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 the Government’s taxation measures on Australia’s competitive advantage and standard of living.

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

Thank you, Mr Deputy Speaker, for giving me the honour of proposing this MPI on our 21st anniversary. I compliment my seven colleagues, the seven survivors from the class of 1990 on this anniversary. When I think back over those 21 years, I wonder whether there has ever been a time just like this when we have had a prime minister who went to the people, faithfully promising no carbon tax while she was Prime Minister—not once, but several times—and then having her turn around just a short time later and recanting on that commitment.

I can recall over the years the l-a-w tax cuts from Paul Keating that never happened, but this is in fact probably worse. Yes, it is in the taxation field, and we know from experience that when Labor talks about taxes and tax cuts, it is simply not the truth, and when they talk about new taxes, they are likely to happen, and even when they do not talk about new taxes, you are going to get them And here is another example of a major new tax which Labor promised faithfully they would not implement—they would not do it. Now today it is the most important thing on their agenda.

The Prime Minister said more before the election than that there would be no carbon tax under the government that she led. She also said prior to that, on 25 June, that she would not pursue a carbon tax before there was community consensus on the issue. She said:

First, we will need to establish a community consensus for action.

               …            …            …

I came to that decision because I fundamentally believe that if you are going to restructure our economy so that we can deal with a carbon price and deal with all the transformations in our economy that requires, then you need community consensus to do so.

Who could say that there is community consensus in favour of the carbon tax today? Where is the community consensus? We have not had the committee that was going to be chosen from the phone book from every electorate to help decide the policy. There was no consultation with the community. The Labor Party went to the last election saying, ‘No carbon tax.’ The Liberal Party went to the last election saying, ‘No carbon tax.’ The Nationals went to the last election saying, ‘No carbon tax.’ There was no community discussion. There is no consensus that there is reason to have this monumental change of heart. It is just because the Prime Minister seemingly has had to do a dirty deal with the Greens—another dirty deal with the Greens.

It is also interesting to note that after she had done a deal with Senator Brown, after she had signed the agreement with the Greens, the Prime Minister said in question time on 20 October:

Yes, I do commit to keeping the promises made at the last election.

After the election, after the deal, in this House in front of everyone here and filled benches behind her—and they are not filled now; the members have all left—she promised then that she would commit to keeping the promises made at the last election. The frequent liar points start to click up—a promise made, a promise broken.

So where is the community consensus? It is simply not there. Was the community consensus evident in the rally outside yesterday with more than 3,000 people present? None of those people were supporting Labor’s carbon tax. Those people are now being described as extremists and radicals, not representatives of the true people, radicals and extremists like the member for Robertson and the three busloads who came from her electorate, making the point absolutely clear. People are being vilified because they exercised their democratic right to have their say. They are not people who, like the trade union movement supported by the Labor Party, smashed down the doors of Parliament House and were defended by members opposite. They did not resort to violence. They were not there with the former trade union boss who was around agitating this kind of a response, this level of debate. These people were putting their case and putting it strongly because they believed in it. They knew they did not have to smash down the doors like the trade union movement to make their point. They did it fairly and decently.

This government is about to do something truly remarkable. They are going to introduce a tax on Australians that is supposed to change the temperature of the globe. What a remarkable tax! Australians on their own are going to be able to cool the planet because we are going to pay another Labor tax, a tax on carbon in Australia that is supposed to cool the planet and make it rain again. Some people are even saying it will stop earthquakes and tsunamis. This is a remarkable tax! I have never seen a tax like it. It is so powerful that it can do all these things.

I have never heard of any suggestion that it was a tax that created the last Ice Age. It was not the tax that created the rain in the Biblical Flood. I do not think that it was a tax that dried up the Sahara Desert. But now we are going to have a tax that will fill the Murray and make it rain again and restore all goodness to the earth. I do not think that it was coalmining or motor vehicles or air conditioners that created the Sahara Desert either, but now we have found the cure, a magic cure—a carbon tax on Australians. We alone, with our tiny insignificant part of the world’s population, can fix these problems with a new tax.

