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

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

The impact of a carbon tax on Australia’s food industry.

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—

Warren Truss (Wide Bay, National Party, Leader of the Nationals) Share this | Link to this | Hansard source

The government wants us to believe that their great big new carbon tax is just a tax on big corporations and on big polluters; on the ugly people who produce our electricity and the ugly people who create our manufacturing industries and our export income. The government wants us to believe that it will actually have no effect on ordinary people; that this is something benign for them and will do nothing to affect their cost of living. The reality, of course, is that that is not true.

This is a tax that will affect every household in Australia. It will affect them every time they go to the shop, it will affect them on the way to the shop and it will affect them on the way home. Everything that they do will be taxed again and again. The price on every item on every shelf in every store will go up and up as a result of this tax. This is not a one-off tax like a GST that is refunded in various elements through the process. This tax cascades; it is there again and again and again. And all Australians will pay.

If you wanted any confirmation, the front page of the Daily Telegraph on the day after this was announced, read, ‘Carbon-fuelled food prices. The price of food will go up as a result of Labor’s carbon tax’. And it is not just that there will be increases in the cost of producing the food but there will also be increases in the cost of selling and transporting the food. A national survey of more than 500 food and grocery retailers said that 83 per cent intend to pass on the cost of their carbon tax by way of higher prices. Frankly, I wonder where the other 17 per cent are. But the reality is that grocery retailers intend to pass on the cost. In the same survey of 525 members, 78 per cent said that this will affect the number of jobs in their shops and the number of hours that people will work.

Even today it goes a step further. The Coca-Cola Amatil chief said:

Australia is in danger of becoming entirely dependent upon imported food—

and he continued:

… the federal government’s proposed carbon tax would further undermine the competitiveness of Australian manufacturers.

He went on to say that he is concerned about the survival—the very survival—of Australia’s food manufacturers ‘if the government were to push ahead with plans to tax carbon emissions’. He added:

I’m really worried about the competitiveness of food and beverage manufacturers in Australia.

And why wouldn’t he be concerned? Australian food and beverage manufacturers are going to have to pay taxes that their competitors around the world will not have to pay. If we import our food and our processed vegetables from overseas there will be no tax but, if we in fact process and preserve and package Australian food and vegetables, they will indeed be taxed under Labor’s scheme.

The Prime Minister has said that agriculture will be exempt from her proposed carbon tax. But who would believe her? Those words are coming out of the same mouth, the same lips, which said on 16 August 2010:

There will be no carbon tax under the government I lead.

She said in August that there would be no carbon tax under her government and she made it even more emphatic a couple of days later when she said:

I rule out a carbon tax.

The same lips are now saying that we will exempt agriculture. Who would believe her? Who believes anything she says? Indeed, the Minister for Climate Change and Energy Efficiency at the table threw doubt on the validity of this whole commitment on ABC Rural on 28 February when he said:

… it’s too early to tell how a carbon price will affect farmers’ costs.

So you have the minister in charge of implementing this scheme not sure how much it is going to cost. He does not even know what the impact will be on farmers and he is not even prepared to recommit to the promise that this tax will not affect farmers.

But let us make it absolutely clear. Could any farmer go to the bank manager and plead with the bank manager for some carrying-on finance and be confident of success? The bank manager would ask him, ‘Have you made any provision in your budget for the effect of the carbon tax?’ The farmer would probably say, ‘Oh, no, Julia has told me that I won’t have to pay the tax.’ Do you think the bank manager will believe that? This is the Prime Minister who said that we were not going to have the tax in the first place, so why would anybody believe her now when she says that farmers will be exempt?

Farmers are not exempt. She is only proposing to exempt farmers from the tax on carbon emissions—and for how long, who knows? They have made it clear that the only reason they are introducing that exemption is because they cannot measure emissions. It is also true of course that under Labor’s proposed rules they would not allow farmers’ sequestration of carbon in the soil to be counted. They will not allow carbon exported in grain or other farm products to be counted. They will not allow carbon in pastures, or in most trees even, to be counted. So in effect, they do not have a system in place, otherwise, there is no doubt that the tax would also apply to the farming sector.

Professor Garnaut advocates the inclusion of agriculture, and he is their major guru in this area. This is the same guy who actually suggested that farmers should give up farming cattle and sheep, and grow kangaroos. Kangaroos are what we should have in this country and they should be the future of farming in this nation. The Financial Review editorial, that gives a lot of advice to everybody, also thinks that farmers should be included. So I can understand why farmers are anxious that the promise made by the Prime Minister that they will be exempt will in fact be like all the other promises—not worth a cracker. It will not be honoured, like her word in so many other areas.

This does have a significant impact. ABARE in its modelling in August 2009 said:

… these additional charges—

the effect of a carbon tax—

would cut beef cash incomes by 13.6 per cent, dairying by 9.7 per cent, sheep by 11.4 per cent, wheat and other crops by 8.5 per cent.

And that is not all. The impact of this tax will flow through into the food processing sector. The government has not said that they will be exempt so when the food is being packaged, when the food is being processed, when the sugar is being crushed, and when the milk is being processed, will those processes be exempt from the tax? The reality is that that is highly unlikely. So these costs will indeed be passed on to consumers.

These costs will make our food more expensive and this will be a price that consumers will have to bear. The dairy industry has calculated that a carbon tax of $26 a tonne would add $7,500 a year to the cost of an average dairy farm. The reality is that Labor does not care. Labor is quite happy to import the food from other countries that do not have a carbon tax and have no plans to have a carbon tax, because they have no commitment to ensuring the food supply of Australians.

The other thing that we have been asked to believe is that there will be compensation paid to the low-income families who will have to bear this higher cost. Again I say: this is a promise that has come from the same lips as those that said, ‘There will be no carbon tax.’ Why should families believe that they will ever get that compensation, or that it will be adequate, or that it will last for more than a day after the next election, or that it will be paid to people in a way that is meaningful? The clear facts are that the government cannot be counted upon to honour its word in that regard.

