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

The government is committed to introducing a price on carbon, and the 2011-12 budget makes some changes to existing climate change programs to better align with that objective. Introducing a price on carbon is a key reform for the government. The budget makes a number of changes for the Climate Change and Energy Efficiency portfolio to better align with the government's objectives. One of the changes within the budget is in relation to the National Solar Schools Program, which has assisted more than 2,600 schools. The program will close earlier than had initially been planned for. It will close in June 2013, generating a number of savings, including creating funding opportunities for energy efficiency, greenhouse and energy reporting, and Solar Cities programs.

Overall, departmental operating funding, of the appropriation funding, will total $435.1 million in 2011-12. That comprises operating funding of $142.3 million, down from $218 million in 2010-11; departmental capital funding of $11.3 million, which is down from $50.4 million in 2010-11; and administered funding of $289.5 million, down from $683.7 million in 2010-11. The major components of the administered funding are energy efficiency programs including the Home Insulation Program, the solar hot water initiative, Low Carbon Communities and a number of other, minor measures. The Office of the Renewable Energy Regulator will receive appropriation funding totalling $29.6 million in 2012-12. The department's operating funding decreases significantly from 2010-11 to 2011-12 and beyond, which reflects lapsing programs and one-off funding for what was then the Australian climate change regulatory authority that had been anticipated under the Carbon Pollution Reduction Scheme. The department's funding does not reflect any funding for establishing a carbon price regulator at this point in time.

Major new measures for the portfolio announced in the budget include the savings I have already indicated from the National Solar Schools Program closure as well as the renewable energy target and implementation of legislative amendments for the Office of the Renewable Energy Regulator, the energy efficiency functions that I have alluded to, greenhouse and energy reporting over four years, the Solar Cities program and savings for the Green Loans and Green Start programs, which were previously reported in additional estimates.

All of these changes ensure that the Department of Climate Change and Energy Efficiency has the resources that are necessary for the work that is ahead of it in its departmental functions: the formulation of an important reform in the form of a carbon price mechanism, the important work of the Office of the Renewable Energy Regulator and the necessary departmental capacity in systems to administer a number of important programs.

Amongst those important programs, the Home Insulation Program has received a good deal of attention over the last 12 months or so. This program, of course, has been the government's focus for dealing with the issues that arose in the implementation of the program. We implemented a foil insulation safety program with regard to foil insulation installed under the Home Insulation Program. That foil insulation safety program is now largely discharged. There is a more general program for non-foil insulation, and the government committed to inspecting a minimum of 150,000 households insulated with non-foil insulation. That inspection program is now also approaching a conclusion. The government sought a range of advice and analysis from organisations, including the CSIRO and a risk assessment organisation—Booz and Company—to advise on the announcement that the government made to draw the wind-up of the Home Insulation Program to a conclusion. We are confident that that will be concluded in the not-too-distant future. (Time expired)

Greg Hunt (Flinders, Liberal Party, Shadow Minister for Climate Action, Environment and Heritage) Share this | Link to this | Hansard source

I ask the minister: on what date did any minister or departmental official first engage a market research firm or advertising agency on a commercial basis for any preparatory work in relation to the proposed carbon tax advertising campaign? On an associated matter, I refer to an announcement last Thursday that the government will spend $12 million on carbon tax advertising. Is this in addition to the $13.7 million allocated for the Climate Change Foundation Campaign in the 2011-12 budget, including a carryover from 2010-11? If so, what will the $13.7 million Climate Change Foundation Campaign funding be used for? Will any foundation campaign money be available towards carbon tax advertising in a supportive manner by non-government organisations?

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

Firstly, of course, it is a responsibility of the department to engage contractors. I do not have the precise dates of engagement at this point in time, but it is a function of the department to engage contractors for that purpose. As I understand it, that process is still ongoing. When those contracts are finalised, they will be recorded on the AusTender site. In relation to the funding that has been announced, last week the government indicated that $12 million has been committed for a national advertising campaign. That is a new commitment. The shadow minister is referring to an amount of $13.7 million that the government had previously announced in relation to a climate change engagement campaign. That is a separate amount of funding that appeared in the budget for 2011-12. It is divided over both financial years. That $13.7 million appears as $5.5 million in the current financial year and $8.2 million in the financial year 2011-12. That $13.7 million was derived originally from what was described as the climate change foundation campaign in the previous term of parliament. There was an amount approximating, I think, $29 million allocated to that campaign. Approximately $15.3 million was returned to the budget, and the remaining $13.7 million was provided for the engagement campaign. So the $12 million announced last week for advertising is an additional commitment that the government has made.

These are measures that are important for ensuring that members of the community have access to the appropriate information at an appropriate time in relation to the measures that the government is taking in the area of climate change and energy efficiency. The engagement campaign funding is not advertising funding in the sense that it is funding television advertising, but it is providing an opportunity for working with organisations, including non-government organisations, to improve understanding of climate change issues and energy efficiency issues. The national advertising campaign for which $12 million has been committed will be to assist community understanding at an appropriate point in time. A final decision about the advertising campaign is yet to be taken and is contingent on further discussions being held and concluded, but the campaign would be intended to provide information to the community about the carbon pricing measures that the government is proposing to implement.

Of course, there has been a lot of community debate about the issue of carbon pricing, a lot of it led by the opposition—of course, extremely misleading and misrepresentative of the positions. I think the community is entitled to be informed about the important measures associated with a carbon price mechanism and in particular that, as the government has committed, at least half of the revenue generated by the carbon price mechanism would be dedicated towards assisting households to adjust to any price impacts associated with the introduction of a carbon price into the economy. Of course, other measures are also important, and the government has further committed that the carbon price revenue would also be disposed towards supporting jobs and competitiveness of the most affected industries and, furthermore, supporting other climate change programs and measures to support the investment in clean energy that we need to be able to reduce our emissions and substantially improve the contribution of cleaner energy sources to our energy supply.

So those generally are the commitments that the government has made. We are continuing to work on the detailed carbon price package. We do so through the Multi-Party Climate Change Committee. Contingent upon the outcome of those discussions, the detail of the carbon price mechanism will be announced, and I think it will be very important for the community generally to have access to reliable factual information about the carbon price itself and how it may impact upon people.

Jill Hall (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

Minister, I am particularly interested in the Climate Commission. I have read the report that has been brought down and met with some of those that were responsible for the report, and I also attended the event in the theatrette. I am particularly interested in what the ongoing role of the Climate Commission is; how the Climate Commission will be able to provide information to communities throughout Australia; how the Climate Commission will work on an ongoing basis; and the benefits that it will provide for communities throughout Australia. I am sure that other members in the House are as interested as I am.

Mr Chester interjecting—

We have the chair of the climate change, environment and heritage committee here with us, and he is a person that is, I know, very interested in this and has also met with members of the body that wrote the report. So, Minister, if you could tell the House how the Climate Commission works, what its role is and its benefits to Australians, I would greatly appreciate it. Thank you.

