Julia Gillard (Lalor, Australian Labor Party, Prime Minister) Share this | Hansard source

As a man who has advocated increasing taxes, which the Leader of the Opposition did at the recent election, presumably he has had time to think through questions of increased tax, with his increased company tax inevitably hitting working families. So, when the Leader of the Opposition talks about the cost of living, he may want to remind himself and remind others that he stands for increased company tax and increased prices for working families. On the question of carbon pricing and electricity, what I would say to the Leader of the Opposition is that, if he wanted to get out an economics textbook, it might be able to teach him a little bit about something called ‘demand’ and something called ‘supply’. When you look at something called ‘demand’ and something called ‘supply’ it then tells you something about ‘price’. When we apply those rules to electricity generation—and I know it can get complicated with a graph, an X-axis and a Y-axis and all the rest of it—or when we apply that economics to electricity pricing, what we see is increasing demand and increasing uncertainty in relation to supply. We have had a decade of underinvestment. Uncertainty by the industry in pricing carbon is constricting investment. If you talk to representatives of the sector, they will say that uncertainty means that, to the extent that there are new investment dollars, they tend to go for stopgap proposals rather than the generation of the baseload power we need. We need to correct that circumstance. Providing certainty to industry is vital to correcting that circumstance. That is why the government, in a collaborative and consultative way through the Multi-Party Climate Change Committee, is working through the question of pricing carbon.

See this speech in context