Helen Kroger (Victoria, Liberal Party) Share this | Hansard source

I will resume the remarks I was making earlier in the day. The Treasury model provided by the government is very limited, and in response the coalition, together with Independent Senator Nick Xenophon, commissioned independent economic research from the respected consultants Frontier Economics. What that modelling clearly demonstrated was that appropriate amendments to the mooted ETS could deliver an unconditional 10 per cent reduction in Australia’s year 2000 greenhouse gas emissions by 2020. This compares to the government’s own target of a five per cent unconditional target.

Importantly for households, the mums and dads, who are now beginning to understand that all of this is going to have an impact on them, the electricity generation sector could be dealt with in a less punitive manner. In short, household power bills need only rise by about five per cent in the short term rather than the staggering 25 per cent hike under the framework currently proposed. This equates to a possible increase of $44 per year compared to a price rise of $280 per year. The Frontier Economics report also provided insight into ways in which our key export industries could be protected in the global economy, minimising the damage of the imposition of the CPRS. There were significant and numerous recommendations from the report that have assisted the coalition in putting together amendments that we hope the government is seriously considering.

I would like to acknowledge the work that the Hon. Ian McFarlane is undertaking with Minister Wong in endeavouring to come back to this place and the other place with some significant amendments. Of these amendments, there are some key changes we are advocating that would dramatically reduce the harm that the CPRS would cause in its current form. It is critical that we provide a level playing field for Australian industries that are in emissions-intensive trade-exposed areas. There is no global upside in imposing costs on our industries if, in effect, that means that the activities of those industries and their emissions will merely go offshore.

Whilst agriculture was not immediately included in the scheme, it was to be considered for inclusion in 2015. That has been a cause of great concern to farmers. I find it interesting that the government have already leaked this week that they will exclude agricultural emissions from any CPRS framework. Whilst I am delighted for rural and regional Australia, it strikes me as passing strange that this would be leaked during what seems to be good-faith negotiations. Notwithstanding that, it is encouraging to note that farmers will be able to earn offset credits.

As a Victorian, I am particularly mindful of the consequences for the coal industry, particularly brown coal. The amendments seek to ensure that Australian coal producers are not unfairly penalised. The consequences for areas such as the Latrobe Valley could be catastrophic. We must endeavour to take a balanced and cautious approach. Australia has been blessed with reasonably priced energy resources, which has provided a foundation for the continuing strength and growth of the resource sector and the Australian economy. The importance of these sectors must be recognised and secured accordingly.

As a vocal advocate for small business I know firsthand what will happen with a dramatic rise in energy prices. Many small businesses operate modestly around the margins. Many are family operations that provide a livelihood for their families and dependants. In Victoria alone there are approximately 482,883 small businesses, representing 25 per cent of the national total, or 96 per cent of all businesses in Victoria. They must be protected. Coal fired electricity generators are a big part of this, and we must ensure that they remain financially viable.