Christine Milne (Tasmania, Australian Greens) Share this | Hansard source

I rise today to comment specifically on the government’s Tax Laws Amendment (Personal Tax Reduction and Improved Depreciation Arrangements) Bill 2006. As I indicated on the night of the budget, the Greens do not support the tax cuts. We think that the surplus would have been much better spent on addressing the significant challenges facing the Australian economy. The Treasurer did not mention these challenges in the budget and even failed to recognise them in the small print in the budget papers. These challenges are the significant impact on the Australian economy that is going to occur, and is already occurring, because of climate change and the need to address energy security issues—in particular, oil proofing the country—in an age where we are going to see not only oil depletion but also much more expensive oil supplies coming into Australia as we shift to being a net importer of oil within the next 10 to 15 years.

The Greens have also said that we believe that this squandering of the surplus—which is how we would see what the government has chosen to do with these tax cuts—is basically taking away a future income stream from government which is going to be challenged by the costs of infrastructure and service delivery to an ageing population. All around the country, people complain of the inadequacy of health services, in particular. They complain about the ongoing costs of providing accessible, high-quality health care in rural and regional Australia—and that is certainly significant in my state of Tasmania—and yet we find the government feels that the surplus is such and the infrastructure is such that it can give away personal tax cuts.

I think it is interesting that the budget has virtually died without a trace. Within weeks of the budget, the ‘Manna from Heaven’ and the ‘Rivers of Gold’ headlines have disappeared. What has replaced that in the public debate is the energy crisis, which I talked about in my budget reply speech. Since the budget, the Prime Minister has discovered climate change in an attempt to legitimise his rush to embrace nuclear power, and we now have a global discussion occurring in relation to the new nuclear club. We have discussions every day about the ongoing cost of fuel. The issue that is the focus in the business pages is the government’s so-called reforms to the fuel taxes and how fuel is delivered around the country. So the issues that the Greens identified on budget night as being the main threats to the budget and as being the areas in which there needed to be forward planning are precisely the issues that are rushing onto the agenda. Meanwhile, the government’s tax cuts have been lost out there in the ether.

Whilst the government might consider that it will get some benefit from votes in next year’s election because of the tax cuts, I doubt that that will be the case—because, for all that it was dressed up to be about middle Australia, these tax cuts were for the rich. This has been a budget for rich Australians, and it has exacerbated the gap between the rich and the poor. Any improvement in the lower- to middle-income bracket is completely absorbed by the increased costs of trying to access services, whether they be health services, education services, public transport services or child care. You name it, everything has become increasingly more expensive, and the tax cuts will not offset the increased costs of trying to access those services.

I think the issue of the government’s loss of a revenue stream into the future is incredibly serious. The entire budget is predicated on the assumption that corporate profits will continue into the future without any kind of interruption. Those corporate profits rely particularly on the mineral boom continuing—not being cyclic, as has always been the case in the past—because of the insatiable demand for minerals from India and China. That assumes that those economies have the capacity to grow indefinitely. It is again a failure to recognise the ecological limits. If China and India continue to grow at the rate that they are currently growing—and as is predicted—their demand for raw materials will be such that there will be huge ecological devastation around the planet in trying to fuel this particular growth. What is more, the inequities in terms of trade between the United States and China will destabilise markets into the future.

My great concern here is that the whole Australian economy has been simplified under the Howard government. Rather than being strengthened, it has been weakened. We have gone back to being, as I said in my budget reply speech, and as Doug Cameron described, a quarry, a farm and a nice place to visit. The manufacturing sector has virtually been lost, and the tertiary sector is tiny and struggling as a result of having its research and development funding strangled. The opportunity was here with the surplus to invest heavily in the research and development that would build us a more sophisticated economy, particularly in the tertiary sector, but instead it is delivering tax cuts.

We have already seen some of the great technological breakthroughs in Australia going offshore to China. We have a situation where the Treasurer gave a $52 million subsidy to car manufacturers in Australia without tying it to fuel efficiency. We had a recent discussion about how well the free trade talks are going with China, and there was even some speculation in the estimates that Australia might be able to export cars to China, but there was no apparent recognition that the Chinese have set higher vehicle fuel efficiency standards than Australia. We will not be exporting cars to China, not just because they can produce theirs more cheaply but because they have set higher fuel efficiency standards than we have in our own country. We need to wake up to the fact that the Chinese are constantly building competitive advantage into the sophisticated environmental management technologies of the next century.

The same applies to renewable energy technologies. China have set a 15 per cent target for renewables. As a result, we have Dr Shi, Australia’s first solar billionaire, making his money in China, because it is in China that he can roll out the photovoltaic technology that he learned how to establish at the University of New South Wales. Meanwhile, Professor Martin Green’s program at the University of New South Wales is underfunded.

What does that say about this budget strategy, which is to rake in the dollars from digging things up and sending them offshore? Having got those dollars, instead of investing in research and development to address climate change—the big security threat of this decade—and building a more sophisticated economy through research and development, and rolling out those technologies and transferring those jobs—as the Germans have done, as the Japanese are doing and as the Chinese are doing—what do we then do? We say: ‘No, any money that we’ve got to invest in R&D we’re going to invest in more digging up. This time, we’re going to invest it more heavily in the coal industry because we hope that, by sending our research dollars to carbon capture and storage and pumping carbon dioxide back down holes in the ground, we can continue digging it up, with business as usual.’