Today the Prime Minister even went further. She said that the assistance is going to be ‘fair and generous’, and the Leader of the Opposition made the very valid point that if people are going to get so much compensation why would they change their behaviour? Why turn out the light bulb if you are being paid compensation for the extra cost of electricity? In reality, this scheme will not even work, because the people who are supposed to be changing their behaviour are going to be given additional compensation. But we know that there are many people—most people in the chain—who will indeed be worse off and it will be a cost that they have to pass on to consumers.

If this tax is $26 a tonne, we are told that the top 200 companies will pay $3.3 billion in tax. That leaves at least $9 billion in the first year to be paid by small business, to be paid by families, to be paid by people who must wear that cost and who cannot pass it on. The reality is that this is a government that cannot be trusted to deliver compensation. It cannot be trusted to guarantee a clean and reliable food distribution system in this country. It is a government that has slashed every year into important rural research and development projects. It has slashed expenditure on quarantine that is to make sure our industry is able to protect itself from pests and diseases in other parts of the world. It has no sympathy for those who produce our nation’s food.

The other quite curious argument the government is using is that we must have this tax so that we can deliver certainty. Well, last week we had plenty of certainty. The coalition had said there would be no tax. The Labor Party had said there would be no tax. There were no doubts whatsoever. Indeed, another survey has said that well over 80 per cent of businesses believed the Prime Minister and had not factored a carbon tax into their future business operations. So the Labor Party are not delivering certainty. They are in fact delivering uncertainty. They have announced a tax and all they are able to tell us about it is that it is going to start on 1 July 2012. We do not know how much it is going to be. We do not know how long the rate will stay at that amount. We do not know who is going to pay. We do not know how much prices are going to go up. We do not know who is going to be compensated. We do not know any of those fundamental issues. How has that delivered certainty to the Australian people? It has delivered uncertainty in massive doses.

That point has also been picked up time and time again by business commentators on this issue. Adding to the uncertainty that is provided in a difficult economic environment by changing economic circumstances around the world, Australia now has a new layer of investment uncertainty. We have the threat of a great big new tax called the carbon tax that this government intends to impose and we have a greater level of uncertainty. There is an uncertainty in the business community. There is an uncertainty amongst Australian families because they do not know what impact it is going to have on them. There is an uncertainty in the workplace because we do not know which jobs Labor are going to sacrifice on the altar of the carbon tax.

We do know that for every one job created—and most of those jobs will be subsidised jobs—over three will be lost in other sectors. That was the clear evidence of the questions put to the government today, to which they could not respond. There will be jobs lost and there will be further uncertainty in households because of the certain knowledge that everything they buy will be more expensive. It will cost more to go to the stores. It will cost more to travel. It will cost more to do the things people want to do.

What the government are doing is creating uncertainty. They have taken away the bipartisan position that both parties went to the election on: the clear commitment that there would be no carbon tax. Only one party promised a carbon tax, and that was the Greens. So whose word should we be taking on this tax? Is the Prime Minister’s word worth anything when she makes a promise with her own lips—‘there will be no such tax’—and then is elbowed out of the way by Senator Brown in her own courtyard to announce the biggest tax that Australia has seen in decades? Those are the people we need to watch, and they have no commitment to excluding agriculture from the carbon tax. They have got no commitment to compensation. They have got no commitment to helping struggling Australian families. You cannot impose a tax that collects $12 billion in its first year, and even more year after year after year, without that having a significant impact on all Australians. Families will find the cost of living so much more difficult to manage as their electricity costs go up, their food costs go up, their jobs are threatened and their lifestyles are threatened by a tax that we do not have to have.

There is a better way. We can reduce CO2 emissions by positive, direct action. Labor always turns to punitive measures—more taxes, more revenue so they can waste more, spend more and deliver less—and Australian families are so much worse off. We need a strong, reliable, secure system, which this government will never deliver. It will only deliver more and more and more taxes.

Craig Emerson (Rankin, Australian Labor Party, Minister for Trade) Share this | Link to this | Hansard source

What an astonishing turnaround today from the coalition. It comes in day after day saying that it knows the impact of the emissions trading scheme and the fixed-price permit on households. That is its central proposition. We have had shadow minister after shadow minister coming in and making claims as to the impact that this will have on households. The proposition is that there is all this uncertainty, that the price is unknown, and therefore this is bad. Well, you can make that proposition if you want in a democracy, but you cannot reconcile it with the other proposition, which is that they know the impact of the price of carbon on households. You can have one, you can have the other, but you cannot have both—and that is what they have said today.

They have said there are two problems: they do not know what the price is, but on the other hand they do know what the price is because they tell everyone every day what the impact will be. In fact, what they have told the Australian people about this impact varies day by day, week by week, month by month and shadow minister by shadow minister. The shadow environment minister, about whom I will have a lot to say in my allotted time today, last year said it will be $1,100. That was on 6 January. This year, on 25 February, just a few days ago, he said it will be $300. But then they have gone on to say it will be $1,000 and then they have gone on to say it will be $500. So: just pick a day, just pick a number. They know the impact of a carbon price which they complain has not yet been determined. You cannot have it both ways, but this coalition always does want to have it both ways.

The coalition have said that the fact that the price has not been determined at this point will create uncertainty. There is no more guaranteed way of creating uncertainty in relation to the efforts of an Australian government to limit carbon emissions than to declare that you will roll the program back. That is what the coalition have declared—that if a carbon price is introduced and an emissions trading system is designed to be implemented then we will get what the previous Treasurer of this country used to describe as ‘rrroll-back’. Remember the Treasurer, at this dispatch box, saying how bad it would be for the Labor Party, on the GST, to implement ‘rrroll-back’? Well, here they are, the kings of roll-back, because they would roll back the entire emissions trading scheme and replace it with what? They would replace it with the most expensive dog’s breakfast that this country has ever seen—a $30 billion slug on Australian taxpayers made up of $10½ billion of the order of magnitude of the black hole identified by the Department of Finance and Deregulation and the Department of the Treasury in the coalition’s costings of its commitments, all unrepudiated and all unrepealed, going into the last election. They are the official estimates of the size of the coalition black hole, which happens also to be the estimated cost of their direct action plan—that is, $10½ billion.

