Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Hansard source

I listened to you in silence, Senator. I would ask that you give me the same courtesy. There was also lengthy reiteration of past matters. I do not propose to respond to them. The only point I would make is that, first, the opposition has the same reduction target by 2020. So if the senator does not believe it is sensible for Australia to be reducing its emissions by five per cent by 2020, on 2000 levels, he should take that up with Tony Abbott. The difference is that the policy that the senator supports will cost the taxpayers who elect him more than the government's policy. It will cost taxpayers more each year—$1,300 without assistance in a picking winners, doling out grants program that is bureaucratically driven. I have placed on record a number of times in this debate why we on this side of the chamber believe it is important to price carbon, both in terms of moving the Australian economy to being a cleaner energy economy and also responding to the challenge of climate change, a position that is not remarkable; it is a position that Mr Turnbull shared, that Mr Howard shared and that the Conservatives in the United Kingdom share. I think Margaret Thatcher was one of the first world leaders to talk about climate change. So these are not radical positions.

I am asked some specific questions. Firstly, I would make a few points on sugarcane. I understand this was raised in some of the committee discussion—although maybe not. The agricultural sector is excluded from coverage under the carbon pricing mechanism. Sugarcane farming will not be directly liable to purchase permits under this mechanism. In addition, the government has agreed to exclude fuel used in agriculture, fisheries and forestry. I am also advised that the sugarcane industry may be able to generate credits under the Carbon Farming Initiative which will be linked to the carbon pricing mechanism by, for example, reducing burning of the above-ground biomass of the sugarcane crop, reducing fertiliser use and sequestering carbon in soils. A number of inputs to farming, such as fertilising chemicals, are priced in international markets and therefore unlikely to rise significantly with a carbon price. The government is providing assistance to producers of fertilising chemicals through the Jobs and Competitiveness Program because they are not expected to be able to pass through their carbon costs. Manufacturers of urea, a key input to fertiliser production, will be eligible for assistance under the Jobs and Competitiveness Program at the 66 per cent assistance level. Manufacturers will also be eligible for assistance under the $1.2 billion clean energy program. This includes $150 million dedicated to manufacturers in the food and beverage processing sector as part of the Clean Technology Food and Foundries Investment Program.

As I indicated to Senator Nash previously, Treasury modelling indicates that electricity prices may rise by about 10 per cent under a carbon price. However, I would note, as I previously indicated, that ABARES has estimated that electricity makes up about 0.9 per cent of total input costs for broadacre farming, even assuming full cost pass-through by electricity suppliers. This implies a very small impact on total production costs.