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

I have received a letter from the honourable member for Wentworth proposing that a definite matter of public importance be submitted to the House for discussion, namely:

The failure of the Government to consider changes to its Emissions Trading Scheme which would result in greener, cheaper and smarter outcomes.

I call upon those members who approve of the proposed discussion to rise in their places.

More than the number of members required by the standing orders having risen in their places—

Malcolm Turnbull (Wentworth, Liberal Party, Leader of the Opposition) Share this | Link to this | Hansard source

The Prime Minister was plunged into darkness today as the lights went out in question time. I am afraid that he wants the lights to go out in small businesses all around Australia. So indifferent is he to the consequences of his poorly designed emissions trading scheme—the one that he demands we must vote for on Thursday—that he does not even know what impact it will have on the price of milk. When the question was asked by the Leader of the Nationals, ‘What impact will the scheme have on the price of milk?’ it was greeted with laughter and derision from the members of the government. That is how little they care for the challenges of Australians meeting higher prices as a consequence of a poorly designed scheme. He was asked too about the impact on taxis, buses and rail—again, no idea. One begins to wonder whether the Prime Minister really knows what he is asking the Senate to vote for this week. Does he have any idea?

So we asked him a very straightforward question about the differences between the way in which his scheme deals with agriculture and the way the Waxman-Markey legislation deals with agriculture in the United States. Virtually anybody with any interest in this topic, keeping up to date with the coverage in the press in Australia, would know that, under the Rudd scheme, emissions from agriculture will be included in the future but not in the near term. But there is little or no availability to agricultural offsets and little or no availability for green carbon, whereas in the United States agricultural emissions are excluded but there is enormous availability for agricultural offsets and, indeed, a very long list is written into the legislation. That is a very significant difference. The Prime Minister did not have a clue. He had no idea what we were asking him about; he was completely clueless.

Here we are a great agricultural nation. It is a vital part of our economy. If we go along with the Prime Minister, we are about to vote for a scheme that will put Australia’s farmers—just looking at the farm sector for one minute—at a massive disadvantage to their competitors in the United States or in Europe because their competitors will have access to revenue from agricultural offsets, from improving soil carbon and from all manner of differing tillage practices that will result in generating carbon credits in the United States and in Europe, but not here. That is a fundamental question, a vital issue of design and just one of many. We have a Prime Minister who demands indignantly that we must vote for his scheme and he had no idea what we were talking about. He had no idea what ‘Waxman-Markey’ was or who that was; he was clueless.

At 11 o’clock yesterday, the coalition, together with Independent Senator Xenophon, released a Frontier Economics modelling study that demonstrated why Labor’s emissions trading scheme—which they have named in true Orwellian style the Carbon Pollution Reduction Scheme, overlooking the fact that we are all made of carbon and carbon is in fact the source of life—is not just flawed but friendless. The Frontier research showed that an emissions trading scheme can be made to be greener, cheaper and smarter. What was the reaction of the government to this scheme?

This was not a Liberal Party publication or a Senator Xenophon publication. Speaking on behalf of the coalition, we had gone earlier in the year to another leading economics consultancy, the Centre for International Economics, and sought advice on the government’s proposals. David Pearce, the executive director there, came back and said, ‘The government has failed to model alternatives to its scheme.’ It has failed to do that. We begged the government to do that. ‘No way,’ they said. As always with the Rudd government, there is no way but their way. They are absolutists. So we asked Frontier Economics, who is a leading firm—probably the leading consultancy in this area and the firm that designed one of the world’s first carbon trading schemes, the New South Wales Greenhouse Gas Abatement Scheme—to do that work.

We commissioned the work that the government was not prepared to do. This very eminent firm, whose professionals are just as competent and just as skilled as anybody working at the Treasury or anybody working in the Department of Climate Change, came up with a report that showed that, with changes to the design of the scheme, we could achieve a cheaper scheme, a greener scheme and a smarter scheme—cheaper, greener and smarter.

What was the Rudd government’s response? At 9 am, a full two hours before the Frontier study was released—that is a full two hours before he could have had any idea of the details of the report—the Minister Assisting the Minister for Climate Change, on the other side of the table here, went out and did a doorstop interview and said, ‘It won’t work.’ He did not have to read it.

Luke Hartsuyker (Cowper, National Party, Deputy Manager of Opposition Business in the House) Share this | Link to this | Hansard source

He is a psychic!

Malcolm Turnbull (Wentworth, Liberal Party, Leader of the Opposition) Share this | Link to this | Hansard source

He is a psychic. Hours before he could even know, he just rejected it perfunctorily and completely. The honourable member behind me said, ‘He is a psychic.’ Well, he actually is the climate change minister’s sidekick, not a psychic. The sidekick’s senior minister, Senator Wong, addressed the National Press Club a little bit later. By now, the Frontier report was public. Of course, there was no time to have done anything more than quickly scan it. She may have scanned it—we do not know—but she certainly could not have absorbed it. What was her report? Just think about this. This is the most important piece of economic reform, the most momentous reform this parliament has considered for many years and possibly in our lifetime. It is a huge change to our economy and we all know it has enormous risks. The issue of the design is a crucial one that has been debated in many forums. Every single country has got a somewhat different scheme. There are great debates about design. It is a critical, crucial issue to the survival of many Australian industries and to the jobs of thousands of Australians.