I have heard lots of novel excuses from the Labor Party for having new taxes, but today’s new reason as to why we must have this tax really takes the cake. The Prime Minister said today that we have to have this new tax because it will make us more prosperous—a tax that is going to make us more prosperous! With $12 billion worth of tax we are all going to be richer; we are going to be better off. What a remarkable tax this is—it is so extraordinary. I cannot help but ask: where is the science that proves that this wonderful new tax will deliver all of these great things? We are told to believe the scientists. Produce for me a scientist that says that a carbon tax on Australians can cure the world’s climate problems; that a tax on Australians will lower the sea level or reduce world temperatures. It is simply a nonsense. It is a tax like all other taxes: it raises more money so that the government can spend it.

And we have been told how they are going to spend it. We have been given all sorts of answers. At one stage two ministers were saying that 100 per cent of this tax was going to be paid in compensation. Later it was said that only 50 per cent was going to be paid in compensation and the other bit was going to go on new green programs. That seems to me carte blanche. I do not know that I could really trust the Labor Party with another $6 billion to spend on green programs—new green programs like pink batts, a Green Loans debacle or a cash for clunkers scheme. What about the solar panel fiasco? We could spend more money on that. The government is still pursuing this line even though it was shown in today’s press that the $14 billion that has so far been spent on green programs in this country has not reduced CO2 levels one bit. Most of the projects that have been funded have actually increased CO2 emissions. The reality is that this tax will be exactly the same.

So who is going to pay this tax? The other great myth of the government is that the people who are going to pay this tax are in fact evil polluters—people who cannot be relied up; people who do not matter in our economy. Just who are these evil polluters? They are the manufacturers who make our steel and the products that we use. They are the food processors who make the food that we eat. They are the electricity generators who generate the electricity to power our houses and the things that we do. They are the people who create the jobs that make our economy strong. These are the evil people who Labor says will pay the tax.

But if you want to look at the reality: the ASX has said that the top 200 companies will pay $3.3 billion under Labor’s proposed carbon tax. That leaves $9 billion to be paid by small business and by households—by ordinary Australians. They are going to have to pay $9 billion of the tax as Labor proposes it. So it is not the remote, ugly, big polluters that are going to have to pay; it is ordinary men and women; families—

Bruce Billson (Dunkley, Liberal Party, Shadow Minister for Small Business, Competition Policy and Consumer Affairs) Share this | Link to this | Hansard source

Good people.

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

good people; people who want to drive their car to see their sick mother; and people who want to go to the shops to buy some food and groceries. And the people have to be punished for this sort of activity—‘they have to be taxed; their behaviour has to be changed; they are evil; they are polluting’. Their behaviour has to be changed by a gigantic tax. But the government is now being told by everyone that this tax will not really work. The economists were out in force today to explain that this tax will not achieve its objectives. The March edition of Quadrant’s economic survey says:

ICAP’s senior economist Adam Carr said a carbon tax would have natural negative effects for both inflation and economic activity in Australia.

He said:

A carbon tax is inflationary, there’s no way around that.

He also said:

There is also no way around the fact that it will cut growth. I mean, where are the large scale viable energy alternatives in the short to medium term? So, really, all putting a tax on carbon will do is lift inflation; it will lift the price or the cost of economic activity. This in turn will cut growth and reduce our standard of living.

This is the kind of ‘wonder’ tax that the government wants to impose upon the Australian people. Economists say it will not work. If you give all of the money back to people by way of compensation, they will not try to change their behaviour, so it will make no difference whatsoever to CO2 emissions. Indeed, it will probably make them worse, because one of the things that this tax will do—as we heard today in question time and as we have heard in the media over recent times—is make doing business in this country more costly.

It will give companies every possible reason to locate their manufacturing industry and create jobs in other places. Toyota Australia said that the carbon tax will ‘leave them in a corner with nowhere to go’. The Australian Food and Grocery Council wondered whether the government even wants food and grocery manufacturing in Australia. The Australian Housing Industry said: ‘It will add $6,200 to the cost of an average home.’ OneSteel observed that a carbon tax ‘will significantly disadvantage Australian manufacturers’. BlueScope described the carbon tax as ‘the steel breaker’.

How can the government reasonably claim that this is a good and sensible thing to do? But let me give you another quote: ‘The carbon tax will not be good for tourism.’ That was not from some evil polluter or some big industry or some big employer; that was said by the federal minister for tourism, Mr Ferguson. When he met the Indian minister for tourism and culture, Ambika Soni, in India on 6 November 2008, he said a ‘carbon tax on aviation is not good for tourism’. So even the government knows that this is a job-destroying tax.

