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

Thank you very much, Mr Speaker, and I am responding directly to the question. I was asked about price signals and the Carbon Pollution Reduction Scheme and we are now seeing something that perhaps explains the grand confusion about these questions amongst some members of the opposition. The price is paid by the biggest polluters. Of course, as rational business people, they will seek to reduce that price and as they seek to reduce that price they will innovate and change the way that they do business and cut the amount of carbon pollution they generate. If you move amongst the Australian business community, and I know the member who asked the question does that, you will meet and be able to have discussions with business people who can talk to you about their innovation plans to reduce carbon pollution because they know that carbon pricing is coming and will start on 1 July next year.

What the member is also referring to is that there is some flowthrough from carbon pricing into the prices of things that people buy and that impact—the Leader of the Opposition in his scare campaign has said that impact is 'astronomical'—is 0.7 per cent of CPI and households are being assisted so that around four million households will come out better off and around six million households will be fully compensated.

As prices change in shops, yes, you will see an effect where goods that have less carbon pollution imbedded in them will be relatively cheaper, but we want those price signals to be true price signals not the results of price gouging, which is why, yes, we will have very strong fines and penalties for anybody who goes through and price gouges—that is, they adjust a price in a way that is disproportionate and not as a result of carbon pricing and then claim to the consumer that the price has only been changed because of carbon pricing.

To come back to the reasons behind this question, if the member has fundamentally misunderstood the scheme I would suggest to him that he look at it again. I know he is on the public record as saying:

When it comes to economic issues, my instinct is for open markets, free competition …

If that is right, he should be endorsing an emissions trading scheme and not the red tape regulation and burdens that the Leader of the Opposition would use to smash Australian businesses and to smash Australian jobs. The other thing I would suggest is that he endorse the government's plan to make sure there that there is no price gouging.

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