Mathias Cormann (WA, Liberal Party, Shadow Parliamentary Secretary for Health Administration) Share this | Hansard source

The legislation before us today is a complete fraud. The process the Senate has been asked to engage in today by the government is a complete farce. This legislation is a fraud perpetuated by the Prime Minister on the Australian people. The Prime Minister is taking advantage of people’s goodwill towards the environment. The Prime Minister wants people to believe that this legislation will help reduce global greenhouse gas emissions and that it is strong action on climate change when he knows very well that it is nothing of the sort.

The Prime Minister knows that this legislation will not help reduce global greenhouse gas emissions, yet he is happy to impose significant sacrifices on people across Australia without giving them a proper explanation of what he seeks to achieve in terms of actual reductions in global greenhouse gas emissions. This process today is a farce because we are being asked to debate legislation when we have not yet been told by the government the form this legislation will be in by the end of next week, when the government ultimately wants it passed. We are starting debate on legislation that we already know will not be in the same shape by the end of next week if the government has its way.

Today is the one-month anniversary of the government’s commencement of discussions and negotiations on a range of amendments put forward by the coalition—amendments which clearly expose the many flaws in this legislation. The government has been negotiating for a whole month. If that were a good faith negotiation, the government would by now have told the Australian people and the coalition which of the amendments it can agree with and which of them it cannot so that the opposition and the Senate could have a proper debate about the merits of the final shape that this legislation will take. Instead we are having a debate here about legislation that everybody in the Senate other than the Labor Party agrees is deeply flawed and we know that the legislation that is ultimately going to be put to a vote if the government has its way is going to take a totally different shape.

So the government is not conducting this process in good faith. It is certainly not acting in good faith with the Senate. This emissions trading scheme legislation is not strong action on climate change. It will not help reduce global greenhouse gas emissions. In the absence of an appropriately comprehensive global agreement, this emissions trading scheme will push up the cost of everything. It will cost jobs. It will put pressure on the economy. It will put our energy security at risk. It will have a particularly bad impact on regional Australia. Yet it will do nothing to help reduce emissions. Why, I would ask, is that a good idea?

Let us reflect on what is being proposed. The government is proposing to impose a price on carbon which is supposed to change behaviours. An emissions trading scheme in Australia could be—could be—an effective way of helping to reduce emissions globally if it were part of an appropriately comprehensive global scheme. Indeed, when the Howard government announced an emissions trading scheme and even when the Rudd government first went through the process of developing one, those schemes were always based on the assumption that they would be part of an appropriately comprehensive global scheme. We now know that this is very far from being a reality moving forward. In fact, it is highly unlikely that this will be a reality moving forward. Surely, then, we need to reassess whether this really is the best way that Australia can help reduce global greenhouse gas emissions.

I have real concerns with the Prime Minister’s approach. He has the typical bureaucrat’s approach. He is our chief bureaucrat here in Canberra. He wants to tick the box. ‘Australian people, you are concerned about the environment, you are concerned about climate change; I have the solution for you: this ETS’—tick, done, irrespective of whether it is actually going to make a difference. This is going to make it worse. If we are going to do something that is ineffective and make people believe that we have fixed the problem, we are going to end up in a worse situation than the one we started with.

What is the actual problem? We are part of a global trade environment. If we impose on businesses in Australia costs that are not faced by our competitors in other countries around the world, this will have an impact on our international trade competitiveness. If we reduce emissions in Australia in a way that will result in increased emissions in other parts of the world, we will have done nothing for the global environment. If we make overseas polluters more competitive than even the most environmentally friendly equivalent businesses in Australia, we will have done nothing to help reduce global greenhouse gas emissions. If emissions overseas increase by more than we can reduce them in Australia as a direct result of the way this ETS is structured, we will have done nothing to address climate change and we will have done nothing to help reduce global greenhouse gas emissions—but we will have imposed significant sacrifices on people right around Australia, sacrifices which the Prime Minister to this day has not explained to the Australian people. He has not explained the benefit either.

