Michaelia Cash (WA, Liberal Party) Share this | Hansard source

Bar a good one in Western Australia—thank you, Senator Cormann! It would seem that even Mr Rudd’s most senior Labor colleagues are worried about the impact of the ETS on jobs in their home states. Otherwise they would not have commissioned the modelling that was undertaken in this report. I will stand up for Western Australia, even if those opposite will sell it out to a spin-driven political timetable. I will not stand by and vote for a scheme that will destroy jobs in Western Australia and negatively impact on my state’s economy.

As a senator for Western Australia, I would now like to highlight a further flawed area of this legislation insofar as it relates to the Western Australian electricity market. The WA energy market, in which gas power is dominant, has not been distinguished from the eastern states energy market in the determination of ESAS assistance, insofar as the Treasury modelling uses the same competitive spot market assumptions for electricity sales for all states. This fails to distinguish the unique circumstances in Western Australia. The WA energy market has fixed priced contracts which do not allow the sector to pass on the increasing price of carbon, which generators will bear. This is not the case for the eastern states, where the price of electricity is based on a competitive spot market, allowing the additional cost of carbon to be passed on to consumers through the market clearing price. There have been several sensible suggestions put forward by Griffin Energy to deal with the unique circumstances that apply in Western Australia.

While I am aware that the energy sector is in talks with the government, it is patently wrong and commercially ludicrous for Western Australians that the federal Labor government should demand that the Senate vote on this legislation before the vital issues that have been raised by Griffin Energy are resolved. But in Western Australia we have not only problems with the federal government not recognising the unique circumstances that apply to the WA energy market but also concerns, as raised by Griffin Energy and by the Western Australian Department of Mines and Petroleum in a letter dated 15 June 2009 to Dr Martin Parkinson, Secretary of the Department of Climate Change. There is concern that the open-cut coal industry at Collie in Western Australia is being wrongly treated because of an apparent error in the National Greenhouse and Energy Reporting (Measurements) Determination 2008. As Mr Noel Ashcroft of Griffin Energy stated in a letter to me:

We find that in October 2008 we were allocated a default coal mine methane fugitive emissions factor in the greenhouse gas statutes (Determination) which bears no relation to the reality of the situation, that is, that WA Collie coal does not have methane, as is the case with Queensland. Nor have we any idea how it got there as there was no consultation.

In the past we were assumed to have the same default fugitive emissions factor as Victoria and South Australia but without reference to us this was changed last year to the equivalent of Qld and NSW at the last determination. It is well known that Qld and NSW have significant methane.

As this factor is to be used as the penalty emissions factor for CPRS it will cost us—

Griffin Energy—

well over $1.25 million per annum and rising as the mining increases to accommodate new projects.

As previously set out in a letter from The Griffin Group to the Department of Climate Change dated 11 May 2009, Collie coal does not have methane, a fact borne out by its absence from the WA mining and safety legislation and supported by the Geological Survey and the state Mining Engineer. Nonetheless Canberra is effectively saying we have to do very expensive research/drilling to verify that we have a low methane situation. It seems that they have adopted a position of “guilty until you prove yourself innocent” in a regime where the cost of proving what is well known is exorbitant!!

What other errors are being made in relation to Western Australia in the formulation of the CPRS and the associated bills? As a senator for Western Australia I reiterate that it is patently wrong and commercially ludicrous for Western Australians that the federal government should demand a vote on this legislation before such vital issues are resolved. Prior to the 2007 federal election the Prime Minister, as then Opposition Leader, said:

In taking the lead before an effective international agreement is in place, it is also vitally important that a domestic scheme does not undermine Australia’s competitiveness and provides mechanisms to ensure that Australian operations of energy-intensive, trade-exposed firms are not disadvantaged.

Well, it would seem that Mr Rudd was a little loose with the truth. When held up to scrutiny the Rudd Labor CPRS fails on all counts: it will cost Australians their jobs, it will kill investment in Australia and it will do very little, if anything, to reduce CO2 emissions. The only action that a government should take to reduce carbon emissions is responsible action. Action taken at the expense or to the detriment of the Australian people should not be supported. The government’s current CPRS, if agreed to in its present form, will result in action being taken at the expense of the people of Australia. But worse than that its implementation in its present form is likely to achieve the perverse outcome of Australia contributing to an increase in global emissions. As a proud Western Australian I will not be selling my state out to indulge Mr Rudd’s appetite for celebrity status on the world stage. This legislation must not be supported.