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

The government is spending $25 million of taxpayers' money on advertising its carbon tax, but it is not giving the facts, the details and the impacts and it is not telling the truth about what will happen to Australians, Australian businesses and the Australian economy under this carbon tax, nor is it telling the truth about the alternatives. Let me begin where the Prime Minister left off just a few moments ago. The member for Aston asked about the impact of the carbon tax on Mystique printing. Mystique printing is a carbon neutral business but it will still have electricity bills to pay. Mystique printing is not going to be magically exempt from electricity bills. Mystique printing, like hairdressers, pizza shops, small manufacturing shops around the country and firms of any shape, sort, type or nature that consume electricity or gas, will have higher bills to pay. The Prime Minister would not stand before this House, in the same way that her advertising campaign will not disclose the full facts and the truth to the people of Australia, and give the simple plain truth that Mystique printing will have higher electricity bills—on the government's estimate, 10 per cent alone in the first year. And that is simply on their electricity bills. It is nine per cent alone in the first year on their gas bills and, most significantly, as the New South Wales Treasury modelling has shown, a 15 per cent increase in electricity, debunking the figures provided by the government. That is in the first year, because each year and every year thereafter the cost for firms such as Mystique printing will increase. Each year and every year thereafter the costs for Australian families will increase, but the full scope, scale and nature of the impacts of this tax have not been released, have not been disclosed and have not been given to the Australian people by the government.

Let us start with something very simple. This is the government's modelling. At the top of page 18 of the government's summary modelling document, there is a simple proposition. It says:

Macroeconomic modelling with an initial domestic carbon price of $20 in 2012-13.

Five and a half weeks after the carbon tax was released, this government has yet to release modelling which reflects even the correct carbon price. When your modelling cannot reflect the correct carbon price of $23, which is 15 per cent higher, 5½ weeks after it has been released then you know that something is not right with the government of the day. This government has directly, deliberately and consistently failed to disclose the full detail, the full impact on Australian houses and Australian homes of their system and it has been utterly untruthful in analysing the alternative model available to the Australian people and utterly untruthful in presenting the world as it is today.

So let me begin, when we look at the government's failure to adequately explain its carbon tax, with the cost to families. Nowhere have I seen in any of the numerous television advertisements at taxpayers' expense, in any of the numerous mainstream newspaper advertisements at taxpayers' expense, in any of the local newspaper advertisements at taxpayers' expense or in any of the internet advertisements at taxpayers' expense the simple fact that the average Australian household will pay $515 per year more for their cost of living as a consequence of the carbon tax. There is no recognition that the New South Wales Treasury says it will have a 15 per cent impact on their electricity prices for households—for mums, for dads, for pensioners, for seniors—in the first year of the carbon tax, before increasing each year every year thereafter.

That is the nature and purpose and intent of this tax: to drive down demand by driving up the cost of living in the hope that a sufficiently punitive price will cause people to shiver through winter and swelter through summer. That is the nature and goal of this particular mechanism. That is what it is designed to do. It is designed to hurt those who are least able to afford it so that they will consume less electricity. That is the structure and the intent.

On numerous occasions the Prime Minister has talked about people consuming the lower cost product. Unfortunately the lower cost, lower carbon product does not exist. The lower the carbon, the higher the cost. What we see is this government intentionally driving up electricity prices. The fundamental problem with what this government is doing is that electricity is an essential service and if you drive up electricity you drive down the quality of life for Australian families.

But you do not drive down the consumption significantly because people substitute not out of electricity consumption but out of the ordinary day-to-day things. Electricity goes up but consumption barely changes. On every analysis it is a largely inelastic good and so, in real human terms, families suffer. As we see in New South Wales, Queensland, Victoria, South Australia, Western Australia and Tasmania, higher electricity prices have not made a material difference to electricity consumption but they have made a dramatic difference to the cost of living for ordinary Australian families.

It goes on from that, though. These things are not set out in the government's carbon tax advertising. The fact is that we are likely to see, as the member for Bennelong has found, that in the city of Ryde $1.8 million of electricity bills for lighting will go up immediately by $270,000, according to the New South Wales Treasury. That $270,000 will either come off services to local ratepayers in the city of Ryde or it will go onto the cost of council rates. There is nothing about that in the government's carbon tax advertising.

Nor is the fact that there will be over $100 million of additional landfill costs to be passed through council rates as a consequence of this tax. There are better ways of doing this that do not involve a massive increase, a $27 billion tax over three years, a $36 billion tax over four years. That is the size and scope and scale of this carbon tax and these are the figures that are missing from the government's carbon tax advertising.