Where does the balance of $20 billion come from? I can tell the people of Australia what would happen. The coalition are saying that they too will sign up to the target of reducing unconditionally Australia’s emissions by five per cent to make them comparable with 2000 levels by 2020. That is the same unconditional target that the Australian Labor Party has embraced. The coalition say they are embracing the same target, a five per cent reduction. The problem is that the Department of Climate Change and Energy Efficiency estimates that the $10½ billion direct action plan will only do a quarter of the job. Therefore, three-quarters of the job needs to be done through the purchase of international permits. Therefore, the coalition’s $10 billion black hole becomes a $30 billion black hole. The Leader of the National Party says, ‘This MPI is about the impact on households.’ What about the impact of $30 billion in extra taxation on Australian households? That is a gigantic impact. It is equivalent to some of the biggest budgets—the health budget, the education budget—of this country. They say that they will whack a $30 billion tax on Australian households. They say the coalition are for low taxes.

Warren Truss (Wide Bay, National Party, Leader of the Nationals) Share this | Link to this | Hansard source

We are.

Craig Emerson (Rankin, Australian Labor Party, Minister for Trade) Share this | Link to this | Hansard source

There we go again: ‘We’re for low taxes.’ I had this discussion yesterday with the shadow health minister on Sky television. The shadow health minister invited me to prove that, in fact, the previous coalition government was the highest taxing government in Australia’s history. I am very happy to do that within this chamber of the Australian parliament today. It is clear from Budget Paper No. 1 2010-11, page 10-7, that taxation as a share of GDP was the highest in Australia’s history under the coalition, not once, not twice, not three times but in 2000-01, in 2001-02, in 2002-03, in 2003-04, in 2004-05, in 2005-06 and in 2006-07. That is about eight gold medals for the champion taxers of Australia! The shadow health minister said yesterday, ‘Oh, but not as a share of GDP.’

Peter Dutton (Dickson, Liberal Party, Shadow Minister for Health and Ageing) Share this | Link to this | Hansard source

It’s not!

Craig Emerson (Rankin, Australian Labor Party, Minister for Trade) Share this | Link to this | Hansard source

It is here. It is in the document. This guy used to occupy the position of Assistant Treasurer and he cannot read a budget. No wonder they have come up with a $30 billion slug on Australian families. They did it before and they will do it again. They were the world champion taxers before; they will be the world champion taxers again. We absolutely know that they have now not an $11 billion black hole but a $30 billion black hole. That would be the biggest tax increase that the Australian people have ever seen, because of the ineptitude of the coalition.

They might have to walk away from their five per cent unconditional target. Who knows—it is only Wednesday and we still have another day of sitting tomorrow. It could well be that the Leader of the Opposition will walk in and reaffirm his undertaking, his fundamental belief that climate change is absolute crap. If he truly believes that climate change is absolute crap—and I am sure that that is one honest statement from the opposition leader; he does believe that climate change is absolute crap—then he can abandon his five per cent emissions reduction target, the bipartisan position. But if he does not abandon the target then he has a $30 billion problem. Worse, the Australian people have a $30 billion problem.

The Leader of the National Party said, ‘Look, the government said that this is a tax on big polluters and it will have no effect on consumers.’ We have indicated that it will have an effect on consumers. We have said that. But we have also said that all of the proceeds of the fixed price permit would go to compensating consumers and to assisting businesses to make the transition to a low-carbon economy. We have indicated that they will be compensated.

There is a champion of pollution taxes in this parliament. I have done a PhD thesis, but the thesis of this champion has to be seen to be believed. I would give it about 9½ out of 10, if you can find it. I am not sure that the shadow environment minister can find it, but we have been able to find it. Here it is: the thesis of the shadow environment minister. It says, amongst other things:

The market system is the preferable regime as it better ensures that the polluter bears full responsibility for the cost of his or her conduct.

We would give 10 out of 10 for that! It is just a goldmine of learned observations. It includes this:

There is also a strong consensus that even if some of the Liberals’ constituents do respond negatively—

that is an understatement—

a pollution tax does need to be introduced to properly serve the public interest.

Ten out of 10 for the shadow environment minister—good on him. Where is he? He is probably watching on the monitor and saying, ‘Gee, Emo is going through my entire thesis.’ You bet your sweet bippy I am going through his entire thesis because he goes on to say:

Business’s greatest concern, according to the Liberal Party, is the need to have a certainty which would enable them to plan for the long term.

With that, I also agree. This thesis led to the inspiration of a very learned opinion piece in the Sunday Age. Again, I have to agree with so many of the statements in this learned thesis from the shadow environment minister. He said:

We should now consider the alternative of pollution taxes. Pollution taxes imposed on the lowest level of emission and increases the amount of waste produced increases. Pollution taxes encourage companies to decrease discharges of pollutants.

He went on to say:

Despite an initial protest from industries taxed not only have they survived but many have flourished because the cleaner industry has often proved to be more efficient.

He talks about the benefits of putting a price on pollution. That is what we are doing—putting a price on carbon pollution. But this man, the shadow environment minister, is under the thumb of the Leader of the Opposition, who says in the party room: ‘Look, I know most of you actually believe in climate change. I know you think this is a real problem, but we have got an opportunity—in fact I, Tony Abbott, have an opportunity—so shut up, keep your heads down and we will go the government over this and we might end up being in government.’ With that address to the party room, the opposition leader shows that he will say anything, do anything and take any opportunity to prevail over people like the member for Wentworth, the member for Flinders and very many members of the coalition and say: ‘Put your philosophy, put your principles and put your values aside because I could be Prime Minister. If you do not, there will be trouble.’