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

Thank you to my close friend and colleague the member for Shortland. I see she is supported by the member for Gippsland in the thrust of that question. I think he was jumping up to ask it himself—almost! Of course, the government has taken a number of initiatives to ensure that the best quality information and research is made available for the consideration not just of the Multi-Party Climate Change Committee members on science and other matters but for members of the community generally. As part of the engagement strategy that generally obtains in the portfolio, the establishment of the Climate Commission is a very important part of engagement with the community.

Just quickly, though, I will point to some of the other measures before I go directly to the issue of the Climate Commission. The government, of course, commissioned Professor Ross Garnaut to update his 2008 Climate change review and in particular to focus on significant changes or improvements in expert knowledge that have implications for the key findings from his 2008 review. Professor Garnaut has concluded that update; he published eight papers and they have been consolidated into a recent book that has been published. So there is very comprehensive information about the science, the economics and the state of international negotiations contained in Professor Garnaut's work. The Productivity Commission was also asked to undertake analysis of the carbon pollution reduction policies of key countries around the world including China, Germany, Japan, New Zealand, South Korea, the United Kingdom and the United States. It found that all countries examined had adopted major policies. In fact, over a thousand policies were identified in the area of climate change intended to help reduce pollution levels. A key finding from the Productivity Commission was that a market mechanism in the form, for example, of an emissions trading scheme is unquestionably the cheapest and most efficient way of reducing pollution across an economy. Those are just two important measures that the government initiated in relation to climate change and to inform the carbon price debate and deliberations over policy.

Another important one though, as the member for Shortland has pointed to, is the establishment of the Climate Commission. It is chaired by Professor Tim Flannery, a former Australian of the Year. There are a number of other eminently qualified members of the commission, including Professor Will Steffen of the ANU, who is a world renowned climate scientist and who is also advising the Multi-Party Climate Change Committee. Recently the Climate Commission conducted a seminar within Parliament House. It was one of a series that it has conducted to date around the country. It commenced with a public forum in Geelong in Victoria and it has visited a number of other important regional areas around the country, particularly with a focus on communities in areas where there is a lot of employment in emissions-intensive and trade-exposed industries. They have been very successful fora at explaining the science and, to some degree, the economics of climate change.

In addition, the Climate Commission has published an important report updating the science which is titled The critical decade: climate science, risks and responses. There were four key findings from the Climate Commission's report. One of them was that there is no doubt that the climate is changing and that the evidence of this is overwhelming and entirely clear. The atmosphere is warming, the ocean is warming, ice is being lost from glaciers and icecaps, sea levels are rising and global surface temperatures are rising. The member for Tangney will no doubt appreciate this. He is unusually quiet while I am mentioning these matters. He is usually slightly more vociferous.

Dr Jensen interjecting—

The Climate Commission's document makes these changes very clear and states what the science is. Secondly, the report adverts to the fact that we are already seeing social, economic and environmental impacts from changes in the climate. Thirdly, the report traverses the area of the contribution of human activity and specifically the burning of fossil fuels and deforestation as contributing to climate change. Fourthly, it makes the point that this is the critical decision. Decisions that we make from now to 2020 will determine the severity of climate change that future generations have to deal with.

Greg Hunt (Flinders, Liberal Party, Shadow Minister for Climate Action, Environment and Heritage) Share this | Link to this | Hansard source

I refer the minister to the Minister for Finance and Deregulation's refusal to guarantee budget neutrality of the carbon tax in Senate estimates on 30 May 2011. Will the minister guarantee that the carbon tax will be budget neutral in each or even just any one of its first three years?

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

When we publish the details of the carbon price mechanism and the entirety of the package, the government will make available the financials in relation to the carbon price mechanism. We are working from a set of principles that have been made public and that have been agreed in the Multi-Party Climate Change Committee. That included budget neutrality, or revenue neutrality, for the scheme for a number of the measures that were anticipated within it.

We have done an extraordinary amount of work over the last seven or eight months within the Multi-Party Climate Change Committee to devise a range of the measures that would operate for a carbon price. We published in February of this year the proposed framework for the carbon price mechanism. It is an emissions trading scheme that commences with a fixed price period of between three to five years.

There is in contemplation, within the principles that have been enunciated by the multiparty committee, the necessity for a number of things to occur. One of them is to ensure that households are assisted to meet the anticipated price impacts of a carbon price being introduced into the economy. The government from its standpoint has made clear, as I indicated in an earlier answer, that at least half of the revenue from the carbon price mechanism would be used to assist pensioners and low- and middle-income households with what we anticipate to be modest cost impacts.

In addition to that, a number of other measures generally—that I also adverted to in an earlier answer—are being contemplated within the broad description of support for jobs and competitiveness within the trade-exposed and emissions-intensive parts of the economy. This will be very important. The government for its part is contemplating a significant level of assistance for those industries that are in the emissions-intensive trade-exposed part of the economy. This will be important from the standpoint of supporting Australian jobs and it will be an important disposition of part of the revenue, as it were, of a carbon price mechanism. Further to that there will be measures, as we have generally described, to support further efforts to drive towards clean energy and other climate change programs.

All of these categories are the subject of detailed discussion within the multiparty committee context. It is not appropriate for me to go into them in greater detail at this point in time nor in relation to the financials of the carbon price package. We are yet to settle on key elements of it, including until there is a final agreement on what the starting carbon price will be. These are all matters that we are discussing within the Multi-Party Climate Change Committee at the moment. When we do settle on a package we will make available not just the detail of each of the measures but also the financial implications of the measures that are taken. That is the government's commitment. We will continue to do the work. We are aiming to finalise this in the not too distant future and make the material available for consideration by the community, which is again why it is important that the government does communicate the detail of these matters to the members of the community in the way that we have foreshadowed.

This is, at the end of the day, I think, the most significant environmental and economic reform that a government will have undertaken. It is extremely important for the country's future. It is an important investment in the country's future as well. It will operate by obliging the largest emitters of carbon pollution in our economy—they number less than a thousand entities—to pay a carbon price for each tonne of pollution that they generate. That is an important distinction from the way that it is being misrepresented by the opposition. They are the largest emitters of carbon pollution in our economy that would have a liability under the carbon price mechanism and it is the revenue that is generated by the payment of that obligation that would support the general categories that I have described: the household assistance, the support for jobs and competitiveness, and the drive towards a clean energy economy.

Tony Zappia (Makin, Australian Labor Party) Share this | Link to this | Hansard source

Recently I met with members of the Climate Commission, as did other members of the committee which I chair, and that includes the member for Shortland. I also attended the presentations by the commission both here in Parliament House and in Adelaide. Furthermore, I attended a Christian coalition on climate change forum, which the member for Isaacs and the member for Flinders also attended, where we heard from a scientist there and other speakers on the issue of climate change.

It is clear to me from the summaries provided by all of those at each of those forums that the evidence supporting the view that climate change is real and that carbon dioxide emissions are contributing to it is very strong. However, it is also clear that there is a campaign underway of some kind to discredit that science. I was very pleased to hear this morning that some of the scientists have come out in support of their fellow scientists on this very issue.

