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

Today we learnt that Woolworths face a 14 per cent increase in their electricity prices as a consequence of the carbon tax. That is not their words and nothing that we present but their written statement. Last week we learnt something more significant even still. We learn that, across Australia, Australian families, Australian small businesses, Australian industrial premises and Australian retail premises are facing not a 14 per cent but an average 15 per cent price hike for their electricity for one quarter alone. So the first quarter of the carbon tax era brought with it the largest single increase in electricity prices in recorded Australian history—a 15.3 per cent price rise, of which two-thirds is the carbon tax. What does that mean? It means that no matter which state you are in, no matter which part of Australia, whether you are rural, regional or urban, no matter whether you are a small business, a senior, a farmer or a family, you cannot hide from the electricity impacts of the carbon tax.

That is not surprising, because, as the parliamentary secretary comes to the table, he will tell you that that is what the carbon tax is intended to do. It is intended to drive up electricity prices. It is first and foremost an electricity tax. It is also a gas tax, but it was designed and intended—it was constructed—to be a source of driving up prices in electricity.

There is a very simple test for members of the government. Do they want electricity prices to go up or down? Is their policy for electricity prices to go up or down? The reality is that, on their watch, electricity prices over five years have gone up 90 per cent. Of that, 15 per cent came in the last three months alone, the highest rise in Australia's history, precisely because of the carbon tax. The government says, 'Look, a lot of the price pressures were built in beforehand.' This is all about making a bad situation worse. Australian families who are sitting around the kitchen table get their electricity bills and look at their electricity bills. Honourable members will know that each and every person in this place will have had families, seniors or small businesses come to them and say, 'My electricity bill is a source of huge stress.' Low-income families and medium-income families right across this country are facing stress from electricity price rises, because that is what the carbon tax was intended to do.

Lest the government say, 'It's all okay; it's not really the source of the rises'—which it is: two-thirds of the highest price rise in Australian history in the last quarter alone—it is intended to go up each year, every year, for ever. Next year the carbon tax goes up to $24.15, then to $25.40, and then it goes up—according to the government's own modelling, released again last week as part of the midyear economic forecasts—to $29 in 2015-16. What does that $29 represent? It represents the carbon tax plus another 25 per cent increase in that carbon tax in its first three years. But then it goes to $37, and then by 2050 it goes to $350. In other words, the carbon tax that comes in now is set to continue to multiply each year, every year, forever, because it is designed to inflict electricity pain. It is intended to inflict electricity pain. And it is inflicting electricity pain. That is how it works. That is how it operates. That is what you can never walk away from.

I ask any member of the government to make a clear answer to this question: is your policy as a member of the government to increase or decrease electricity prices? It is as simple as that. Is their policy to increase or decrease electricity prices? When you go through the facts, when you look at their modelling, when you analyse the real world, the carbon tax is an electricity tax that is driving up electricity prices.

But it does not just stop there. Gas prices went up 14 per cent in the last quarter. Again, the carbon tax is responsible for approximately two-thirds of the gas price rises, and that is also what was intended to happen, what the government wanted to happen. In the real world, when a family gets an electricity bill and a gas bill and they see an increase of 15 per cent in electricity and 14 per cent in gas, and they are already struggling to meet higher costs of living because their health insurance costs have gone up by an astronomical amount under this government, they sit there, they look at the bills and they wonder how they are going to pay. That is the lived experience of the carbon tax for Australians, who in the last month have received the bill. It is the bill that they were told before the election that they would never have to pay. That is the truth and the reality about the carbon tax.

When you go around the states, in New South Wales, contrary to what the government would have you believe, it is the carbon tax which, according to the independent regulator, is responsible for 50 per cent, as a minimum, of price rises for this year coming. When you go to Victoria, the carbon tax is responsible for two-thirds; in Western Australia, 72 per cent; and, in the ACT, 75 per cent. In Western Sydney the carbon tax is responsible for 80 per cent of electricity price rises. And then, when you go to Queensland, where Campbell Newman has frozen the most fundamental of domestic retail tariffs, the carbon tax is responsible for between 80 and 100 per cent of electricity price rises. So it is not the states driving electricity prices in this last quarter; it is the carbon tax, fair, square, centre, undeniably, on the evidence of the ABS, on the evidence of the government's own modelling and on the evidence of the independent regulators, and it is the bills faced by ordinary Australians which are all the evidence that they need. The government likes to pretend that it does not hurt, it is not happening and it is not because of the carbon tax. It does hurt, it is happening and it is absolutely because of the carbon tax. But remember this: each day, every day, as you go forward between now and 2020, the tax is designed to go up and up and up.