Yesterday we saw the beginning of very inappropriate usage of comparisons. I have got very broad shoulders. I play a bit of rugby, even these days—not all that convincingly—

Warren Truss (Wide Bay, National Party, Leader of the Nationals) Share this | Link to this | Hansard source

We heard about that.

Craig Emerson (Rankin, Australian Labor Party, Minister for Trade) Share this | Link to this | Hansard source

Let us hear about this. You would think that the coalition would backtrack on this a little bit because we know that the member for Indi, another shadow cabinet minister, this morning on the doors made a similar comparison that the shadow health minister made in respect of me and Colonel Gaddafi yesterday. This morning, the shadow minister for industry and innovation, the member for Indi, made the comparison between the Prime Minister and Colonel Gaddafi.

The Leader of the Opposition was asked about this and he said, ‘It is not the sort of language I would use.’ The interviewer asked, ‘Will you have a talk to the member for Indi?’ and he said, ‘Oh, we’ll have a talk to the member for Indi.’ You would think, having declared that he would have a bit of a chat to the member for Indi, that the last thing that she would do after that time had elapsed is put out another press release—this is beyond going on the doors this morning—where she said, ‘If Ms Gillard believes that under her carbon tax Australian jobs and manufacturing will be better off, she, the Prime Minister, is as deluded as Colonel “My people love me” Gaddafi.’

The comparison was also made by Senator Abetz, who in my memory is the coalition opposition leader in the Senate. This is a pattern. You see this pattern with the opposition leader where he says, ‘It was not me; they might have gone a little bit too far,’ but in fact he is behind it. This comes out of central casting, the opposition leader’s office, but he does not have the basic guts to say, ‘Yeah, that’s me; I am quite happy to stand by that,’ because he lacks courage.

Warren Truss (Wide Bay, National Party, Leader of the Nationals) Share this | Link to this | Hansard source

Mr Deputy Speaker, on a point of order: the matter of public importance is about food prices and I do not think the ravings of the minister have any relevance.

Peter Slipper (Fisher, Liberal Party) Share this | Link to this | Hansard source

It is a wide-ranging debate. There is no point of order. The honourable member will resume his seat. I call the Minister for Trade.

Craig Emerson (Rankin, Australian Labor Party, Minister for Trade) Share this | Link to this | Hansard source

You know they have lost the argument when they take silly points of order like that and when they make stupid comparisons like they have been. You would think they would have some consistency in their modelling and in their thinking, but there is no consistency. The only consistency from the opposition leader is that he wants to be Prime Minister and he does not care what he needs to do or what he needs to say to become Prime Minister. I will make this prediction: this man will never be the Prime Minister of Australia because he has no principles and he is completely without courage on this and all other matters.

John Cobb (Calare, National Party, Shadow Minister for Agriculture and Food Security) Share this | Link to this | Hansard source

This carbon tax will quite obviously be a disaster for our economy, especially for agriculture and the food industry. Today we found out that it is not $26 a tonne but $45 a tonne. It has been a tumultuous time in agriculture in recent years. In recent years agriculture has faced every possible disaster. It has had 10 years of drought, it has had locust plagues and in recent times it has had floods, it has had fire and it has had enormously fluctuating commodity prices, not to mention probably the highest dollar we have seen in many years—all of which are not to our advantage.

Over the last two, three or four years other countries have, quite rightly, focused on food security. They have focused on the fact that the world population is growing. Those in the know are talking about climate change and world food supplies. They are looking to tighten up. Other countries and global companies have been investing in food security. In the last three years, there has been 10 times the investment in Australian agriculture, particularly in agribusiness. That should send a message. You would think that in this climate we would have a renewed focus on agriculture by the federal government. But the opposite has happened. The government do not understand and they do not care what agriculture has to deal with or how. The government gained power on the back of rural Independents abandoning agriculture, and they are doing it with alarming regularity. Let us remember that we are talking about the sector of Australian industry that produces all the food.

In the last two weeks, the minister for agriculture and his predecessor, Minister Burke, supported Coles over the dairy farms. That is a great understanding of agriculture! Then we have the Minister for Trade, who is sitting at the table right now, skiting before he even starts negotiations with the Japanese on the free trade agreement that he would take no notice of—

Craig Emerson (Rankin, Australian Labor Party, Minister for Trade) Share this | Link to this | Hansard source

Mr Deputy Speaker, on a point of order: the member would know that I have corrected that. I have never made that statement, not once. It was reported and it has been clarified.

Peter Slipper (Fisher, Liberal Party) Share this | Link to this | Hansard source

There is no point of order, and, as the minister would be aware, there are forums of the House that he could use if he wants to correct the record.

John Cobb (Calare, National Party, Shadow Minister for Agriculture and Food Security) Share this | Link to this | Hansard source

The record shows that the trade minister made the statement that he was not going to take agriculture into account when he dealt with the Japanese on free trade agreement negotiations.

Craig Emerson (Rankin, Australian Labor Party, Minister for Trade) Share this | Link to this | Hansard source

I told you: I did not make that statement.

John Cobb (Calare, National Party, Shadow Minister for Agriculture and Food Security) Share this | Link to this | Hansard source

You would think that ex-union officials would know how to bargain! Can you imagine them saying, ‘We want a wage rise but we’re not really all that fussed about it’? The apple industry have been devastated—and we are talking about food prices here—by the decision that New Zealand apples will be able to come into Australia, and then they see their Prime Minister standing in the New Zealand Parliament celebrating that fact with the New Zealanders. This is a fire blight situation. You would not go to the New Zealand Parliament and celebrate, saying, ‘You can bring them in.’

Mike Kelly (Eden-Monaro, Australian Labor Party, Parliamentary Secretary for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

Dr Mike Kelly interjecting

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

The Parliamentary Secretary for Agriculture, Fisheries and Forestry ought not to interject from outside his seat. You can if you return to where you belong.

John Cobb (Calare, National Party, Shadow Minister for Agriculture and Food Security) Share this | Link to this | Hansard source

If fire blight comes to this country, we will not have an apple industry in this country. Is that something to celebrate? I think it is poor form, and it shows contempt for our own apple industry.

