Rowan Ramsey (Grey, Liberal Party) Share this | Hansard source

Much is said about the trustworthiness of politicians and the political system. These carbon tax repeal bills could not be a more obvious example of a political party or a political leader delivering on a political commitment. These bills to repeal the carbon tax deliver on a rock-solid commitment from the coalition, an unwavering commitment for the life of the last parliament. Every Australian knew exactly what the coalition's intentions were in this area prior to the election, prior to the time they voted overwhelmingly to entrust the nation's future to the coalition. To not do exactly what we promised would be to defy the will of the electorate. To understand the importance of delivering this commitment it is worth remembering that the broken commitments by the previous government, by the Labor-Greens alliance, were at the heart of Australia's rejection of their incompetent government.

Firstly, the nation listened to former Prime Minister Kevin Rudd when he told us that climate change was the greatest moral challenge of our time. When the going got tough and when the rest of the world balked at action at Copenhagen Mr Rudd abandoned his commitment and within a short time lost his job to the former member for Lalor Julia Gillard. This clear reversal of policy was never properly explained to the electorate. Voters were not consulted, were not asked for an opinion and were never given compelling reasons for the abandonment of that policy. Ms Gillard took the Labor Party to the 2010 election promising there would be no carbon tax under a government that she led. Within weeks of her appointment as Prime Minister that commitment was abandoned and the Labor Party joined with the Greens to establish the world's biggest carbon tax, a tax costing our economy $9 billion a year.

Once again this was a clear reversal of policy not properly justified to the electorate. Once again we were not asked, not consulted and never given compelling reasons for the abandonment of the policy. Yet again a Labor Prime Minister lost their job at the hands of the party insiders. Within weeks of the return of the member for Griffith, Kevin Rudd, to the prime ministership, the Labor Party yet again changed policy on this central issue and were suddenly no longer in favour of the world's biggest carbon tax but instead again in favour of an ETS—but this time one linked to Europe's much troubled scheme. Once again an explanation of this abrupt about-face of policy was poor. No wonder people's trust has been shattered.

The election was resoundingly won by the coalition, which had an unambiguous message in this area—no carbon tax. The people were given a clear choice and responded by entrusting the governance of the nation to the coalition. It is incumbent upon each and every one of us—Liberal, Labor, Greens, National and Independent—to do whatever we can to enact their wishes, and that means in this case supporting these bills.

Let me turn to the reasons why the coalition have opposed this tax from the first moment. Australia is struggling to remain internationally competitive. Every day we hear new stories of the loss of manufacturing jobs across the nation. ABS data shows that there has been a net decline of more than 143,000 jobs in the manufacturing sector between 2008 and April 2013, or a decline of 13 per cent. For instance, Goodman Fielder recently announced they were pulling out of Ballarat—34 jobs—Toyota dropped 350 jobs in April and another 100 in October, Electrolux are shedding 500 jobs, Sandvik are dropping 25 jobs and South Pacific 500 jobs. In South Australia, Peacock Furniture put off 50 people earlier this year, Scott's Transport 30 jobs and Holden another 500 jobs this year.

I have never claimed that the carbon tax alone is responsible for all of the job losses in the manufacturing industry; however, Australia has prospered by making the most of its competitive advantages, and one of our competitive advantages has been relatively cheap energy. The carbon tax that has been imposed on our economy has acted as a reverse tariff, favouring our fiercest competitors. In fact, electricity prices in Australia are up to double those in comparable energy abundant economies and electricity prices have been responsible for 60 per cent of the increased costs in the manufacturing industry since 2008.

The coalition support the previous government's near-term aim—that is, to reduce emissions by five per cent by 2020. What we have opposed is the method, and it is worthwhile comparing the Labor Party's tax with the efforts and methods of our competitors. I was just drawn to the comments of the Leader of the Opposition. By stating that this side of the parliament does not believe in climate change ignores the fact that we are committed to exactly the same target as the Labor Party. We are just divided over the manner in which we will get to that target.

I turn again to our competitors. None of the world's top five emitters—China, the US, India, Russia or Japan—has an abatement scheme in place that is enforceable. Plentiful new supplies of oil and gas worldwide will make the task of many renewables more difficult. Often repeated claims by the Labor Party and others that the rest of the world is taking significant steps to price CO2 emissions do not bear scrutiny. Intentions and announcements are one thing; actions are another. The last period of government under the Labor-Greens alliance only underlines this point. For instance, the opposition are fond of telling us that China is introducing an ETS. In fact, the Chinese scheme covers just one per cent of its economy. With China being responsible for 25 per cent of the world's emissions, it has an average price on CO2 emissions of just 4c per tonne. The US are responsible for 18 per cent of world emissions and their various schemes cover less than six per cent of their economy and have the effect of producing an average price across the economy on carbon of 77c a tonne. The much vaunted scheme in Europe, which covers just 40 per cent of the economy, averages about $3 a tonne for total emissions.

