John Murphy (Lowe, Australian Labor Party) Share this | Link to this | Hansard source

I am please to continue my speech on the National Greenhouse and Energy Reporting Amendment Bill 2009. The Carbon Pollution Reduction Scheme and our renewable energy target for 20 per cent of Australia’s electricity supply to come from renewable sources by 2020 will drive the creation of low-pollution industries and low-pollution jobs. I am pleased to emphasise that the provisions in that scheme and in the particular bill before the Senate this week will extend the economic benefits of our climate change policies to regional Australia. The provisions of that bill, designed to promote carbon plant sequestration, follow the opening of the first geosequestration project in the Southern Hemisphere by the Minister for Resources and Energy just over a year ago. These projects are fundamentally important to the development of a low-carbon and low-pollution economy which will help Australia address the challenge of climate change.

There is a cross-section of support throughout the community for the proposed scheme. Environmental and industry groups are expressing a firm desire for the legislation to be passed prior to the Copenhagen talks in December. For instance, the President of the Australian Conservation Foundation, Professor Ian Lowe, said of the government’s scheme:

It puts Australia in a leadership position along with the EU in relation to developed countries targets which will be crucial for a sound Copenhagen outcome.

Furthermore, I refer the House to comments by the Chief Executive of the Australian Industry Group, Heather Ridout, who has called on this scheme to be passed by the parliament this year. Following the announcement by the Prime Minister and Minister for Climate Change and Water, she said:

AI Group has consistently called for the legislation to be passed this year. This is critical to establish the degree of certainty business requires in assessing medium and longer-term investment decisions.

The AiG is not alone in its support for the proposed scheme. They are joined by the Australian Conservation Foundation, the Business Council of Australia, the Climate Institute, the Australian Council of Trade Unions and the Australian Council of Social Services. Given the diverse interests represented by these groups, it speaks volumes that they are all united in their support for the government’s emissions trading scheme. Moreover, this demonstrates the widespread support across the nation for the government’s action to seriously address climate change.

Obviously, the Carbon Pollution Reduction Scheme needs to be passed prior to the Copenhagen summit for Australia to play a leadership role. I encourage opposition members to remember this when the time comes to vote on the legislation in the Senate. Their vote could very well determine the role Australia plays during the December talks. As a nation so vulnerable to the devastating effects of climate change, it is in our interests to play a significant role in Copenhagen. It is therefore incredible that the Liberal Party would have Australians believe that they are the party that promotes the interests of businesses. However, if they vote to defer the passage of the CPRS until the Copenhagen summit in December of this year they are merely creating business uncertainty, which is the last thing Australia needs in the midst of a global recession.

To defer the passage of the CPRS legislation would delay the passage of the most important piece of environmental legislation in Australian history. Such a move by the opposition will delay the urgent action needed to develop a green economy characterised by low-carbon and low-polluting industries which promote green jobs. Consequently, the actions of the opposition in delaying the passage of this bill cannot be justified as pro business.

In recent months we have heard members of the opposition talk about the impact of debt on future generations. I ask those same members to consider the impact of climate change on future generations. I challenge the opposition to consider the impact of rising temperatures, the effects of more extreme droughts, cyclones and floods and the consequences of a barren Murray-Darling Basin. If members of the opposition were so concerned about the prosperity of future generations they would not have delayed the passage of the CPRS legislation with their antics in the Senate this week. They would not vote to delay government action designed to tackle the most serious economic, social and environmental issue facing our young people in the future.

At the last federal election Australians rightly believed that they were voting for an end to this inaction. Many constituents told me that they would vote Labor precisely because they wanted a government that would act on climate change by ratifying the Kyoto protocol and implementing an emissions trading scheme. This bill and the related bills demonstrate that the government is still determined to take the urgent action for which Australians are loudly calling. The public’s strong support for action has not changed either and it is a pity the Liberal Party is yet to realise this.

In a recent interview on the 7.30 Report, British climate change economist Sir Nicholas Stern issued a clear message to the members and senators who serve the Australian people in this place. He said:

… people will be looking very hard at Australia and they’ll say, ‘Given their high emissions, given the technologies that Australians have and given the ingenuity of the Australian people and industry and academic life and in government and elsewhere … . If they can’t do it,’ others will say, ‘How can anybody expect us to do it?’ So I think that the actions in Australia are highly significant.