My question to you, Minister, is twofold. Firstly, are you aware—and I appreciate the response you gave earlier to the member for Shortland—of any country or any government that refutes the science of climate change? Secondly, given that it is quite often raised that carbon dioxide emissions are contributing and that what we need is a global response, can you advise as to what the next stage of the post-Copenhagen process will be?

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

Thank you to the member for Makin for those questions on important issues. I had the opportunity, along with my colleague the Parliamentary Secretary for Climate Change and Energy Efficiency, of attending the international conference under the UN Framework Convention on Climate Change at Cancun in Mexico in December last year. During that period of time and during the various discussions over the course of the period that the conference ran for, which was the better part of two weeks, I was certainly not aware of a single country that questions the climate science. There were specific elements of the conference and side events to consider these matters. No serious political leadership, I think, internationally questions the science. The advice governments are receiving internationally is that the science is clear that carbon pollution is contributing to climate change and the warming that is being experienced, and that the response that we need to take is to reduce our levels of carbon pollution.

The Leader of the Opposition, the member for Warringah, and perhaps the member for Tangney stand out internationally in this field. They are quite outstanding from that point of view. No-one seriously in political leadership questions the responsibility that governments have to make public policy to address this problem. We had the Prime Minister of New Zealand address the House of Representatives today. New Zealand is a country with an emissions trading scheme in operation. It is currently under review to extend the scope of its operation and, potentially, the carbon price that is in operation in their economy. I have had the opportunity of speaking with the Prime Minister about the operation of the scheme and, of course, the report is that New Zealand is still there, the sun still comes up and the economy is operating well. They have had a number of challenges and tragedies to deal with, as we all know, but emissions trading is operating within the New Zealand economy effectively and is assisting in driving down carbon pollution. I think the New Zealand government looks forward to the opportunity for their scheme ultimately to link with an emissions trading scheme within our own economy.

On the side of the international negotiations, of course it is necessary. This is a diabolically complex environmental and international economic problem. It requires an unprecedented level of international cooperation to effectively address it. Despite some of the criticisms that are made from time to time of the efforts of the international community to tackle that complex problem, there is no doubt that a lot of progress has been made. The Kyoto protocol has been a very important instrument in garnering support internationally for developed countries making emissions reduction commitments. It has provided an important basis for the development of market mechanisms and a host of other measures that are important foundations for a stronger effort internationally to mitigate the effects of climate change and reduce pollution.

The next UNFCCC conference will be in Durban in South Africa in December of this year. The government is hopeful that that will lead to further progress in the international efforts to deal with this complex problem. There has been an endeavour to popularise, by those who do not support action on climate change, the concept that the Copenhagen conference was somehow a failure. In fact the Copenhagen conference led to pledges by many countries to reduce their emissions. Those pledges have been included for the first time in a decision of the UNFCCC at Cancun in Mexico and will be the basis for the further negotiations to take place during the course of the rest of this year and at Durban for how the international community will go about dealing with this issue and identifying the responsibilities that individual countries will take on.

So it is a process that the government is very committed to, an important one from an international standpoint that this government remains committed to. Internationally, I think that there is goodwill to take this issue further. There is respect internationally for the science and there is certainly an appreciation of the necessity to get on and tackle this problem.

Dennis Jensen (Tangney, Liberal Party) Share this | Link to this | Hansard source

Minister, you have spoken many times and have stated that the science is basically conclusive on this and that the effects of CO2on temperature are very well understood. You as an engineer in a previous life would understand that scientifically, if you have got some sort of bar and you put a certain stress on it, you know the point at which that is going to fail. Given that the science is so well understood, assume that the rest of the planet goes on with business as usual under the IPCC scenarios for all global economies apart from Australia and we have a carbon tax/ETS: can you please tell me what we are after? After all, it is not actually reducing CO2, it is actually reducing global average temperatures. Can you please tell me what effect our scheme will have on global average temperatures by the year 2100?

Next, assume that all nations actually act on climate change in exactly the same way as Australia does: what is Australia's effect on global average temperatures then by 2100? And in the Australian context, how much will the total cost of this be? What is the anticipated price required per tonne of CO2abatement as opposed to CO2—

A division having been called in the House of Representatives—

Sitting suspended from 17:02 to 17:15

The final part of the question I was asking before the suspension is: what will that cost be per household?

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

The first part of the question, as I recall it, relates to the science. I will address that first. I might need some clarification about the final part of it—the cost relating to households.

Dennis Jensen (Tangney, Liberal Party) Share this | Link to this | Hansard source

What is the anticipated price per tonne of CO2 in abatement as opposed to CO2 emitted in order to achieve it, and what will that cost be per household?

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

I think the best way I can tackle this is to go back to what the scientific evidence is telling us, firstly, and possibly the most convenient way to do that is to refer again to the most recent report that the government has received and that has been published, and that is the report by the Climate Commission titled The critical decade. I made some remarks in brief about the findings of that report in updating and overviewing the scientific evidence. Of course this is an international problem that needs to be tackled internationally but Australia needs to play its part.

In part, the member for Tangney's question is essentially asking what is the point of Australia doing anything. The point of Australia doing something is that we are a contributor to the carbon pollution that the scientists are indicating is contributing to the warming being experienced and the increasing threat that climate change represents. We are the highest per capita emitter of carbon pollution amongst the developed economies, we are one of the top 20 emitters of carbon pollution of all countries internationally, and we share the responsibility, as other countries do, of mitigating the risk of climate change. The reason we need to be mitigating that risk is based on what the scientists are telling us. Again, the Climate Commission's report finds that there is no doubt that the climate is changing and that that evidence is overwhelming and clear. It finds that the atmosphere is warming, the ocean is warming, ice is being lost from glaciers and icecaps and sea levels are rising. It finds that the biological world is changing in response to the warming. It finds that global surface temperature is rising fast, and that the last decade was the hottest on record.

Furthermore, the Climate Commission findings go on to indicate that we are already seeing the social, economic and environmental impacts of a changing climate and that, with less than one degree of warming globally, the impacts are already being felt in Australia. These are the findings of the Climate Commission, and they have relied on eminent scientists within the Australian scientific community. It also finds that in the last 50 years the number of record hot days in Australia has more than doubled and that this has increased the risk of heatwaves and associated deaths as well as extreme bushfire events. The Climate Commission has found on the evidence—

Dennis Jensen (Tangney, Liberal Party) Share this | Link to this | Hansard source

Mr Deputy Speaker, I rise on a point of order. I was not questioning the science; I was asking, accepting the IPCC position, assuming a business as usual case, assuming all the science was correct, how much are we going to reduce global warming—

Sid Sidebottom (Braddon, Australian Labor Party) Share this | Link to this | Hansard source

Order! It is very unusual to be asking questions in the middle of a response. There is ample opportunity to jump again and re-form your question or ask your question again after the minister or whoever is speaking has finished.