And so, presented with a report from this expert group that has done many reports and studies and work for other governments, including other Labor governments, what does this enlightened, open-minded, thoughtful climate change minister say? She just says, ‘It’s a mongrel.’ All I can say is that she may well say it is a mongrel but that, by dismissing it so recklessly, she just underlines what a dog of a scheme she has in the Senate this week.

The fact is that the Australian people expect the government to do its work thoroughly on this. They expect a government to listen, discuss, consider and negotiate, especially when it comes to matters that affect their weekly budgets, their ability to get a job, their ability to make their small business successful and their ability to live in a growing and sustainable economy and environment—especially when it concerns this vital matter, the biggest, most significant policy-driven structural change to the Australian economy in our lifetimes. But this arrogant Labor government will not listen. It is determined to go ahead and implement its own flawed and friendless emissions trading scheme regardless of the costs and consequences. It sees no alternatives, hears no alternatives and certainly will not speak of any alternatives.

The government like to talk about climate change deniers. Let me say that the only denial at the moment is that being practised by the government. They are denying that there is any wisdom other than in themselves; they are denying that there are any designs that are valuable or useful to consider other than their own. We have a Prime Minister who, when asked about the legislation that will doubtless in some form become the benchmark and template for emissions trading schemes around the world—the American legislation—had no idea what we were asking him about. He was clueless.

The government will not shift from its ideological hang-ups: big government, high taxes, heavy spending and excessive regulation. Part of the genius and wisdom behind the Frontier Economics proposal is the fact that, because it results in dramatically lower electricity prices in the near and medium term, you do not require that enormous churn of money—that enormous tax grab by the government which the government then recycles. It is a vastly superior approach.

Of course, the government tries to pretend that it actually has a scheme that is complete, and it says to the opposition, ‘Well, where are all your detailed amendments?’ The government has not even finalised its own scheme. What it is asking the Senate to vote on is a coathanger. It is asking the Senate to vote for a coathanger that the government will then choose to hang whatever coat or jacket it wants to on. It is still designing its own scheme, and the assistant minister knows this better than anybody. Negotiations are still underway with the coal industry, led by the assistant minister opposite. That is Australia’s largest exporter. The coal industry and the assistant minister know that this scheme will destroy thousands of jobs and cancel billions of dollars of investment, including in the assistant minister’s own electorate. He is currently trying to negotiate, caught between the coal industry, the unions working in that industry and his ideological, left-wing colleagues on the other side, and he is trying to find some changes. They are not going to be agreed between now—

Greg Combet (Charlton, Australian Labor Party, Minister Assisting the Minister for Climate Change) Share this | Link to this | Hansard source

Mr Combet interjecting

Malcolm Turnbull (Wentworth, Liberal Party, Leader of the Opposition) Share this | Link to this | Hansard source

He is smiling; he knows I am dead right. So what he is seeking to do is to get the Senate to agree to a framework for a scheme that is actually a work in progress.

What about another big industrial sector? We have talked about agriculture; we have talked now about coal. What about the electricity generators? There they are; that is about half the emissions. They have been offered compensation that is clearly, plainly inadequate. It is going to devastate the balance sheets of the generators. So the government has asked the investment bank Morgan Stanley to examine these balance sheet effects and come back and report on what additional compensation or changes to the scheme design could be made. With coal the whole scheme is in negotiation, so the senators do not know what they are voting for there, and with the generators it is all under negotiation again and subject to this report from Morgan Stanley. Most of the detailed regulations governing how various industrial activities are defined and compensated under the emissions trading scheme remain unreleased. Rules for fewer than a dozen of what could be up to 100 sets of sector-specific regulations have been finalised.

Yesterday, by contrast, we presented a proposal from Frontier Economics that would see average annual household power bills only $44 higher rather than $280 higher, as under the Rudd ETS. It presented much smaller and more gradual increases in power bills, and that, of course, dramatically decreases the need for compensation to households, eliminating or dramatically reducing the fiscal churn. Of course, another very profound benefit of the approach recommended by Frontier is that hundreds of thousands of small businesses will also experience a much lower increase in their electricity bills. Under the government’s proposed scheme, many households would be compensated for the large and abrupt hike in their power bills, but no such compensation is envisaged for businesses even though they consume more electricity than households. Rather than the loss of 26,000 regional jobs revealed by the modelling of the CPRS, Frontier’s proposed changes would lead to net gains of 42,000 in employment in regional Australia. The Frontier proposal will see an improvement in employment in regional Australia; the Rudd government’s CPRS will see the devastation of regional and rural Australia.