We would do well to consider Sir Nicholas’s words. He has issued a message that we cannot ignore. The international community is looking to Australia for leadership and the Rudd government are determined to show this leadership. We are determined to address the issue of climate change and prevent its potentially devastating effects. The decision we make as members of parliament in 2009 to either support or reject climate change legislation will have a significant bearing on future generations, who stand to lose the most as a result of climate change if governments throughout the world do not act today.

The National Greenhouse and Energy Reporting Amendment Bill 2009 is extremely important given the context of its implementation. The bill is one of the measures to improve public disclosure and provide reliable data on the level of greenhouse gas emissions from corporations. The importance of such reports from corporations cannot be stressed enough. Australia’s national energy statistics provide the basis of efficient and effective energy policy. Based on those statistics, governments can plan, implement and monitor greenhouse gas reduction levels and the effectiveness of energy efficiency programs. The reports can also assist in economic and trade forecasting and preparation. The data also ensures Australia meets its international reporting obligations under the International Energy Agency energy agreement and the United Nations Framework Convention on Climate Change. To ensure the reliability of data, a clearly defined legislative framework to which corporations can refer and to which they can comply is vital. Hence, the National Greenhouse and Energy Reporting Amendment Bill has made changes to clarify definitions and requires auditors to register with the Greenhouse and Energy Data Officer. This will undoubtedly instil further confidence in the integrity of the reporting process.

Other amendments were made to clarify the meaning of important terms in the act, such as ‘external auditor’. The definition of ‘external auditor’ will be replaced by the new terms, ‘audit team leader’ and ‘greenhouse and energy auditor’, due partly to stakeholder confusion about the term ‘external auditor’. Section 75A will provide greater detail on the requirements for auditors, including qualifications, expertise and, importantly, independence. All of these changes highlight the purpose of providing stakeholders with a stronger framework from which to refer, while simultaneously improving the quality of the data collected.

It is noteworthy that the proposed amendments and related bills are being introduced after extensive consultation with business, governments and the public to ensure the legislation is practical and meets the needs of all stakeholders. The extensive consultation process conducted for this bill and related bills is another example of the Rudd government’s desire to establish an inclusive, transparent and accountable approach to all aspects of governance. Coupled with the desire to provide transparent and reliable data on the energy usage of corporations, the government is also aware of the sensitivity of auditing and the need to provide proper protection for commercially sensitive information. These twin challenges will be better addressed with the introduction of these proposed amendments. The bill ensures that the secrecy provisions under the act extend to the information gathered while conducting audits and will apply to all audit team members, as the government recognises the importance of such a balance.

It is estimated that, by the 2010-11 reporting period, the legislation will cover more than double the number of corporations currently reporting, and the Department of Climate Change estimates that the reporting system will improve the data coverage to over 70 per cent of greenhouse gas emissions in the applicable sectors. Given the importance of such data in laying the foundation for future policy, I cannot stress enough the importance of these amendments. Those of us on this side of the House would like to continue our work with initiatives to reduce greenhouse gas emissions. Those of us on this side of the House are not afraid to look at the facts, as frightening as they may be, and show the courage needed to address the immense challenge which exists.

I conclude by commending the Minister for Climate Change and Water, Senator the Hon. Penny Wong, for the action she has taken on such a complicated and, indeed, serious challenge. I commend the bill to the House. (Time expired)

Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Energy and Resources) Share this | Link to this | Hansard source

In rising to address the National Greenhouse and Energy Reporting Amendment Bill 2009, I note that it is another example of what was achieved by the Howard government in doing practical things, as distinct from just talking about them, to lower Australia’s greenhouse gas emissions. This bill makes minor amendments to the coalition’s National Greenhouse and Energy Reporting Act 2007. It aims to improve the functions of the act and to strengthen the audit framework of the act. Most importantly, it allows corporations to appeal to the Administrative Appeals Tribunal if they disagree with Commonwealth determinations.