I was Chair of the Senate Select Committee on Fuel and Energy, and we had a series of departmental officials in front of us providing explanations about what the emissions trading scheme would and would not do. I asked a senior official of the Department of Climate Change a very simple question: what is the target in terms of a net reduction in global emissions to flow from a proposed Australian emissions trading scheme? The official was not able to answer. Of course he was not able to answer. Some say that is an unfair question, that he could not possibly know, because it depends on what happens in other parts of the world. Exactly—it depends on what happens in other parts of the world.

In the report of the fuel and energy committee we made this counterintuitive observation: if we are really serious about reducing global greenhouse gas emissions—if that is the target, if that is our objective—it may well be in the best interests of the world for Australia to increase emissions in certain areas if it helps to reduce emissions by more in the world overall. I will explain. If we want to expand our LNG industry in Australia, we will increase emissions. But, for every tonne of additional emission-producing LNG in Australia, we will be able to reduce emissions in China by 5½ to nine tonnes if that LNG displaces coal. We will be able to reduce emissions by four tonnes if it displaces coal in Japan. That is a net positive effect for the world environment. Australia should be having a debate about how we as a nation can best contribute to a reduction in global greenhouse gas emissions; we should not be having a debate about an ETS as an end in itself. The ETS was only ever seen as a tool, an instrument, that could help us achieve a particular objective. If the global circumstances change, we have to be adult and mature enough to say: ‘Okay let’s reassess. Let’s remind ourselves what it is we are actually trying to achieve. Then let’s see if there are better ways we can achieve our objective.’

Much has been made of the argument that the coalition took an emissions trading scheme to the last election—and we did; there is absolutely no doubt about it. But since then a lot has changed. Firstly, we had the Garnaut review. We had the green paper, the Treasury modelling and the white paper. We had five Senate inquiries. We have a much better understanding now about what an emissions trading scheme can and cannot achieve—particularly in the absence of an appropriately comprehensive global agreement. The assumption was that the Australian ETS would be part of an appropriately comprehensive global scheme—which is much less likely now. Furthermore, the objectives for Copenhagen were set after the 2007 election. We had the Bali conference in December 2007—Senator Wong’s first foray onto the international stage. That is when they set the objectives for Copenhagen. We know that in Copenhagen developed nations from around the world were supposed to commit to emissions reduction targets. Even the Prime Minister is now conceding that that is not going to happen. So should we just press ahead no matter what it means in terms of reducing emissions around the world, no matter what it means in terms of jobs, the cost of living or energy security? That would just be completely irresponsible.

The government likes to simplify this debate into a debate between climate change believers and climate change sceptics. I think that is a completely simplistic way of handling the debate. The government had its own doubts a little while ago. Let us reflect on this. When Kevin Rudd was elected to government, first-up he said: ‘We’ve got to take urgent action. This is the highest moral challenge of this century. Those that don’t agree to take urgent action’—which is this ETS—‘are climate change deniers, climate change sceptics.’ He was into name-calling. But I remind the Senate that on 12 February this year it was the government—it was the Treasurer Wayne Swan—who commissioned a ‘new’ inquiry into the choice of emissions trading. It was to be chaired by Mr Craig Thomson MP, the chair of the House of Representatives Standing Committee on Economics. I remind the Senate of the terms of reference—this is in February, after the green paper, after Treasury modelling, after the white paper and after the draft legislation was put out there:

The Committee will inquire into the choice of emissions trading as the central policy to reduce Australia’s carbon pollution, taking into account the need to:

a) reduce carbon pollution at the lowest economic cost;

b) put in place long-term incentives for investment in clean energy and low-emission technology; and

c) contribute to a global solution to climate change.

What a sensible set of terms of reference. But do you know what happened? A week later, the inquiry was cancelled by the Rudd government. The reason it was cancelled would have been because there would have been a battle going on inside the Rudd cabinet between those who thought, ‘Hang on, let’s just see whether this is really the most sensible way to go’ and those who were blindly following ideology, who had committed themselves to an ETS as an end in itself, who had lost sight of what we were actually trying to achieve and who thought it would be a loss of face to question the choice of an ETS as the way forward at this late stage.

On 4 May, Minister Wong and the Prime Minister made an extraordinary announcement. They announced the delay of the implementation of an emissions trading scheme by 12 months. If anybody else had put that forward a little while earlier, they would have been accused of being climate change deniers, climate change sceptics, and they would have been called all sorts of names.