As I said, this is not something that has been worked up by a policy committee of the coalition; this is the work of one of the leading firms—arguably the leading firm—in Australia, the firm that designed one of the most successful and earliest greenhouse gas abatement schemes in the world, the New South Wales GGAS scheme. That work, instead of being treated with the respect, attention and consideration of thoughtful men and women concerned about the future of Australia and Australians’ jobs, has been treated with contempt, and that speaks volumes for the arrogance and the indifference of the Rudd Labor government.

Greg Combet (Charlton, Australian Labor Party, Minister Assisting the Minister for Climate Change) Share this | Link to this | Hansard source

You would think, listening to the Leader of the Opposition, that the opposition is seeking to debate a piece of coalition policy. But what was released yesterday by the coalition was a report by a consultant that adds to a whole host of reports that have been published in relation to climate change and the development of an emissions trading scheme. In fact, it is not coalition policy, as confirmed by the Leader of the Opposition, and it means that the only substantive piece of policy work advocated by a political party in this place that is in the form of detailed legislation that has followed many, many months of detailed preparation and work and extensive consultation—the only piece of substantive policy work—is represented in the Carbon Pollution Reduction Scheme legislation which has been passed by this House and which is currently before the Senate. That is the only piece of detailed work that is the subject of consideration and relevance here. In two days time in the Senate a vote is due upon that scheme, and it is important—given that it is the only detailed policy work, it is in the form of legislation passed by this House, and it is currently before the Senate—that we do revisit exactly what that legislation is founded upon, and what it intends to do from an environmental and economic standpoint.

The underpinning foundations for the Carbon Pollution Reduction Scheme are the science. The science is unequivocal. It is the overwhelming consensus view of international scientists—represented in the fourth assessment report of the Intergovernmental Panel on Climate Change, involving 1,250 scientists with peer reviewed work from 130 countries—which tells us that the climate system is warming, and that human-induced emissions of greenhouse gases are responsible for that warming. The science is also telling us that the impacts of climate change are unavoidable and, if we are able to stabilise emissions at present levels, warming of at least 0.6 degrees Celsius will occur. However, if no action is taken—if there is no cogent policy response by this government and others around the world—we will see, on the basis of the scientific evidence, temperatures rising by up to five or six degrees Celsius above 1990 levels by the year 2100.

We must therefore dramatically reduce emissions, or serious consequences for society, for the economy and the environment will be the result. With increased ocean temperatures and acidity, our own Great Barrier Reef—which contributes to important biodiversity and, on an economic front, about $5 billion and around 60,000 jobs to Australia’s economy—will be prejudiced by these climate change events. A study released this week, for example, by Oxford Economics showed that total bleaching of the Great Barrier Reef would cost approximately $38 billion.

So we are confronted with a hugely important and serious challenge, and there is no excuse for inaction. The cost of inaction on every possible front, environmentally, socially and economically, will be far greater than the cost of taking action to combat climate change, and the government is committed to that action. We have set ambitious targets to reduce greenhouse gas emissions in this economy, and, of course, as this place is well familiar with, we have set a minimum, unconditional, targeted cut of five per cent in domestic emissions by the year 2020 if no other action is taken internationally in the context of an internationally negotiated agreement. But we have also set a medium-term target of cuts of up to 25 per cent in greenhouse gas emissions by the year 2020 in the context of a comprehensive, international agreement. This government will play its part internationally to help shape a global agreement consistent with stabilising carbon dioxide equivalent gases in the atmosphere at 450 parts per million, and our targets are consistent with that goal.

The Carbon Pollution Reduction Scheme will work by putting a price on carbon to help transform our economic structure to a lower carbon future. In partnership with that initiative, the other great institutional change that this government supports that is in legislation before this House is contained in renewable energy target legislation. This government proposes to increase the renewable energy target to 20 per cent of our electricity supply by the year 2020. In partnership with that, we are making huge investments in energy efficiency: $3.8 billion alone to install domestic insulation to reduce greenhouse gas emissions. In addition, we are supporting significant investment in carbon capture and storage technology to try and commercialise that technology to the benefit of the coal industry and lower-cost power generation, and we are supporting up to a $19 billion estimated investment in renewable energy sources by the year 2020.

The CPRS has been developed following many years of debate that go right back to earlier years in the Howard government. Eventually, under great pressure, the former Prime Minister, John Howard, commissioned Dr Peter Shergold to prepare a report and ultimately the coalition adopted an emissions trading scheme as its policy—but that was about the end of any action we saw from them and it was, of course, very late in the day. They never signed Kyoto. They are populated with climate change sceptics. They never took concrete action.

This government committed to the Kyoto protocol, in one of the first acts of the government. We are on track to meet our targets under that particular international agreement in the period 2008 to 2012. We have commissioned Professor Ross Garnaut to do comprehensive work. We have prepared a green paper and a white paper. We have consulted extensively with industry. We have prepared draft legislation. There has been months to consider it. Significant changes were announced to our policy position on 4 May in the context of the global financial crisis. And at every point along the way we have been cognisant of the economic issues that are pertinent to this policy issue, and we have acted to support jobs in the economy and to help provide a buffer against the impact of the global economic recession in the context of introducing the Carbon Pollution Reduction Scheme.

