Bill Heffernan (NSW, Liberal Party) Share this | Hansard source

My mother will be on to me next thing. Bear in mind that the government cannot even tell us what the questions are. I have asked these questions in estimates to try to get a decision on what the questions that have to be answered are. Bear in mind that if the Waxman bill gets through the US Senate, America’s farmers are going to be in on the credit side and out on the debit side, which is precisely what we should do here. But in the white paper they say, ‘If the 2013 decision excludes agriculture, mitigation measures should still be applied in agriculture which result in costs of emissions similar to those under the scheme.’ They want to have their cake and eat it, too.

The science on the future is sending a signal to the world that Mother Earth is the referee of all of this. What Senator Milne said is right: if the science is correct and consistent, there will be a billion people downstream from that watershed who will be short for water. You do not have to believe it, but you have to do something about it; you have to have a plan; you have to have a contingency for the variability and vagueness of the science. The science on the future says that in 50 years time 50 per cent of the world’s population, if we grow to nine billion, will be poor for water; there will be a billion people unable to feed themselves; 30 per cent of the productive land of Asia will go out of production; the food task will double; and, get this, 1.6 billion on the planet could be displaced.

The one thing that everyone takes for granted in this debate is the modelling on energy and the impacts on coal, gas and all the rest of it. No-one is worried about food. Everyone takes it for granted that if you go to Coles, Woolies or Aldi and you go down the right aisle you will get bread, the veggies and the meat. Let me tell you: in the future, what is in your fridge is going to be more important than what is in your garage.

I want to address two issues tonight. We need to allow science to catch up. If you have any brains, when you drive into a fog, you turn your lights on and slow down. That is what we ought to be doing. We should recognise the problem, recognise the danger, but give time for science to catch up. There is an MBD company which has had an algae proposition go through the science build stage and move to the commercialise up stage. If that comes on stream, every coal fired power station on the planet that applies that process, which downstream provides—through the CO2 extraction—zero emissions, will have a biofuel base and a feedstock for feedlots. If that happens, if we allow energy to catch up, it will completely alter the sums on global CO2 and what will happen. That is just one.

We can also go to energy through thorium. If we put the money that is going into pink batts into the development of thorium, we could bring it forward with a bit of intensive science. Australia has the world’s largest supply of thorium, a non-plutonium based next generation after uranium nuclear source. And we have the Indians out here trying to buy up our resources without telling anyone. We could have that sort of electricity generation.

We ought to let technology catch up and we ought to slow the debate down. How ridiculous is it to try and pass this legislation through this parliament before we even know how it is going to impact on farmers? They take their food for granted. But at $17 a tonne, if farmers are included, most irrigated dairy farmers are insolvent.

When bottled water, which has got less than a cent’s worth of water in it, is sold for $2.50 and milk is cheaper—when you have to get out of bed at four o’clock in the morning to milk the cow—it is stupid. It is stupid. How can you make that decision when this government does not even know what the questions which have to be answered are? But it wants to include us and give us the answer later. How ridiculous is that? Where are we going to go? Where is the food task going to be met? At $40 a tonne, 30 per cent of the production cost for beef and mutton is the tax. You are going to put us out of business.

The CSIRO is already doing work, which is included in Science of the Future, to meet the global protein task—part of the food task—with fish protein. But noone in this debate is giving serious consideration to the impact on agriculture of the legislation that is before the parliament now. In fact the government have ducked the question, because they are saying, ‘We will give you the answer in 2013.’ What they are doing is telling our farmers that, when they go to the bank to renegotiate their mortgages and the bank wants to know what their five-year plan is to service the mortgage and asks, ‘What about this tax that is going to be imposed in 2013 which might mean 30 per cent of your production cost is just the tax?’ they are supposed to tell the bank, ‘We will tell you in 2015, old mate.’ And you expect the bank still to extend the credit line to farmers! I think that deserves an expletive, but I will not use the expletive.

Can I ask, if the government is listening—and noone on the other side has talked about agriculture yet—wouldn’t it make sense to give consideration to having farmers in on the credit side so that, if you do rotational grazing, zero tillage or annual perennial farming, you can get some credits? How do you calculate that? This is why the Waxman bill has excluded beef. India has 250 million cattle—a quarter of a billion cattle. Australia has 28 million. Brazil has 3½ times what Australia has and America has slightly more than that. India has more cattle than Brazil, America and Australia put together. Why would we go in with our 28 million cattle—and by the way our sheep herd has gone to 70 million from 210 million—if India has 250 million cattle which they pat and milk and do not eat? Why would we put ours in if we want to keep ourselves in business? How ridiculous is that? How corny is the thinking?