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

The member for Calare will resume his seat. The Minister for Trade, on a point of order—which I will be listening to very carefully.

Craig Emerson (Rankin, Australian Labor Party, Minister for Trade) Share this | Link to this | Hansard source

Mr Deputy Speaker, it will be a better founded point of order—that is, that this is an MPI about carbon pollution. What this fellow is talking about has absolutely nothing to do with—

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

The minister will resume his seat. By definition, matters of public importance are wide-ranging debates. There is no substance to the point of order. I call the member for Calare.

John Cobb (Calare, National Party, Shadow Minister for Agriculture and Food Security) Share this | Link to this | Hansard source

With the carbon tax that Labor are so proud of and that the Minister for Trade cannot wait to impose, Australian farmers are more exposed than almost any other industry. Whether or not they wear it themselves, they will wear its effects like no others. Electricity, fuel, fertiliser and transport, it does not matter where you go; we all know, with a carbon tax of $45 a tonne, just how expensive it will be—well, we will if the government ever work it out. Let us look at the example of the impact of the carbon tax on milk prices. We all know that, irrespective of whether or not agriculture is included, all those things will become much dearer for dairy farmers. It remains to be seen, with the minister for agriculture backing Coles and Wesfarmers over dairy farmers, if milk will be included or not—if there is even anyone left to produce it. When dairy farmers need to buy in feed, new breeding stock or new machinery, they will be slugged by the prices as badly as anyone in the economy. With the recent milk price war, we can all see—everybody, with the exception of Australia’s own agriculture minister and his predecessor, Minister Burke, who have virtually stated that Coles were in the right—the impact that this is going to have. The Australian dairy industry estimates that this will cost an extra $7,500 per year, but that was with the carbon price at $26 per tonne. At $45—

Craig Emerson (Rankin, Australian Labor Party, Minister for Trade) Share this | Link to this | Hansard source

Dr Emerson interjecting

John Cobb (Calare, National Party, Shadow Minister for Agriculture and Food Security) Share this | Link to this | Hansard source

Your own Treasurer quoted from a $45 a tonne paper today. So the average dairy farm is going to be out of pocket by about $13,000 or $14,000, simply for electricity. That is just for electricity. That is not transport. That is not fertiliser. It would be nice if those dairy farmers were able to recoup that money, but we are price takers, not price setters. The price cut in milk might be good for consumers in the short term but not in the long term: given that their house prices are going to fly up and given that we are talking about a carbon tax at $45 a tonne, they are going to have to pay $600-odd or more for their domestic electricity use.

The Prime Minister and the Labor government claim that Australian agriculture will be excluded from the carbon tax. Given that the Prime Minister stated a day or days before the election that we would not have a carbon tax at all, I actually think Paul Keating would roll over in his grave with jealousy—

Craig Emerson (Rankin, Australian Labor Party, Minister for Trade) Share this | Link to this | Hansard source

He’s still alive!

John Cobb (Calare, National Party, Shadow Minister for Agriculture and Food Security) Share this | Link to this | Hansard source

because this is a bigger lie than the L-A-W law tax. It puts that one in the shade. If the Prime Minister has already broken her promise to Senator Bob Brown over this carbon tax, let us face it: they are going to include agriculture. Bob Brown and agriculture? They are about as compatible as flame and ice-cream.

The government have, in three short years, already devastated the agricultural sector by draining resources and exposing our borders, as well as our domestic and export industries, to exotic pests and noxious diseases. The government have slashed R&D. Let me tell you that R&D is the only thing that the agricultural industry in Australia believe can get them through to the productivity levels they need anyway—let alone the productivity levels which the minister for agriculture apparently, in the last couple of days, told ABARE that farmers would need to gain to get over the recent floods et cetera. That is one way of doing it! It is better than any government assistance, obviously! R&D is critical to productivity but has been slashed, the industry is not going to get any help with the floods or whatever it is and the government has decided there are no more exceptional circumstances with regard to drought. That is fine, I guess. But, if you put a carbon tax for agriculture on top of all that, there are not too many places for farmers to go. The government has totally ignored agriculture in the recent floods and rains. The drought has been taken over by floods, so everything has to go.

It has occurred to me that there might be something very cunning going on. With regard to the jobs the Treasurer could not explain, they could put people to work catching Asian bees, which the government are not going to do anything—(Time expired)

Craig Emerson (Rankin, Australian Labor Party, Minister for Trade) Share this | Link to this | Hansard source

Mr Deputy Speaker, I rise on a point of order. During the debate the Leader of the Nationals again made a comparison between me and Colonel Gaddafi, and I want it withdrawn.

Peter Slipper (Fisher, Liberal Party) Share this | Link to this | Hansard source

I do not believe there is a point of order. Could the shadow minister clarify what he said?

Warren Truss (Wide Bay, National Party, Leader of the Nationals) Share this | Link to this | Hansard source

The situation was that the minister was calling points of order in this debate about food. I made the point that my contribution was about food and that his ravings about Colonel Gaddafi were not relevant to the subject.

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

If that is in fact what the Leader of the Nationals said, there is no point of order. Were he to have accused the Minister for Trade of being like Colonel Gaddafi then that, of course, would have to be withdrawn. There is no point of order on this occasion.

Kirsten Livermore (Capricornia, Australian Labor Party) Share this | Link to this | Hansard source

Another day and another MPI based on fear not facts, politics not principles and now slur not science. Will the opposition ever take their responsibilities as parliamentarians seriously? Will they ever engage in a sensible and rational debate over policies like this one on climate change that are fundamental to our nation’s future? On the evidence so far, the answer is clearly no. We are not even a week into this debate and the desperation of Liberal-National Party members is plumbing new depths. We have seen them reach almost hysterical levels in their attempt to mislead Australians about the effects of a carbon price. Let us look at some of the statements by opposition members about this. Last year Greg Hunt said it would be $1,100 per year—

Peter Slipper (Fisher, Liberal Party) Share this | Link to this | Hansard source

‘The member for Flinders’ is the correct means of description.