What have we seen from the other side? Nothing but chaos and delay—every attempt made to grasp at straws to try and delay consideration. As the Prime Minister said in question time today, on at least seven and now on eight occasions excuses were found for delayed policy responses in this context. There are climate change sceptics on the other side: the member for O’Connor has been extremely vocal; the leader of the National Party in the Senate has been no less vocal in challenging any policy response by the coalition in relation to this issue.

The underpinning principles of the CPRS are absolutely sound and have been worked through very thoroughly. It is a cost-effective cap-and-trade scheme that will meet hard targets, and we need to have a scheme that will meet targets. It will drive a carbon price through the economy. It has broad coverage, and cost effectiveness and equity across different sectors of the economy because of its broad coverage. In fact, 75 per cent of greenhouse gas emissions in our domestic economy are covered by the scheme.

Agriculture has been the subject of some debate. Of course, we have committed that agricultural emissions will be excluded from the scheme—at least until the year 2015—with a decision on their ultimate inclusion or otherwise due by the year 2013. And we have provided for credits to be created in relation to forestry activity under the CPRS. This furphy that has been put forward that agriculture is somehow being disadvantaged or included here in relation to the emissions is demonstrably false, of course. There will be adequate opportunity for all of the interests in the agriculture industry to continue to advance their opinions and do the detailed work that is necessary in partnership with this government.

There has been some talk about jobs and the impact of the Carbon Pollution Reduction Scheme on jobs in the regions and in what are termed emissions-intensive trade-exposed industries. This government has acted very carefully, in consultation with industries like aluminium smelting, cement manufacturing, zinc smelting, alumina refining and a whole host of others that I think we can adequately describe as both emissions intensive in their production processes and trade exposed, where we need, of course, to be cognisant of their competitive position in the international marketplace. We have done an enormous amount of detailed work to support those industries during the introduction of the Carbon Pollution Reduction Scheme, and to support the jobs of people in those industries.

The Leader of the Opposition is alert to the fact, of course, that I am a representative from the Hunter region. I can tell you that I am very, very conscious of the impact of the Carbon Pollution Reduction Scheme in my region. I am in consultation with the aluminium smelters in the region, with the coal miners in the region and with the electricity generators in the region. The Hunter is the heartland of coal-fired electricity generation for New South Wales. Eraring Energy, in my own electorate, produces 25 per cent of baseload electricity in New South Wales, and to suggest that these matters have not been considered carefully by the government is completely and utterly absurd. We have put on the table $750 million in transitional assistance over five years to support jobs in the coal industry in relation to those mining operations which have the most methane-intensive coal seams—a feature of the geology of our coal deposits within this country.

In relation to the issue of the price of milk and the CPI impacts—endeavoured to be raised in the clumsiest conceivable fashion by those opposite during question time today and in the Leader of the Opposition’s contribution—the government has done and published a detailed analysis of the price impacts in the most extensive Treasury modelling ever undertaken in this country in relation to a reform such as this. And we have put on the table a $6 billion assistance package that will ensure that low- and middle-income households are shielded from the price impacts of the introduction of the CPRS.

Let us come to the electricity generating sector. This is the sector that in the Frontier report—which is not coalition policy—I think it is fair to say receives the most assistance. It is proposed, under this Frontier report, to carve the electricity generation sector out. It produces up to 40 per cent of the country’s greenhouse gas emissions, but we will carve it out and we will put it under the operation of an emissions intensity arrangement. This is not a new arrangement. I was in a perfectly sound position at 9 am yesterday morning to respond, given the leaks that have emanated from the coalition side of politics about the Frontier report over the last week. From the media reports, our own experience in speaking to Frontier Economics, in listening to the advocacy of Mr Danny Price—who was running the press conference yesterday for the coalition—and in speaking to Mr Price, this emissions intensity concept is not a new concept. It has been around, it has been considered in all the formulation of the CPRS, and we were in a very sound position to know exactly what was coming.

The fundamental problem with an emissions intensity system as advocated in relation to this issue is that you cannot be certain about the delivery of hard targeted reductions in greenhouse gas emissions. When you add to it the coalition’s wish list that all emissions-intensive trade-exposed industries get 100 per cent free permits, we bring in the coal industry’s fugitive emissions—the methane emissions I alluded to earlier. They are all going to get 100 per cent free permits. Agriculture is going to be excluded for all the foreseeable future—that is 16 per cent of Australia’s greenhouse gas emissions.

What we have here is a magic pudding—you are putting all these things together. Double the assistance to the electricity generators, as well as take them out of the scheme, and we are going to have lower electricity prices as well—notwithstanding all of the costs that are added to the economy—and double the unconditional target. This is just a completely implausible proposition—lacking feasibility, not credible. The modelling is not transparent, the assumptions are not available for proper consideration and it is not even coalition policy. Who knows if it ever will be?

