Bert Van Manen (Forde, Liberal Party) Share this | Hansard source

I welcome the opportunity to speak on the Clean Energy Bill 2011 and related bills. I agree with the member for Kingston's closing remark that this issue is too important to ignore. It is too important to ignore because of the fact that this is a cascading, compounding tax which is deliberately designed to affect every component of our daily lives. It will have seriously detrimental effects on ordinary Australians, on Australian business, on the Australian economy and on the future wealth of this nation.

This all-encompassing, all-pervading, giant new tax is based on a fundamental deception, a deception by the Prime Minister as a result of her statement, six days prior to the election, 'There will be no carbon tax under a government I lead.' Rubbing further salt into the wounds of this deception is the fact that this deception is in and of itself based on the false premise that corrective taxation delivers some sort of economic or societal nirvana. This is a complete fallacy in that it ignores the vast magnitude of externalities. As it is impossible to determine the range or extent of these externalities, it is impossible to calculate the right level of taxation and consequently the correct level of compensation. Economist Ronald Coase demonstrated that externalities vanish only in a wholly unreal world where people can negotiate and carry out transactions at zero cost. Such a world of zero transaction costs would deliver economic perfection. But the fact of the matter is that neither governments nor markets deliver us into this nirvana. In fact there is a real risk that a carbon tax will not be a revolution but will lead to further exclusion, social inertia and the stripping of assets from those already at the bottom of society.

It is the height of arrogance to believe that we as a society can control global climate via a tax on carbon dioxide emissions to which Australia's contribution is a mere 1.5 per cent of total global emissions. The government has yet to answer the all-important question: by how much will the carbon tax reduce global temperatures and what changes in the climate will it therefore prevent? This is particularly relevant given that global average temperatures rose to a peak in 1998 then fell slightly and have been reasonably stable since that time—this during a period when CO2 levels have continued to increase.

This government's blind submission and appeal to authority, whether it be Tim Flannery, the IPCC or any other authority the government considers convenient for its arguments, is a clear demonstration of the government's inability to sell its argument, of the moral and ethical vacuousness of its arguments and of its inability to discuss the issues involved. This government just triumphantly announces a decision and expects everyone to fall into lockstep with it. The carbon tax clearly demonstrates that the government is a shallow manipulator of the truth and despite its protests to the contrary it will only succeed in making the poor poorer while benefitting those already with the wealth and resources to mitigate the effects on their lifestyle and businesses. In addition, the bills make no reference whatsoever to practical, sustainable, long-term measures that will be implemented to deal with on-the-ground environmental issues such as restoring water quality in rivers and waterways and protecting vital areas of biodiversity for future generations. Actually dealing with these issues is a core element of the coalition's direct action plan. I suggest those opposite take some time to read it occasionally. It contains the practical, on-the-ground measures that our communities require to create a sustainable framework for future generations.

There are many reasons why this proposed carbon tax will deliver economic climate change to this nation and create economic drought in many industries, not the least being the manufacturing industry. Firstly, as outlined in research released by the Australian Trade and Industry Alliance, more than 90 per cent of jobs in the manufacturing sector will be exposed to the full effects of the carbon tax. In contrast, only 58 per cent of European manufacturing jobs are exposed to the European carbon pricing scheme. Reports from both Britain and Spain show that, on a net basis, for every one job created two or more jobs in the ordinary economy are lost—and no amount of government compensation can make up for you losing your job. Employers will face higher power costs and higher prices for both raw materials and manufactured inputs under the carbon tax while trying to compete against international rivals who will pay no extra taxes or charges. This is in addition to the government's acknowledgement in its own documentation that at least three million households will be worse off immediately.

A Deloitte Access Economics report commissioned by the Bligh government predicts Queensland's gross state product will be slashed by 2.76 per cent by 2020 and by 4.11 per cent come 2050. Its report also predicts a loss of 21,000 Queensland jobs while separate Queensland Treasury modelling predicts 12,000 jobs will be lost. The Institute of Public Affairs makes the point that unfortunately job increases that the government talks about will be offset by job losses, and net job creation from discriminatory taxes or subsidies is only possible through reduced living standards. A further salient point is that electricity from wind in Australia costs three times as much as electricity generated from coal or gas. It is no wonder electricity prices continue to increase.