Kirsten Livermore (Capricornia, Australian Labor Party) Share this | Link to this | Hansard source

I beg your pardon, Mr Deputy Speaker. The member for Flinders this year was saying it would be $300. Apparently, the member for Goldstein has another way of calculating it and he is saying it will be $1,000. The Leader of the Opposition in New South Wales was saying just the other day it would be $500. So in their desperation to whip up fear they are really just making this stuff up, and today’s MPI is no different.

Usually they use electricity prices as the basis of their daily fear campaign. They come in here quoting price rises that have nothing to do with any carbon price. We do not have a carbon price. We on this side know all about the price rises that we have experienced in this country over the last three to five years. There have been price rises in the order of 40 per cent over that time. We also know the causes of that: underinvestment in generation infrastructure and underinvestment in transmission infrastructure. This has been acknowledged by the electricity sector and by industry. They have acknowledged that this underinvestment will not be addressed without certainty around a carbon price.

Today the scare campaign has shifted to food. Again, there are no facts in this; there is just fear. There is no basis for the claims that members opposite are making. Again, if you turn to the facts, you will see in the modelling around the CPRS last year that the estimates were for about a one per cent price rise. But people in the industry are telling us that it is too early to make these claims with any certainty. A spokesperson for Woolworths on 1 March said that they could not forecast potential price impacts until more details of the scheme were released. The National Retail Association agreed with that, saying it is a little too early to tell what will happen with a carbon tax and what the implications are likely to be for prices.

The opposition will not let any facts slow them down in their fear campaign. The facts are that agriculture is exempt from the carbon-pricing mechanism that has been announced. Farmers will not pay any carbon price on their production. In fact, farmers will be able to benefit from the Carbon Farming Initiative that will provide new opportunities to participate in lucrative international markets for carbon credits. Under the Carbon Farming Initiative we will legislate clear rules for the recognition of carbon credits that could then be sold in national and international markets.

In his review of his 2008 report on climate change, Professor Garnaut described this as a historic opportunity for rural areas to cash in on the international push to reduce carbon emissions. He said:

It is potentially transformative in the Australian rural economy. We are in a good position with our large interest in biosequestration to put things in place to create opportunities for our rural community which can then be taken up by the rest of the world.

This is great news for farmers. The Carbon Farming Initiative is just one program that demonstrates this government’s commitment to addressing climate change in real and practical ways that give our important industries the incentive to innovate and embrace new opportunities.

We have said consistently that we will take steps to reduce Australia’s carbon emissions and to transition and transform our economy to one based on clean energy where future growth is not dependent on ever-increasing production of carbon. With the highest emissions per capita in the developed world—higher even than in the United States—Australia’s households and businesses are at risk of being left behind in a global economy that is already moving to cut pollution. If we just ignore that shift in the international marketplace, we risk hurting our economy and losing jobs.

In at least the last two elections the Labor Party advocated putting a price on carbon and doing that through an emissions trading scheme. In at least one of those elections—the one in 2007—the opposition was advocating exactly the same thing. After years of neglect and inaction, then Prime Minister Howard was finally dragged into the 21st century by the member for Wentworth and others in the Liberal Party and convinced that Australia could no longer ignore climate change. What was John Howard’s answer at that time? His answer was pricing carbon through an emissions trading scheme. So the scheme announced by the Prime Minister two weeks ago reflects the economic consensus and previous political consensus that the most efficient and low-cost way to reduce carbon emissions in Australia is through a market based emissions trading scheme.

Our two-stage plan for a carbon price mechanism will start with a fixed price for three to five years before transitioning to an emissions trading scheme. A carbon price is a price on pollution. It is the cheapest and fairest way to cut pollution and build a clean-energy economy. The best way to stop businesses from polluting and get them to invest in clean energy is to charge them when they pollute. The money raised through the carbon permit scheme will be used by the government to assist households and industry. Every cent raised from the carbon price will assist families with household bills and help businesses make the transition to a clean energy economy.

We will stick with the facts in this debate and we will stick with the job of economic reform. We on this side understand that the facts are hard for the Liberals to face up to—the fact that an emissions trading scheme was Liberal Party policy; the fact that, back in 2009, those among the opposition caucus room voted to support the emissions trading scheme negotiated by the members for Groom and Wentworth; and the fact that an emissions trading scheme is the most efficient and lowest cost way to reduce carbon emissions. I do not expect those opposite to take my word for it. They should listen to their colleague the member for Wentworth, who has said repeatedly that he wants to see a market based solution and that the economic market consensus is around an emissions trading scheme as the most efficient and effective way of reducing carbon.

It appears that the opposition have no answer to those facts, so instead they are resorting to a scare campaign. But perhaps that is not altogether true. It seems that they do have an answer: direct action. How does direct action work? It seems that they do not like to talk much about that anymore, and now we know why. When you look at the figures that have been released by the Department of Climate Change today it is very obvious the opposition want to stick to their scare campaign and not talk about their so-called plan to reduce carbon emissions in any way in this debate. The figures from the Department of Climate Change say that the coalition’s direct action policy would cost over $30 billion, rather than the claimed $10½ billion. Even the $10½ billion was coming off the budget bottom line and out of taxpayers’ pockets. Under these figures the Australian average family would be $720 worse off under the direct action policy.

For all that hurt and pain for households, for all that cost to the budget and to taxpayers—and there is no assistance package in this direct action policy of the opposition’s—that plan is still only going to deliver 25 per cent of the carbon pollution abatement required for the coalition to meet the bipartisan target of minus five per cent. This is a complete sham; it is just a con job. The opposition know this because Treasury has told them already that direct action measures alone cannot do the job without imposing significant economic and budget costs. The opposition should spend less time on generating their fear campaign—which, after the Colonel Gaddafi comments, is starting to turn into a hate campaign; and that is something we have never seen before—and more time on developing real responses to climate change and reforming this economy and getting it ready. In the meantime we on this side of the House will stay focused on the facts and the work we need to do to develop the detail of a fair and balanced mechanism to price carbon and get our economy ready for the future.