The proposition that is being put forward is not credible. It is not greener to put forward cuts of 10 per cent by 2020 when our proposal will achieve up to 25 per cent cuts in greenhouse gas emissions. It is not cheaper to increase uncertainty across the economy by having two schemes operating somehow in parallel and exempting all of these areas of emissions from the operation of the scheme. In fact, it opens up opportunities for the generators to have windfall gains.

It is not smarter, either, to avoid a decision today to continue to let carbon emissions rise. It is irresponsible for the coalition to advocate this position when it is not even their policy. They have got two days to make up their mind, and they should do the right thing in the national interest and in the environmental interest internationally, and vote for the Carbon Pollution Reduction Scheme.

Andrew Robb (Goldstein, Liberal Party, Shadow Minister for Infrastructure and COAG and Shadow Minister Assisting the Leader on Emissions Trading Design) Share this | Link to this | Hansard source

For 2½ years, since the member for Griffith became leader of the Labor Party, on climate change we have been regaled in the most sanctimonious of terms, with endless references to the great moral challenge of the 21st century—the need for Australia to provide global leadership, the need for political courage, the need for resolve and good policy in this area. Our new Prime Minister basked in the glory of Bali and hinted at 25 per cent cuts in emissions by 2020. No greenhouse gas mountain was too high for our new Prime Minister. Clearly, here was a man of character, a man up to that challenge, a man who would do whatever it took to get the policy response right. Yet, when presented with a proposal to modify their emissions trading scheme, which could be twice as green at 40 per cent of the cost and save 70,000 regional jobs in the process, this Prime Minister dismissed it out of hand. We heard it today ad nauseam: total dismissal. A man who said, ‘This is the great moral challenge of the century’ has turned a deaf ear and a blind eye to any suggestions which contradict his view of the world.

Yet this is not a back-of-the-envelope proposal. The authors developed the first mandated carbon emissions scheme in Australia. In fact, it was the first carbon emissions scheme mandated in the world: the greenhouse gas abatement scheme, introduced by Premier Carr. The authors of this Frontier proposal are experts in these schemes and in the practicalities of the electricity sector. The authors used the same model and the same assumptions that the government used in the government modelling, which the member for Charlton just talked about with pride. The Frontier Economics people who authored this report used the same model and assumptions as the government models. It is comparing apples with apples. It is a 100-page study which warrants detailed examination. It is a very serious contribution, and the outcomes suggested by Frontier’s work are not incremental. They are huge improvements, and the responsible thing to do would be to consider this work thoroughly and constructively. That is what the government should be doing. It should have the courage, the responsible attitude, the wherewithal and the wit to take advice, to seek advice and to get this scheme right.

As far as the coalition is concerned, the work has been done in good faith. It is the modelling that we had asked for for months and months and months. It is the modelling recommended by the Centre for International Economics in the report we commissioned to advise us on the deficiencies in the white paper. That report, you might recall, said that the Centre for International Economics did not differ with the long-term view of the government for 2050. But that report said that the transition period, the first 20 to 30 years, is a black hole and that there could be all sorts of unintended consequences if the rest of the world did not engage. It said that there were alternative approaches, alternative emissions trading schemes and alternative modifications to an emissions trading scheme which could overcome many serious unintended consequences—that that modelling should be done, could be done and could be done quickly. That was the modelling that the government refused to undertake, the modelling that we have commissioned at our own expense with Senator Xenophon.

We on this side of the House are concerned about getting this scheme right. This is the biggest deliberate structural change in our history. In its current form it will see several key regional centres shrink over the next 20 to 30 years. That is the result of the modelling. To the member opposite, the member for Corio, your area has the biggest carbon footprint in the country. It is estimated that the Geelong region will shrink by 20 per cent over the next 20 to 30 years if you stay with your flawed scheme. This is unacceptable. Things must be done to this scheme. The government must have an ear and an eye to recommendations and to proposals which can overcome the deep flaws and the great disruption that will occur in regional Australia. Yet the member for Charlton inexplicitly dismissed that before it ever got released. How embarrassing. We saw it again today. At nine o’clock, two hours before we put it on the website, he had dismissed it. It is ignorance and it is political game playing. Minister Wong dismissed it in the most derogatory of terms, without any opportunity to study it, an hour after it was released. The Prime Minister today clearly displayed total ignorance of Frontier’s proposal—total ignorance of what is a cap-and-trade scheme. The member for Charlton did the same. They do not understand.

The Frontier proposal is a cap-and-trade scheme. The intensity target across generators, which are 50 per cent of the emissions, tracks down to zero over 20 to 30 years as is proposed in the Frontier report. When it reaches zero it is identical to the government’s CPRS system. It is a cap-and-trade scheme. The GGAS scheme in New South Wales was a baseline in credit. This is a cap-and-trade. There are fundamental differences in the schemes. The government do not understand. They have not read it, they have not studied it, they do not want to hear of any alternatives and yet, as an aside, the Rudd scheme is littered with intensity targets. All of the free permits being allocated to trade-exposed entities rely on intensity targets that have been established by the government. In fact, the way they treat fuel in this scheme is identical to the way Frontier Economics have treated the generators. But the Prime Minister is unaware of this; he is ignorant of this.

