Michelle Rowland (Greenway, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Climate Change and Energy Efficiency. Will the minister outline how the government's plan for a carbon price can help households and business transition to a clean energy future? How has this been received and what is the government's response?

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

I thank the member for Greenway for her question. The government plans to introduce a carbon price because it will cut pollution and drive investment in clean energy in the future. Importantly, it will do so at least cost to our economy, to businesses and to households. On this point, this morning the Prime Minister and I received letters from an international group, the Institutional Investors Group on Climate Change. That group comprises 72 members with assets under management of about $8.8 trillion—

Opposition Members:

Opposition members interjecting—

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

something the coalition seems to believe to be trivial. The group advises its members on investment risks and opportunities with respect to climate change. In their correspondence, the group had this to say:

Evidence from leading economists including Sir Nicholas Stern and your own Professor Ross Garnaut, have clearly articulated the potential costs of inaction and the economic case for reducing emissions to avoid dangerous climate change. As whole of economy investors, this is evidence we must respond to.

The correspondence goes on to advocate that a market mechanism which prices carbon is the least cost way to cut pollution levels. Support for a market mechanism is consistent with the views of senior market economists, with leading business groups and with the findings, a week ago, of the Productivity Commission. The Productivity Commission said:

… the consistent finding from this study is that much lower-cost abatement could be achieved through broad, explicit carbon pricing approaches, irrespective of the policy settings in competitor economies.

That is a clear and unequivocal finding that a market mechanism is the cheapest, lowest cost and most efficient way for us to be reducing our pollution levels and driving investment in clean energy.

From a different part of the debate, today the chief executive officer of the Victorian Council of Social Services, Cath Smith, said:

It is time for Australia to adopt a price on carbon. It is clear that this is the most effective, efficient and fair option on the table to both tackle climate change and put the onus onto our biggest polluters and energy users to change their behaviour, while delivering compensation to people most at risk of disadvantage.

The conclusion from all of the commentary is very clear—that a carbon price is the fairest, the cheapest and the most effective way to cut our pollution at the least cost to our economy.

The issue of 'least cost to the economy' translates to 'least cost to households' and 'least cost across the economy to businesses'. A carbon price also generates revenue to support households as well as businesses. In contrast, the Leader of the Opposition has made it clear that he supports a subsidy-for-polluters policy paid for out of taxpayers' money. The Leader of the Opposition has also made it absolutely clear that he would remove any assistance provided by government to pensioners and to households—that is, he is going to claw back the pension increases, he is going to claw back increases in family assistance and he is going to claw back any other options to deliver that assistance—in the form of tax cuts, for example. You should recognise that households deserve the assistance the government is indicating it will provide and that you must not claw it back from them. (Time expired)