This is a tax that will hurt Australian people. This is a tax that will drive Australian jobs overseas to factories where the CO2 emissions will be much greater than in an environmentally sensitive country like Australia. When you close down a cement factory in Australia and open up one in China to supply cement to Australians you increase CO2 emissions. If you close down an Australian aluminium refinery, you may cut emissions in Australia but you increase the emissions in other countries where the emissions are much greater.

I visited the smelter in Kurri Kurri last week with Mr Baldwin, one of the members nearby, and we were impressed by the very real concerns of the trade union representatives we met and the management of the firm about the future of their jobs. They know that their owners will not invest again in Australia if we have this tax that other countries do not have. They know the next investment decisions will be to go to countries like Qatar, China or Indonesia, because they do not have such a tax. The uncertainty created by the government’s floating of this stupid carbon tax idea, this cure-all—the carbon tax that is going to save the world—has already damaged confidence in Australian industry and forced people to make decisions to invest in other parts of the world.

This is a tax that will not help the environment. This is a tax that will not make Australia prosperous. This is a tax that will not do things for Australian families. This is a tax that will destroy Australian jobs. This is a tax that will hurt Australians, and it should be rejected by all Australians. (Time expired)

Bill Shorten (Maribyrnong, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

I invite the members of the opposition to stay and listen a while and learn a bit. I listened carefully to the contribution from the current Leader of the Nationals and I would like to put forward the proposition in the next few minutes that our government’s taxation measures are having a positive impact on Australia’s competitive advantage and our standard of living.

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

Mr Hartsuyker interjecting

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

The member for Cowper will remain silent.

Bill Shorten (Maribyrnong, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

Well, we can all pray! In advancing this proposition, I would like to put up six submissions in support of it. I will address the Leader of the Nationals’ remarks about carbon pricing, but I also want to examine, in the course of this MPI, the inconsistencies in the opposition’s attitude to climate change. I would also like to register my concern about the climate extremists—

Darren Chester (Gippsland, National Party, Shadow Parliamentary Secretary for Roads and Regional Transport) Share this | Link to this | Hansard source

Mr Chester interjecting

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

The member for Gippsland!

Bill Shorten (Maribyrnong, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

the lunatic fringe, which some in the opposition are willing to—

Darren Chester (Gippsland, National Party, Shadow Parliamentary Secretary for Roads and Regional Transport) Share this | Link to this | Hansard source

Mr Chester interjecting

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

The member for Gippsland will remain silent also.

Bill Shorten (Maribyrnong, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

To support the positive impact of our taxation measures in Australia, I would like to use as reference the concern some of the more thinking elements of the coalition must be feeling about the association of their leader and others with the lunatic fringe, in terms of some who attended the rally yesterday. I would also like to examine and shed some light on the tax myth that somehow—

Darren Chester (Gippsland, National Party, Shadow Parliamentary Secretary for Roads and Regional Transport) Share this | Link to this | Hansard source

Mr Chester interjecting

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

The honourable member for Gippsland will remain silent.

Bill Shorten (Maribyrnong, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

the Liberal Party and their country allies, the Nationals, have an attitude of lower taxation than Labor, and point to the facts which very much contradict that case. When we look at the competitive position of the government’s taxation measures, I would also like to examine what we are doing with the minerals rent resource tax and some of the other positive changes that we have made since 2007.

Returning to the first of the submissions as to why the impact of our taxation measures will be positive on Australia’s competitive advantage and our standard of living, we must of course talk about the need to establish a carbon price. We are putting a price on pollution because it is the right thing to do, not because it is easy or popular. Big reforms in Australia are always hard fought and are met with well-resourced scare campaigns in favour of the status quo. Action on climate change was never going to be painless—we knew that before we announced it—but governments are elected to do what is right, not what is popular. Sadly, the Leader of the Opposition blindly refuses to accept that a low-pollution future is in Australia’s national interest, because he does not believe that climate change exists. So, just as putting in place superannuation was the right to thing to do—although it was opposed by those opposite—and just as removing the tariff wall was the right thing to do, pricing carbon and building a low-pollution future is, again, the right thing to do.

It is a fact that in Australia we produce more carbon pollution per head of population than any other country—

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

That’s not true.

Bill Shorten (Maribyrnong, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

It is a fact—

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

That’s wrong.

