Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Climate Change and Energy Efficiency. Why is it important that policies to tackle climate change are fiscally responsible and what threat is posed to the national and household budgets by some non-market-based mechanisms?

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

I thank the member for McEwen for his question. The government has set out a plan to tackle climate change by establishing a carbon price through a market mechanism. Of course, a carbon price through a market mechanism is going to be the most economically efficient way of cutting pollution and driving investment in clean energy.

On the other side of the chamber, we have the so-called direct action policy. What we know from scrutinising that policy is that it demonstrates that it would cost over $30 billion rather than the claimed $10.5 billion, which would mean that the average Australian family would be $720 a year worse off under the Leader of the Opposition’s direct action policy. Furthermore, under that policy—a direct cost to the budget—there will not be a single dollar of assistance for households to meet those costs.

Under direct action any future government is going to face a $30 billion budget black hole. That $30 billion is going to need to be met through higher taxes or cuts in expenditure and cuts to services. Without that expenditure, the opposition has no hope of achieving its stated target of a five per cent cut in emissions by the year 2020. It is bad economics and it is bad for the environment. Interestingly enough, the shadow minister, the member for Flinders, has not in the course of the day—and I have been watching—effectively attempted to deny their figures. He does not deny the $30 billion black hole and he does not deny the $720 cost to families. Instead, the problem is to be solved with the magic bullet of soil carbon.

Not only are there significant questions about the science of sequestering carbon through the soil but there are also agreed international rules that prevent us counting soil carbon as abatement for our pollution reduction targets. The member for Flinders seems to be implying that it is all going to be okay because he is going to change the international accounting rules. He is going to go to the UN and convince 190-odd countries to change the international accounting rules. I cannot see it happening in a hurry.

The opposition have run out all sorts of interference today. They have likened the Prime Minister and other government ministers to Colonel Gaddafi and all sorts of ridiculous things, but they have not effectively answered this question about their own policy. They will not stand up for market principles. Their policy is a farce. The shadow Treasurer has been pretty vocal about this issue. He is well and truly on the record as a man of market principles. Only some months ago, in the book by Lenore Taylor and David Uren, he said:

I was acting industry minister in 2002 when Peter Costello, David Kemp and I argued, unsuccessfully at that stage, in the Howard cabinet that we should have an ETS.

He went on to say:

I believe the market mechanism is the best way to price a commodity. I am a true believer in markets.

Why don’t you act on it?

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

Order! The minister will direct his remarks through the chair.

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

Ditch this silly direct action policy and embrace the economically responsible approach.

Joe Hockey (North Sydney, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

My question is to the Treasurer. Has the Treasurer seen the report by Verso Economics in the United Kingdom which finds that, for every job created in the UK in renewable energy, 3.7 other jobs are lost? It states:

Research in Spain, Germany and by the EU suggests that net employment effects are negative, with the likely opportunity costs or costs associated with higher energy prices outstripping the creation of green jobs.

Treasurer, how does this fit with your claim that a carbon tax would create additional jobs?

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

I thank the shadow Treasurer for his question. What we know is that an emissions trading scheme is the cheapest, most cost-effective way of dealing with carbon pollution and driving the creation of jobs, particularly in renewable energy. That is a fact. Whether you go back to the Stern report in the UK, a report of much higher standing than any that could have been quoted by the shadow Treasurer, or the Treasury modelling that was conducted here recently or indeed most of the reputable work around the world, it all points to the fact that a price on carbon is the cheapest way to drive investment and jobs. It is the cheapest and most efficient way of making your economy more competitive for the long term.

There is a very clear difference between this side of the House and those on the other side. We on this side of the House want to charge polluters because they should not be allowed to pollute for free.

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

Order! The Treasurer will return to the question.

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

We want to use the revenue to assist households that may be impacted upon, as well as industries that may be impacted upon.

Joe Hockey (North Sydney, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

Mr Speaker, I rise on a point of order that goes to relevance. I asked the Treasurer how he comes to his claim that the carbon tax would create additional jobs.

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

The member for North Sydney will resume his seat. Again, because of the level of conversation and interjections it is very difficult for me to be able to listen to every word that the Treasurer is saying. I had invited him to return to the question moments before the point of order. The Treasurer will be directly relevant to the question.

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

Nothing could be more relevant than having an emissions trading scheme, which is the cheapest and most-efficient way to reduce carbon pollution and drive investment in the jobs of the future. There is a very clear contrast between our approach and that of those opposite. What they want to do is use a direct action policy which taxes families to hand money to polluters. That is inefficient and it is not sustainable. As the modelling which has been published today shows, their direct action model will cost $30 billion, or $720 for every family, when it is fully operational. There is a very clear contrast.

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

The Treasurer will relate his material to the question.

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

We on this side of the House want to charge polluters and assist industry and households. Those on the other side of the House want to put an unsustainable bill of $30 billion on the public purse, which will be paid for by average families, and give that money to polluters. That is the alternative that we are debating here. No wonder they are so rabid when the contrast is put in that way.

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

Order! The Treasurer will bring his answer to a close.

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

Their policy is not efficient, and the member for Wentworth has already pointed this out. Consider for a moment what $30 billion is equivalent to.

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

Order! The Treasurer will bring his response to an end.

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

It is equivalent to the entire education budget. It is equivalent to our support for pharmaceutical benefits for three years.

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

The Treasurer will resume his seat.