As I said, the legislation in its original form was introduced by the coalition government. Yesterday at that dispatch box, the Prime Minister finally admitted that, in fact, the coalition had spent $3 billion lowering Australia’s greenhouse gas emissions—not talk; not setting up new institutes to duplicate old institutes; not strutting the world stage with new ideas but doing nothing at home. The coalition actually put in place structures and mechanisms to lower greenhouse gas emissions. By structures, I mean physical structures. We set up a process whereby Australia is well placed to meet its Kyoto target. There are those who sit opposite who repeatedly are loose with the truth and say that, for 11½ years, we did nothing. If $3 billion is nothing, perhaps I have now gained an insight into how $315 billion worth of national debt is not a concern to this government.

The previous government were very committed in a practical way to lowering greenhouse gas emissions and to ensuring that Australia led the world with a range of technologies. In the solar industry, we provided $75 million to build the world’s largest photovoltaic solar power station. We provided funds to coal fired power stations to lower their greenhouse gas emissions. We assisted the gas industry. We actually set up the mechanism and the legislation around the mandatory renewable energy target. We built the wind industry in Australia that we now have. None of that happened by accident; it all happened as a direct result of what the Howard government did during their 11½ years. The legislation, which is being amended in a positive sense today, is part of that process. It is part of the commitment that Australia’s government under John Howard gave to both Australia and the world that we would do our share.

The original act also provided for public disclosure of a company’s level of greenhouse gas emissions and energy production and use. That was the first time we had a process in Australia where companies were required to report their emissions. With that, we began a process of benchmarking and best practice. That saw companies lower their energy use and therefore their emissions and do so in a way which allowed them to recoup the cost of those efficiencies. In fact, it was the leading edge of driving energy efficiencies. Probably the world’s leaders in energy efficiency are the Japanese. We have much to learn from them. There are a whole range of ways that you can drive energy efficiency, and this legislation, as I say, was just part of it. We put it in place after extensive consultation with states and territories as well as with industry and other stakeholders. A streamlined National Greenhouse and Energy Reporting System was developed, aimed at minimising costs and red tape.

The National Greenhouse and Energy Reporting (Measurement) Determination 2008 provides methods and criteria to calculate greenhouse gas emissions as outlined by the National Greenhouse and Energy Reporting, or NGER, Regulations 2008. The coalition will support this bill in both houses. As I say, it simply builds and probably improves on the legislation that we introduced—but the goal is the same: to ensure that greenhouse gas emissions are reported.

The National Greenhouse and Energy Reporting Amendment Bill 2009 aims to better facilitate the administration of the act and also better reflects its original policy intentions. It focuses on establishing an audit framework under the act for the CPRS and is a response to consultants’ feedback. The bill imposes no burdens on industry beyond those originally intended by the act. Wouldn’t it be great if we could say that of all bills related to lowering greenhouse gas emissions that this government has introduced?

We are, of course, confronting a situation, but this government introduced legislation which is now in the Senate and has already passed through this House—with a much truncated debate, I must admit. I found no satisfaction in only being allowed to speak for 10 minutes during the debate on that legislation. I would have thought that legislation which represents the biggest fundamental reform in Australia’s economy would be allowed full debate in this House. Luckily, in the Senate we are going to see that. Senators are not as easily bludgeoned by this government. They are insisting that full investigation of the legislation, combined with a full debate, take place. The economic and social consequences of the CPRS legislation will be examined.

Madam Deputy Speaker, that will be crucial because what we are seeing in terms of the effects of the CPRS—legislation which will rely on this legislation that we are debating—is an enormous impact on Australia’s energy industry and energy consumers. We will see an impact on the electricity producers, starting with power stations in the Parliamentary Secretary for Health’s own state. Power stations in Australia are facing closure under the CPRS. That closure may not take place in the first five years. There will be an enormous increase in the cost of electricity, and I will explain that in a moment, but in terms of power stations, the first brown coal power station may close as early as 2015. I hope not. Where do you generate 1,000 megawatts of baseload electricity in Victoria when you will have a requirement in Australia for 1,000 megawatts a year to be added to our generation grid between now and 2020? How do you replace 1,000 megawatts of generation if it does close in 2015?