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

Thank you, Mr Deputy Speaker. I am endeavouring to answer the question. The Climate Commission finds that sea level has risen by 20 centimetres globally since the late 1800s, impacting on many coastal communities. It finds that another 20-centimetre increase by 2050, which it finds is likely at current projections, would more than double the risk of coastal flooding. The Climate Commission finds that the Great Barrier Reef has suffered from nine bleaching events in the past 31 years, and of course that iconic ecosystem and the economy that depends on it face serious risk from climate change.

The Climate Commission goes on to traverse the evidence about human activity, and particularly the burning of fossil fuels and deforestation, contributing to what we are experiencing. The Climate Commission finds that there is a very large body of observations, experiments, analyses and physical theory pointing to increasing greenhouse gases in the atmosphere, with carbon dioxide being the most important as the primary cause of the observed warming. All governments have to take this into account in responding to this challenge, and Australia needs to play its part along with other nations. (Time expired)

Tony Zappia (Makin, Australian Labor Party) Share this | Link to this | Hansard source

Recently I and other members of the House met with a delegation from Tibet and with a delegation from Bangladesh. Both delegations expressed alarm and concern about the melting of icecaps in the Himalayas, and in particular about the impact that melting is having on their future water supplies and, in turn, their ability to grow their own food—in addition to the fact that their land may well be inundated by seawater if the sea level rises predicted by some of the scientists eventuate. Minister, what representations have you had from countries such as Bangladesh and Tibet in respect of the concerns they have about climate change and sea level rises, and in particular what representations have been made to you for assistance from our government to try to cope with those changes?

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 Makin for that very important question. About six weeks ago my counterpart from Bangladesh, the Minister for Environment and Forests, who has responsibilities for climate change was in Australia. It was the second occasion I have had the opportunity to speak with him about the issue, as I firstly met him in Mexico in December last year. In fact, we co-chaired discussions about the establishment of an international financing mechanism, a global fund, principally for the purpose of assisting developing countries to implement mitigation measures to cope with the impact of climate change.

There are many people in the population of Bangladesh who live on land that is only marginally above sea level. The risk of sea level rises is immense for the people of Bangladesh. It is one of the reasons that Bangladesh and many other nations affected in a similar manner, such as island states which also have populations living marginally above sea level, have a critical interest in international efforts to mitigate the risk of climate change. They are very mindful of the scientific evidence that I was pointing to in my previous answer and the fact that increasing carbon dioxide emissions, primarily produced through the burning of fossil fuels such as coal and oil, as well as through deforestation activities, are critical issues from their point of view that need to be addressed in an international context.

They are very mindful of the fact that developed countries such as our own have had the opportunity, through industrialisation and through deriving energy sources from the combustion of fossil fuels, to industrialise and develop particular standards of living that the developing nations generally do not share and enjoy. Therefore, they come to the international negotiations with some very firm and understandable views about these matters. They see it as a responsibility upon developed nations, particularly a nation like Australia which has the highest per capita emissions amongst the developed economies and is one of the 20 largest emitters of carbon pollution internationally, to take measures to reduce our levels of pollution and to contribute to international efforts to mitigate the effects of climate change. Therefore, the minister from Bangladesh was very interested in the government's carbon price plans. They see it as an important contribution to international efforts. They understand that nations acting on their own can only have so much influence to mitigate the risk of climate change, but they understand well that nations acting together and in good faith to put in place measures to reduce carbon pollution will be what it takes to mitigate risks for millions of people who live very close to sea level.

I have not had the opportunity of speaking with representatives from Tibet directly about this particular issue, but I well know and understand the concerns that they have, and they have expressed them in the international fora as well. At the end of the day, the important message for the Australian community and, I think, for the political leadership in Australia is that the scientific evidence is there. The government formed the Climate Commission to review the evidence, publish material, update the science, coordinate the scientific community and debate within Australia, and conduct public fora to discuss the foundation or policy reason for taking action on climate change and reducing pollution. That is happening. Political leaders need to take responsibility for this matter—to respect the scientific evidence that is presented and to formulate public policy responses accordingly. The public policy response that I think has to be accepted is to reduce pollution in our economy at the lowest cost way—that is, the lowest cost across the economy, households and businesses—to make sure that we are playing our responsible part internationally, and that we are able to participate in international discussions in an appropriate way and have our efforts recognised.

Sophie Mirabella (Indi, Liberal Party, Shadow Minister for Innovation, Industry and Science) Share this | Link to this | Hansard source

Minister, given the government has now unceremoniously dumped the cash for clunkers program, was the coalition not correct all along to maintain that this was nothing other than an ill-conceived idea? Why did the cash for clunkers policy not have adequate preparatory work done on it before it was announced as ALP policy during the 2010 election? Seeing that you are now arguing that the carbon tax will be introduced at a price well south of $40 a tonne, why was a scheme that would have cost $430 a tonne ever announced as policy? Surely you now concede that it was a ridiculous policy at that sort of price tag. Is it true that the industry department alerted the government to there being a clear risk that the rollout of the cash for clunkers program would replicate the kinds of problems experienced in the government's disastrously bungled Home Insulation Program?

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

Firstly, I accept none of the contentions made by the member for Indi. I make that clear at the outset. Generally, in policy responses to climate change, when one respects the science and therefore accepts the responsibility to reduce carbon pollution, we have to look at which public policy measure is the most desirable from the standpoint of economic efficiency. Some public policy measures that have the objective of reducing pollution may also have other public policy objectives such as, for example, supporting the development of the solar industry within our economy. However, when you are looking at the principal policy response to climate change and of the need to reduce our carbon pollution we need to go about doing it in the most cost-efficient manner. That is why the government has argued strongly for a market mechanism—whether it be through an emissions trading scheme or a carbon tax—as the way of putting a price signal in our economy to achieve the emissions reductions at the least cost.

The Productivity Commission considered these issues in general in the Australian economy and in the economies of our major trading partners in a recently published report. The Productivity Commission, unsurprisingly I think for those familiar with these issues, found that the least cost way of reducing pollution is through a market mechanism like an emissions trading scheme. That is why the government have been arguing on this basis. Also, over the last 10 months and beyond and in the previous term of parliament as well, we have rationalised a number of the climate change programs and initiatives—for example, one that went back to the Howard government period in the form of subsidies and support for solar panels on domestic rooftops. If the sole purpose of these sorts of programs is to abate carbon pollution, they are not necessarily the least cost means of achieving the outcome. The government, particularly over the last 10 months while I have been in the role as minister, have been looking at these programs, rationalising them where appropriate and focusing on the principal policy response that is necessary.

If the member for Indi is seriously concerned about these matters and the most efficient public policy response is through reducing pollution, I am sure that she would recognise and accept the fact that a market mechanism is the best way of reducing carbon pollution in the economy. The Productivity Commission report that I referred to in fact found that the effective cost of the abatement measures currently in place in our economy within our electricity system—whether they are state feed-in tariffs or other programs of support for various technologies or changes—is in the range of, I think, $44 to $98 per tonne of carbon abated. It also found that across the economy, had we done it through a market mechanism, we would have achieved the same levels of carbon pollution abatement for an approximate cost of $9 a tonne. These are material matters and it is extremely important when considering our policy response to climate change that we go down the path that is going to achieve the abatement at the least cost to our economy, and as I have said before that means the least cost to households and the least cost to businesses.

