David Bushby (Tasmania, Liberal Party) Share this | Hansard source

I have read all the submissions and I have been to a number of the hearings. That one submission that you referred to may well have said what you said it did, but the vast majority of submissions to that inquiry have said that the government's approach will not work and it will come at great cost to small and large business. Of course, the submitter that you referred to represents financial interests. Why wouldn't financial interests welcome the introduction of a new tradeable market? Of course they would like it. There is money to be made from it. They are going to love it.

Senator Urquhart harked back to the fact that we have had 20 years of unbroken eco­nomic growth. Of course we have. We have had an amazing period of economic growth that has come on the back of reforms under­taken by both the Hawke government and the Howard government. The Hawke govern­ment reforms, major reforms like floating the Australian dollar and opening up the Australian banking industry to foreign com­petition, were all made with the full support of the coalition at the time. The major positive economic reforms under the Howard government were opposed by the then Labor opposition. The reality is that the reforms that were made under the Hawke and Howard years were what set the Australian economy up to withstand the 2007 global financial crisis and what occurred after­wards. It was not the appalling decisions made under Rudd and Gillard; it was the fact that we went into that so far ahead of every other developed nation in the world. So it is not surprising that we came out ahead of every other developed nation in the world.

Senator Urquhart also claimed that we have lost our way. She spent half of her time attacking us over what we were doing and the way we were talking down the economy. If we have lost our way and that is a problem, what does she say about the Prime Minister who upon becoming Prime Minister said that her government had lost its way and that that was why she was needed at the helm at the time? The way she has led Australia since she became Prime Minister is only leading to one outcome—that is, the loss of jobs and an increased cost of living.

Senator Urquhart also cited Treasury modelling and used that as some form of justification for the amazing positive benefits that are going to flow from this new toxic carbon tax. The fact is that the government will not release the Treasury modelling. We have no idea what assumptions are in the Treasury modelling. We are not even sure that the forecasts in the modelling are based on the carbon price that the new tax will start with. They cannot confirm that. They will not tell us. But, if you have to look at modelling, there is modelling and there is modelling. I had many discussions with then Secretary of the Treasury, Ken Henry, about the veracity of forward modelling. He admit­ted over and over again that you cannot put a lot of store in the actual figures, that all they are is an indication of where things might go based on the assumptions that you plug in at the time. If you are going to look at model­ling, you can look at the state model­ling that we have seen in New South Wales, Victoria and Western Australia. In all cases it shows massive job losses in each of those states. That is modelling conducted by the treasur­ies in each of those states. Whether they are right or the federal govern­ment modelling is right I guess time will tell, but the reality is that you cannot just stand there and look at modelling and say: model­ling says there will be XYZ; therefore, that is what is going to happen. It is not going to happen. It is entirely dependent on the assumptions that are built into the modelling in the first place and then the circumstances that actually apply to what you are modelling as you move forward.

Senator Urquhart also mentioned that there was $1.6 billion in compensation for small business. I am not entirely sure what that was, but she went on to say that there were 2.7 million small businesses that will be eligible. If that is the case, even if you accept that there is $1.6 billion available for small businesses to tap into—and that is $1.6 billion over two years—that works out to around $30 per annum per business. If you look at it, even on the government's figures electricity is going to go up 10 per cent. If you were, say, a small drycleaner, you might have an electricity bill of $16,000 or $17,000 a year. You would get a $1,700 increase in the cost of your electricity—just the electri­city—as a result of that 10 per cent increase. I do not think $30 a year compensation is going to go far in offsetting that $1,700 increase.

Senator Urquhart also mentioned that ACOSS was happy with the compensation. I can tell you that the compensation for households is a three-card trick. Even if you accept—which I do not—that the compen­sation that is being offered is sufficient to adequately cover the start price of $23 on this carbon tax, what happens when that $23 turns into $33 or $50 or $350, the figure that Treasury's own modelling predicts it will reach in 2050? CPI indexation is not going to match an increase in cost to $350 per tonne of carbon. There is no way that the compen­sation is going to catch up. I think ACOSS and anybody else who represents low-income earners who thinks that this compen­sation is going to be adequate to ensure that people on low incomes do not suffer as a result of the carbon tax need to go and have a good hard look at their figures and revise their position.

The fact is that this government is intro­ducing the carbon tax at the worst possible time. Australia's manufacturing sector is already under pressure. A carbon tax will increase costs, which overseas competitors will not have to pay. Jobs will go offshore to factories which in all likeli­hood will actually emit more emissions than Australian manu­facturers would in making the same product. Under the current econom­ic circumstances, business simply cannot afford another tax. Yesterday—and Senator Ryan has mention­ed some of this—the National Australia Bank put out its confi­dence index, which showed a dramatic fall in business confi­dence. Now is not the time to slap another tax on. Dun and Bradstreet yesterday relea­sed a report which showed that in the June quarter there was a 12½ per cent increase in insolvencies, and that followed 4½ per cent in the previous quarter—and this is at a time when, inter­nationally, insolvencies are at a record low. But in Australia in the last quarter they went up 12½ per cent.

Businesses cannot afford a new, big, toxic tax at the moment. It is the worst possible time. This is because it will put them at a major disadvantage. There will be no level playing field when it comes to the carbon tax, because no other country is planning to impose an economy-wide price on carbon. The Productivity Commission report of just a couple of months ago clearly stated that not one other country on earth is bringing in an economy-wide carbon tax or emissions tra­ding scheme—not one other country—and yet we are planning to do that. In the United States, all moves towards a national cap-and-trade scheme have been abandoned. While Europe has an ETS, it does not cover the whole economy and it provides many indus­tries with free emissions permits. Just by contrast, the European ETS raises only $500 million a year, while Labor's carbon tax will raise $9 billion in its first year. That is $500 million in the European ETS—

Senator Singh interjecting—

which, as I said, Senator Singh, did not cover the whole economy and provides many industries with free emissions. It is not a fair comparison. Australian industry, by being saddled with a $9 billion tax a year in a much, much smaller economy than Europe has, compared to a $500 million a year tax in the European ETS, is saddled with a huge competitive disad­vantage either when Australian businesses are looking to compete with businesses from Europe or, alternatively, when European businesses are looking to come into the Australian market. They will be able to undercut us and put our manufacturing industry, which is already under threat and suffering from a high Australian dollar, under great pressure. It can only be bad for jobs and for the economy.

Further, the government claims that China is acting to reduce its carbon emissions, but the fact is that China's emissions are forecast to rise by 500 per cent by 2020. We are looking at trying to reduce our emissions by five per cent by 2020. In the meantime, China's emissions are going to go up by 500 per cent by that same year. (Time expired)