Mike Kelly (Eden-Monaro, Australian Labor Party, Parliamentary Secretary for Agriculture, Fisheries and Forestry) Share this | Hansard source

I am very grateful to have this opportunity to talk on this subject. I have just heard the member for Indi and if there is any person in this parliament who should be fighting hard for a price on carbon and who should be fighting for action on climate change, it is someone who represents a regional area. We have seen from those members who pretend to represent regional Australia total neglect of their interests. Where do you stand in relation to the carbon farming initiative? What about the fact that all of these renewable energy investments are going to land in regional Australia? What about those wind farms in Victoria—over 2,000 proposals for Victoria alone?

What really sticks in my craw is the bleating we hear from the other side about manufacturing and jobs. Where were they during the global financial crisis? They were asleep. That is where the Leader of the Opposition was. While we were busy saving 200,000 jobs, they were trying to deny the country that opportunity. They were not interested in manufacturing during the 12 years when they let infrastructure and skills slide in the country. They were nowhere to be seen. They were missing in action.

They claim they support manufacturing but their position on this issue shows they have abandoned the fundamental beliefs that they used to have in markets and rational economics. This embrace of irresponsible politics demonstrates what this is really all about. Why do they continually cry for an early election? Is that anything to do with this national interest that we are so vitally concerned about on this subject?

Are we getting a genuine debate on policy in this discussion? No, we are not. What we are getting is a short-term political objective on display for the nation to see. They want an early election because they know that in the long term, as these policy issues play out, the people of Australia will come to realise by 2013 that it is all nonsense, that the coalition's claims in relation to these issues are garbage and that the opposition leader is a fraud.

The government scheme intends not only to support manufacturers, because it will position them for the new economy that is coming down the pipe towards us, but also to provide generous household assistance and support for jobs as we shift to a low-pollution economy. It will also assist industry to tackle the climate change challenges that they face. As has been emphasised by other members of the government, if we do not have a price on carbon, if we do not position ourselves in this way, it is quite conceivable that we will face carbon price action against us by other countries that are doing their bit. They will not stand by and let Australia, which has such an emissions intensive economy, take no action and so we may start to see penalties imposed upon us that equate to border taxation adjustments on our exports. That would be catastrophic for manufacturing and industry in this country. That is what we are trying to avoid.

This policy will assist those companies that are emissions intensive and trade exposed. Through the CPRS network we did have a very substantial assistance package of up to 94.5 per cent for our most exposed industries. That assistance not only sends a price signal to those industries to reduce their carbon pollution but also, if it is in the form of free permits, provides actual assets. Businesses will have an opportunity to reduce their carbon emissions and to sell surplus permits. If they cannot reduce their emissions, there is a substantial level of shielding against carbon leakage.

We should remind ourselves of what substantial players in the investment market have to say about these critical issues. When we talk about the price of power going up, we are talking about the lack of investment in infrastructure in this country over a long period. There is no carbon price in place now—that is the only reason prices are going up. We know that, with the power challenges we will face in the future, we have to get busy on producing the new baseload generation that we need. There is no point going down the road of trying to build new coal-fired power stations—we know that is not the way forward. The only way to get the renewable energy investment that we need, and step-down technologies like gas, is to get a price in the market that enables those replacement technologies to happen.

I remind the chamber of what Mr Nathan Fabian, the chief executive of the Investor Group on Climate Change, had to say about the CPRS on Radio National in 2009. He spoke for some of Australia's major institutional investors, including super funds, insurance companies and private sector fund managers such as AMP Capital and Colonial First State, representing $500 billion in funds under management—the sort of money we need to drive investment in much-needed power infrastructure. In a Radio National interview on 28 May 2009 he said:

Our members are concerned about delays in the emissions trading scheme, they are concerned about the trajectory of the change in the economy between now and 2020 and beyond. And their view is that we should be smoothing the transition as much as possible, smoothing what is a significant adjustment in the economy, to spread the impact on their investments.

Our members would rather get going with the scheme.

Single digit earning impacts are expected for most of the emissions intensive trade exposed companies. And those figures reduce when the current compensation scheme—

the scheme that was associated with the CPRS—

is taken into account. So they are not overly concerned about short to medium term.

Our investors expect companies to plan, to spread risks and to manage a transition over the long term. Our investors can see that climate change is a long-term investment risk that they must manage. They feel that they’ve got no choice. Some of our investors are super funds that have a 20 to 40 year horizon for their members. Superannuants like you and I and they know that they must think about long term risks. Facing that reality, they want to start to manage the risks as soon as possible.

Fran Kelly asked:

So just finally then what’s your response to this delay we are seeing likely to occur now that the Coalition will delay the Bill?

He replied:

Yeah, well, that’s the concern, it’s curious to target for a high target in 2020—

a renewable energy target—

but a later start. Clearly that will lead to greater volatility in financial markets and we’ve just had a pretty serious experience of what that can be like to the economy.

That is a man and an industry that represents the sort of investment that this country needs, and a reference to the sort of support that manufacturing will need to generate the power that they will require in the new economy.

We also need innovation. New industries will be created by innovation when this new economy begins to arrive. Just recently in Israel I saw how innovation and skills in new technology serves an economy massively well. They were able to navigate the economic crisis very well and also were growing at five per cent a year prior to that crisis. Because of their investment in innovation and skills they have a diverse economy. We understand we have a patchwork economy that we are trying to deal with at the moment, and in support of our companies not only do we want to see this new economy driving new directions for industry but also we want to make sure that in dealing with their challenges they have the support they require—support through the funds raised through this scheme—to make the transitions they need to make. Also, with this investment, we will see the development of new industries that we can export and they can get involved in exporting and partnering with other companies in addressing those challenges. Probably the worst aspect of this whole debate has been the scare campaign that the coalition has been mounting. Mr Abbott is challenging Harold Egbert Camping—

See this speech in context