In my role as minister, I certainly have no concern about looking at alternative policy approaches from the standpoint of using the most effective approaches. Contrast that with the nonsense that forms the subsidies-for-polluters policy that the coalition are advancing as a response to climate change. It is going to cost tens of billions of dollars out to 2020 in direct government subsidies for polluters to achieve no net environmental gain. Ultimately, the subsidies-for-polluters program will be funded by taxpayers to the tune of $720 per household on average. No rational economic analysis could ever justify that approach. It is not a credible policy response to this issue, and unless and until the coalition and the member for Indi accept some basic economic principles in relation to this issue—that is, that a market mechanism is the best way of proceeding—they have no credibility in criticising anything. (Time expired)

Darren Cheeseman (Corangamite, Australian Labor Party) Share this | Link to this | Hansard source

There has been plenty of scientific evidence to show that a one metre rise in the sea level will have a very substantial impact on many parts of the Australian coastline. Many parts of the Bellarine Peninsula within the Geelong community will be substantially impacted. Parliamentary Secretary, what will the impact be on the Australian economy if we do not reduce our greenhouse gas emissions, with sea level rise likely to inundate not only many parts of the Geelong area but also many other parts of the Australian coastline?

Mark Dreyfus (Isaacs, Australian Labor Party, Cabinet Secretary) Share this | Link to this | Hansard source

I thank the member for Corangamite for his question which relates to the identified impacts of sea level rise across Australia as a result of climate change that we know is certain to occur and is already occurring, and that is why various state governments have already written it into planning schemes. Notably, the Victorian state government have written into the planning schemes for the 12 coastal municipalities a projected sea level rise of 0.8 metre by the end of this century, which will of course affect parts of the electorate of Corangamite and indeed parts of my electorate on the eastern shores of Port Phillip Bay. Some of the material published by the Department of Climate Change and Energy Efficiency indicates that with increased sea levels, it is likely that storm surge and inundation events could well threaten some 9,000 homes in the electorate of Isaacs by the end of this century. Similar events are predicted to occur right across Australia in coastal areas, particularly in low-lying areas and up the east coast of Australia that will threaten homes and businesses—all of which are likely to require very serious adaptation measures to be taken.

In addition to the mitigation policy work being undertaken both at the domestic and at the international level, the Department of Climate Change and Energy Efficiency is also working on adaptation measures, funding research into adaptation and assisting both local governments and state governments in planning for the inevitable changes that are going to occur in Australia's coastal areas as a result of climate change that we know is going to occur. One of the reasons that the Department of Climate Change and Energy Efficiency has published a range of material, including first pass coastal mapping exercises, is to increase awareness of the threat posed by sea level rise in the coastal areas of Australia. That mapping uses aerial photography and computer assisted calculation to map and show in a direct way the areas that are exposed to the effects of sea level rise. One of the reasons the government last week published a series of facts sheets dealing with the effects in each state of sea level rise, or indeed all of the effects that are predicted now from climate change, is to raise awareness of sea level rise. We know, for example, that sea level has already risen by 20 centimetres globally since the late 1800s. There have already been impacts on coastal communities throughout the world. There is a projected further 20 centimetre increase by 2050, on current predictions, which would more than double the risk of coastal flooding.

As already pointed out by the minister, it is not just Australia that is at risk of sea level rise; it is every coastal community in the world. It is a global problem that we are trying to deal with. As the minister mentioned in his previous answer, we have recently had a visit from the Bangladeshi minister for climate change. Their problem—somewhat different from the those faced by the large number of small island states—is that they face the potential dislocation of some 30 million of their people. Bangladesh is a populous country of 160 million people currently, and 30 million of those are at risk from the sea level rise that is predicted by the turn of the century if we do not quickly act on the mitigation task we face.

Sophie Mirabella (Indi, Liberal Party, Shadow Minister for Innovation, Industry and Science) Share this | Link to this | Hansard source

Is the Australian Food and Grocery Council's modelling correct when it says that we should expect an increase in food and grocery prices of three and five per cent under the CPRS modelling? Is Citigroup correct when it says a carbon tax will impact on the profitability of supermarket retailers by between two and four per cent? If not, why do you refute these figures? Has anyone from the department, the minister's office or your office met with the Australian Food and Grocery Council to consult on the impact of a carbon tax on food and groceries? Have either you, Minister Carr or Minister Combet commissioned any modelling or seen any modelling about the impact your carbon tax will have on food and groceries? Parliamentary secretary, is it correct that your government signed an agreement late last year, as part of the Cancun process through the UN, which now requires Australia to contribute to a so-called 'green climate fund'? Is it also correct that payments to the fund are sourced from approximately 10 per cent of the carbon tax revenues raised from developed nations? Is it also true that the government has committed to spending $599 million on payments to this fund over the current three-year budget period and that about $470 million has already been allocated? If not, what are the correct figures? If the starting price of the carbon tax was to be $25 a tonne, what would be the total amount that Australia would need to pay into the green climate fund in the first year of the tax?

Mark Dreyfus (Isaacs, Australian Labor Party, Cabinet Secretary) Share this | Link to this | Hansard source

I thank the member for Indi for her multipronged question, the first part of which went to grocery prices. We have just had another example of so much of the misinformation campaign we have had to endure over the last several months from the opposition. It is the case that all that has occurred to date in the many meetings of the Multi-Party Climate Change Committee, following on from the start of those deliberations in October last year, is that agreement has been reached on the broad architecture of the carbon price scheme, the detail of which has now been in the process of negotiation since that announcement by the Prime Minister and the minister for climate change on 24 February this year. It is of course the case that we are yet to announce the carbon price. It is of course the case that we are yet to announce the precise levels of assistance to go to households, although the Prime Minister has made it clear that more than half of the revenue from the carbon price that is going to be raised from polluters is going to go in assistance to low- and middle-income households.

We have not yet announced either the price or the levels of assistance, let alone the details of assistance that is going to also be available to businesses, nor have we announced the details of exactly which industries in what amounts or what level of assistance is going to be available to the energy-intensive trade-exposed sectors. That is why it is not possible for the member for Indi or Ms Carnell, on behalf of her trade association, or anybody else to make the kind of estimate that is included in the question just posed by member for Indi, which asserted there would be a three to five per cent rise in grocery prices. Of course it is the case that the government is modelling the impact of the carbon price on food and groceries. The member for Indi would be aware, having debated in the House the carbon pollution reduction scheme legislation—and indeed the member for Wentworth is also here and he would be only too well aware—that there was very detailed modelling of the likely impact on food and groceries in relation to that scheme.

