Alan Eggleston (WA, Liberal Party) Share this | Hansard source

Recently, at the Lowy Institute in Sydney, Prime minister Rudd described me as a ‘conservative climate change sceptic’ quoting my comments in the previous debate on this legislation in which I said there were two schools of thought about climate change: the greenhouse gas school and the geologists who pointed to the fact that climate change and change in sea levels has occurred over the eons of the earth’s history. It gives me a great sense of pride to have been so criticised by Kevin Rudd, because my point of view shows that I have an open and questioning mind, which is I think very important in politics, where all too often an uncritical herd instinct takes over judgement at the expense of common sense. This may be helpful to political leaders such as Mr Rudd, but I am proud to say that it is not my way, and I do question how open Mr Rudd’s mind possibly is on this subject.

Last night the Canadian government announced that it has decided to defer its greenhouse legislation until the rest of the world reaches an agreement on climate change and the USA decides how it will tackle emissions. One can only hope that sanity will prevail in Australia and the Rudd government will withdraw this legislation until at least the outcome of the Copenhagen conference is known.

According to evidence given to four Senate inquiries this legislation for a CPRS will have a serious adverse impact on the Australian economy. The Rudd/Wong CPRS is an unnecessarily grandiose scheme that will impose huge costs on the Australia economy, particularly on the agricultural and mining sectors, which are in fact the twin pillars of not only the Western Australian economy but also that of Australia as a whole. In evidence to the Senate committees the Minerals Council of Australia predicted that there would be 124,000 direct and indirect job losses as a result of passage of this legislation. It said that it would have a severe impact on agriculture, not only on production but also on processing of agricultural products. As well, the Senate committees were informed that in regional Australia in general the costs of living would increase because the cost of transport and power would increase were this legislation to be passed. Perhaps most importantly the Senate committees were told that the CPRS would reduce Australian competitiveness, and so reduce our export income, and would result in loss of emissions intensive industries to other countries—such as cement and aluminium smelters—if this legislation were to be passed. Furthermore, the Senate committees were advised of the likelihood of suspension of new projects such as gas developments in north-west. For example, Don Voelte, the CEO of Woodside, was quoted as warning that his company would look to other countries, such as Indonesia, Qatar and Africa, to establish new projects rather than bear the burden of the extra costs and reduced profits the CPRS would mean to his company.

Last week I attended an Institute of Public Affairs seminar in Melbourne on the economic impact of climate change, where the impressive list of speakers included Dr Alan Moran, Dr Alex Robson, Dr Brian Fisher as well as Professor Richard Toll and Lord Monckton, by videoconference. The seminar was informed that while there will be a negative impact on the Australian economy the two states that would be most economically impacted on by the CPRS would be Queensland and Western Australia, my home state. These two states are the drivers of the Australian economy and provide the ongoing wealth which most of the rest of the country lives on. Queensland will be adversely affected because the coal industry will face closure and Queenslanders will have to pay more for electricity because cheap coal will no longer be available to be used as a source of power. Similarly, in WA, resource projects will be under threat because the impact of CPRS taxes will make many projects uncompetitive. It was also said that WA would be forced to cease using gas for power production because of the impact of the CPRS.

The CPRS is an emissions trading scheme. It is predicated on the assumption that our major trading partners, the top four of whom—China, Japan, South Korea and India—are in the Asian region, will go ahead and establish emissions trading schemes and that Australia will be able to trade carbon credits with these countries. However, a month ago I attended a forum on renewable energy in Beijing where I found that none of our major regional trading partners are likely to establish an ETS, although they are committed to large renewable energy programs. This view has since been confirmed by the Deputy Leader of the Liberal Party, Julie Bishop, who recently visited our major regional trading partners in Asia and stated on ABC TV’s Lateline program on Monday night that none were likely to establish ETS programs.

The fact that none of our regional trading partners are likely to establish emissions trading schemes has serious implications for Australia because it means that there will not be any major countries with whom to trade off the massive additional taxes which the CPRS will impose on the Australian economy and industry. In fact, the Australian people will have to bear the cost of the CPRS, which it is variously estimated will range from an additional $50 billion to $87 billion per annum and which will add to the cost of living of average Australians, leading to job loses across the board as many industries become nonviable. It will particularly impact on members of lower-income groups, who will find themselves paying more for consumer goods. Household power bills as well as the cost of transport will also rise.

I think that sometimes we Australians are rather naive and think that because of our rich resources, Australia is a lucky country and we do not need to protect our advantages as assiduously as other countries do. However, when the Senate Standing Committee on Economics was looking into the CPRS issue, Mitch Hooke, the CEO of the Minerals Council of Australia, said when asked about the impact of the CPRS on the Australian economy:

Australia has to be very careful that it does not get carried away ... about our comparative advantage in ... natural resources.

He said Australia:

... is increasing sovereign risk associated with investment conditions—

with this CPRS—

and you do not need to be a Philadelphia lawyer or an economist to know that they will move their activities to where they do not have those costs. That is known as carbon leakage.

According to the Institute of Public Affairs, neither Treasury nor Professor Garnaut modelled a scenario in which there were no regional trading partners for Australia to trade carbon credits with. In other words, the situation we face today, where none of our four major trading partners have emissions trading schemes or any plans to introduce them, has not been modelled because it was perhaps rather naively assumed that countries such as China would come on board, as Professor Garnaut says, and establish emissions trading schemes some time around 2015. This means that the actual cost to the Australian economy of the Rudd/Wong CPRS is not known. Surely it is totally unacceptable that this should be the case. Senator Wong says that industry wants certainty, and I am sure that they do—