For a completely different reason, four years ago, when I was the minister, I suggested that if we did not continue to invest in electricity generation and distribution in Australia, we would see the lights go out in Melbourne during the Commonwealth Games. We did not know until afterwards just how close we got to that, but that was with all power stations functioning at full capacity. If we start taking power stations out of the grid as a result of an ill-thought-through CPRS then we are putting at risk not only the economic development of Australia, but also the very safety of Australia’s communities in both a physical and an economic sense.

If I go onto the LNG industry, which again will be affected by this legislation that we are debating today, and consider the impact of the CPRS on that industry, we see a situation of sheer lunacy. The liquefied natural gas industry exports gas primarily to Asia. When it exports a tonne of LNG to China, it saves between 4½ and nine tonnes of CO2. So what does this government do? It taxes the LNG industry under the CPRS. I say ‘tax’ because even though they say it is a carbon price, when you are using the world’s best technology you cannot lower your emissions any further. And Australia’s LNG plants use the world’s best technology, so they have nowhere to go but to effectively pay a tax. So we are taxing, we are disadvantaging the competitiveness of Australia’s industries by introducing a CPRS which will actually save global emissions. We are taxing the industries that can lower greenhouse gas emissions globally. Australia’s emissions will go down, but not by the factor that the world’s emissions will go up. The world’s emissions will go up more as a result of ours going down. Of course the same argument applies with aluminium and other energy-intensive industries. The aluminium smelters in Australia are among the most efficient in the world. In fact, they are in that part of the cost curve that denotes the fact that they use electricity in a highly efficient way. And as well as that, they have introduced technologies to lower other emissions such as chlorine and fluorine. There is no future for those industries in Australia—certainly no future for expansion—under the CPRS.

I could go on and on, but before I leave the issue of the CPRS, I draw to the House’s attention a couple of issues that need to be dealt with that have come to light this week. As a result of reporting their emissions through this legislation that we are debating today, and then complying with the CPRS, we are now seeing that not only will the aluminium industry be affected, not only the LNG industry, not only the cement industry, not only the copper smelting industry and not only the refining industry, but as a result of some work done by the Australian Chamber of Commerce and Industry that small businesses will be affected as well. The very engine room of employment in Australia, where people go out and have a go and mostly make money but sometimes lose it, and maybe their house with it, but mostly make money and then employ people, the very heart of employment in our economic community is going to be attacked by the CPRS. It is going to be attacked in a way that means the small business community, if it is to survive, will have to lower its employment.

We are in a global situation, in a global financial crisis, where Australia and its best economists are predicting that we may go into a recession; we may in fact see unemployment double over the next 18 months. The government’s response to that, through the reporting process of this bill we have in front of us, is to introduce legislation which will increase unemployment—not just in the aluminium industry, not just in potential new industries that will no longer come to Australia, but in the industries that are at the very heart of Australia’s employment growth. Reading from the ACCI release:

As a consequence—

of the CPRS—

trade-exposed SMEs—

small and medium enterprises—

have limited opportunities to pass the costs on to their customers, but are not eligible for assistance under the proposed CPRS transition package.

Increases in energy and transport costs will impact directly on SME employment and profitability.

So the very heart of the economy will be attacked to the core. The release goes on:

The study finds that the CPRS in its current form will generate additional costs that would erode firm profitability by between 4 and 7 per cent on average. In order to compensate for the erosion in profitability, the study shows that firms would … need to reduce labour costs …

That means lay people off; that means let them work less hours. It says SMEs would need to reduce labour costs by between 4.4 per cent and 8.1 per cent for the food processing industry and between 7.4 per cent and 12.9 per cent for the plastic manufacturers. The Parliamentary Secretary for Health, sitting opposite, should be very interested in that and the member for Wills should be very interested as well, because in Victoria we have—

Mark Butler (Port Adelaide, Australian Labor Party, Parliamentary Secretary for Health) Share this | Link to this | Hansard source

I’m from South Australia.

Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Energy and Resources) Share this | Link to this | Hansard source

Well, you will be even more interested if you are from South Australia. My apologies, you are from Port Adelaide. Both in South Australia and in Victoria we have a substantial industry called the car industry, highly reliant on plastics. Having been the minister for industry for six years, can I say that car manufacturers go to their component suppliers and say, ‘We want a cost down this year.’ And, of course, the component suppliers, who have this pressure every year, say, ‘Look, we just cannot do it anymore.’ What happens then is that those car companies, without any compunction, go to China and buy that plastic component—that door handle, that armrest, that piece of trim in the car.