When the carbon price and its details are announced, which the Prime Minister has indicated is going to be in the middle of the year, then it is going to be possible to make detailed calculations and to make estimates with much greater precisions of the likely impact on food and grocery prices. Until then, it remains simply part of a scare campaign or a campaign of misinformation, which we have had all too much of from the Leader of the Opposition through this year. The other part of the question from the member for Indi went to Australia's contribution to financing arrangements emerging from the United Nations Framework Convention on Climate Change. I will start with the second part of the member for Indi's question, which went to what is known in the United Nations Framework Convention on Climate Change talks as fast-start funding. I can confirm that Australia committed, in 2009-10, to contribute $599 million to fast-start funding. The figure that the member for Indi gave in her question was of approximately $470 million having been spent or otherwise committed. I can say, although I cannot say to the nearest million dollars, that that is generally correct. I can indicate to the member for Indi that, to give an example of what the fast-start funding goes to, one part of that funding was committed to and announced by the minister and me at Cancun in December last year at the United Nations framework convention talks: a $30 million contribution that Australia is making to carbon projects in Indonesia—in particular to a project for dewatering of peat in Kalimantan province. It is something that we are very pleased to join with Indonesia and Norway on in a joint project that is going to enable Indonesia, through a range of forestry and other related projects, to contribute to the carbon emission reduction task that the world faces.

The other proposition was to the effect that 10 per cent of the carbon revenue was to be contributed— (Time expired)

Proposed expenditure agreed to.

Broadband, Communications and the Digital Economy Portfolio

Proposed expenditure, $ 1,669,355,000

Anthony Albanese (Grayndler, Australian Labor Party, Leader of the House) Share this | Link to this | Hansard source

I will make some brief opening remarks to the Committee. Through the 2011-12 appropriation bills, the government will provide the Broadband, Communications and the Digital Economy portfolio with $4.1 billion to deliver its priorities. This includes $2.7 billion directly to the department portfolio to deliver its priorities, including a $2.3 billion contribution to the $3.1 billion equity injection into the NBN Co. in 2011-12, with $300.7 million of the remainder coming from the 2010-11 appropriation act and $438 million from the Building Australia Fund. There will be $990.7 million through the department to the ABC, $228 million through the department to the SBS and $112.6 million to the Australian Communications And Media Authority. The government will provide $372.4 million in new funding and $18.2 billion in equity funding over the period 2011-12 to 2014-15 to the portfolio for a range of measures, the National Broadband Network, of course, being the most significant. There will be $18.2 billion in equity funding provided to the NBN Co. over the budget in forward years, with $3.1 billion being invested in 2011-12. There will be $37.4 million over four years to support the government on the NBN rollout. The $376.5 million will be provided from 2011-12 to 2014-15 for the switchover to digital-only television. Funding will be provided to the department, the Department of Human Services and the ACMA. In 2011-12 $15.2 million will go to continuing funding for the National Indigenous Television network, or NITV. There will be $12.5 million over four years for community broadcasting to increase content production in the areas of ethnic and Indigenous broadcasting and radio for the print-handicapped and to establish a new community radio content development fund, and $2.2 million in 2011-12 to continue the current arrangements for untimed local calls in the extended zones pending the outcome of the review of telecommunications retail price controls. The budget provides $8.3 million to the department and the ACMA to facilitate the auction of spectrum in the 700-megahertz and 2.5-gigahertz bands in 2012-13 and to undertake preparatory work required in the lead-up to the auction, including the valuation, planning licence framework and auction process, and there will be $3.4 billion to the ACMA to ensure greater compliance and strengthen communications with industry.

The Australian government understands that access to affordable high-speed broadband is increasingly essential to the way in which Australians communicate and do business. The NBN will help improve education and health service delivery and connect our cities and regional centres. It also delivers a significant microeconomic reform through the restructure of the telecommunications sector. NBN Co., the company established to build and operate the NBN, has forecast in its corporate plan that $35.9 billion in capital expenditure will be spent on building the NBN. The government will make an equity investment of $7.5 billion towards the NBN. NBN Co.'s corporate plan confirms that taxpayers will get their investment back with interest and that the NBN will provide a rate of return higher than the government bond rate.

The government is also extending its support to assist Australians to make the switch to digital television. The 2011-12 budget provides $376.5 million in funding for ongoing assistance. The household assistance scheme remains the centrepiece of the government's ongoing assistance to Australians in making the switch to digital TV. There are also a range of digital economy initiatives in the budget. The National Digital Economy Strategy launched on 31 May 2011 announced government programs that will assist Australian households, businesses and non-profit entities to enjoy the economic and social benefits that the NBN can deliver and programs that promote tele-health and online education. These measures are part of a coordinated approach to help grow Australia's digital economy and increase digital productivity. (Extension of time granted) They represent the next step in the government's commitment to strengthen Australia's digital productivity. The government will closely monitor the implementation of these initiatives and progress against the goals outlined in the National Digital Economy Strategy. Further measures may be identified and implemented over the duration of the strategy. Funding announced in the 2011-12 budget for the department, the ABC, the SBS and the ACMA will encourage a vibrant, sustainable and internationally competitive digital economy here in Australia. I commend the appropriation to the House.

Malcolm Turnbull (Wentworth, Liberal Party, Shadow Minister for Communications and Broadband) Share this | Link to this | Hansard source

I ask the minister to turn his mind to the National Digital Economy Strategy, which he just referred to, and in particular to page 21 of that strategy, which confirms what we know from the ABS: that the biggest obstacle to universal internet access in Australia is household income, or rather a lack of it, with 34 per cent of households on incomes of $40,000 a year or less not having any access to the internet. Internet access rises rapidly with household income. Agreeing, as I am sure the minister does and as we all do, about the virtues of universal access to the internet and the benefits it brings, affordability is an absolutely key issue.

In the NBN's corporate plan it estimates that, following the introduction of the NBN, customers on the lowest speed—that is the 12-megabit-per-second speed, which is really no more than and in many cases slower than ADSL2 speeds—would be charged in the order of $55 to $58 a month. There are many ADSL2 plans currently in the market—with 50-gig caps, for example—which are costed or priced at a similar or indeed lower price. Dodo offers a similar plan with a 100-gig limit for only $29.99 a month. The question for the minister to reflect on—and I will provide him with some more information to assist him an answering it—is going to be: given that affordability is a key issue in terms of universal access to the internet, how is the NBN going to make internet access more affordable if it is not going to offer connectivity at a lower cost, and indeed a markedly lower cost, than that which is currently offered in the market at the moment? I ask the minister, as he formulates his answer, to reflect on the fact that in the NBN's corporate plan it forecasts the prices for the 100-meg, 50-meg and 12-meg speeds, beyond which it is difficult to imagine that any residential user would have any conceivable appetite for additional speed, remaining constant over time. Yet we know from the authority of the OECD and from our own experience that between 2005 and 2008 ADSL prices in Australia fell by 45 per cent. That 45 per cent decline in prices was the consequence of technology and competition. The NBN, as I said, has forecast or predicted or stated that these access prices will remain the same in nominal terms through to 2020.

The minister should address this issue. This is a fundamental threshold issue. Nobody denies that fibre to the home will deliver faster speeds and greater capacity of data transmission. That is not an issue. But is it going to deliver more affordable access to the internet? There is nothing in the business case, the corporate plan or anything else that has been said by the NBN which suggests that it would. I would seek the minister's assistance in telling us how he believes the NBN is going to make internet access more affordable to low-income households.