I cannot believe that, when we went to the Climate Change Committee, they just sat there with dumb faces and did not know any answers. ‘Let’s talk about energy,’ they said. They do not have any answers. So the government have to tell agriculture where farmers are up to before we make this decision, whether it is before Copenhagen or after Copenhagen. At the present time, they have no idea and I have not found one person in the government that can answer the question—not one person in the opposition that can ask questions of the bureaucrats to get an answer on what it all means because the bureaucrats do not know. They have said, ‘We will tell you in 2013.’ It is absolutely stupid.

I turn to something that came up today. A company that came in today wants to do something that is unique to the world—coal gasification and fertiliser production. This is the stupidity of where we are. Under what is proposed, and I am going to talk in detail on this, the company cannot start that process. A $50 million tax is going to be applied.

Here is what they propose—and I have to say there is work for the government to do on this, on sovereign issues. A company is restricted in the amount of output of a fertiliser plant which can be sold in Australia. It may produce up to a couple of million tonnes, but they can only allow seven or eight per cent of that to be sold in Australia. If there is one thing that Australia needs for its farmers, it is competition in the fertiliser market. So these fellows are at a serious disadvantage. They are proposing to build a plant which will mean a couple of million tonnes of fertiliser a year and only 100-odd thousand tonnes of that will be allowed, under what is proposed, to be sold in Australia.

I would like to go to the debate on emissions-intensive trade-exposed activities. There has been much criticism in the media in recent days about the failure of Rudd government Minister Wong to focus on the details of their proposed pollution reduction scheme. There has been a feast of motherhood statements. We met today with Rio Tinto. Rio Tinto ought to be out the front of the building, instead of sneaking around corridors here having meetings that they do not want exposed, about the problems that they are going to be presented with. The same goes for Mitch Hooke and his mob. They should have all the people who are going to lose their jobs out the front here holding up placards, not sneaking around the corridors here with some sort of merge deal with the CFMEU saying, ‘Oh no, don’t get offside with the government even though we are going to lose all these jobs.’ How ridiculous is that?

We on this side of the chamber believe in looking at the detail of this scheme. No one wants to go to the detail: ‘We will give you the detail later. It will be in the regulations. She’ll be right, mate. Go and have a beer.’ The biggest economic reform package that this country has ever seen deserves close scrutiny and debate, and we have not had that debate yet. We have had a lot of point scoring politically. We have not gone into the details. As I say on agriculture, noone has a clue. No one has a clue what it means, but it has the potential to put our farmers out of business. So let’s look at the detail. Let’s have a debate about the detail. What is the hurry? We have plenty of time.

This is a bit like the apology. It had to happen for our Indigenous people, but for a lot of people it was sort of like: ‘Let’s do it and get it out of the road.’ So we did it and got it out of the road. Now please explain to me how any Indigenous people are any better off. Every year I talk to thousands of Indigenous people who are mates of mine, but please explain to me how they are any better off and how the disgusting conditions they live in in the Northern Territory, where there are 7,000 kids that do not have access to a high school and there are 17 people to a home—when we allegedly have between $700 million and $800 million to build homes—have improved. How are they any better off now we have apologised? It is a disgrace.

This is the same thing. This is going to confession. We all feel guilty—80 per cent of Australians feel we have to do something about it, but there would be 75 per cent of Australians who have no understanding of what it means and how it is going to happen and how it is going to affect them. But, yes, we will all go to confession with: ‘Don’t worry about the details; we will just get it out of the road.’ That is what we are doing.

I want to focus on one very important part of the detail of the proposed scheme and it relates to how our emissions-intensive trade-exposed industries work out their carbon liabilities in this scheme. If I do not finish this, I would like to table what I have left.

One of the stated rationales for providing an EITE assistance package is to avoid carbon leakage and to compensate Australia’s emissions-intensive trade-exposed industries for the costs they will wear in competing on price with nations that do not face a carbon cost. As I understand it, for each emissions-intensive trade-exposed activity the government will publish an allocative baseline. These allocative baselines are for EITEs in determining what their carbon liability will be, the number of permits they will have to purchase and the number they may be entitled to receive for free. So these allocative baselines will determine the bottom-line impact of the scheme on every EITE, emissions-intensive trade-exposed, industry operating in the country and how every new one considering investing in Australia today will be affected.