So if we see a 7.4 per cent to 12.9 per cent cut in the average ability of these companies to pay wages, in terms of what they will have to reduce labour cost by, then you are going to see more of these component companies go under. This is at a time when we hear the Minister for Innovation, Industry, Science and Research in the other house speak about how important the car industry is and how much pressure it is under. I agree with every word he says because, as I say, six years of assisting that industry has taught me just how lineball it is. But at a time when that industry and, more importantly, the component industry that supports it are reliant on support from government, it is going to introduce legislation that affects their core component suppliers. The ACCI release goes on to say that its study shows the cuts in labour costs for chemicals manufacturing SMEs will need to be between 1.8 per cent and 3.2 per cent; and for machinery and equipment manufacturing, between 1.8 per cent and three per cent.

While the legislation we are discussing now is very sound legislation, legislation that needs to be amended and needs support in both houses and will get support in both houses from the opposition, it is legislation which provides the ability for the CPRS to decimate Australian industry and jobs. And when that debate starts in earnest in the Senate, the Senate will not bow down to the bludgeoning that we got on this side of the House, when the time that we could speak on that bill was cut in half.

This bill is not perfect. It does not provide certainty and flexibility for the mining industry, especially with regard to contract miners. There need to be better provisions to allow flexibility on who actually has to report the emissions—that is, the mine owner or the contractor operating the mine. The former parliamentary secretary, now Minister Assisting the Minister for Climate Change, who was negotiating with the coal industry should know how that industry works. He has got plenty of it in his own electorate. The industry has asked the government to amend this legislation so that the default position in the case of emissions reporting lies with the owner of the mine. Here he comes—welcome, Minister—just in time to hear this. He is trying hard—

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

I remind the member he is speaking through the chair, and I have not changed my gender recently!

Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Energy and Resources) Share this | Link to this | Hansard source

Madam Deputy Speaker—and you are not a ‘he’ either—we have asked the government to address these industries’ concerns as a matter of urgency, but as yet that has not happened. On that basis we will seek to move amendments in the other place to ensure that this bill operates in an even better way. No-one is trying to avoid the responsibilities in the instance of coalmines in reporting emissions, but there needs to be a system that allows industry and commerce to be flexible so that, in a default situation, someone has the onus. In that situation it makes sense that the people who are exporting coal—that is, the owners of the mine—have the reporting responsibility. As I said, the coalition will be supporting the amendments in this legislation in both houses and, with the support of the Senate, moving the amendments I have referred to ensure that common sense prevails.

Kelvin Thomson (Wills, Australian Labor Party) Share this | Link to this | Hansard source

Courtesy of a cold, I have a voice somewhat like the member for Groom, but that is about where the similarity ends. Unlike him, I believe that the Carbon Pollution Reduction Scheme is extremely important to the future of this country and I believe that Australia has not done anywhere near enough during the course of the last decade to tackle global warming. The member for Groom said that the Carbon Pollution Production Scheme would damage Australia’s competitive position. I point out to the House that, as Lenore Taylor wrote recently, right around the world countries are locked in domestic debates similar to the one underway in Australia. For example, the European Union has promised to cut emissions by at least 20 per cent of 1990 levels by 2020 and that it will cut to 30 per cent if other advanced economies follow suit. New Zealand is reviewing its emissions trading laws and aims to align them with the scheme that emerges in Australia. Canada has committed to reduce emissions by 20 per cent by 2020, but has put its emissions trading laws on hold until the rapidly evolving United States scheme is finalised. Lenore Taylor also reports that China has promised to reduce energy consumption by 20 per cent below 2005 levels by next year and that Indonesia has pledged to reduce emissions from its energy sector to 17 per cent less than they were projected to be in 2025. So this debate is going on around the world. But if the views of the member for Groom were to prevail in these various countries, that would be a recipe for disaster—for floods, for bushfires, for refugees around the world and for us to completely fail to tackle climate change.

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

Order! It being 2 pm, the debate is interrupted in accordance with standing order 97. The debate may be resumed at a later hour and the member for Wills will have leave to continue speaking when the debate is resumed.