Darren Cheeseman (Corangamite, Australian Labor Party) Share this | Link to this | Hansard source

I am very grateful to be given the opportunity to address the issues in this particular appropriation. I can recall being elected in 2007 and getting around my electorate of Corangamite and speaking to many of my communities. Of course, my seat covers 7,000 square kilometres and has many communities that for a very, very substantial period of time have not been able to access decent internet speeds. As a consequence, many kids who are studying year 12 classes cannot email projects from their schools to their homes so as to work on them in the evening. Nor can they, at the end of their evening studies, email them back to school so that they can have the material ready for when they return to school. When I talk to many of my colleagues from regional Australia they report the same things. Regional Australia has been very much isolated in many regards from the benefits that come from having reliable, decent internet.

Of course, when I was talking to those communities in the lead-up to the 2007 election and through the course of the last parliamentary term and the last election, many communities raised with me the National Broadband Network and asked what benefits might be provided to them in a practical sense by having the National Broadband Network deployed. I can report that there have been a number of visits from key groups within my community to parliament to talk to the government and to talk to the National Broadband Network company to raise with them the very tremendous opportunities that having reliable, high-speed broadband will provide to regional Australia and, indeed, to my region of greater Geelong. They certainly report to me tremendous business opportunities that will come.

Of course, when we look at the alternative policies it appears to me that there is no alternative policy being articulated by the other side. Indeed, the National Broadband Network problems within my electorate were allowed to be developed under the Howard government, who could not manage to hold onto any plan for any length of time. In fact, there was a new plan almost every year, each of which failed dismally.

Minister, I am very curious to hear your views of the benefits that might ultimately come to regional Australia, particularly electorates like mine, where we have many communities that are spread out over a large area. What opportunities might there be for new technologies to be deployed in areas like my seat? I have a very vibrant tourism economy, and tourism economies sell their wares through the internet. Many of my tourism operators cannot trade overseas through the internet as a consequence of having very poor or unreliable broadband. So I am curious to know, from your perspective, how the National Broadband Network might assist seats and communities like mine in taking advantage of superfast broadband.

Anthony Albanese (Grayndler, Australian Labor Party, Leader of the House) Share this | Link to this | Hansard source

To address first the contribution from the member for Corangamite about regional benefits for the National Broadband Network: because the NBN is such a transformational piece of infrastructure, it will indeed remove the current digital divide between country and city. It will deliver the same service access in wholesale prices in rural Australia as in our cities. We are rolling out some 6,000 kilometres of fibre-optic links connecting cities and regions from Perth to Geraldton, Darwin to Toowoomba and to Broken Hill along the Murray.

The $60 million Digital Regions Initiative is funding innovative trials in health care, education and emergency services in these regional communities. For example, high-quality telehealth trials in Armidale and Kiama, where the NBN will be rolled out this year, provide in-home services for older Australians with chronic conditions and for youths with mental illness. Four of the five first-release sites in Australia are in regional Australia, as are eight of 14 second-release sites. In Queensland, our most regional mainland state, the NBN will sustain 5,000 jobs per year, with about $7 billion of investment in that state. We have finished the backbone linking Geraldton, where families can now get speeds 10 times faster and at twice the download quota for the same price.

Indeed, there are benefits for urban communities as well. When I launched the national urban policy, it noted that one of the ways that we can deal with issues such as urban congestion is by removing the tyranny of distance, changing the way that we work and the way that we live as communities so that people who have the great benefit of living in your beautiful electorate along the Great Ocean Road can be connected in a similar way to which they are in the Melbourne CBD. That breaks down the tyranny of distance, which is of great benefit particularly to regions but also takes pressure off our cities.

With regard to the comments from the member for Wentworth, I say to the member two things. Firstly, retail prices are yet to be advised by retail service providers. The member would be aware of that. NBN Co. have indicated that wholesale prices are comparable. Secondly, the NBN is designed to transform the competitive environment for telecommunications services. This is an important microeconomic reform. This, essentially, provides the spine, just like—in another area of direct relation to my portfolio—the Australian Rail Track Corporation builds the track. On top of that, there is competition for freight service provision. You have to have the breakthrough such as the ARTC, and I give credit to the former government for the establishment of that corporation.

But we had tried 20 different plans under the former government to deal with high-speed broadband and its delivery. The market had essentially failed at that point to deliver the sort of outcome that was required. So the government made what I believe was the bold and correct decision to seize the initiative in the national interest: to have a bold initiative that ensured that we could compete with our neighbours in delivering high-speed broadband that is affordable and available regardless of where people live and regardless of the income that they are on. One of the great issues of broadband is, of course, that high-speed broadband does deliver significant productivity gains, but it is also a very egalitarian exercise as well. It provides access for students, for example, to information technology regardless of where they live. It is a transformational piece of technology; hence the whole design of the scheme, which was an initiative based upon the failure of the former government's 20 separate plans.

I notice that the member for Wentworth acknowledged that fibre to the home will be faster. That is why the government has promoted this initiative. (Time expired)

Malcolm Turnbull (Wentworth, Liberal Party, Shadow Minister for Communications and Broadband) Share this | Link to this | Hansard source

I am touched by the minister's remarks about the NBN conquering the tyranny of distance, but the question that I addressed to him and that he singularly failed to respond to is about the tyranny of poverty. The digital divide is marked by poverty—by lack of household income—and the affordability of the NBN or of internet access is absolutely critical. It is fine for the minister to try to brush that issue away as though it is of no concern to anybody in this place, but this is the single biggest barrier to internet access. If the government and this parliament are serious about social equity and people getting access to the internet then the issue of affordability is fundamental.

The minister said that the retail prices have not been determined. They have not been determined in the sense of being finally determined, because the NBN is not operating and the retail service providers are not in operation. However, the numbers I quoted to him are taken from page 105 of the NBN's corporate plan, and the figures that I quoted, of $53 to $58, are the estimated retail prices for the 12-megabit service with a 50-gigabit limit. There it is: page 105 of the NBN corporate plan. Those numbers, the minister should be aware, are very much at the low end of what the market participants are estimating the likely retail price will be after all of the additional connectivity and backhaul is provided by the relevant retail service provider. So I would ask the minister once again if he could actually answer this question and not seek to fob it off.

I might add to the information I provided in my previous remarks another point, and this is also a critical issue about affordability. You would not build the NBN, or contemplate building the NBN, for $50 billion or whatever it winds up being if all you were going to do was to deliver download speeds of 12 megabits per second, because many Australians now are able to get that on existing technology, and you certainly would not need to go to fibre to the home to do that. So the promise has always been that households will demand faster and faster speeds.