Nor is there reference to the fact that for dairy farmers, on some estimates provided by the industry, the average cost will be $7,000 per year more. Some of that will be passed through to consumers, but in many cases where the vast bulk of production is sent to export markets it is the dairy farmer that will face those costs. The dairy farmer on a struggling farm will meet that cost himself or herself, with the cost going straight back to the family budget and the impact on their viability.

Nor do we see the extraordinary fact that this carbon tax produces approximately 25 per cent of all of the savings that the government claims will be made in terms of emissions. This is the great lie at the heart of the policy and the advertising. Approximately 100 million tonnes—according to the summary indicators document, 101 million tonnes—will be sourced from overseas. According to the deeper modelling document, 94 million tonnes will be sourced from overseas. Let's call it a rounded figure of 100 million tonnes that will be sourced from overseas and that is using abatement purchasing. That is using the very model which this government has attacked, derided, denounced and ridiculed. At the end of the day they have been forced into an abatement purchasing model.

The second thing, though, is that 20 million of their 160 million tonnes comes from an incentive scheme to clean up the power stations. The difference is that we would clean them up and they would close them down. This is the heart of direct action which they have ridiculed, mocked, derided and yet adopted when it comes to the moment. That leaves the carbon tax itself being responsible for about 40 million tonnes of emissions reduction versus business as usual by 2020. What does that mean? It means that the effective cost of carbon for domestic abatement using their tax is well over $160 per tonne. It means that their system, which relies on driving up the price of electricity, is fundamentally economically unsound because it has relied upon either driving down demand by driving up price—but the history of Australian economics in the last 30 years, as Colin Barnett says, is that electricity is an essential service—or changing supply by forcing the closure of coal fired power stations where, unfortunately, their own work shows that a dramatically higher price still would be needed. In other words, their system on their own analysis does not work. Seventy-five per cent of their reduction comes from some form of direct action and 25 per cent of their reduction actually comes from the carbon tax. The carbon tax is entirely superfluous to reducing emissions.

These figures are not included in any of the advertising, which is why it is so execrable. More significantly, when you look at the modelling you see that the $20 per tonne carbon price 5½ weeks later still has not been updated. How can it be, Minister Combet, that you have the wrong carbon price in your modelling? How can it be that the government of Australia has the wrong carbon price in its modelling? It is unacceptable, indefensible and incompetent. Nor has the modelling been reflected to update the fact that its assumption of 100 per cent purchase from overseas sources has been overturned by a political decision to leave it at 50 per cent purchasing from overseas sources. Nor does the modelling indicate the fact that the brown coal buyout is entirely unfunded. They already have a $4.3 billion black hole but, other than some vague reference to the contingency reserves beyond the forward estimates, there is no provisioning for the $2 billion plus that is likely to be the cost of the brown coal buyout. While we have a $10 billion program where we are completely upfront, they have a program which over nine years is likely to be well over $80 billion. What we see is a $4.3 billion black hole to start, another $2 billion that is missing and none of these figures are set out in the carbon tax advertising.

Then this brings me to the extraordinary element which the Leader of the Opposition made reference to today, $3½ billion each year every year from 2020 onwards—it will start at a lower figure before then but it will climb—will be spent on purchasing foreign carbon credits from foreign carbon traders. That is Australian money going straight offshore each year with a huge impact on our national viability. According to page 72 of the government's own modelling, that figure by 2050 will be 434 million tonnes of certificates at a price in 2010 dollars of $131 at a total cost to the economy of $57 billion or approaching 1½ per cent of GDP, and that is on purchasing foreign carbon credits from foreign carbon traders.

The Australian Crime Commission has found that there has been widespread fraud in Europe in relation to these credits. This is not in relation to some emerging economy. In Europe there has been massive fraud using this approach and that is what this government is proposing—1½ per cent of GDP on foreign carbon credits alone, $3½ billion by 2020 on foreign carbon credits from foreign carbon traders alone. We set out in our policy on day one—which the minister has failed to acknowledge, but I see on page 14 of the direct action policy in big blue headlines the words, 'Direct Action in Australia, not Overseas'—that every dollar of our policy would be spent in Australia.

Obviously, the minister made a false statement to parliament yesterday. He would not defend himself today. We set up from day one that every dollar would be spent in Australia. If the minister is unable to read the document, there it is in big blue letters, 'Direct Action in Australia, not Overseas', every dollar to be spent in Australia. The minister might do the honourable thing and apologise to the House for his express, clear and absolute misstatement yesterday because there is no defending that. He knows it, we know it, the Australian press gallery know it and the Australian people will increasingly know that we have seen deception on a grand scale. But at the bottom line at the end of the day what this government has done is that it has systemically misled the Australian people about the costs to households of the carbon tax, the costs to businesses such as Mystique printing, and the cost to the economy of $3½ billion a year straight to foreign carbon traders. (Time expired)

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