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

I am delighted to speak to this motion put forward by Mr Adams, the member for Lyons. I may not agree with all the elements of the motion and some of the assertions it contains; however, the general sentiment of support for pensioners is an absolute verity. In relation to that, I want to set out three issues today. I want to, firstly, look at the role, status and position of pensioners within the seat of Flinders, which has the fifth oldest demographic in Australia of the 150 seats in the Commonwealth parliament; secondly, look at the great national trend of our ageing population; and, thirdly, address one of the specific elements contained in this motion, and that is the assault on electricity pricing which will drive up the price of power for pensioners within Flinders, within Victoria and within Australia more generally in such a way that it is a regressive taxation measure which hurts the poorest but leaves the wealthiest in our country largely free of any significant impact.

Let me deal first with pensioners in the electorate of Flinders. The latest figures that we have are that within the electorate of Flinders there are over 24½ thousand people beyond the age of 65. This demographic represents 26 per cent of the total number of voters enrolled in Flinders. The numbers of those on various forms of pension or income support are in the space of 20,000. So there are a very significant number of people who receive support, assistance or help from the government in some way, having given a lifetime of service and work to the country, the state and the electorate. We have a profound social responsibility to deal with the needs of pensioners and we have a critical economic duty to ensure that we do not have a society which is divided in such a way that there is extraordinary dependency.

There are two great issues for the pensioners of Flinders. For future pensioners, it is about ensuring that there is a superannuation system that gives them an opportunity that we therefore provision in ways which will ensure that they have guarantees, but not in a way which destroys the economic base of our society as we go. The other issue is for current pensioners. There are many members on both sides of this House who have worked towards trying to boost the standing of and support for the seniors community. Seniors need two things. They need to have an adequate living basis—what is sometimes called a living wage—so the pension needs to address their basic needs and their ability to prosper; and this needs to be coupled with rules that will provide incentives but not penalties for additional work to supplement the pension, so they can have a meal out or purchase presents for the grandchildren and they can take some time for themselves. It should not be a subsistence lifestyle which is mandated. With the basics that are provided, there should be an opportunity and incentive there for those who can acquire additional income to work and to have that choice without incurring a penalty. That is of fundamental importance to the pensioners of Rye, Rosebud, Dromana, McCrae, Blairgowrie, Hastings, Somerville, Mount Martha and so many other parts of the Mornington Peninsula, not to mention the extraordinary population on Phillip Island in Cowes, Rhyll, Newhaven and Ventnor. All of those towns along the surf beach and nearby San Remo have very high numbers of seniors, as do Corinella and Coronet Bay. These towns rely on their seniors—they are the backbone of their society—so we need to do all that we can to help them.

At the national level we are witnessing an ageing society, so we need to have a balance between immigration and population growth, but it has to be a sustainable population. I remember putting this argument forward in the Australian in April and being criticised by many in the Labor Party—before they adopted it as a theme in the last election. I am not saying that is causation, but it is interesting that the ALP attacked what was, I think, a fairly non-controversial idea, particularly when it subsequently proved to be the basis of one of their election platforms.

That brings me to the third issue, that of power pricing. Today we see that there is a plan, proposal or idea that the government is putting forward which will drive power prices higher for pensioners. This will be most significant for pensioners because it is a regressive form of taxation.

We see that the emissions trading scheme and the carbon tax—they are different sides of the same coin—operate primarily by using electricity prices as the principal lever. This works by taxing the entire economy. Whether you fix the volume of emissions under an emissions trading scheme but keep the price fluid or you fix the price but keep the volume fluid under a carbon tax, either will drive up electricity prices dramatically.

Let us take not just my views on this but those found in official government documentation. The Independent Pricing and Regulatory Tribunal of New South Wales made provision for the impact of the government’s emissions trading scheme on electricity prices. The tribunal said that without an ETS electricity prices would be allowed to rise over a three-year period by approximately 35 per cent. That is an enormous impact as it is. With an emissions trading scheme—or, by extension, under a carbon tax—the additional impact would be a further 25 per cent. That would take the total increase in electricity prices over three years to 60 per cent. That additional 60 per cent represents an extraordinary component of the income stream available to pensioners on limited resources. More significantly, it comes on top of what the IPA has recently found to be a 60 per cent increase in electricity prices to date.

I am a passionate advocate of genuine action on climate change such as cleaning up and converting power stations, including Hazelwood and Yallourn in Victoria—the brown coal power stations—from coal to gas on a competitive incentives basis. But this mechanism neither cleans up the power stations nor offers equity to pensioners. So we see that, under the New South Wales modelling, a 60 per cent increase to date will be met with a further 60 per cent increase in power prices. The result, of course, is that it does not have any significant impact on Australia’s emissions. How do we know this? Because we have had a test run with a 60 per cent increase to date, and that has not had a major impact on electricity consumption, because electricity is an essential service. That is the point: electricity is an essential service. If you tax an essential service for which there is no ready alternative you will see a minimal impact on consumption of that inelastic good but a major substitution effect on the individuals who have been hurt. They will not be able to buy schoolbooks for their grandchildren or swimming lessons for their grandchildren. They will not be able to go out to the cinema or a restaurant. It produces enormous pain without necessarily producing the intended outcome.

We think there is a better way for pensioners—that is, provide incentives to reduce emissions through a carbon buyback form of direct action. Let us clean up the power stations and do other things such as cleaning up our farms by providing incentives that will reduce emissions directly. All of this stands in stark contrast to a 60 per cent increase in electricity prices to date and a further 60 per cent increase in electricity prices as outlined and proposed by the government under its emissions trading scheme. (Time expired)

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