I also draw to the attention of the Senate the secrecy with which the government has been handling all of this. Important information around the economic modelling conducted by Treasury has been kept secret. The Senate has used all of the powers and procedures available to it to force the government to release significant information related to the economic modelling into the CPRS. To this day the government has refused, on very weak grounds. Of course, we have the government-commissioned Morgan Stanley report, about the impact on electricity generators, which the government to this day is keeping secret. I remind the Senate that the Rudd government, in its economic modelling about the impact of the CPRS, incredibly, assumed that there would be a seamless transition from a high-carbon to a low-carbon electricity generating industry—which is not an appropriate assumption to make.

I also remind the Senate of the controversy in the lead-up to the last election, when Peter Garrett came out and said, ‘Well, yes, Australia might go it alone. Australia might commit to targets even if China and India do not come on board.’ Remember that? The Prime Minister had to essentially pull Peter Garrett back into line, and then of course Peter Garrett was subsequently demoted. I quote from the Australian on 30 October 2007:

Peter Garrett’s political credentials were in tatters last night after Kevin Rudd forced his environment spokesman to issue a humiliating clarification of Labor’s greenhouse gas policy.

At the core of that argument was, of course, that any Australian ETS needed to be part of a comprehensive global scheme in order to achieve its intended objectives, which are to help contribute to a reduction in global greenhouse gas emissions.

The Treasury modelling, which is to assess the impact on our economy, on jobs, et cetera, assumed that the US would have a scheme in place by 2010, that China and the richer developing countries would have a scheme in place by 2015, and that India would have a scheme in place by 2020. That is not going to happen. The Prime Minister knows it is not going to happen; everybody knows it is not going to happen. Isn’t it then in the national interest for us to reassess the most appropriate way forward? Of course it is.

I have argued publicly, and my views are well and truly on the record, that I do not think that we should be finalising this legislation before Copenhagen and before we know what the rest of the world is prepared to do in relation to emissions trading—in particular the US. The reason for that is that, if we go ahead with a scheme that is not in sync with the rest of the world, it is going to have bad impacts on our economy and there will not be any environmental benefits. The Copenhagen conference is three weeks away. The Prime Minister and Minister Wong have already delayed the implementation of the scheme by 12 months. They have delayed the reintroduction of this legislation into the Senate by three months, for their own political reasons. Why is it then not in the national interest for us to wait another three weeks to find out what comes out of Copenhagen so we can make a sensible decision, in the national interest, early in the new year about the best way forward in terms Australia maximising our contribution to the world in terms of reducing global greenhouse gas emissions and doing it in an economically responsible fashion?

If the government are serious about wanting to reduce global greenhouse gas emissions, there are a whole range of things that they could do that would have a net beneficial effect. Previous speakers have already mentioned that if we were serious we would go down the nuclear path. The UK has just announced 10 more nuclear power stations. The President of China, when he spoke on climate change before the United Nations a few weeks ago, outlined a series of strategies: renewables, energy efficiency, more trees and nuclear. Countries around Europe that previously had been reluctant about nuclear are all going down the nuclear path, because they recognise that nuclear has to be part of the solution if we want to responsibly achieve dramatic reductions in greenhouse gas emissions in a way that does not compromise our economic prosperity and our energy security moving forward.

If the Prime Minister was serious about climate change and about reducing global greenhouse gas emissions, he would show some leadership towards the Labor state governments and the Labor opposition in Western Australia—who, to this day, have backward, old-fashioned policies in relation to uranium mining. Australia has got 40 per cent of the world’s known resources of uranium. One very effective strategy to help reduce global emissions would be for Australia to expand our uranium exports and essentially help supply nuclear power stations around the world that would displace coal-fired energy. Why is the Prime Minister not calling on state premiers who are resisting this? Why is the Prime Minister not picking up the phone to the leader of the opposition in Western Australia?

I am about to run out of time, but the short point that I want to make is that this legislation is a fraud. Prime Minister Rudd is performing a complete con on the Australian people. He is taking advantage of people’s goodwill towards the environment. He wants people to believe that this will be effective in helping to reduce emissions, when he knows that this is not true. This is going to be bad for the economy and bad for the environment. (Time expired)