Bill Shorten (Maribyrnong, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

The Leader of the Nationals had 15 minutes to speak; if he regrets he did not make his points, I would rather he took this opportunity to at least listen to ours. It is a fact that our big polluters create more pollution per head than any other country in the world. In order to start turning this around, we need to start making the biggest polluters pay so that they—

Darren Chester (Gippsland, National Party, Shadow Parliamentary Secretary for Roads and Regional Transport) Share this | Link to this | Hansard source

Don’t go down with the tax, Bill.

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

I warn the member for Gippsland!

Bill Shorten (Maribyrnong, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

We want to make sure that the largest polluters are encouraged to invest in lower carbon pollution efficiencies—and I appreciate the member for Gippsland’s attendance in the chamber!

Darren Chester (Gippsland, National Party, Shadow Parliamentary Secretary for Roads and Regional Transport) Share this | Link to this | Hansard source

I can’t sit here and be quiet, sorry!

Bill Shorten (Maribyrnong, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

Unfortunately, if we are forced to wait, the costs will be far greater. There are no soft options and there are no cost-free ways to act.

There are two certainties about climate change: all nations including Australia are going to have to take action, and the longer we leave it the harder and the costlier it will be. I think there is a great danger to the Australian economy in having to play catch-up if we blindly refuse to change now, when we have the time to change. I do not think there is a ‘do nothing’ option, contrary to what the coalition would have people believe. Ignoring this situation is a bit like ignoring an illness until it becomes too much. Like treating an illness, early treatment is always better than later remedy.

We do believe that the large polluters should pay for their pollution. We think that they should look for less polluting ways to operate. We believe that every cent paid by the large polluters should go to families, businesses and climate programs that will help drive that transition to a clean energy future. This is all about making Australia’s largest companies pay for their pollution so that they have an incentive to improve their performance. It is not going to come out of the pay packet each fortnight, as some in the coalition would have people believe. There will be changes, but we will give people assistance so that they can be supported in the transition to a lower carbon economy.

There have been plenty of references to the question of which party is the party of the markets. What we believe is that a market based mechanism to reduce carbon emissions will provide the best chance for Australia’s standard of living to improve. It will certainly have less of a negative consequence than the direct action scheme of those opposite and it will be less damaging than the ‘no change’ option, which many of the climate change sceptics believe in. Lord Stern has said that the cost of inaction will be greater than the cost of action. If the views of those opposite prevail and defeat the proposals we have for setting up a carbon price, I believe that Australia’s prosperity and our future jobs will be at serious risk.

I think that the opposition’s position is, sadly, saturated in contradictions. On the one hand they get involved in organising climate change sceptic rallies, whilst on the other hand they want to put forward their direct action on climate change policy. On the one hand we have a Leader of the Opposition who thinks that climate change is ‘crap’ or, at least, that the science is not settled, whilst their alternative leader, the member for Wentworth, has made belief in climate change central to his political brand and values.

On one hand we have the daily media stunts of the opposition, designed to scare people about the impact of a carbon price, while at the same time they deny that they are running a scare campaign. On one hand we see the crocodile tears feigned by the opposition about cost-of-living pressures, but on the other hand they have the unfunded direct action package that would blow a multibillion-dollar hole in the budget and that would have to be paid for by taxpayers.

On the one hand—

Michael McCormack (Riverina, National Party) Share this | Link to this | Hansard source

Mr McCormack interjecting

Bill Shorten (Maribyrnong, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

I appreciate the member for Riverina is new to politics.

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

The member for Riverina is not in his seat—unless he has moved.

Bill Shorten (Maribyrnong, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

I was hoping my points were moving him. In 2007 Prime Minister Howard went to the election with an emissions trading scheme policy. The climate issue has progressed by four years and we see the coalition has regressed by many more years in their categorical opposition to an emissions trading scheme. On one hand, the coalition would have you believe that they are the party of free enterprise, but on the other hand they staunchly oppose a market based mechanism in our economy to help lower the amount of carbon pollution.

On one hand they feign interest in international engagement and good global citizenship, but on the other hand they like to see Australia stand idly by while the rest of the world takes action and we become a global laggard. On one hand they say that Australia needs to be a leader in innovation; at the same time, they do not want to see anything done for industry to gear itself up for a clean technology and green-collar economy of the future.

The bottom line is that they are on the wrong side of history in this debate for one simple yet very straightforward and powerful proposition: what they are putting forward to Australia does not work in our future interests. Forgetting the political analysis for a moment, if we look at the debate on logical grounds—you could call it the front-bar-at-the-pub common sense test; call it what you like—we see that in any analysis that steps back from the daily changing headlines the coalition’s proposition does not stack up because of their contractions and contradictions on climate change and pricing.

