Penny Wong (SA, Australian Labor Party, Minister for Climate Change and Water) Share this | Hansard source

Senator Xenophon, whom I respect, has made a number of assertions that I am going to have to counter strongly. I admire his loyalty, because I know that he has worked with Frontier and Mr Price on many occasions previously and he has continued to advocate for this scheme when others have dropped off. For a while he had support from the Liberal Party and you may get that again, Senator. You never know, you may be able to convince Mr Abbott to adopt it.

But if you want to accuse the government of not being transparent I do not think that the government has had a fully worked out report with disclosed assumptions from you or from Frontier. In fact, my recollection is that officials from my department met with Frontier not long after the report was released. Those assumptions have not been made clear to us. But leaving that aside—because the government is not going to drop this policy, and I have made that clear—I am advised that the only way Frontier actually balances the fiscal balance is to not pay any compensation to households. So, Senator, if you are going to criticise the government’s scheme for assistance to households could I respectfully suggest that you disclose to the chamber if you propose to provide any assistance to households, because that is the basis on the figures we have provided and tabled in this chamber of the Treasury advice. In fact, from memory, Treasury was actually quite generous in that it modelled a portion of the household package as compensation.

To paraphrase you, Senator Xenophon, you said that there are different ways of taking action on climate change and different plans. That is true. But it needs to be a plan that works. This is not a model that has been put forward and will be operational in this form, as I am advised, anywhere in the world. In your comments you were mixing up figures. You accused the government of saying that electricity prices would rise between seven and 12 per cent. What we have said is seven per cent for the first year and approximately 12 per cent thereafter. So that was a two-year indication. You then also said that the compensation the government has put on the table is inadequate. Again, I say that in a circumstance where neither you nor Frontier has made clear whether or not you would offer any household assistance that would seem to be a little self-defeating as an argument. I say that both the Prime Minister and I have previously indicated that each year in the budget context we will continue to review and monitor the adequacy of the household compensation package. In other words, if the carbon price is higher or if the electricity price rises more than anticipated that is something the government can adjust in a budget context. That is a commitment to which we will be held to account should this scheme pass.

In regard to the higher targets that you wish to achieve—and we have had this debate before—your scheme, and from what we know from the Frontier report, would in fact lead to lesser targets in Australia than the government’s scheme. We are at one in saying that international trade is a good thing. I think we agree on that. But the reality is that I do not think it is logically consistent to say that it is a greener scheme if the only way you get a more significant target is by increasing the number of overseas permits.

I say to you, Senator Xenophon, that whilst I disagree with your policy—and you know that—I do commend you for actually putting something forward and having the willingness to put a different policy forward. It is not one that has gained a deal of support either in this chamber or in the community, but I think it has been a very sound attempt to put a different policy on the table, even if the government and I do not agree with the policy that is proposed.

In relation to uncertainty, when I raised previously the uncertainty issue it was not in relation to the electricity sector; it was in relation to the other sectors. In fact, what the model that you are proposing does is give certainty to electricity generators at the expense of certainty in the other sectors in the economy. I will postulate that that may be why others in the business community have not been supportive.

I have been handed a note by my advisers asking me to clarify my comments in relation to contact between my department and Frontier Economics. There has been contact, but I need to confirm the precise timing of that contact. I think I said the contact was a year ago and that may not be correct. I will get some advice on that and perhaps discuss that with you later, Senator Xenophon. In short, we do not agree with this model. We do not think this is a sensible way forward, but I have to say that at least Senator Xenophon, as a single Independent senator, has done more than the opposition has in terms of putting forward a policy. The other side’s policy appears to be to just say no.