The arrogance of the government is palpable. There has not even been a pretext of consultation. The smell of politics in this is putrid. The government want to use this scheme for a political exercise. You almost feel they are willing us to vote against it. They are trying to create a scheme which we will find deeply damaging, especially to regional centres. They are egging us on to vote against this scheme for purely political purposes. It is a take it or leave it approach not only with us but with all the stakeholders. Greens and industry alike have come to us for months saying they get humoured at these meetings but never get any action on their proposals.

In its current form the government’s scheme will export jobs and emissions because of the massive tax on electricity, which will make key regional industries uncompetitive. It must be addressed. It is a design flaw in the scheme. It is a design flaw which in many respects is designed to maximise the revenue that the government will receive—tens and tens of billions of dollars over the next 10 or 20 years. They are running so hard to dismiss this proposal because it removes their capacity to generate tens of billions of dollars which they could use at their own discretion, much of it to go into consolidated revenue in the years ahead to pay off the unprecedented levels of debt that they have imposed on this economy. This approach of the government is purely politically motivated.

Rather than an abrupt 40 per cent jump in power bills, the changes proposed by Frontier would mean a small and gradual increase, giving households and businesses time to adjust. The onus now is squarely on the government to sit down and discuss this alternative approach. The work also adds much further weight to the argument that Australia should not finalise legislation until we see the outcome of developments in the United States and at Copenhagen. There is no necessity to pass this legislation now. It is a phoney deadline created by the government for purely political purposes. The government must stop playing politics with this vital area of policy, stop the take it or leave it approach and come back, sit down and discuss this with us and others to get a reasonable outcome. (Time expired)

Richard Marles (Corio, Australian Labor Party, Parliamentary Secretary for Innovation and Industry) Share this | Link to this | Hansard source

Human caused climate change is the great issue of our age. It represents one of the greatest challenges which have been faced by humanity. It represents one of the greatest challenges faced by public policy makers. So there has never been such an important time for people in this building, for people in this place, to conduct their affairs in such a way as to pursue the national interest. History will judge us on what we do here or what we do not do here, whether we like it or not. History will surely condemn the coalition for failing to rise to this challenge and instead allowing itself to slip into the indulgence of its own political interest.

The challenge which is faced by the globe is stark. We have heard that if we were to stabilise emissions right now there would be an increase in global temperatures of 0.6 per cent. If we do nothing and continue on a business as usual approach, we face global increases in temperatures of five to six per cent. The effect that that would have on the delicate balance of the global ecosystem is hard to completely comprehend, but what we absolutely know is that the effects will be drastic. Garnaut says that we will face a 34 per cent increase in the cost of supplying water to our urban communities. He says that we will face an additional 4,000 heat related deaths every year in Queensland alone.

The Rudd government has approached this challenge with seriousness and with clarity. The very first thing we did was take this issue to the people at the 2007 election and seek their mandate, a step in the democratic process which, if we are to judge our opponents opposite on the way in which they brought Work Choices into this place, is a very novel step indeed. We then commissioned Professor Garnaut to provide us with a report, which he did in the middle of last year. We put in place a consultative process, with a policy proposition in the green paper presented to the Australian people in July of last year. Then in the white paper a government position was presented to the Australian people in December of last year.

What that position contained was a cap-and-trade scheme, the kind of scheme which is being embraced by economies around the world, tailored to Australian circumstances—a scheme which will deliver an unconditional reduction in greenhouse emissions of five per cent by 2020 but as much as a 25 per cent reduction, depending on the pace of the rest of the world; a scheme which will place a price on carbon across the broad breadth of our economy, covering 75 per cent of emissions in the economy; a scheme which will provide assistance to those sectors of the economy which are most dependent upon carbon, such as aluminium, where 90 per cent of the permits to that sector would be provided free; and a scheme which would provide assistance to low- and middle-income earners so that they can deal with any increase in household costs associated with the scheme.

Then in May of this year, with the global economic crisis having an impact upon our economy, we changed the proposition in these respects: we delayed it by a year, we put in place a fixed price of $10 a permit in the first year and we increased the assistance to those sectors dependent upon carbon. That proposition was put to this place in May, it was passed by the House of Representatives in June and it stands before the Senate for a vote in two days time. This has been a considered and measured approach.

Far from there being a failure to consider changes to the ETS, as is proposed in this matter of public importance today, there has in fact been a consideration of thousands of submissions and representations which have been made by all sectors of our society to the government. I doubt there has ever been more consultation for a government proposition as we have seen in relation to the CPRS—and rightly so, given how significant the CPRS is to our economy. We have seen participating in this great national discussion the AiG and the BCA; the ACTU and unions across the country; the Aluminium Council and companies like Alcoa; the cement industry and companies like Blue Circle cement; the automotive industry and companies like Ford; and the environmental sector and groups such as the ACF. But there is one group which has been absent, and that is the coalition.