I think they are also getting found out for their association—and not all of the people who are opposed to this are cranks—with some of the extremist groups who fronted up for their association in yesterday’s rally, if I can call it a rally. Many regard the Leader of the Opposition’s association with some of those extreme views as unbecoming of a leader of a major political party in Australia. I did wonder about that particularly obnoxious, nasty placard, which is in the Fairfax papers, which the Leader of the Opposition, the member for Mackellar, the member for Indi and an assorted raggle-taggle bunch of coalition MPs were standing in front of.

Jamie Briggs (Mayo, Liberal Party, Chairman of the Scrutiny of Government Waste Committee) Share this | Link to this | Hansard source

Mr Briggs interjecting

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

The member for Mayo will remain silent.

Bill Shorten (Maribyrnong, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

What we saw was a number of coalition MPs—I think the Leader of the Nationals was standing in the Leader of the Opposition’s shadow, as he is wont to do—with a very nasty poster behind them. I thought, being charitable to members of the opposition, that perhaps they had been set up and that somehow an extremist had come in behind them to embarrass them. But I found out from other reports about the rally that the chap with the poster—whatever you thought of it—had been standing there and the Liberal MPs came and stood in front of it.

Then I went further. I had a look at the website of the No Carbon Tax rally group. The website was advertised on some of the T-shirts that members at the rally were wearing. This unusual website includes a 10-second guide to the world of climate change sceptics and a sceptics handbook—that would surely be one of the shortest books in the English language, the world of climate change sceptics. They say that CO2 is not pollution and does not need to be reduced in the first place. They say it is natural, we exhale it and it is needed by plants to grow. Then they say that even if CO2 were dangerous—which is an interesting concession—and even if we reduced it successfully in Australia or even globally, there is no physical evidence that it would have any beneficial effect on the climate. They describe global warming as the great 21st-century climate change folly. The website has a link to the climate change sceptics shop—that would be fun to shop at; the Climate Sceptics political party—I do not know if they are registered yet; and Menzies House. Some of the slogans yesterday were: ‘CO2 is just tree food’, ‘carbon tax is a tax on fresh air’, ‘don’t tax the air we breathe’, ‘CO2 really ain’t pollution’ and ‘climate change is crap’.

What concerns me is not that some people hold unusual views—that is a factor in our democracy; what concerns me is that the alternative government of Australia chooses to associate itself with some of these extreme views. I can only wonder if indeed the Leader of the Nationals will be seeking policy advice from Charlie Sheen next. He is not doing the sitcom; he could dial in to shadow cabinet every week, or maybe just once a month, to give the guys a bit of a leg-up.

Just as what we saw yesterday was ridiculous, another myth that the opposition pedal about the tax situation in Australia is that somehow if they were in power taxation would be marvellously low and we would be led to a land of milk and honey under the National Party and the Liberal Party and that, by contrast, Labor is dangerous on taxation. Let’s just deal with this myth. In 2007, when the Howard government was defeated at the polls, Commonwealth taxation as a proportion of the GDP was 23½ per cent. Now, in 2009-10, it is down to 20.3 per cent. Ladies and gentlemen, the facts do not lie. We have seen this driven in part by the economic slowdown in corporate revenue falls and the tax take but we have seen significant personal tax cuts. The tax burden in Australia has us measured as the sixth lowest in the OECD.

Under Labor, we have a better tax regime and we have a better chance to reform the economy. Someone who is on $50,000 this year is paying $1,750 less tax than in 2007-08. But, of course, we have not forgotten the pensioners and we have increased the pensions. We have increased the pensions by $128 a fortnight for single pensioners and around $116 a fortnight for pensioner couples. We are making sure there is an education tax refund, we have the Medicare Teen Dental Plan, the childcare rebate and we are improving the returns for people who get family tax benefit A. We have extended the tax refund to school uniforms, there is paid parental leave and we have not taxed large companies in order to get the paid parental leave. We are providing paid paternity leave for fathers, and there will be further pension increases in the course of this year. We want to make tax returns easier. This means there will be standard deductions of $500 rising to $1,000. We are providing tax relief to savings accounts.

One of the ways we are doing this marvellous list of accomplishments is through the minerals resource rent tax. What we are doing is ensuring that the benefits of the minerals boom are spread throughout the whole economy. We are doing this through making sure that the proceeds of the MRRT will go to infrastructure in the states of Western Australia and Queensland and elsewhere. We are also making sure that we can increase superannuation for 8.5 million Australians.

