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

Certain disaster, as Senator Nash says. I am sure industry wants certainty about the costs which the CPRS will impose on it but which this government seems, very reluctant to reveal. At the very least, I would have thought that the government should require Treasury to model the scenario we now face, where none of our regional trading partners will establish emissions trading schemes, and advise the Australian people and Australian industry what the implications are for our national economy. Only this week, I was briefed by the proponents of a urea plant in the south-west of Western Australia, who stated that their plant would not be viable when the CPRS taxes were added into their calculations and that it is thus probable that this plant and the jobs it would create would be going to another country. One can only wonder how many other projects will be affected in this way and move offshore.

I would now like to say a few words about the impact on small- and medium-sized businesses. According to the Australian Chamber of Commerce and Industry, small- to medium-sized businesses will be adversely affected by the CPRS. As everyone knows, SMEs are the biggest employers in Australia, and any adverse economic impact on them has the potential to cost a lot of jobs across this country. According to the ACCI, the proposed CPRS transitional assistance package does not adequately protect the small- and medium-sized business group from the consequences of the CPRS, which I think is an unacceptable consequence of this legislation and is a matter which the Rudd government must surely rectify if it is to have any credibility when it comes to ameliorating the impact of this legislation on the people of Australia and if it has any concern for jobs in those small companies, which, as I have said, are the biggest employers in this country outside of government.

One must wonder about such an oversight. Surely the union-focused Labor government understand that small- and medium-sized enterprises really do employ more people than any other sector of this economy; but perhaps they do not. Perhaps that is why so much of the structure of this scheme has had such dire economic impacts—because this government really does not understand how the Australian economy functions and works.

I would like to make some comments about the western electricity market. Coalition senators were surprised that the Rudd government did not heed the request by Griffin Coal for amendments to correct a disadvantage that this legislation places on the western electricity market by not permitting the price of carbon to flow through to the consumer, as is the case in the so-called national electricity market, which is actually the eastern states electricity market, and Western Australia is apparently not quite part of the national scene in the view of Treasury. The western electricity market is largely gas dependent in comparison to the so-called national electricity market, which is coal based. I would certainly urge the government to rectify this situation and adopt the amendments which Griffin Coal has put forward to correct this disadvantage to the people of Western Australia.

The complexities of the CPRS in international trading, as well as the impact it will have on the Australian domestic economy, raised the question for me personally of why the Labor Party is taking Australia down this CPRS emissions trading scheme road to ruin when a less costly, simpler and arguably more effective option for Australia would have been a carbon tax. The option of a carbon tax has been supported by significant figures such as Dick Warburton, who is Chairman of the Board of Taxation, as well as eminent economists such as Geoff Carmody and industry leaders such as Mitch Hooke from the Minerals Council of Australia.

Some advantages of a carbon tax include: a carbon tax would have been much simpler to implement, without the need for the creation of the enormous bureaucracy which will be required to administer the CPRS—to which Senator Minchin has referred; a carbon tax could have been administered through the Treasury and the existing tax system, just as the GST is; a carbon tax would have been easy to change when needed and could have been varied in the annual federal budget; and, as Dick Warburton said in an article in the Australian Financial Review on 21 October this year:

Far better, then, to take the carbon tax route, which is more transparent, more direct and, importantly, more flexible. Should the supporters be right, you can ramp up the tax, but should they be wrong, you can diminish or eliminate the tax.

Very simple. I find it a matter of considerable interest that the only industry group which has supported the Rudd-Wong CPRS is the Business Council of Australia, membership of which, according to a recent article in the Australian, is largely comprised of bankers, lawyers and others associated with the finance industry. This is a group that will benefit directly from the business of carbon trading and stand to earn huge commissions from such trading. Since that is their business, that outcome is to be expected; nevertheless, one would have thought that the Rudd government would have paid more attention to the interests of those representing the mainstream of the Australian economy, such as the Minerals Council of Australia and other groups representing the poor and underprivileged—whom the ALP claim to represent the interests of—as well as industries such as those which are found in the rural sector, before setting up an emissions trading scheme which will have such adverse impacts on the Australian economy and the cost of living for ordinary people in this country.

This legislation has the potential to seriously weaken the Australian economy with dire long-term consequences, and I believe it should be rejected in its present form; or, preferably, consideration of it should be deferred until the outcome of the Copenhagen conference is known. Accordingly, I urge the Prime Minister to follow the responsible example of the Canadian government and defer this legislation while awaiting the outcome of the Copenhagen conference.