Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Hansard source

President Ronald Reagan once criticised government economic policy as policy which goes along like this: if it moves, tax it; if it keeps moving, regulate it; and if it stops moving, subsidise it. This morning Labor went through stages 1 and 2: they imposed the tax and then they wanted to make sure that things would stop moving, so they whacked on massive regulation. Now we are dealing with stage 3 of that process in bad economic policy, which is to come up with a subsidy to deal with the hurt and the absolutely devastating impact that will come from the first two stages, namely a bad Labor-Greens tax and massive regulatory burdens—which, of course, will make Australia less competitive internationally, will cost jobs, will help steel manufacturers in other parts of the world take market share away from steel manufacturers in Australia and will help higher emitting manufacturers in other countries take market share away from lower emitting manufacturers in Australia. This of course will lead to a shifting of emissions to other parts of the world, where emissions will be higher for the same level of economic output than they would have been had the activity taken place in Australia.

Manufacturing workers across Australia understand this very well. That is why, when the Leader of the Opposition, Mr Abbott, travelled across Australia speaking with workers in manufacturing business after manufacturing business about the impact of this bad and toxic carbon tax on their jobs, they got it. They knew that Labor were imposing a cost on production which was not going to be faced by their competitors in China. They understood that Labor were acting with the Greens to make Australian manufacturing businesses less competitive internationally—and for no reason, because it is not going to lead to a reduction in global emissions. On the contrary, it is actually going to lead to an increase in global emissions. So there they were, manufacturing workers across Australia, being asked to make a sacrifice which they know, which the Australian Labor Party in their heart of hearts know, which all of us know, will not actually make a difference to the global environment. That clearly was a problem for the Labor Party.

It was also a problem for one particular union boss named Paul Howes, the National Secretary of the Australian Workers Union. As he was travelling behind in the wake of Mr Abbott, as he was travelling from manufacturing business to manufacturing business, he got the very clear feedback from his members that they, along with the overwhelming majority of manufacturing workers across Australia, hate this carbon tax because they know that it will cost jobs, that it will lead to lower real wages—the Treasury modelling tells us so—and that their families will face increased cost-of-living pressures.

You might remember, Mr Acting Deputy President Furner, because I know you are a student of the media on a daily basis, that a few months ago Mr Howes was there on the front page of the Australian, sending a message to his members. But he was doing more than sending a message to his members, he was sending a message to the Prime Minister, whom he helped install just over a year ago. He said, 'If this carbon tax costs one single job I will oppose it.' Some people might ask, 'Who cares what Paul Howes thinks?'—I am sure some people on the inside of the Labor Party would ask 'Who cares what Paul Howes thinks?' I know that the Greens would ask 'Who cares what Paul Howes thinks?' But of course the Prime Minister was in a bit of a bind, because she needed the Greens to be able to hold onto power, she needed to go along with the Greens in pushing the carbon tax—even though she had promised before the last election that there would be no carbon tax—and she needed Paul Howes in order to be able to stay on as leader. The Prime Minister knew that if Paul Howes was going to send a message to Labor members of parliament that they needed to vote against this carbon tax because it was going to cost jobs then she was going to be in a hell of a lot of trouble. And that, of course, is the context for this. This package we are dealing with today is really the price Julia Gillard had to pay to Paul Howes in order to buy his silence. Inadequate as this package is to deal with the damage that will be inflicted on the Australian manufacturing sector through the carbon tax, this is the price that Prime Minister Gillard had to pay so that Paul Howes stopped making comments on the front pages of the newspapers about how bad this tax would be for jobs.

You can understand why Paul Howes was feeling a little bit intimidated: he was following Mr Abbott from one manufacturing business to the next and Mr Abbott was getting standing ovations from workers at those manufacturing businesses because he was standing up for them against this Labor government, which does not care about workers. I walked into these big manufacturing businesses with Tony Abbott and I could not believe it. I have never experienced anything like it—standing ovations from workers for Tony Abbott, because he was standing up for them in the face of a government that does not care and has sold its soul to the Greens political party.

But it was not just Prime Minister Gillard who was in the gun sight of those workers, it was also Mr Howes. Mr Howes at some point is going to be up for re-election as the national secretary of the Australian Workers' Union, and that will happen before Ms Gillard is up for re-election as Prime Minister of Australia—that is, if things go according to plan. One never knows in relation to this. Mr Howes could not ignore what his members were thinking; he could not ignore the fact that his members, manufacturing workers across Australia, were completely against the carbon tax. They understand that this tax will push up the cost of living, make us less competitive internationally and cost us jobs. He could not ignore it, so he went on the front page of the papers and said, 'If this is going to cost one single job, I will make sure that my members in parliament are going to be against it.'

Can the government give Mr Howes a guarantee that the carbon tax, which was passed earlier today, will not cost a single job? No, of course they cannot. Try as they may to point to the Treasury modelling, that modelling never assessed the impact of the carbon tax on jobs. There has been a lot of dishonest spin, from the Prime Minister down. The Prime Minister, the Treasurer, the Minister for Climate Change and Energy have all dishonestly claimed that Treasury modelling shows that the carbon tax will not have an impact on jobs. They have also said that jobs will continue to grow.

The truth of the matter is that Treasury, at the direction of the government, has included an assumption in its modelling of the impact of the carbon tax that effectively means that the government is assuming that full employment will continue irrespective of a carbon tax. Treasury has included a technical assumption that the so-called non-accelerating inflation rate of unemployment, NAIRU, will remain constant over the long term and will not be impacted by the changes caused by the carbon tax.

Common-sense logic will tell you that that is not the way things work in the real world. Common-sense logic will tell you that if manufacturing businesses in China and other places become more competitive and we become less competitive and manufacturing businesses in China and other places take market share away from us, clearly that is going to have an impact on jobs in Australia. By the same token, common-sense logic will tell you that, for businesses in Australia competing with imports from overseas, if those imports from overseas become cheaper and more cost effective and more competitive because manufacturers in other parts of the world do not face the same cost increases as the manufacturing businesses in Australia will under the Labor-Greens carbon tax, clearly that is going to have an impact on jobs.

Labor of course does not want people—