Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Hansard source

I thank the member for La Trobe for this very important question, because the central challenge for Australia on the road of reform is to provide business with the certainty to invest in the low-pollution economy of the future. Other economies are doing it but we are not doing nearly enough. What we have to do is to give business the certainty that they can make the necessary investments in power generation, for example, so we can not only be certain of supply but we can also be certain that we may just be getting value for money.

The road of reform is sometimes hard and what we have to find is the most economically efficient way of doing this. Of course, the most economically efficient way of doing this is a market based mechanism that those opposite will not contemplate because when it comes to essential reforms which will benefit this country all we see from them is the politics of the stop sign. They will not go down the road of reform which is going to deliver the prosperity this country needs. And what this country needs is a price on carbon. Why do we need it? We need it to stay competitive. We need it to drive the investment in the alternative technologies. We need it to be contemporary. We need it for our future prosperity but they will not contemplate it because they are more interested in playing the politics of the issue. They are not interested in the national interest.

What they say is they want to do it by regulation. But, of course, regulation is not the most cost effective. There has been a lot of debate in this House in the past day or two about the OECD. The OECD has had this to say about the importance of a price on carbon and doing it in the most efficient way and not going down the road of regulation that the member for Flinders wants to go down. That is not the cost-effective way. That is the way that will impose very big costs on our budget and very big costs on our industries—and when you do that you make them uncompetitive. This is what the OECD had to say about the solution that has been put forward by those opposite:

… attempting to reduce emissions through regulatory and subsidy arrangements would also be costly for the economy. The cost of regulatory approaches to reduce emissions can be more than twice as high as the cost of market based approaches.

That is what the OECD had to say in their recent report, and they are backed up by the Treasury. The Treasury has made this point:

A carbon pricing regime would achieve the necessary abatement at a cost per tonne of emissions significantly lower than other announced alternative policies …

That is where the economics stand and that is where the national interest stands but the member for Flinders over there wants to sit back and decide where the subsidies are going to go and how much Australians are going to pay to pick winners. I would not trust him to wash my car and I most certainly would not trust him to pick the winners. I most certainly would not trust him to do that.

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