Rowan Ramsey (Grey, Liberal Party) Share this | Link to this | Hansard source

It is fascinating to watch the Labor Party debate a subject they know nothing about. The last two speakers—the Minister for Trade and the member for Capricornia—have collectively mentioned the word ‘food’ only twice. I might just repeat what the matter of public importance is: ‘The impact of carbon tax on the Australian food industry’. While the member for Capricornia mentioned the word ‘food’ twice, I do not think I heard the word ‘agriculture’ come out of either of their mouths through the whole debate. As I said, that is what you get when people talk about something they know nothing about. One of the great issues for Australia and one of the great challenges for our farmers is that the party that is ruling Australia at the moment knows nothing at all about agriculture, its importance to the nation and its importance to the world as the industry that will feed a population which will double by 2050.

One thing I do welcome from the government is its recent announcements that it has decided to exclude agriculture—that was the one time they mentioned agriculture—from the carbon tax arrangements. I concur with this. I must say that it defies common sense that people do not to understand that agriculture is a closed circuit when it comes to carbon. Basically, when it rains, plants grow; plants take carbon out of the atmosphere; cows come along and eat the grass and it turns into grain; we ship the grain off to people to eat; those people eat the grain; it turns back into carbon, which turns into energy and heat, and some of it turns into some pretty unmentionable product that goes down the toilet; and the cycle begins again. It is a cycle of about two years.

I welcome the fact that the government say they are going to leave agriculture out of the picture. The only stumbling block is that they say a lot of things. It was only 10 months ago that the now Prime Minister said she believed in an ETS. Two months later she did not believe in an ETS. Leading up to the election we were never going to have a carbon tax, but here we are six months later and we have a carbon tax. So I hope they stick to their word on agriculture at least. But a carbon tax only makes sense—and I am sure that those on the other side would concur with this—if it alters people’s behaviour. That is why an understanding of agriculture is so important. Agriculture is worth around $45 billion a year to the Australian economy and it is largely an export industry. It also feeds our nation, and I hope to get back to that later in this MPI.

Let us have a look at the export industry. Anyone who understands agriculture knows that farmers are price takers: when we put our commodity on the market it does not really matter what cost we put on it in Australia; we will take what the market has to give us. If someone is producing that commodity somewhere else in the world cheaper, we have to come down and meet that market point.

On the point about changing behaviour, if we put up the price of fuel—and Australians use about two billion litres of fuel a year in production—by around 6½c a litre, farmers have no choice: they will still use the same amount of fuel. Already we are the most modern and efficient industry in the world. We use the best tractors in the world with the latest motors. The latest harvesters cost in the range of $800,000. It is not as if this is old technology. We are using satellite guidance. Our farmers have reduced farming to a one-pass operation. We use the least possible fuel, for good reason: it costs a fortune. One of the things we try to avoid using on farms is fuel. We could double the price of fuel and the net result would be the same: if you want food—and the world needs food—you are going to have to burn the same litres to get the product.

One of our great advances in farming is no-till farming. It and the use of chemicals has rescued Australian soils from degradation. It gets the tractors out of the paddock. We use much lighter implements. We go out and we spray the weeds. We do not work the earth anymore. We do not push it down the rivers. That is what modern farming is about. It is a wonder to go onto a modern farm, Mr Deputy Speaker, because you are looking at some of the most technologically advanced industries in the world. There is this picture in urban Australia, which we must repaint, that farmers are wandering around with the seats out of their pants and a hayseed hanging out the back of their hats. It is not like that at all. These are very modern, technologically advanced industries, and they have worked out how to cut their inputs to a minimum.

One of the biggest inputs for any farmer is the fertiliser bill . Not every farm size in Australia is the same, so I generalise, but I will talk about farmers that come from my part of the world. Typically they will be spending $100,000 a year on fertiliser. Fertiliser is a little bit like aluminium. We talk about aluminium being ‘solid electricity’. Fertiliser is not quite as bad but my understanding is that it is around 30 to 40 per cent responsive to the price of the energy that goes into it. So if we raise the price of energy, the price of fertilisers will inevitably go up by a considerable amount. You cannot farm without fertiliser. It is already the most expensive thing on our agenda. We would be farming with as little fertiliser as we possibly can. Artificially pumping up the price of fertiliser will not change behaviour and if it does not change behaviour then the carbon tax will not do what the government says it will do.

I said I would try to return to domestic food production, because it is very important. There is not an enormous amount of domestic food production in my electorate—after, of course, the production of meat. One of the great concerns of not only Australian farmers but the community at large is that they see an increasing amount of foodstuffs coming into Australia from overseas. We are feeling fearful for our future and our ability to make sure that Australia is self-sufficient in food. Sure, we will always have surpluses of wheat, we will always have too much wool and of course we will have too much beef. But in many of the other product lines we are beginning to wonder. For instance, one product that has been discussed here today and quite a lot recently is milk. But if you walk down the supermarket aisle you are exposed to a disturbing truth: there is an increasing amount of food coming in from overseas.

Labouring extra costs onto Australian farmers, Australian food, Australian agriculture—those things that those people on the other side of House do not want to talk about—will not increase the price of those things coming in from overseas. It will just make them more competitive with our farmers. We have already lost something like 17 per cent of the Australian farming workforce between 1996 and 2006. We are waiting for the results of the latest census, but I do not expect that figure to have changed too much. Seventeen per cent of our workforce, or 54,000 people, have been forced out of agriculture in those 10 years. It is not because they all got rich or retired and decided to head off to Bali to live for the rest of their lives; these people have been forced out because of the tough economic times and the tough realities of competing in world markets.