It is also worth noting that in the last few days Japan has announced its aim of cutting emissions by 25 per cent from 1990 levels has been abandoned in favour of a goal of 3.8 per cent of 2005 levels by 2020. It comes back to that point where I said rhetoric is one thing, action is another. This is not to say we do not need to reduce our own emissions, and in fact both sides of politics agree on the target of five per cent; however it does highlight the futility of trying to get too far in front of the pack. The tax that the Labor Party imposed on Australia, in comparison, covers 60 per cent of our economy, the current headline rate of tax is $24.15 a tonne and the average price for CO2 emission across our whole economy—and bear in mind that the US's was 77c—is more than $14 a tonne. We are completely out of step with our trading partners and this is very damaging to Australia. So in this debate we should have far less of the cherry picking of other nations' selective programs and pretending that they are something they are not, namely economy-wide carbon taxes with few if any exemptions. What we see from other countries that are truly serious about reducing CO2 emissions are policies designed to deliver reductions without sinking their own economies.

When the original bills that these bills are repealing were first debated in parliament I raised that one of the biggest dangers to Australia was the issue of carbon leakage, and the lived experience in the manufacturing industry is that those fears were well grounded. Applying a tax to our producers presents a relative advantage to our overseas competitors and works to shift industry out of Australia to lower cost points of production. In fact our relatively clean industries can end up in countries that do not tax their CO2 emissions, quite possibly with operators to which the relative energy efficiency or CO2 output of their industry may be at the very bottom of the list of their priorities. The result can be worse for Australia and definitely worse for the environment.

Locally, in my electorate the abolition of the carbon tax will be met with a loud cheer. In Whyalla, where OneSteel operates one of the last remaining steel plants in Australia, slashing the tax will deliver savings of around $40 million a year to the company. For a division of the company that has seen huge losses and write-downs in the last few years, it will provide significant help and will help ensure its long-term future in the city. Even though there has been a great expansion in the mining industry in Whyalla, the steelworks, with around 1,700 workers, are still by far the biggest employer in the city.

In Port Pirie, where the Nyrstar smelter needs an investment of $350 million to ensure its future, the removal of $6 million a year in tax will provide a great incentive for the company to support that investment. The smelter employs more than 700 people and, if a four-to-one multiplier effect is used, that in effect makes it responsible for almost half the jobs in Port Pirie. It is just not conceivable that we could lose this plant from Australia. It is also worth noting that the $6 million paid each year in carbon tax would service almost half the loan for the transformation project.

BHP at Roxby Downs consumes almost one-third of the state's electricity and is by far the biggest consumer of diesel; it is currently wearing the full brunt of the tax. Since the decision by BHP to suspend the expansion at the mine, more than 1,000 jobs have been lost from that community. Obviously the carbon tax is not the only reason for BHP's decision, but the problems increase as one impost is piled on top of the last. The chief issue here is how this project, this expansion at Roxby Downs, an expansion the whole state was pinning its future on, is disadvantaged compared to other investment options that BHP has around the world. That discrepancy, that self-inflicted reverse tariff, occurs when we implement a tax regime, in this case a carbon tax, that is significantly different to our major trading competitors.

The Grey electorate covers more than 900,000 square kilometres; it is about 10 per cent bigger than New South Wales. As expressed by others before me: we suffer from the tyranny of distance. Unless the carbon tax is abolished, from July next year heavy transport will begin to pay the tax at a rate of 6.85c per litre. Every country town in Australia will face higher costs on everything. Particularly affected will be farmers earning export dollars for Australia, but with no ability to pass that increased cost along, because Australian farmers compete against farmers in other parts of the world who are not paying the same impost.

A penalty of living in the country is that we pay freight on everything to and from our regions. So once again the most important spokes of the economy are to wear the brunt, including the exporting sector, which cannot pass on the cost of the increased taxes on electricity, on gas or on transport. The carbon tax trading system was the flavour of the month just a few years ago as the best means of reducing emissions, but the failure of a string of climate change conferences, starting with Copenhagen, has resulted in nations across the globe abandoning their original commitments in this area. Increasingly they are in favour of a more direct approach such as the coalition is proposing and embodied in such schemes as the Renewable Energy Target. Such schemes will need ongoing management and adjustment from time to time, and that is why the government is committed to the previously scheduled review of the RET.

There have been a number of critics about the efficiency of the direct action proposal; however it should be remembered assistance will only be made available on a competitive tender basis and there will not be a direct cost or comparative disincentive placed upon Australian industries. However, we can only get on with the job when the will of the Australian people is accepted, not only here in the House of Representatives but in another place as well. Australia will be watching and it expects the parliament to get on with the job, and I support that view.

See this speech in context