Whilst this great national discussion has been underway, the coalition have treated us to a practical demonstration of chaos theory. They have been hopelessly split on this issue. We are told that the Leader of the Opposition is in favour of an emissions trading scheme, and yet the member for Warringah said on 27 July this year that he thinks the science behind climate change is ‘contentious, to say the least’. The member for Goldstein is on the record as saying that we should be putting more into proving up the science. How do you reconcile that with the position taken by the coalition to the election last year, as famously disclosed to the Australian people through the Liberal source to Phil Coorey in the Sydney Morning Herald on 28 July last year when he said that the reason that the coalition supported an ETS was that ‘We were staring at an electoral abyss. We had to pretend we cared’?

Despite all that disunity, the coalition have been unified on one thing. Far from dealing with the national interest, they have been completely unified on the fact that the way to deal with this issue is to pursue their own political interests. Trying to reconcile that with the extraordinary divisions amongst their own side has led to inertia and procrastination. We have been asking for a policy from the coalition and what we have got back from them is: ‘We’ll tell you after the Garnaut report’, ‘We’ll tell you after the Treasury modelling’, ‘We’ll tell you after the white paper’, ‘We’ll tell you after the Pearce report’, ‘We’ll tell you after the Senate inquiry; in fact, why don’t we have a Productivity Commission inquiry’—even though the Productivity Commission has already stated a position on this—and finally, in May of this year, they said, ‘We’ll wait until after Copenhagen.’

Given what we know to be the position of the Leader of the Opposition, his failure to put a position on the part of the coalition represents his greatest failure of leadership.  The Leader of the Opposition now is the coalition’s own wheel of fortune. Every time he walks into a party room meeting, at the beginning of that meeting the party room gives him a big spin—and it is anyone’s guess as to where he will end up. Yesterday he ended up with the Frontier report: ‘greener, cheaper and smarter.’ It is greener, we are told, even though the Frontier report, if it were to become policy, would mean forgoing tens of millions of tonnes of greenhouse emissions compared with the CPRS by 2020. It is cheaper, we are told, even though it would certainly give rise to an increase in uncertainty. You do not have to believe me on that; listen to the BCA. They say:

The BCA is concerned that a baseline and credit model will bring additional uncertainty over time as such an approach may require changes to the baselines to achieve emissions targets and the quantum and timing of such changes is unknown …

And it is smarter, we are told, even though the rest of the world is embracing a cap-and-trade scheme and, were we to go down the path the opposition wants us to take, we would be isolated from the rest of the world. This is a proposition which does not add up. It gives 100 per cent exemptions to emission-intensive industries. It gives 100 per cent exemptions to methane emissions from coalmines. It doubles the assistance to the electricity industry. It does not cover the agricultural sector or the energy sector, even though they represent half the emissions equation in this country. And yet, magically, what has been proposed is a doubling of the emissions reduction target by 2020. If the coalition go down this path, then Malcolm Turnbull will become the David Copperfield of this debate: the great illusionist—and make no mistake, this is a great illusion. But what it is clearly not is opposition policy. That is one thing on which Malcolm Turnbull has been very clear.

We still have not seen a single amendment from the opposition in relation to this scheme. All we are told this represents on their part is a grunt. The reality is that in May of this year the Liberals left this great national debate. What this country knows is that it has to change in relation to climate change. What this country wanted was a say in how we get there, and they got that through the procedure that the government has delivered. The Australian people want the two great parties to work together on this issue, but the fact that the coalition walked away from this issue in May of this year is something for which they will stand condemned by history. What the people of this country want is certainty. They want it from the coalition, they want it from the government, and they want it from this parliament—and it can be given to them if the coalition votes for the government’s legislation in two days in the Senate.

Greg Hunt (Flinders, Liberal Party, Shadow Minister for Climate Change, Environment and Water) Share this | Link to this | Hansard source

On what we are told is the greatest moral challenge of our time, it might lead—just perhaps—to five minutes of the government’s time to consider the Frontier report, and not reject it before it has been put. It might lead to five minutes of the government’s time to meet face to face to discuss a proposition which is greener, because it offers twice the baseline savings that the government propose; cheaper, because it offers $49 billion of potential savings over the life of the program for the next 20 years—or $9,000 per Australian family of mum, dad and two children—and smarter, because it would save 68,000 regional jobs.

We are told that this is the greatest moral challenge of our time, and yet the government’s legislation is for three years hence. With legislation which has an effective start date of three years hence, they are not willing to spend five minutes now to double the baseline for emissions, reduce costs by up to $9,000 per family, and save 68,000 rural jobs. They are not willing to meet to consider and assess; nor will they even allow discussion with what the member for Corio refers to as one of the two great parties of this majestic democracy. We are in agreement on that assessment, but we are in disagreement on the fact that, if this is the great moral issue—and I happen to agree—we should talk, we should meet, we should negotiate and we should seek to improve legislation, make better savings and do it at a cheaper cost and in a way which will create more jobs. If those jobs do not matter to the people in the government, then it should be on their heads. If those savings of $9,000 per family do not matter, then it should be on their heads. And if those emissions reductions of double their baseline proposal do not matter, then that truly shall be upon their heads.