People talk about droughts and floods and all the rest of it. I care about that stuff and it is a reality, but at the end of the day it is the strength of the business model that will support Australian agriculture. If those businesses cannot make money, we are out of the show. In a world that is going to double its population by 2050, where we are losing prime urban land not just in Australia but all around the world, and where there is land degradation and we are losing water supplies, the challenge is out to agriculture to grow more than it has ever done before. What we are doing at the moment with his carbon tax is disadvantaging Australian farmers with the rest of the world and threatening to drive them to the wall. The margins in farming are infinitesimal. A farmer is lucky if he is making three to four per cent on capital a year. Who else would invest in an industry like that? If this government throws another cost onto them, that margin disappears. (Time expired)

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

There is no doubt that the National Party are full of gloom and doom. There is never a positive position for the rural sector. Like Hanrahan, it is always, ‘We’ll all be rooned.’ The position that carbon is not a problem and that we do not have to deal with it is not reality. The reality is that carbon is there, we are going to have to deal with it, the world is going to deal with it, Australia needs to deal with it and we need to deal with it right across our economy. That is the point and that is what this government is doing. The Liberal position has changed from John Howard, to Mr Turnbull to the position that they have now. It is an unsustainable position. They know that but they are trying to find something in a political sense.

The previous speaker, the member for Mallee, dealt with a couple of matters. Of course we have to use fertiliser, but there are people who are working hard at farming with a lot less fertiliser, a lot less sprays. There are people out there doing it. That cost is not going away, whether there is a price on carbon or not. That price is still going to be there and is still going to increase. We know that and those opposite know that, so it is a false argument to bring that into this debate. No-till farming, harvesting moisture—of course they are doing that. And the smarties out there are really into that in a positive way. Mechanical agriculture: more use of that is going to continue to help meet costs. Being able to produce more with less: we have seen farmers do that with water and there are a lot of people out there—a lot of very good farmers—doing that in a positive way. The member talked about the workforce. There was no bigger change in the workforce than when tractors replaced horses. If you want to look at statistics those are the biggest statistics to look for in agricultural change.

We really need to come to grips with getting a price for carbon. Calling it a carbon tax is probably a bit misleading at this stage. We really need to work on a carbon price that can be in place by 2012; we need to get legislation passed through this parliament so that can occur. A carbon price would be a market mechanism. It is incredible for me, from where I come from, to stand in this parliament and say the Labor Party is going to use a market mechanism to achieve an outcome, while the other side, the Liberal Party, is opposing that and have an idea that they are going to win government on it. I do not know where Menzies’ philosophy would fit into that thinking. It is a really interesting thing to stand in this parliament and think about that. But that is the position the Liberal Party are in in their political manoeuvrings. It is really quite a strange thing to have occurred.

Following getting a fixed price on carbon, there is clear intent that there would be a smooth transition to an emissions trading scheme. That is the government’s position; that is what we should be moving towards and that is what we are moving towards. Detailed issues including the starting price, the length of the fixed price period, and assistance arrangements for households, communities and industry will be addressed as we go through this debate. We need to have a debate based on facts, not fear. We need to get on to the facts about this issue that our country needs to deal with. We need to have a calm and rational conversation about what is best for Australia and how to tackle climate change and build a clean energy economy. We have certainly seen some of the worst aspects of the Liberal Party on the television today from the doorstops this morning.

The Leader of the Opposition should really be having a conversation where he is putting out his party’s position based on the facts of this debate and not about fear. The coalition’s direct action policy will cost $30 billion and ensure that taxpayers, rather than those putting out carbon, are the ones who pay. That is what the Liberal Party’s and the National Party’s positions are. They say that those that are polluting do not have to pay, but the ordinary taxpayers of Australia will pay $30 billion. Now when we start talking about who is going to get hit under what policy, it is their policy that will take the hit. Government rather than markets will pick the winners. It is really astounding that the Liberal Party has a position like that. There will be no investment certainty provided for industry. That is what industry tells me they want. A lot of industry leaders know the world is going to have a carbon price. There is going to be carbon. We are going to reduce carbon in the atmosphere and we are going to reduce what is producing carbon. Industry leaders want certainty so that they can get on with their decision-making and their industry-planning and their investments. Much needed economic reform will be ignored and replaced with this stop-gap political solution. Households will not receive any assistance to cope with the cost-of-living issues; I understand they will be slugged about $720 on their tax bills because of the Liberal and National parties’ policy position.

Under the Gillard government’s policy position, the people who produce the carbon will be the ones who pay. The market will pick the winners. We will sort out where we are going to go in the new world of reducing carbon. Industry gets investment certainty; households will receive assistance to help them with their household bills. We will look after communities and households. And the national economy will undergo significant change as we move to a clean energy future with certainty and a means of doing so.

Agriculture, which is being used by the National Party in this debate, is exempt from a carbon price, as has been repeatedly stated by the federal government. So their arguments are false; the argument on which this debate is based today is a false argument. Of course we went around looking at what carbon meant. In a report brought down by the House committee, Farming the future, we certainly went into some of those things. There was certainly one thing that came out of that report—that is, healthy soil, healthy food. That is certainly something that we need to get to our heads around.

No doubt, when a carbon price is worked out and we move to an emissions trading scheme, the agricultural industry may benefit from going down that path. In the report of that committee we certainly looked at those issues and the adaptation prospects and impacts of climate variability and climate change on agriculture. There could be a lot of positive things in that area. There could be a lot of opportunities into the future, especially for the farm-forestry area. We took evidence from Mr David Matthews, a farmer at Kilcoy, Queensland, who described its importance. He said:

… soil organic carbon is the building block for all vegetation.

Of course, he is exactly right.

This is an argument based on fear. The falseness of the debate will come back and really work against the Liberal-National Party, who are trying to have a debate on a political point. They will not win on that because this is too big an issue to just have a political position on. A carbon price will cut pollution and drive investment in clean energy. A carbon price is the cheapest and fairest way to reduce pollution and invest in clean energy. This Labor government we will always support those who need help to meet an increase in their cost of living—especially pensioners and the most vulnerable. (Time expired)

Debate interrupted.