Ted O'Brien (Fairfax, Liberal Party, Shadow Minister for Climate Change and Energy) Share this | Hansard source

The Safeguard Mechanism (Crediting) Amendment Bill 2022 forms part of the Albanese government's signature climate change policy reforms to the safeguard mechanism. The coalition is considering this specific bill within that broader context.

While there is bipartisanship in this parliament with respect to joining global efforts to reduce emissions to achieve carbon neutrality by mid-century, there is anything but a bipartisan agreement on how we go about reaching that goal. The 'how' matters, because how you seek to decarbonise the Australian economy and how you map a path to decarbonisation will determine the future in which our children and their children will live. If Australia ventures down the wrong path, as we are under this Labor government, our children and grandchildren will live in an Australia that is weaker and not stronger; poorer and not more prosperous; and an Australia that is more likely to be captured by the interests of foreign powers rather than being fiercely independent as a sovereign nation. What's more, Labor's plans to reduce emissions will fail, and will not make as a substantial contribution as we could be making as a nation to tackling global emissions. Once a successful, fit-for-purpose coalition framework, Labor is turning the safeguard mechanism on its head—reversing its intent and operation, and changing it from one that incentivises businesses to one that punishes businesses; from one that's voluntary to one that's mandatory; and from a scheme driven by technology to one that's driven by tax. Labor's safeguard mechanism is a Trojan horse for the carbon tax that Labor has longed for for many, many years.

I was referring before to the question of how we decarbonise the Australian economy. This carbon tax proposed by the Labor government and hidden within the safeguard mechanism accentuates a fundamental divide between the Liberal-National coalition and the Labor-Greens coalition. For the Liberal-National coalition, our approach has always been to strike a balance. We have always sought a balance. I underscore that word 'balance', because we have balanced both the reduction of emissions and the growth of the Australian economy. We met and exceeded our Kyoto targets and we reduced emissions by over 20 per cent on the 2005 levels. We put Australia well on track to beat our Paris treaty commitments, and we did so while, at the same time, improving the Australian economy. Our economy grew by up to 23 per cent over a nine-year period under the coalition government. There was record GDP, record jobs and record investment—investment, I might add, which included clean energy technologies. It was more investment than ever before.

We struck a balance. And how did we strike that balance? We did it by packing enterprise, by backing engineering and by working with industry, not against industry. We backed technology and we backed the search for solutions that were practical and which could be executed and implemented. On the other hand, Labor has failed to strike a balance because, instead, Labor backs big government, Labor backs big unions and Labor backs big taxes. Indeed, Labor's safeguard mechanism is illustrative of this, especially when it comes to Labor's backing of big taxes. It is the most punitive policy of its kind in the world. Starting 1 July of this year 215 Australian businesses will have to reduce their emissions by 4.9 per cent each year to 2030. This is the fastest rate of decline imposed by any government. It's even higher than the European Union, which is renowned for having set such a high bar in this regard. Under its emissions trading scheme their rate is 4.4 per cent. So, Labor is setting a decline rate that is even higher than the EU. As a reference point, I think it is worth noting that the EU's emissions trading scheme includes the electricity sector—outside of which emissions of large industrial businesses fell by one per cent between 2012 and 2018. Labor's scheme excludes the electricity sector, and it is putting the responsibility on large industrial businesses in Australia to reduce their emissions by 4.9 per cent—that's nearly 5 per cent—every single year through to 2030. This is unachievable. It won't happen. Why? The technology to do so simply does not exist and Labor knows this. And I know Labor knows this, because the same companies that've been coming through my office have been going through the minister's office, and they've been saying the exact same thing: the technology to reach these targets does not exist.