What we are doing is working like Trojans to improve our tax system. We want to boost our national savings. We want to increase our superannuation. We want to decrease company tax rates. The Henry review made clear that it was far wiser to tax immobile resources than mobile resources because mobile capital could be moved all around the world and it was a far better idea to tax immobile resources such as minerals. What we are doing with that is moving our taxation system to reallocate it to fall more on the immobile resources, and we are seeking to lower the corporate tax rate. We want to provide superannuation for low-income earners. We want to raise the concessional caps. We want to raise the level of the superannuation guarantee from 70 to 75. We want to introduce a tax discount on interest. We want to see the phasing down of international withholding tax. (Time expired)

Andrew Robb (Goldstein, Liberal Party, Chairman of the Coalition Policy Development Committee) Share this | Link to this | Hansard source

Australians need to clearly understand that this decision to introduce a carbon tax is driven solely by politics—opportunistic, cynical and totally self-serving politics. It is the price of a single vote in this chamber. That is the nub of it. It is the price of saving the Prime Minister’s political skin. And the price will not be paid ultimately by some anonymous nasty big business; it will be paid by Australian families, by Australian seniors, by all of us. It will be paid in higher costs of living, in lost jobs, or in both. For every million dollars raised, $100,000 will, by agreement, go off to the United Nations. Can you believe this? One hundred thousand in every million will go off to the United Nations. That is akin to spending it on pink batts. It is like throwing the money away. This is a self-serving, cynical move by this government.

This debate is an argument about who can deliver a five per cent reduction in CO2 emissions by 2020 with the least impact on electricity prices and on jobs. It is about incentives, really. In going it alone on a carbon tax and then, subsequently, an emissions trading scheme, the incentive is to shift emissions and jobs overseas. In going with direct action, the incentive is to reduce emissions in Australia in a way which reduces global emissions without increasing electricity prices or costing jobs. This is a fact which is consistently ignored, misrepresented and lied about in the arguments put by those opposite. There are alternatives. There is a better way, and we have it. The crux of the better way is the fact that we are going alone on this measure of a carbon tax and then an emissions trading scheme.

The key flaw in the Gillard government’s decision to impose an $11 billion tax every year on Australians is the failure of the rest of the world, and in particular our major competitors, to come with us, to act in unison. Yet we have been lectured in a sanctimonious fashion for years and years and years by those opposite about the imperative of a global scheme. We heard it endlessly from the former Prime Minister, from the former Deputy Prime Minister, from the former minister for climate change. They said: if emissions are to be reduced, and reduced in the most economically efficient manner and in a way which will reduce global emissions, we had to have a global scheme. And they were right. If we had a global agreement which included our major competitors it would mean Australia, with its cheap coal, would be one of the last countries to transition away from coal for electricity generation. This occurs because if a global emissions trading scheme or a global carbon tax scheme was in place, the world’s emissions would be cut fastest and at least cost by Australia buying international emissions permits rather than converting its own power stations. It is all about comparative advantage. It is basic economics, but you would not know it from the gobbledygook about the markets that we have heard from the other side.

It is basic economics that if the rest of the world have got higher cost emissions, those plants will be phased out sooner than our plants. Yet this has been totally ignored; in fact, I do not think they really understand it. And that means that we could have coal fired power generation that will be scrapped possibly decades ahead of what could happen, if we go it alone. We could have 30 or 40 years of coal fired power generation scrapped when, if there was a global agreement, other countries would be scrapping their coal fired power generation and we would still have cheaper electricity with our hundreds of years of cheap, good quality coal. But, no, we will scrap our industries and send them offshore—our lead smelters, our zinc smelters, our aluminium smelters, our cement works, on many of which whole towns rely. Whole communities, people’s lives, their families, their grandparents, the kids, the schools, the community spirit—gone because of political expediency. That is the sole reason they have stepped aside from what they told us for years must apply—a global scheme, otherwise we are not competitive internationally—to go unilaterally to save their skin, to get that one vote up there.

One Green vote in this House to save your political skin. It is pathetic. It is self-serving. It is cynical. It is irresponsible. At the cost of Australian jobs and at the cost of the living standards of Australians, you are prepared to do what you are going to do: make the biggest structural change in our history, scrap coal fired power plants years before they would, scrap all these other industries, cost us tens of thousands if not hundreds of thousands of jobs—all in the interests of saving your political skin.