The problem, beyond the enormous hurt to individual family budgets and small business budgets, is that it does not even work. It is designed to reduce emissions. As we saw from the ABS and as we saw in the government's own modelling in its latest Kyoto update, our emissions go up, not down. They go up from 578 to 621 million tonnes in Australia between now and 2020, up 43 million tonnes. Instead, we then have to go offshore and buy 94 million tonnes of foreign carbon credits by 2020 at an average of $37, or $3½ billion. Take the carbon tax, and then you add $3½ billion, which private business will have to pay on top of that. That $3½ billion is money which could and should have been invested in Australia, and that $3½ billion grows to $57 billion, again on the government's own modelling, by 2050.

You wonder: what is the context? What is $57 billion? In the context of 2050, it is 1½ per cent of GDP. It comes on top of a carbon tax which is 1½ per cent of GDP. That is the approximate value of our defence budget. So they are going to take a defence budget and spend it on domestic carbon credits, and then they are going to take a second defence budget and spend it on foreign carbon credits. Whether it is Kazakhstan or any other place from which we are going to buy our foreign carbon credits—

Mr Briggs interjecting—

or Kenya, because of course we are, as the member for Mayo reminds me, sponsoring the Kenyan carbon accounting system, although it was not approved by former Minister Downer, as the Treasurer and the Leader of the House attempted to say; it was approved last year. What we see is this: $57 billion, 1½ per cent of GDP domestically on carbon credits and 1½ per cent of GDP, or the value of the defence budget, on foreign carbon credits. There is no way that any government in Australia will sustain that expenditure of public and private money over that period of time, so it is a system designed to fail, because it does not even achieve its job domestically.

Let us then look at the real world and see what we find. We saw from Woolworths not something that was hidden but a presentation given at a major conference. Woolworths' presentation to the Energy Users Association of Australia was absolutely clear. The carbon tax impact was 14 per cent for this year alone. The carbon tax works in this way. It is generally about 2c a kilowatt hour. That is then added to your bill. If you are on a lower tariff than 20c a kilowatt hour, you are going to be paying higher than 10 per cent of your bill. Woolworths obviously had some good purchasing arrangements. For them, their evidence, their statement, their presentation was of a 14 per cent increase in their electricity bill directly attributable to the carbon tax. That means either they absorb the cost and they have to reduce jobs or they pass it on to consumers. Let us assume for a moment that they absorb the cost. One thing that is absolutely happening is milk suppliers and others are not able to pass on their costs, up the tree, to Woolworths.

I want to give an example, supplied by the member for Paterson, of the Williams Dairy in Vacy—I am very happy to table their electricity bill. The carbon tax component of the Williams Dairy $17,066 bill was $1,749.17. Add $175 for GST and the impact of the carbon tax is $1,925. That represents, against what they would otherwise have paid, a 12.7 per cent increase. That is a small business which is on the edge, a small business which is struggling with already high costs. And what has been said by the proprietor of this business? The proprietor has made it absolutely clear that these additional costs are pushing them out of the dairy industry. These additional costs are the straw that broke the camel's back. These additional costs have to be worn by family small businesses. They cannot be passed through. It is small businesses that are wearing these costs. These carbon tax costs are real, significant and important.

Let me take it to another level. Perilya Mining have released a report noting that they will have a $3 million increase in electricity costs this year. As stated by the managing director of the company, Mr Paul Arndt, 'For Perilya, the carbon tax is the bulk of the increase in electricity charges. The overwhelming bulk of that is as a consequence of the carbon tax'—a mining operation being hit by the carbon tax on their electricity prices and that is exactly what it was meant to do.

I want to deal now with one particular argument which the government uses. The government says it is all network prices. Network prices have gone up—let us be absolutely clear about that. We have said that for a long time, but let me also tell you that there is somebody in this House who demanded, in a speech about network expenditure and investment, that network expenditure go up. Who is that person? Let me read you a quote from two years ago in reference to electricity price rises:

The current price rises in a number of states have been principally caused by a sustained period of under-investment. Significant investment is required to replace ageing network infrastructure and deliver energy security.

Any guess who that might have been?

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