Take, for example, a commercial laundry in my electorate who currently employs nearly 200 people. They have estimated an increase in costs of between $150,000 and $200,000 per annum for electricity. These costs will have a direct impact on the profitability of the business, so they may elect to reduce or not replace staff, or they may seek to pass the cost on, which will lead to higher costs to hospitals, restaurants and hotels who utilise their services. This in turn will impact on those businesses and they will have to make decisions on how to manage those increased costs. None of these businesses are trade exposed, so none of them will receive any compensation.

Another example is a local panel beating business, which again will face higher input costs not only for its electricity but also for many of its other costs such as car panels and new machinery. This is in an industry that is already struggling with high costs due to the squeeze put on them by insurance companies. That begs the question: how are the insurance companies going to account for the increased motor vehicle repair costs? In all likelihood, knowing the insurance companies, it will probably lead to higher motor vehicle insurance premiums, further impacting on family budgets. I ask those opposite whether these potential increased costs are being modelled anywhere into the compensation package.

These are just brief examples that clearly illustrate the sinister, unseen aspects of this cascading and compounding tax. This is why it will impact on every area of business and of life, and its effects will be far greater than allowed for under any compensation package. It is increasingly obvious that this tax is all economic pain for no environmental gain. The government's own figures document the fact that there will be an immediate 10 per cent increase in electricity prices, a nine per cent increase in gas bills and, most outrageously, a $4.3 billion black hole in the budget. Of greatest concern is that we do not know whether these figures are based on a carbon price of $20 per tonne or $23 per tonne, because the government still has not released the modelling. The government has also not detailed what will happen once the carbon tax price goes to $29 per tonne or $131 per tonne, as it is forecast to do in the government's own figures.

Prices for electricity and gas will continue to increase and, based on the figures in the government's own documents, they will increase at a rate far greater than inflation. As gas and electricity prices are part of a suite of goods and services used to calculate the CPI, this will result in a higher CPI figure, which in turn will have the potential to result in higher interest rates—and this at a time when Australians are already struggling with the costs of living and housing affordability is a growing concern for many Australians, not just first home buyers.

This brings me to my overriding concern with the proposed carbon tax, and that is the wanton destruction of the wealth of this nation for future generations. We constantly hear the government talk about the mining boom and the potential for the mining boom to build our accumulated national wealth. This is an important issue, as Australia is presently a net importer of capital to fund our economy and lifestyle, with approximately 50 per cent of private debt and 70 per cent of the government's current $200-plus billion debt funded globally. Yet this proposed carbon tax package is not just deliberately designed to see our emissions increase through to 2020 and by 2050 only decrease by three per cent, it is also deliberately designed to transfer by 2020 up to $3.5 billion per annum of the wealth of our mining boom overseas to pay for carbon credits to offset our increasing emissions. This is made even worse by 2050, when it is estimated that $57 billion per annum of our wealth will be sent offshore to purchase foreign carbon credits. Given the known fraud of $5 billion in a sophisticated market such as Norway, how do we ensure that no fraud occurs and real action is taken overseas in the less developed markets?

There are long-term consequences which are not being discussed, such as what the negative effect will be on the share prices and company growth prospects of Australian companies and what the flow-on cost will be to the retirement savings of Australians through their superannuation funds. What will be the effect on future federal government budgets of increased age pension liabilities due to lower retirement savings of Australians caused by the unknown or unforeseen consequences of the carbon tax? In my opinion these are important unanswered questions that go to the heart of the question about the future prosperity of this great nation.

I would finally like to take issue with some comments made by the member for Robertson in her speech last week and her appeal to the ultimate authority. The member referred to Genesis chapter 1, verses 28 and 29, and Genesis chapter 2, verse 15. She is correct that they clearly state we are to tend and keep all that we have been given. But the member then attempted to make a link between this admonition and the carbon tax, and this is a very long bow to draw. The verses she refers to in no way give the government a mandate to impose a tax and create massive new bureaucracies; they in fact are an admonition to each of us individually to do our part to better take care of our environment and all that we have been given and ensure that we leave a positive inheritance for future generations.

An economy-wide wealth-destroying carbon tax that will provide no practical on-the-ground environmental outcomes is not the solution. However, the good news for the Australian community is that the coalition, through its direct action strategy, does have a genuine costed alternative that caps the cost and provides a range of practical measures that will actually contribute to enhancing the quality of our environment, thereby creating a sustainable economic and environmental framework to leave a positive inheritance for future generations.

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