Acting unilaterally will be irrational, and a very costly adjustment in Australia to the great advantage of our competitors. Acting alone with a tax is not rational. Acting alone ignores the fact that the market they endlessly parrot on about is now a global market. When they talk here, preaching to us about the marketplace and the need for market forces, they are assuming that the market we are talking about is Australia. We are now in a global market, okay? In case they do not know, we are in a global market.

This means that we cannot quarantine Australia from the world market. It is like putting a carbon tax on in Victoria and no other state, and then all standing around scratching our heads wondering why hundreds of jobs and lots of industries are moving into New South Wales, South Australia and Queensland. It is the same thing: we are going to put a tax on Australia and scratch our heads, wondering why jobs are going to move into China, Malaysia, Thailand and India and into all of the neighbouring regions, and why our competitors around the world are getting a free run.

This is irresponsible, this is inane and this is naive. They do not know what they are talking about, and their economics is not even at a prep school level. They misrepresent it and they misunderstand it. We have a situation where the former Prime Minister understood it, and that is why when he was so disconsolate after the Copenhagen round that he gave in to the urgings of those opposite to scrap a global scheme—he suffered accordingly.

He understood it and industry understands it: if you want to change global emissions you need a global agreement. The Europeans, in their stupidity, have proven this. Since 1990, the Europeans’ emissions from production have fallen flat—no change. They are priding themselves and are so pleased with themselves that they have had no increase in emissions of production. But their consumption of carbon has gone up by—only—44 per cent. What we have seen is a hollowing out of manufacturing in Europe, and it has all gone to China—emissions from Europe have gone to China.

As sure as night follows day this carbon tax will see a hollowing out of manufacturing in Australia. A global agreement must include our competitors. Who are they? Countries like Brazil, the biggest global producer of iron ore, or countries like Qatar in the Middle East—the biggest producer of gas. There is Sakhalin in Russia, which also produces gas. There is North America, and in Africa countries such as Cameroon, with huge oil and iron ore deposits. This is a government which is going to put us at an enormous disadvantage, undermine the great opportunities this country offers and kill the morale of so many people. This is a government which is irresponsible and is acting solely out of political motive. They must be condemned. (Time expired)

David Bradbury (Lindsay, Australian Labor Party, Parliamentary Secretary to the Treasurer) Share this | Link to this | Hansard source

I rise to take advantage of this opportunity to speak against the matter that has been put before the House this afternoon.

The opposition, in their matter of public importance, have come forward asserting that the taxation policy of this government has in some way jeopardised the future living standards of Australians. I make the point that my colleague the Assistant Treasurer made a little earlier, and that is that one of the significant initiatives that we have undertaken in relation to taxation is the introduction of the minerals resource rent tax. We are working through the process of introducing that reform, and in doing so will undertake a taxation reform that will ensure the Australian people are able to secure a reasonable return upon the exploitation of our resources.

This was a tax that was recommended by the Henry review. The Henry review recommended that we should shift our taxation base away from more mobile factors of production and shift taxation to those areas that are more fixed. In that very way this government has brought forward a proposal that will not only introduce a minerals resource rent tax but cut corporate tax and company tax.

We find ourselves in the bizarre situation where the Liberal Party—supposedly the party of business—would like to parade themselves around as being supportive of business, and in particular, small business. But when it comes to company tax, we have a proposal to cut company tax and they want to stand in the way. They want to block a tax cut for companies. In doing so, they want us to do what they did in office, and that is to walk away from the great opportunity to tap into the mineral resources that are currently being exploited at a great rate of knots in this country as a result of the mining boom mark 2.

We are determined to take advantage of this opportunity; we will lock in those gains in the form of the minerals resource rent tax, and we will secure higher living standards for Australians through an investment in their long-term future through retirement savings.

In terms of the broader question of tax, I offer a few comments in relation to the overall tax burden across the economy. This government has made a commitment to retain taxation levels, or to ensure that taxation levels do not exceed, on average those levels that were in place when we came into office. To emphasise that point, the ratio of tax to GDP dropped from 23.5 per cent in 2007-08 to 20.3 per cent in 2009-10. So for all the discussion about taxation and the great burden of taxation that this government is supposedly imposing on people, the facts are facts, and those facts demonstrate that when it comes to the proportion of tax to the size of the economy we have lowered the burden of taxation in this country. Putting all of the rhetoric to one side, those are the facts.

