Ron Boswell (Queensland, National Party) Share this | Hansard source

The Senate is debating the National Greenhouse and Energy Reporting Amendment Bill 2008.This bill amends the National Greenhouse and Energy Reporting Act 2007. It mandates the separate disclosure of direct and indirect greenhouse gas emissions. It allows the minister to specify conditions of measurement and their publication and amends provisions relating to reporting requirements. The original coalition government act was passed in September 2007, establishing a national mandatory corporate reporting system for collection and dissemination of information related to greenhouse gas emissions, energy consumption and production. The reporting obligations under the act are intended to lay the foundation for the proposed national emissions trading scheme, due to be introduced in 2010.

Organisations that are going to have to start reporting from the middle of 2009 will need to have in place systems to measure their emissions and trade carbon and will need to address all reporting and monitoring responsibilities under the NGERS. Currently, about 450 companies are required to report under the scheme and by 2011 the number of organisations is estimated to increase to more than 700. Evaluation of the implementation of the scheme and the impact and costs of the measures is still to be undertaken, as the 1 July 2008 start-up date has only just occurred.

This bill signals that Australia is on the cusp of a radical change in the way we do business. There is to be a new cost, at present unquantified, that will impose a burdensome tax on our largest businesses, our largest employers and our largest export earners. Australia faces the most serious decision affecting our economic viability since the great depression. Yet those circumstances were largely beyond our control; with the Rudd government’s carbon pollution reduction scheme, we hold our destiny in our hands.

This debate needs to engage the public’s attention in far greater depth than we have seen so far. There should be no taboo on questioning exactly what price we will pay in jobs, exports and economic health. I say that because there have already been attempts by the green lobby extremists to vilify any who challenge their right to moral supremacy in this debate. Where so much is at stake, we should be totally informed about the consequences of our legislative actions. The costs to householders, workers and businesses under the proposed green paper are dire to say the very least. Business went along with the government to start with, saying, ‘Yes, we’ll work to reduce greenhouse emissions.’ But they do not seem to have realised the Pandora’s box they have opened by choosing that tactic.

The green paper is a recipe for colossal damage to our key competitive industries. The recent BCA study highlights the dangerous impact of Rudd’s emissions trading scheme. It would be reckless in the extreme to impose this on the Australian economy. The Business Council of Australia study found that half the businesses will see their returns drop below acceptable levels. Some trade-exposed, emissions intensive industries will close; others will wind back. There will be a large reduction in new investment. I hope you are listening to this, Senator Carr, as you are the industry minister. Australia will lower its emissions in large part by exporting them to other countries. We will simply import our growing needs rather than meet them locally. Australia will suffer considerable economic pain for no global environmental gain.

The government’s green paper compensation scheme is inadequate and contains significant anomalies. The green paper approach will strongly limit future trade-exposed, emissions intensive investment. The electricity sector requires a near doubling of spending on new power generation and transmission lines to $4 billion per annum. Gas use for electricity must approximately triple, requiring significant development of undeveloped and, as yet, undefined Bass Strait reserves. It is highly likely that brown and black coal electricity generation facilities will have to be rapidly revalued and written down. There is a severe risk of increased electricity supply interruptions.

Australia’s comparative economic advantage is built on commodity based, emissions intensive industries that are often greener than our overseas competitors. Damaging our major industries and sending them offshore will only leave Australia worse off economically and the world worse off environmentally.

We should also be very careful about becoming partners with New Zealand in an emissions scheme, as was recently canvassed by Prime Minister Rudd. New Zealand, as I understand it, already has a carbon market relationship with Europe. If Australia joins up with New Zealand we could be prematurely brought into the European market through arbitrage and we would be swamped by what happens there because it is so large and so beyond our control.

There are 1.1 million people directly employed by trade-exposed, energy intensive companies. Many more are beneficiaries of jobs that flow from the output of these companies. The New South Wales Minister for State Development, Minister for Energy, Minister for Mineral Resources and Minister for Primary Industries, Mr Macdonald, told trade-exposed industries in June that it looked as if emissions trading could double power prices in the eastern seaboard electricity market. He added:

I shudder to think how the wealth and job-creating industries of NSW will cope.

The Rudd government, he warned:

... has to devise the scheme carefully so as not to send the economy in to freefall.