In terms of the uranium debate, we have precisely the same thing. We have a strategy of digging it up. But this time it is even better, because not only are we digging it up but we are filling up the holes with the waste we get back. That is an incredibly sophisticated strategy: Australia becoming the nuclear waste dump of the world and generating income from the storage of high-level nuclear waste which will be sent back to us from any number of countries around the world! That includes America—and President Bush. At the moment, he cannot get domestic approval in the United States for the storage of high-level nuclear waste, so what could be better than turning to his good friend Prime Minister John Howard and asking if he can dig a hole in the ground and store the high-level nuclear waste here for a fee? Australia is continually building budgets on digging it up, sending it away and, in the case of nuclear, taking back the waste.

This budget was an opportunity to use the surplus to invest in the new economy, and it has failed to do so. There is nowhere near the investment that is needed in solar thermal technology, for example. For all the talk about nuclear being needed for energy security, nothing could be further from the truth. The CRC on coal technology in Australia released a report saying solar thermal could produce all of Australia’s base load power using 37 square kilometres of land and could be cost competitive with coal within seven years. Why aren’t we investing in that technology, which would then be taken up in a huge way by countries such as China, and in other parts of the world where they are desperate for base load energy to replace fossil fuels? It makes absolutely no sense that Australia’s greatest resources, our huge area and our sunshine, are not being recognised as being a competitive advantage.

Instead, we are predicating a budget surplus future on the basis of our ongoing capacity to dig up minerals and send them overseas on the assumption that the minerals boom will last forever. If that is not a high-risk strategy for a budget, I do not know what is. We also have the ageing population. We have to deal with the fact that fewer and fewer Australians will be paying the taxes to keep a larger number of people who are living longer and requiring not only health and transport services but all the community services that provide a reasonable quality of life for people in their old age.

From the Greens’ perspective, we are seeing a squandering of the surplus on the basis of a risk that we can continue to dig up minerals. It is a failed strategy for our future and one that does not benefit low- and middle-income earners, who overwhelmingly would rather have better access to health, education, public transport and child care today rather than a few dollars in their pockets which do not go towards meeting those needs. In the committee stages of this bill I intend to move an amendment to address the issue of building some sort of real energy security in Australia. We have had some discussion of it since the budget, but there has been no discussion of the practical measures that could be taken to reduce energy demand in Australia. That is the simplest and cheapest way of dealing with increasing energy challenges.

Earlier this year, the Minister for the Environment and Heritage moved the Energy Efficiency Opportunities Bill, which required companies using more than 0.5 petajoules of energy per annum to engage in a mandatory energy efficiency audit. I thoroughly support that. That is precisely the way we should be going in a whole range of areas. But the government has failed in that because all it requires is that those companies conduct the audit. It does not require companies to implement the findings of those audits. At the time that bill was being debated I moved an amendment saying that the companies should not only identify the energy efficiency measures but be required to implement them with a payback period of two years initially, phasing into a period of five years, so that we got an upgrade in Australia’s business community and so that we became much more energy efficient. If you are serious about energy efficiency and security, that is what you do.

When the government moved for accelerated depreciation in the budget it was a clear opportunity to tie that accelerated depreciation to energy efficiency. In the committee stage of this bill I will be moving an amendment which does what the government had an opportunity to do with the Energy Efficiency Opportunities Bill. Hopefully, they will rethink it. If we are going to give business a windfall for accelerated depreciation, why should those businesses which are the most energy thirsty, the energy guzzlers on the grid, get a windfall benefit without having to take some responsibility for upgrading plant and equipment? As a result, that is what I will be moving, to make sure that the accelerated depreciation provisions do not apply to these energy guzzlers unless they implement the findings of the mandatory audit that the government now requires them to conduct. That is a first step and a practical step. It will be a test of the government’s so-called new commitment to climate change and to reducing our energy footprint.

The whole issue of climate change is not seriously on the government’s agenda. In the estimates just recently we had a situation where I asked the Department of Foreign Affairs and Trade and Senator Coonan whether they were looking at the national security ramifications of climate change for Australia in the Asia-Pacific region, just as the Pentagon has done for the United States. Senator Coonan had difficulty understanding the question. She asked several times and she could not understand what an environmental matter might have to do with national security. Today the Lowy Institute released their report on the national security ramifications of climate change. Only a few months ago I moved a motion asking the government to recognise environmental refugees and to work to have it incorporated into the UN convention on refugees. The government once again rejected that. I am not prepared to accept that the government even have climate change on their radar, except to invoke the words when they want to use it to cover another agenda, like being part of President Bush’s nuclear club, which is the most recent invocation of the issue of climate change.

Whether the government likes it or not, climate change, energy security and oil depletion are the big challenges to Australia in this century. They are the challenges which will rock the budget and knock it right out of the water when we have major and extreme weather events occurring because of climate change. They are going to be the issues when the next generation of Australians look back and see that the government squandered a massive surplus, failed to recognise how the world had significantly changed and failed to take advantage of Australia’s competitive opportunity at this point of significant change to embrace renewable energy and solar technologies and to go out and create a sophisticated economy that helps Australia, is globally responsible and demonstrates global leadership.

That is why the Greens are opposing the tax cuts. That is why I will be moving to require companies to do what is the right and responsible thing at this time. If they want the benefits of accelerated depreciation then they can take the responsibility for implementing the energy efficiency measures that will begin the process of focusing business on what needs to happen in Australia to address climate change.