These allocative baselines are the key for EITEs in determining all of this. So where are these allocative baselines? Where is the detail of this most important element for the future operating costs and price impact of our emissions-intensive trade-exposed industries and their bankers and everyone else down the line in their business model? The government gives as one of its reasons for passing this legislation this week the need to give certainty to industry. I hope the government are listening, but they turned off a long time ago. They have turned this into some sort of low-grade, cheap, political ambush. Yet the detail of these allocative baselines is not in the legislation before us. There is no sign of them. The government says it will put these all-important baselines, which determine the bottom line for the emissions-intensive trade-exposed industries, in the scheme regulations, for God’s sake. But so far they have only released eight, and for those eight they merely communicate the end result of their decision. If you go to the table on pages 20 and 21 of the exposure draft regulations you will see it.

Of further concern is that the rules for making these allocative baselines were clearly stated in the white paper but these all-important rules have not been included in the legislation—and, please, why not? Is it like agriculture and they do not know the answer and are trying to dream it up? The Rudd government talk all the time about the importance of transparency and accountability. It seems odd, therefore, that they would leave out this important detail. These people need to know. In the interests of transparency in government decision making and of providing business certainty, these rules should be included in the legislation. This is flawed legislation. This is dopey.

I understand that these allocative baselines are meant to be technologically and feedstock neutral. I also understand that these allocative baselines are meant to be made in reference to Australian historical emissions data but that, where an Australian EITE industry is made up of one or a few entities, the international emissions data for that activity will also be used to set the allocative baseline. The reason for this, and I quote from the white paper, is ‘so as not to result in more or less favourable treatment of activities in where there are few Australian producers, compared to industries where there are many’. This makes sense as, after all, Australian EITEs, whether existing or potential, are competing globally and should be assessed accordingly.

I have recently heard of several instances where it is believed that the government’s intention is to ignore its own guidelines and set these allocative baselines with reference to only one possible feedstock instead of considering the full range of feedstocks used here and globally to produce any EITE product. How cuckoo is that? We all know that natural gas has fewer emissions than coal. We also know that Australia has an abundance of coal and more limited supplies of natural gas. So what would be the effect of setting allocative baselines for an activity that can use either natural gas or coal as a feedstock in reference only to natural gas emissions? We are talking here about non-power uses of coal, of course. It would mean that those EITEs who use coal to produce product A would be required to purchase disproportionately higher numbers of permits compared with EITEs using natural gas for producing exactly the same end product. An allocative baseline set out in this way clearly disadvantages coal, even low-emissions coal, and reduces the international competitiveness of industries that depend on it. Yet the government says it wants a low-emissions future for coal.

The government ought to allow technology to catch up for coal. That is the better solution. Slow down and put your lights on and let technology catch up. For God’s sake, technology will catch up. Farmers now do zero tillage farming. Twenty years ago you ploughed the paddocks three times before you put the crop in; now you do not plough it at all. We have Spanish and Israeli technology that is 40 times more efficient than the old furrow irrigation. Let technology catch up and solve this problem. What is proposed here is to send the message that we are on the ball. Everyone wants to do something about Mother Earth’s interpretation of how we are destroying the earth. She is the referee and we have to fix it up or we will all be ruined. But let us give time to technology to catch up. I quote a recent statement by Minister Wong:

When it comes to coal what I would say is this, if you are serious about action on climate change, then you have to find a lower emission solution for coal.

               …            …            …

We have to find lower emissions technologies …

That was Penny Wong on 6 August 2009 in a doorstop interview at the Pacific Islands Forum. Even she says we have to do it. For God’s sake, why doesn’t the government listen to her? This is crazy. What is the hurry? Turn the lights on and slow down; we are in a fog. They are in a power dive. They are flying in cloud and are in a power dive. They ought to be flying straight and level. And they are trying to build a plane without wings, for God’s sake.

There is technology in the pipeline to solve these problems. If I were in charge in a philosophical sense I would shoot two out of three lawyers, but there are lawyers and bankers who see this as the new feast coming. This is the new river of gold. We should slow down and let technology and hardworking scientists provide a solution for the planet, not hand it over to the bankers—thanks very much.