it; they will pass it on—unless, of course, you happen to be a consumer. At the end of this whole arrangement being put forward by the Labor government, the only people that will be paying for the ETS will be consumers, because industry will pass the costs on. That means every man, woman and child in this nation will be paying for the cost of an ETS.

When you compare the $40.6 billion cost over four years of the ETS plan of the Labor government against the $3.2 billion plan over the four years—both with the same outcome of a reduction of five per cent—where are the stark differences? The stark differences are that you lead by incentive, you create the opportunities through incentive and you do not penalise. If somebody is already at world-leading practice, with emissions as low as can be achieved, why should they be penalised? Why should they have taxes placed upon them which, in addition, make them less internationally competitive?

The policies that have been released today have a lot of detail. It is the comments of the industry people out there that I find most encouraging. A statement today from the National Farmers Federation said:

“The NFF is encouraged that that the Coalition has committed to an incentive based scheme for farmers to drive abatement from their sector,” NFF president David Crombie said.

“In addition, we are comforted by the Coalition’s commitment to no additional indirect costs to energy and energy related farm inputs, which can have a major impact on the profitability of our businesses and regional communities.”

ACCI said today, in a statement by Peter Anderson:

It is in the public interest for there to be a strong contest of policy ideas about climate change responses before we impose major or unilateral adjustment costs on our economy, and the Coalition statement contributes to that.

An industry that affects my region dramatically is the mining industry. A statement today from Mitch Hooke, Chief Executive Officer of the Minerals Council of Australia, said:

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 statement goes on to say:

The Coalition’s proposal establishes an incentive for companies to invest billions of dollars in breakthrough technologies critical to reducing emissions.

I draw the House’s attention to the front page of the Newcastle Herald from June 11 last year. The front page said, ‘Carbon plan: 17,000 jobs at risk in Hunter’. It was an article by Ian Kirkwood, the industrial reporter, and it said:

THE Federal Government’s carbon pollution reduction scheme would severely affect the Hunter economy, a new report commissioned for the NSW Government reveals.

The Access Economics report into the scheme’s impact on disadvantaged regions says that by 2025, it could cost the Hunter 17,000 jobs and cut its commercial output by more than $1 billion a year.

Coal, predictably, would be hardest-hit with at least one in three Hunter coalminers likely to lose their jobs as industry output fell by 37 per cent “relative to the [no carbon scheme] baseline”.

It would also be felt at Tomago Aluminium and Hydro’s Kurri Kurri smelter, with national aluminium output predicted to be at least 50 per cent less than without the scheme.

The Hunter’s coal-fired electricity industry is also expected to suffer.

Overall, Access Economics says the proposed carbon scheme will cut the Hunter’s output by 3.7 per cent and take 2 per cent from employment.

Things become dramatically worse if Australia’s carbon permits are not part of an international trade.

In this case, employment is hit by 7.8 per cent and output by 10.2 per cent.

That is perhaps one of the most damning articles I have ever read about the impact of an emissions trading scheme on a region—an impact that would be hard for many to recover from. Compounding that, of course, is the rise in power bills. In October last year, IPART put out a report saying that the price of electricity would rise, and rise dramatically. In fact, the IPART report said:

By 2013, the impact of the Federal Government’s emissions trading scheme would increase the average bill of EnergyAustralia customers by 23 per cent, Integral Energy customers by 25 per cent and Country Energy customers by 21 per cent.

So we have two very different proposals to achieve the same outcome—an outcome of five per cent. You have the proposal by the Labor government that taxes everybody and everything, which, according to a report by Access Economics commissioned by the New South Wales Labor government, will see some 17,000 jobs go in the Hunter region. Contrast that with the proposal put forward by the coalition which will see no jobs go—no jobs go, no tax.

One proposal is: 17,000 jobs go, a tax on everything and the average household electricity price will go up nearly $730 a year. Against this is: no increase in electricity, no increase in unemployment, no increase in tax and, therefore, no increase in grocery prices and no additional cost to households but still achieving that five per cent goal. So, for the life of me, I cannot understand why the government is not prepared to sit down and look at this. I cannot understand why the Prime Minister, with all his rhetoric, was determined to drive Australia into a position which the rest of the world was never going to pick up—Copenhagen displayed that—and which is going to financially disadvantage our industries that are internationally competitive. The people in this country, the industries in this country, have worked hard, invested a lot of money and been determined to be internationally competitive. And they have achieved that. They have done it well. They have done it very successfully. Off the backs of their efforts, this country rode through the global financial crisis without too much of a deep impact. So now this Labor government’s intent is to tax them out of existence.

Mr Deputy Speaker, I put this proposal to you: if the Labor government’s ETS had been imposed on Australia prior to the global financial crisis, what position would we have come through the global financial crisis in? Let me tell you, the word ‘recession’ would have imprinted over the quarterly results for many, many terms. I say to this government: you are not the oracle. You are not the font of all knowledge. You do not have the only plan. And the problem is that you have trapped yourself into a corner where you have failed to accept any other ideas. I remember well when you first released your emissions trading scheme, your CPRS, and it was non-negotiable. You were not prepared to sit down at the table and talk to the coalition; it was your way or the highway.

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