Scores of businesses caught under this new carbon tax, this new safeguard mechanism regime, will not be able to set the reduction anywhere near the rate set by the Labor Party. I genuinely believe that Labor is happy about this. Labor doesn't want business to meet this bar. Why? Because that allows its carbon tax to come into play. If businesses could meet the targets there wouldn't be a need for Labor's carbon tax. Once a business cannot reduce its emissions in line with that near five per cent target set by the government it will have to buy Australian carbon credit units—otherwise known as ACCUs. The government is pricing ACCUs, it is pricing carbon, at $75 a tonne. And for those who are wondering if $75 a tonne is a fair price or not, I remind them that it is over three times larger than the previous Labor government's attempt to introduce a carbon tax. They priced carbon at $23. The Albanese government now wishes to price carbon at $75. It's also a price that is higher than eight of Australia's top 10 two-way trading partners. The exceptions being the United Kingdom and New Zealand. Eighty per cent of Australia's two-way trade is with nations that are not covered by a national carbon price, or if they are their prices are substantially lower than the price Labor wishes to introduce.

Australia's international competitors in alumina, cement, copper, coal, gas, iron ore do not pay a carbon price, including those from the United States, Malaysia, Thailand, Qatar, Russia, India. So as much as Labor is clearly following the path of the EU, it's notable that the EU businesses receive billions of euros in support for the scheme annually in the form of free credits. Some have estimated that around 50 billion euros have been handed out since the ETS started.

Labor's $600 million support package doesn't even compare, but we know that Labor doesn't do detail very well. It never has. Labor is very happy to sell the dream. Labor will sell the dream, even if that dream turns into a nightmare. You might recall the soaring rhetoric of the Prime Minister when he spoke about leading Australia into a new era of climate change. The Treasurer boasts that he is redefining capitalism. The Minister for Climate Change and Energy believes he is enabling the biggest economic transformation Australia has seen, as big as the industrial revolution. This government are a humble lot, ushering in new eras, redefining capitalism and facilitating the next industrial revolution. Economics has been replaced by 'egonomics' with this lot, and it is reflected in the safeguard mechanism—the policy that they wish to impose on the Australian economy.

With all Labor's chest-beating on this policy and with the Prime Minister, the Treasurer and, in particular, the Minister for Climate Change and Energy screaming as loudly as they can and signalling their virtues, this safeguard mechanism is apparently their signature policy to enable all of this. This is their centrepiece policy. You would think that the government might have had Treasury, or at least the department, do some economic modelling on what its impact might be, but they didn't do that. Think about that. The government is talking about a new era, redefining capitalism and this being as big as the industrial revolution. It's introducing its centrepiece policy that will enable all of this and facilitate it, and they don't even get it modelled by Treasury or the department. They don't know the impact.

That impact, of course, is on the economy. It's on individual companies—Aussie companies—and it's on jobs. It's on everyday Australians and their livelihoods, and it's on regional communities. They didn't model the impact. But what we did learn, through the Senate inquiry into this bill, is that apparently a little bit of modelling was done. It wasn't disclosed by whom, but some modelling was done. So we, together with the Greens, asked the minister to produce that modelling. The government is refusing to disclose what little modelling was done—the only modelling that was done. Treasury didn't do it. The department didn't do it. I don't know who did it. The Australian people don't know. As for what it said, this government will not tell the Australian people, despite looking them in the eye and saying: 'This is going to be as big as the industrial revolution. We've done a bit of modelling but we—the government—will not show you.' That's the message from the Labor Party.

Let me assure members of this House that there is nothing safe about Labor's safeguard mechanism. It's bad for the economy and it's bad for the environment. If Labor introduces one of the world's most punitive carbon taxes, one of two things will happen. Either businesses will pass on the additional cost impost to their customers—consumers—or they'll close their doors. For those businesses that pass on the cost, it will become a hidden tax paid by everyday Australians. So let me put this in really clear terms. Due to Labor's policy, anyone running a car will pay more as the price of oil goes up. Due to this policy, anyone buying a new apartment, building a home or, even, refencing a property will pay more as the price of steel goes up. Anyone replacing the window frames at home or fixing the roof of their garden shed will pay more as the price of aluminium goes up. Anyone laying a concrete slab at home so they can park their car on it or laying bricks to create a garden bed will pay more because the price of cement will go up. Anyone buying a loaf of bread or maybe a packet of rice will pay more as the price of gas and, therefore, fertiliser goes up. And it goes on and on and on.

