Simon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | Hansard source

It is a pleasure to follow Senator Thistlethwaite, who is new to the Senate. I acknowledge his eloquent contribution to this very important matter of public importance:

The Gillard Government’s introduction of legislation to impose a carbon tax in breach of its election commitments not to do so.

I notice that Senator Thistlethwaite ignored completely the context of this matter of public importance debate, ignored completely the reality that the government of which he is a member promised explicitly at the election, in the most explicit terms in which a Prime Minister has ever made a promise prior to an election, not to do exactly that which it has done today, not to introduce a carbon tax. It was Prime Minister Julia Gillard who stared down the barrel of television cameras in that election campaign and said the immortal words:

There will be no carbon tax under a government I lead.

She did not follow on from that and say, 'However, we remain committed to pricing carbon.' That was not part of the statement. I am not misquoting her. She said emphatically:

There will be no carbon tax under a government I lead.

She made sure that the clear and direct impression she gave the Australian people was that she would not do exactly what the government has done today, which is to start the groundwork to debate what are apparently now some 19 pieces of legislation relating to the carbon tax. This is a never-ending feast. A few days ago we thought there would be 13 and then it sounded as though there would be 15. Yesterday Mr Albanese announced the process for handling 18 carbon tax related bills and when the motion was released late last night and we saw it in the light of day today we saw that apparently there are 19 carbon tax bills—more than 1,000 pages of legislation to be dealt with. And this government wants to rush all of that through. I will come back to some of those process issues shortly.

Let us have a look at what Senator Thistlethwaite said. He argued that this is important to make a difference to human induced climate change. That of course is the underlying argument. He brought in the emotive aspects of talking about his children and about the world we leave behind for them, and they are valid sentiments. The problem is he never managed to link those sentiments and the policy of the carbon tax with any evidence that demonstrates that global emissions will actually reduce. He never managed to demonstrate that Australian emissions will even—

Senator Thistlethwaite interjecting—

Senator, you might like to read you own government's Treasury advice which demonstrates that in fact Australia's emissions will keep rising through the period to 2020 under the carbon tax. They will actually be more in 2020 than in the benchmark year. This is the fundamental problem with what the government are doing: they are living in some dream world scenario where they have convinced themselves that the whole world is taking complementary action. I wish the whole world were taking complementary action, but the reality is that the world is not. Many countries are moving in exactly the opposite direction unfortunately and, as the Productivity Commission in their independent advice to the government so clearly put it, no other country has an economy wide carbon tax or an economy wide ETS in place—no other country; nobody else. Anybody who comes in here and cites the countries they claim are moving in that direction are, frankly, citing examples that are in no way comparable with what this Labor government are attempting to do.

The senator argued, in his three points, that this carbon tax would protect the environment, create jobs and compensate households. I would love to think it might protect the environment but for the reality that, as I indicated before, emissions in Australia will continue to go up under this carbon tax. We know from all of the modelling that is available that global emissions will continue to go up as India, China and other countries dramatically increase their emissions over the foreseeable future by an amount far in excess of any difference this carbon tax is going to make to Australia's emissions profile. So we know global emissions will go up and we know Australia's emissions will go up. It is pretty hard to see, in that context, how this meets the senator's criterion of it protecting the environment.

He argued that it would create jobs. Yet in question time today I highlighted the comments of the CEO of BHP Billiton, Marius Kloppers, who indicated very clearly:

… if you increase the cost you will get less investment than you had before.

He described the carbon tax as:

… an economic dead weight cost because it's basically just an export tax, and those costs get discounted into investment decisions.

He said it 'is a tax which competing countries like Indonesia, South Africa, and so on, do not have'. They are pretty clear comments. An economic dead weight loss was how the CEO of one of Australia's largest companies, one of the largest companies to invest in Australia, described this carbon tax. What is the outcome of him viewing it that way? He says:

… if you increase the cost you will get less investment than you had before.

What is the outcome for Australia? Less investment will come to Australia because major competing countries, particularly in the minerals space, like Indonesia and South Africa, do not have a comparable tax; therefore it will be cheaper for investment to go to those countries. That will be the outcome we see.

Equally, the good senator argued that it would compensate households—that the government has a plan to compensate households. Firstly, we cannot get a straight answer out of the government as to how many millions of households will be worse off, but we know there will be many. We know there will be many millions of households worse off as a result of this carbon tax; the government just will not say precisely how many. And we know it will not just be households who will be worse off. Even those who are traditionally friends of the Labor government in the Australian Council of Social Services have highlighted problems with the carbon tax. In their statements and submissions to government they have said:

Many welfare service providers spend disproportionately on essential goods and services likely to be impacted by a carbon price, notably energy and food.

They went on to say this 'may lead to a reduction in the quantum or quality of services' that would be delivered to low-income, disadvantaged and vulnerable individuals and households. But guess what? There is no compensation for those charitable service providers. They miss out. Their only choice will ultimately be to reduce the services they provide or to pass on the increased cost of those services to those vulnerable individuals, households and families.

For the households themselves, even those who are lucky enough to get the compensation, there is absolutely no clarity from this government as to how on earth they are going to ensure the compensation keeps pace with the costs to the overall economy of this carbon tax. We know that by 2020 around $3½ billion per year will be sent overseas as Australian companies purchase international permits. They will still pass those costs on to Australian households and consumers, though; it is just that the government will not have the money to provide compensation. So either there will be a giant black hole or the compensation will not keep up with the costs that are passed on to Australian households and consumers—it is one or the other.

In closing, I highlight the rank hypocrisy of this government when it comes to the way in which this carbon tax is being considered. Back when the Howard government introduced the GST legislation, the Howard government agreed to have four Senate committees run concurrently to assess the vast array of legislation that comprised the package. Those Senate committees had four to five months in which to report. All of them had non-government majorities and a non-government senator, a Labor senator, as chair. And during that time debate on the GST was deferred. Instead, the Labor Party, now in government, want to have one committee, for about three weeks, assess these 19 bills with a Labor chair—with a government appointee as chair. They hectored the opposition today on how we erred in our judgment on Work Choices. Well, you are erring now. You are erring in your approach to the carbon tax. Just as you will pay a price for Ms Gillard's lie, you will pay a price for these mistakes as well.