I want to address the issue of the carbon price, because this is very much central to the discussion. When it comes to the carbon price, there will be many Australians all around this country who will be somewhat confused by the adversarial nature of the debate that we have been engaged in in this country. But to those Australians I say this: ask yourself a simple question. Do not be distracted by so many of the furphies that are brought forward by some of the extremes in this debate and, in fact, by some who understand the issues but seek to obfuscate and to confuse people. Ask yourself this question: do we believe as a nation that we will be able to continue to rely upon fossil fuels the way we do today into the future—10 years, 20 years, 30 years or 40 years into the future? Do you believe that we will be able to continue to rely on fossil fuels at the same rate that we currently do? Most Australians will conclude that the answer to that question is no, and if your conclusion is no then you are faced with a challenge, as this government is faced with a challenge. That is the challenge of how we best prepare for that future, a future where we as a nation will not be able to be as dependent upon fossil fuels as we have been in the past. There is much evidence, when it comes to preparing for that massive restructure that this economy will need to undertake, of the benefits of early action, regardless of international action. We support and encourage international action, but the benefits for the Australian economy will be there if we take early action.

There have been many parallels that have been made in relation to free trade. Sometimes when the economic reform train leaves the platform there are people left on the platform. We saw, when the Fraser Liberal government left office, that it had failed to confront some of the challenges in relation to free trade. We saw the Hawke and Keating governments tackle those issues. When the Hawke and Keating governments tackled the issues of free trade and tariff reform, the same voices of dissent and opposition came forward and said, ‘This will cost jobs.’ The same voices of dissent and opposition came forward and said, ‘We should not act ahead of the rest of the world.’ If we look back on those reforms and the benefits that they have delivered to the living standards of all Australians, the evidence is emphatic. All of the pretenders on that side of the parliament now like to pretend that they were hitching a ride on that train as it left the platform when it came to the economic reforms of the 1980s. They want to try and claim that mantle. They missed the train then, and today they are in danger of missing the train again.

Some of the smarter types on that side understand this, and one of the great challenges that they have from a public policy perspective and from a political perspective is that they are so divided on this issue. There are two camps in the Liberal Party. There are those that believe that climate change is real, that we need to take action and that the best way to do it is with a market based mechanism. They would consider themselves to be the true Liberals in the true Liberal tradition. Challenges of this nature, they would say, should be dealt with with a market based mechanism. They seem to be hiding at the moment, but I know that they are there, because when it came to the leadership ballot last time round Tony Abbott won by only one vote on this issue. The opportunity to vote on these issues will come again. But let us talk about the other camp. The other camp are the sceptics, and they are the ones that appear to be in the majority at the moment.

But the great difficulty that both of these camps have is that they cannot actually go out and sell what they believe in their heart of hearts, because it is not the Liberal Party policy. It is not the coalition policy. The coalition believe—or so they say—in reducing emissions by the same amount that we are committed to: five per cent by 2020 on 2000 levels. If you are going to try to achieve those cuts, you cannot argue the line that we see so many of you trying to argue: that climate change is not real. If it is not real, why are you wasting $30 billion of government funds—taxpayers’ funds—on a direct action policy that is an absolute sham, involves importing carbon credits from offshore and, in the end, will actually lead to an increase in carbon emissions by 17 per cent? That would mean that each family in this country will pay indirectly through their taxes—it might not be a specific levy, but I tell you what: indirectly they will pay—$720 to fund a climate change policy that is supposed to reduce emissions by five per cent but will increase them by 17 per cent.

It is a sham, and we will spend the next two years of this parliament shining a light on this sham. Those same people that found the courage to support action on climate change in the last parliament will be called to action, and they will be called to account. There will be people in electorates around this country—like the member for Bennelong, the member for Macquarie and the member for Brisbane—who will have to account to their electors, who believe that action should be taken on climate change. I will tell you the best evidence that the electors of Bennelong feel that way: they managed to convince even former Prime Minister John Howard that he needed to take action on climate change and, to his credit, he proposed to do so. And do you know what? As you all run away, scurrying away like cockroaches under the light, you will miss the train of economic reform and you will have to live with that. I tell you what: we will make you pay for that. In the same way as those that missed the boat last time round continue to pay, we will make you pay. (Time expired)

Consideration interrupted.