In the midst of a cost-of-living crisis, the Albanese Labor government is introducing the world's most punitive carbon tax that will be passed on and paid for by everyday Australians at a time when they can afford it the least. It should be noted that the Australians who will hurt the most due to this are the ones who can least afford it. At a time when some families are struggling like never before, the Labor Party, who will spruik values of social justice, are more than happy to pass legislation enabling a policy which is a hidden tax and which will drive up the prices of everyday goods for everyday Australians. It is a disgrace.

There will be those businesses, however, who just can't survive and can't pass on the cost to their consumers. They will shut their doors. I know that some businesses are genuinely looking at the possibility of shutting their doors. I know that because they've told me. They've told the minister too, by the way. I think we all know the human impact when a business closes. We're not just talking about profits for the business owner. We're talking about jobs. We're talking about livelihoods. We're talking about Australian families that can't put what they need on the table. Businesses are at risk of closing over this tax. The government knows about it; they've been told about it. If they can produce a skerrick of modelling that would provide any guarantee at all that that won't happen, please do. But they won't. They've been asked to. They know that businesses may close, that they're likely to close, that jobs will be lost and that lives will be hurt.

I've probably said enough about the economic consequences of Labor's reformed safeguard mechanism, but what probably hasn't received sufficient attention in this debate is the environmental consequences. When Australian businesses close their doors, especially manufacturers, it's operations in higher emitting nations that will typically fill the void. I had steelmakers and smelters telling me months ago that, due to the increase in energy prices under the Labor government, they might need to close and that their operations would likely move to India and China. Let's see what happens when you throw a carbon tax into the mix.

I have also subsequently spoken to companies and industry associations specifically about the safeguard mechanism that Labor is seeking to reform and the introduction of a carbon tax, and I can tell you that businesses are at risk of closing. When they do, it will be operations in high-emitting nations like China and India that will fill the void. According to a 2020 Climate Leadership Council analysis, Australian manufacturers are three to four times more emissions efficient than those in China and India. Let's think about that. Let's put that in the context of an example here. Labor introduces its safeguard mechanism and introduces its carbon tax. If an average manufacturer caught under the scheme emits one million tonnes of CO2 each year and has to close its doors, and if that gap in the market is filled by an operation in, let's say, India, then you are looking at four times those emissions. Instead of one million tonnes of emissions affecting the challenge of climate change, you now have four million. That's four times as bad. And yet, this government claims that this policy is in fact a policy that will help tackle the challenge of climate change. This this is greenwashing—Labor style: push it offshore, pretend it doesn't happen. It's someone else's problem, even though the net impact on the environment is worse. They know for a fact that is going to happen. Again, I've spoken to companies that have walked me through the same presentations the government has seen. That is what's going to happen.

Let me close where I started. There is no question about the need for action to tackle the challenge of climate change in Australia. There is no question about that whatsoever. There's also no question about the need for Australian industry to continue reducing its emissions. There's no debate about that whatsoever. But, on the question of how we should go about it as a nation, there is absolutely a debate. The climate change and energy debate in Australia has moved into a new phase, but that phase is all about how. Labor is answering the question of how in the wrong way, and it's setting Australia up to be weaker, to be poorer and to be more captive to interests of foreign powers and not our own. Carbon trading and ACCUs will continue to play an important role, but they should not be used by the Labor Party to facilitate a punitive taxation regime. That is not what it's all about. Government policy that decapitates the economy instead of decarbonising it should be rejected and so, too, should the outsourcing of emissions that leaves the world worse off, not better. With that, the coalition opposes this policy and therefore opposes this bill.

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