Tony Abbott (Warringah, Liberal Party, Leader of the Opposition) Share this | Link to this | Hansard source

My question is to the Prime Minister. I refer the Prime Minister to John Fragopoulos, who runs FishCo in Belconnen and who is already paying $3,000 a month for electricity to keep his small business going. How much will his power costs rise under the Prime Minister’s carbon tax? And if her answer is that she has not announced the details yet, what can be more uncertain than a tax she cannot explain?

Julia Gillard (Lalor, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

I thank the Leader of the Opposition for his question. What I would recommend to the Leader of the Opposition is the words of the member for Groom, who was very, very frank about the question of electricity prices before the last election and his words still ring true today. What he said was that the enormous investment needed across Australia to expand electricity supplies will double power prices during the next five to seven years, regardless of who wins government. He went on to say, ‘Power prices are set to double over the next five to seven years irrespective of who is in government.’

Tony Abbott (Warringah, Liberal Party, Leader of the Opposition) Share this | Link to this | Hansard source

Mr Speaker, I rise on a point of order on direct relevance: how much more will prices rise because of the Prime Minister’s carbon tax?

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

There are a number of parts to the question. I will listen carefully to the Prime Minister’s response. She understands that she needs to be directly relevant. The Prime Minister has the call.

Julia Gillard (Lalor, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

Thank you very much, Mr Speaker. The member for Groom went on to say, ‘Lack of planning has led to an investment drought.’ What that means, and what the Leader of the Opposition ought to acknowledge, is that we are in a situation where electricity prices are rising, where there has been insufficient investment in the sector and, in part, that insufficient investment has occurred because of uncertainty about a carbon price. So for the small business person that the Leader of the Opposition refers to, there are basically two futures: one of rising electricity prices, with no action on carbon pollution, no investment certainty because there is no carbon price, and a continued lack of investment in electricity generation and distribution with all of the stresses and strains that implies for prices; or the alternative future, the future that the government would advocate for and which we announced when we announced the carbon pricing mechanism last week—a future where we fix a price for carbon, there is certainty for those who would invest that will enable investment in energy, in renewable energy, in electricity generation that will expand capacity that is important for small businesses, for big businesses and for households and, because we are a Labor government, there is fair and generous assistance to households. They are the two alternatives.

On being clear about the alternatives, I think the Leader of the Opposition should acknowledge that his alternative is one where he takes $20 billion of taxpayers’ money, uses it to buy international credits because it is the only way he can reach the bipartisan targets for carbon pollution reduction and then spends $10.5 billion on ineffective direct action measures, a total of $30 billion spent in all, so—

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

Order! The Prime Minister will not debate the question.

Julia Gillard (Lalor, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

an additional tax burden of $720 per year for Australian families. What the Leader of the Opposition stands for is imposing that additional $720 whilst electricity prices rise, whilst households go without compensation or assistance.

We stand for a different future: pricing carbon, certainty of investment, fair and generous assistance to households. That is what our scheme is all about. I would say to the Leader of the Opposition: it is time to put the politics aside and do something in the national interest. That is what we intend to do.

Christopher Pyne (Sturt, Liberal Party, Shadow Minister for Education, Apprenticeships and Training) Share this | Link to this | Hansard source

Mr Pyne interjecting

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

The member for Sturt will withdraw.

Christopher Pyne (Sturt, Liberal Party, Shadow Minister for Education, Apprenticeships and Training) Share this | Link to this | Hansard source

I withdraw, Mr Speaker.

Janelle Saffin (Page, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Prime Minister. Prime Minister, why is setting a price on carbon the best way to assist business to take up cleaner sources of energy and to help—

Opposition Members:

Opposition members interjecting—

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

Order! The member for Page has the call.

Janelle Saffin (Page, Australian Labor Party) Share this | Link to this | Hansard source

Prime Minister, I will start at the beginning. Why is setting a price on carbon the best way to assist business to take up cleaner sources of energy and to help families with the rising costs of living?

Julia Gillard (Lalor, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

I thank the member for Page for her question. She understands the benefits of tackling climate change. She understands the benefits of pricing carbon. She is someone who has worked with her local farming and agricultural industry to discuss the benefits of carbon farming and measures for agriculture to benefit from programs like our Carbon Farming Initiative, which was launched in her electorate.

We have a responsibility to price carbon in the national interest. I do not want Australia to be amongst the highest carbon pollution emitters in the world. I do not want to experience an energy shock in fossil fuel prices and a fossil fuel constrained future. I do not want future generations to be saddled with the costs of our delay. I do not want our economy to be left behind. I do not want our confident nation to be let down. I do not want a debate that is ruled by fear instead of facts. That is why we need to act now and we need to have a national debate that is ruled by facts, not fear.

A carbon price will make polluters pay, and that price signal will mean that businesses innovate and find lower pollution ways of doing things. It has happened before. To take an example of how pricing pollution works, let us look at the endeavours in the United States to remove the problem of acid rain. A price was put on sulfur emissions from power stations and people said, ‘They’ll install scrubbers to deal with the stripping of sulfur. That will be very expensive. How will everybody cope?’ In truth, what happened was that they innovated, so they switched to coal with lower sulfur. They innovated and, yes, they did install those scrubbers, but because power stations were demanding the scrubbers in large numbers there was innovation and volume that brought the price down. What we should learn from this example is very clear: a price signal sends a message to business to innovate and to reduce pollution. When businesses started reducing pollution they worked out how to generate what they needed to with less pollution and they increased demand for alternative technologies and that in and of itself brought the price down.

Former Prime Minister Mr Howard recognised these economic realities. He recognised that there would be transitional costs, but he recognised that there could be a new, lower pollution future when he said:

Significantly reducing emissions will mean higher costs for businesses and households, there is no escaping that and anyone who pretends to do otherwise is not a serious participant in this hugely important public policy debate.

On this side of the House we are serious about this enormously important public policy debate. It is why we are being frank with the Australian people about the need to price carbon. It is why we are being frank with the Australian people about price effects. It is why we are being frank with the Australian people about how this will change and transform our economy to a clean energy future. What we are not doing is trying to hide the cost, the way the Leader of the Opposition is—desperately trying to hide his $30 billion impost on Australian families and his extra tax bill of $720 a year. We will continue being frank and working this debate through with Australians. We would expect the Leader of the Opposition to come clean about the costs of his scheme too.