Late last week we heard more bad news from the transport sector on the unworkability of the carbon reduction scheme. Domestic tourism and Australian airlines will be hard-hit because their costs will go up, while foreign carriers will be cheaper by comparison. This is because the aviation industry will not qualify for compensation. I think the call should go out to the tourism minister: ‘Where the bloody hell are you!’ And perhaps also: ‘Who the bloody hell are you?”

The rail industry is upset that the trucking industry gets compensated for fuel price rises, while they get nothing. The shipping industry says that that puts them at a disadvantage as well, not to mention the fact that foreign shipping will be exempt from the carbon scheme, which will put Australian coastal shipping at a huge competitive disadvantage.

On the weekend it was reported that the Managing Director of Alcoa Australia, Alan Cransberg, warned the Minister for Resources and Energy, Martin Ferguson, that the emissions trading system as currently envisaged, combined with the government’s proposed mandatory renewable energy targets, would threaten future investment in Australia. A representative of Chevron Australia said that the scheme could threaten the proposed Gorgon liquefied natural gas project in Western Australia, even though it would be one of the cleanest LNG projects in the world, with plans to sequester carbon from its operations underground. The manager of refining at ExxonMobil, Glenn Henson, said that the current compensation formula would threaten the operation of the refining industry in Australia. A representative of OneSteel said that the proposed scheme would have the perverse effect of driving production towards higher emissions processes that were slated to receive compensation, rather than cleaner processes that were not. And just today, the Australia Institute reported that an emissions trading scheme will cost charities and community groups $1.1 billion a year. The executive director, Richard Denniss, said:

... if you’ve got hundreds of people in an aged care home then that is a lot of hot water systems. That is a lot of air conditioners. It is a lot of heaters and it is a lot of other energy intensive appliances being used 24 hours a day, seven days a week.

Is the government going to compensate charities for extra energy costs? They are not in a position to pass on higher charges to their clients. How will the charity and community sectors cope with an ETS? Has the government even thought about it? And what about the government’s own agencies in these areas? Where in the forward estimates does it allocate extra spending to departments to cope with rising costs as a result of an ETS?

Of all the issues to decide to take real action on, rather than just posing, Rudd chooses the one with the highest risk to jobs and to the economy. There is Fuelwatch and GroceryWatch, which are merely token reactions to government by populism. The one time—the most important time—on which it would be wise to watch closely what is happening before acting intemperately is with this emissions trading scheme. The most important businesses in Australia are lining up to say how this scheme will wreck Australian industry. We have transport infrastructure providers warning of the fallout, we have tourism up in arms about the effect on their competitiveness and we have the not-for-profit sector asking how they will cope with higher costs. Never have I seen a policy give rise to such a litany of liabilities.

We are told that, since the European Union has instigated a system, we can have one too. Yet the Australian reported on August 25:

The EU hasn’t worked out how to treat its emissions-intensive trade-exposed industries and find an equitable system for auctioning permits.

They are facing the same problem as Australia is: any domestic trading scheme renders the home country less competitive and encourages the relocation of trade exposed firms to unregulated economies. To quote Matthew Warren:

Business activity and commensurate government revenue will diminish, unless these transfers can be accurately identified and compensated, or until a comprehensive global deal can be negotiated.

The European Commission is working on a solution by 2010 with a gradual phase-in of permits from 2012 to 2020. People say, ‘If the EU has done it, why can’t Australia do it?’ But the problem is that the core dilemma for Australia—what to do about export industries—has not even been addressed by Europe. We cannot copy or learn from them because they do not know how to handle it either.

Before I conclude I would like to note the latest output from the global warming enthusiasts. The World Wildlife Fund has claimed that recent freezing temperatures in Sydney are proof of the urgent need to cut carbon pollution. I thought we were talking about the perils of global warming. I thought we had to act to stop temperatures rising and inflicting untold disasters on us. Now carbon emissions are responsible for global cooling? This whole emissions trading scheme has been built on the assumption of man-made global warming. Now we are asked to believe it is man-made global cooling and that that will be a similar disaster. That is what I would call a very inconvenient truth. What a twisting charade—and it is no mistake.

I hope the business sector, and Ms Ridout in particular, see what a dangerous friend they have made in accepting global warming. I hope they see now the policy Armageddon they have opened up. If the Rudd government’s emissions trading scheme is not drastically altered, if the litany of liabilities is not comprehensively addressed, then it is Australia who will end up pleading with the East Timorese to take us as guest workers and not the other way round.