I refer the minister to a study that was recently conducted in the United States for the Federal Communications Commission by the US economists Greg Rosston, Scott Savage and Donald Waldman. The study is called Household demand for broadband internet service; it had quite a lot of currency at the time it was published. It found that people were willing to pay an additional US$45 a month to go from slow broadband to fast broadband but only an additional US$48 a month to go to superfast. They concluded that there is only a US$3 premium to go from fast to superfast, which would be the equivalent of, say, 50 megabits per second; it would actually be considerably lower than this, but certainly 12 megabits per second would be regarded as fast broadband. Yet the NBN's corporate plan—again, I am referring the minister to page 105—estimates that people will pay an extra $35 to go from 12 megabits per second to 50 megabits per second. The experience of all of the telcos offering higher speeds over HFC cable at the moment is that they have great trouble in getting material additional income for getting an uplift of speed from fast to very fast or superfast speeds.

So I would ask the minister to take that on board as well, because if the NBN is not going to make 12 megabits per second more affordable as a baseload ADSL2-comparable speed and if the promise of the NBN is to offer superfast connectivity, which is much more expensive—$35 a month more expensive according to the NBN—then why does the minister believe the NBN will make internet access more affordable? I would ask the minister not to dodge this question again. This is central to the whole plan.

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

I represent one of the fastest growing residential areas of New South Wales, and some of those growth suburbs include areas such as the Ponds, Kellyville Ridge and Stanhope Gardens. I can say without any shadow of a doubt that the issue in these areas about which I receive more complaints and inquiries every single day than about anything else is broadband accessibility. These are areas where absolutely no investment has taken place in these new suburbs up until now. I have people ringing me up and saying: 'In this day and age, I am amazed that I am unable to get ADSL2+ to my home. I have a small business at home. I am absolutely unable to run it effectively because I cannot get adequate broadband accessibility.'

Minister, as you are aware, Riverstone is the site of the first Sydney metro rollout, which means that it is important for these new areas in the north-west, which have not only growing residential areas but also a huge amount of employment lands being released. These are industrial areas of Riverstone and Schofields which are being opened up to more innovative technology and are looking for affordability, accessibility and also the wide variety of applications and services which will be provided from access to the highest quality broadband, which they have not had until now.

In asking this question of the minister, I would also like to say that this is not just a poverty barrier and, if it were, I would question what the opposition did when they were in government to address that barrier. We have had whole areas of Western Sydney which had no investment in infrastructure. If you look at the maps of Mount Druitt, you see that they are areas which have been totally neglected for over a decade. These are areas which are crying out for transformational change. They had no input over the 12 years that those opposite were in government, and even today those opposite have the hide to stand up here and say that it is a poverty issue. It is not just a poverty issue. I would ask the minister whether he agrees that it is an issue of simply not having investment in these new suburbs and having no incentives to invest. There has been absolutely no incentive to invest. Even today we query whether or not there is going to be any investment in those areas without the NBN because the NBN is the investment in these new suburbs. I would say to the member for Wentworth: I do not get asked by these people why we are having the NBN. The only question I get asked is when, and it cannot come soon enough for these people.

I attended on Saturday night a house meeting in the suburb of Kings Langley of a group of residents who were concerned about their inability to obtain even ADSL2+. One of the residents called a street meeting and opened his house up to people. This is an area of Kings Langley which, as the member for Parramatta will know having once represented this area, is a pretty well developed suburb. But this particular subdivision was actually developed after the cable wars so does not have any cable running through it. These are people who have satellite dishes on their roofs and they are rightly asking, 'Why in this day and age are we unable to access the highest-quality affordable broadband services?' It is a legitimate question. So I went along to this meeting and heard the concerns of those 20 residents who were there, each of them not saying, 'Why are we getting it?', they are saying, 'When are we getting it?' For these people, it cannot come soon enough.

I will also mention in asking my question to the minister: we know that internet access is one of the applications and services that will be provided from high-speed broadband that can only be delivered through the NBN. I would like to ask the minister in terms of both the affordability of that internet access and the economic benefits, what will the NBN deliver for residents, such as those in Greenway, who are waiting to get high-speed affordable broadband services?

Anthony Albanese (Grayndler, Australian Labor Party, Leader of the House) Share this | Link to this | Hansard source

I thank the member for Greenway and the member for Wentworth for their contributions and their questions. Indeed, I do agree with the comments of the member for Greenway. My only regret is that she did not take the member for Wentworth to her meeting in north-west Sydney so that he could actually see on the ground what has happened in terms of a poverty of infrastructure being provided in terms of telecommunications.

It is no accident in terms of the equity component that the NBN will bring that we are beginning the rollout in Sydney in Riverstone and Schofields. These suburbs will be transformed as communities because the NBN will not only transform what people can do in their own home with fibre to the home but also transform employment opportunities for high-tech, high-paid jobs. It is no accident either with regard to the equity component that was raised by the member for Wentworth—I say with some convenience—that the rollout began in Tasmania in areas that had been deprived of high-level technology in the past. Already six Tasmanian retailers are offering more competitive prices and services than many on the mainland can get. This is what Stephen Love of Galloway's pharmacy in Scottsdale had to say:

I've taken a 100mbit speed offer, that's actually very close to the cost of my previous ADSL2+ connection. The NBN will provide huge potential, for lots of new applications, especially in health which is of interest to me being a pharmacist.

So you can see what the response is on the ground. Certainly wherever I have gone, the NBN has had enormous support and indeed is one of the reasons why I am here as a minister and not as a shadow minister, because a range of the representatives on the cross benches regarded this as a critical issue moving forward.

With regard to the question about access raised by the member for Wentworth, under our system almost everyone gets access to fibre to the home. That is the basis of the system in terms of getting fibre to the home under the National Broadband Network. The NBN will not set retail prices. It is an open access, wholesale-only provider. So you will have a level playing field there. It will encourage competition which will lead to lower retail prices and better services—to give the analogy again, back to the way that freight rail system has been developed in this country. If you have a secure foundation then you are able to build competition on top of that that will allow the market to operate. I know that the member for Wentworth supports markets, unlike some of his colleagues who seem to have walked away from support for markets. I certainly support markets as well. I believe markets can be an extremely democratic way of allocating resources and providing significant benefit to more people on the ground.

The NBN Co. approach to developing its pricing model is this: the product and pricing approach developed by NBN Co. as part of its corporate plan has a number of core concepts, including a strong focus on gathering retail service providers, end-user requirements being simple and easy to understand and harnessing observable trends in end-user demand and utilisation. NBN Co. has consulted with more than 25 ISPs in developing its pricing approach. Given that the bells are ringing—

Sid Sidebottom (Braddon, Australian Labor Party) Share this | Link to this | Hansard source

It's a quorum, minister.

Anthony Albanese (Grayndler, Australian Labor Party, Leader of the House) Share this | Link to this | Hansard source

Well, I am going for a quorum. I commend the appropriation to the House.

A quorum having been called in the House of Representatives—

Sitting suspended from 18 : 22 to 18 : 30

Question agreed to.

Sid Sidebottom (Braddon, Australian Labor Party) Share this | Link to this | Hansard source

It being 6.30 pm, the debate is interrupted in accordance with standing order 192, and the resumption of the debate made an order of the day for the next sitting.