This brings me to my second major point. After the unwillingness to talk, discuss or improve, against the background that they are holding the great renewable sectors hostage, they should decouple this day, this hour, this moment, the renewable energy legislation from a scheme which could be improved in terms of the emissions trading scheme. We offer a greener, cheaper, smarter scheme. But they have made the renewable energy legislation hostage to a fundamentally flawed emissions trading scheme. The great solar energy prospects of the mirror fields that we see in California and Nevada could be real in Australia. The great geothermal fields of the Cooper Basin and of Western Australia and Victoria could be real in Australia. Tidal, wave and algae energy are all enormously prospective, but the government are holding those sectors hostage. So the second point is: decouple the renewable energy target, the majestic vision of a 20 per cent clean and renewable energy sector. Decouple that legislation right now, and we will help you pass it. You want real action from us? We offer renewable energy jobs today. Let us preserve the solar sector, which is in disarray because they have abolished the rebate, and let us give the renewable energy sector a real investment pipeline.

Firstly, talk; secondly, decouple; and, thirdly, let us offer the agricultural sector a real future. The government cannot say whether the agricultural sector is in or out. On the one hand they say to them, ‘You’re not really there,’ and on the other hand they admonish us for not including it. We will not be making burping cows subject to a tax under our regime. It is not just whacky; it also out of line with what is the case under the Waxman-Markey bill in the United States. We will, however, offer the great prospect of green carbon as the biggest single source of carbon emissions reduction in Australia. If you care about carbon reduction, you need to include green carbon in your system—soil carbons, biochar, algae energy. These things are real and powerful—revegetation of mallee and mulga, reafforestation and avoiding deforestation. Include green carbon, decouple the legislation and sit down and talk with us. (Time expired)

Kerry Rea (Bonner, Australian Labor Party) Share this | Link to this | Hansard source

I rise this afternoon also to talk to this matter of public importance. I stress that that is the segment of today’s proceedings that we are speaking under—matters of public importance. When we hear from the opposition that what they want us to do around this very, very important public debate is simply talk about their report and look at issues around decoupling the renewable energy legislation from the Carbon Pollution Reduction Scheme, you can tell that they do not take this issue as a serious matter of public importance. They take it more as a diversionary tactic over their leadership troubles. We know that climate change is real. We know that the science is there, that the evidence is there and that this is, as I said, a fundamental matter of public importance. In fact, it is so important that it requires us to completely rethink the way that we as a community, as a nation, indeed as a global society, do business.

We have had at least 10 years of debate about how we as a planet can address this and about how we as human beings can start to reverse in some way the impact that we have had on our atmosphere and on pollution. We have had 18 months of the government putting out green papers and white papers and engaging, as the member for Corio said, in probably one of the most detailed public debates we have ever seen in this country. But what do we get from the opposition? Two days before this vital legislation is being voted on, we get a consultant’s report that is not even endorsed by them as a party policy. It has been cobbled together in six weeks—as I said, not to seriously address the issue of reducing emissions and pollution but in fact to divert the public’s attention away from their leader’s appalling approval ratings and continuous drop in the polls.

It is a report which has been cobbled together and which has no real substance at all. It has nine vague principles. There is this wonderful scheme that is going to completely exempt those industries which contribute most to carbon emissions in this country. It is not going to really deal with the energy sector at all. They want us to decouple and support renewable energy. At the same time, it is going to deliver an even bigger reduction in emissions than what is proposed in the government’s legislation! This is not a magic pudding; it is a half-baked magic pudding. It is a furphy that has been put up by them, and that shows no real intent to debate or address these very fundamental issues.

The opposition claim that our legislation is an attack on farmers. It is not. In fact, if you speak to people in regional and rural Australia, they will tell you that they are some of the biggest victims of climate change and that they are desperate for the government and the community to address this very critical issue. If you actually talk to people about what the challenges are on this particular issue—

Greg Hunt (Flinders, Liberal Party, Shadow Minister for Climate Change, Environment and Water) Share this | Link to this | Hansard source

Mr Hunt interjecting

Kerry Rea (Bonner, Australian Labor Party) Share this | Link to this | Hansard source

We hear from the opposition again that it is an attack on jobs. I think it is really interesting that they would actually argue this point. It sounds a bit like the doomsayers who talked about the introduction of technology—in particular, computers—and how it was going to destroy our way of life, how people would lose jobs and how the whole of our society would fall apart. We are now fundamentally dependent on computers. We now have many, many wealthy people who have made a lot of money out of computers. We now have a whole different approach to the way that computers support our industry and our basic needs. This is the same sort of debate. This is about looking at how we can protect the future, create a sustainable environment, create a sustainable economy and not have this head-in-the-sand attitude to what is of fundamental importance.

This issue is also of great concern to our neighbours. I was talking at a human rights conference recently to members of the Pacific Islands. This is not an academic debate for them about a consultant’s report; this is about whether they have fresh, clean water in their creeks, rather than salt water because of rising sea levels. This is about land being reclaimed.

Dick Adams (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

Order! The discussion is now concluded.