John Williams (NSW, National Party) Share this | Hansard source

I rise to speak on the Steel Transformation Plan Bill 2011. The spending starts for the compensation for the carbon tax. There is no other reason this legislation is before the Senate. The government are well aware that the carbon tax passed through this place yesterday to the glee of many and the disappointment of others. They are well aware of the cost this carbon tax is going to have on our nation, including on the cost of doing business. I will say it again: if you strangle your business sector you strangle your economy. Business is where the nation's wealth is derived. Businesses employ people, those employed people pay tax and government, federal or state, gets the money to carry out their services, whether they be aged-care facilities or defence. It all comes from the business sector. The more we strangle our business sector here, especially those businesses that have to compete against competitors overseas where our exchange rate is damaging us, the cost of labour is far cheaper and the cost of energy is far cheaper because those countries have not decided to put a price on carbon and a cost on industries, the more we strangle our economy. Those businesses overseas do not face that; we do. Hence, that is why this legislation is before us.

I will turn to the cement industry. I am well aware that the cement industry is getting a 94.5 per cent discount on the carbon tax. I have raised this issue before in this chamber. We had 15 cement factories in Australia. One in Central Queensland closed up 18 months or so ago. A few months ago we heard the terrible announcement that Kandos was closing its factory, so we are almost back to 13. Kandos, I believe, employed 96 workers directly, and many of the truckies and the other businesses that survived and fed off the Kandos cement factory will feel that closure as well. In Australia we produce around 10 million tonnes of cement a year. When we produce a tonne of cement in Australia we produce 0.8 tonnes of CO2, that is around eight million tonnes of CO2 a year. China, that huge nation with its huge population, its huge growth of some nine per cent or 10 per cent a year and its exports growing enormously, produces in excess of one billion tonnes of cement a year. I said that we produce around 10 million tonnes a year; we actually import two million tonnes of cement as well. In China the average amount of CO2 produced in cement manufacturing is 1.1 tonnes of CO2 per tonne of cement. Comparing that to Australia: we produce 10 million tonnes of cement, with eight million tonnes of greenhouse gas, CO2, or whatever you want to call it. In China if you produce 10 million tonnes of cement you produce 11 million tonnes of CO2.

Here is the problem: if we shut down our industry in Australia, we will no doubt import from China our cement, those 10 million tonnes now being manufactured in Australia—of course, that production is on the slide as we have had one factory close and another announce its closure. We will see 11 million tonnes of CO2 produced in China, compared to the eight million tonnes that are produced in Australia. That is three million tonnes extra. I have said before that we do not have a tent over our nation. We are linked to the world in trade and in the atmosphere. Shutting down our industries and moving them overseas equals more CO2. If your goal is to reduce more CO2 that is simply not going to work.

The cement industry is going to receive a 94.5 per cent discount on the carbon tax. That will still cost the cement industry in Australia an extra $9 million. Industry cannot afford $9 million. I have met with the cement industry, I am sure people in the government have met with them, I am sure Senator Carr, the Minister for Innovation, Industry, Science and Research, has met with them. The cement industry cannot afford a tax of $9 million. Why? Mainly because of the exchange rate. I will take you back to why the Australian dollar is so strong. Look at the difference between our interest rate and those of most trading nations, those OECD nations, around the world. Most of their interest rates are almost at zero, while we have an official interest rate of 4.5 per cent. I welcomed the 0.25 per cent reduction on Melbourne Cup day. That was good news for battlers, for home loan borrowers, for small business and for farmers, although we have not seen any reduction in interest rates for small business or farmers yet. I have certainly been in touch with the four major banks to ask: 'What are you doing with your business loans?' We welcome the 0.25 per cent reduction from the Commonwealth and Westpac banks. It was only 0.2 per cent from the NAB, but that is still a reduction. Twelve months earlier when there was a rise of 0.25 per cent in interest rates, we saw the Commonwealth Bank raise its levels by 0.45 per cent and the NAB by 0.35 per cent. So we are getting some relief.

The interest rate differential is one of the reasons— it is not the sole reason—the Australian dollar is so strong. When people overseas are investing, are they going to invest and get 0.5 per cent or are they going to invest in Australia and get 4½ or five per cent? Sure there are exchange rate risks, and movements in exchange rates can turn everything pear shaped; I know that too well. However, this is a problem we are facing with industries. I will say it again: the cement industry—those 13 factories—cannot afford a $9 million tax if it is to survive. It cannot afford it. We will see more closures in this industry, just like in the steel industry.

We see that BlueScope and OneSteel are getting compensation through this legislation. My colleague Senator Bernardi highlighted the share market and what the carbon tax has cost those companies. This is where we have a serious problem with this whole plan: the cost of doing business. I know the majority of households are going to be compensated; there will be three million households that will not be compensated. That may cover some of their costs in increased electricity prices and in increased fuel prices, as electricity is used in much of the processing and delivery of fuel.

We now see that we are going to have under this proposal almost seven cents a litre on the road transport industry. Any truck with a tare weight of 4½ tonnes or more will face some $510 million of extra diesel tax. There was a 38 cents a litre excise on fuel. The coalition, driven by John Anderson, former Nationals leader and Deputy Prime Minister, brought in an 18½ cents a litre rebate for the transport industry. Consequently, they would pay just 19½ cents a litre, the road user fee, to contribute over the damage to the road. The government has already taken almost 3½c of that rebate off our truckies. On 1 July 2014, they plan to take almost another 7c off our transport industry. Where is the compensation for our transport industry? In regional Australia we need the trucks. Our rail system has been depleted. We should have invested in our rail system instead of pink batts and school buildings that are mainly the responsibility of state governments anyway. We could have put that money into the Brisbane to Melbourne train line, even up to Gladstone. We could have developed better infrastructure to make our country more productive and more competitive. But, no, we wasted so much of it.

Senators opposite have been laying very low on the diesel rebate, because, as I said yesterday across the chamber to Senator Sterle, there will not be a truckie vote for the Labor Party or the Greens come next election. You cannot put $510 million of extra cost on our truckies. I do not know if the transport industry would even make that much profit right across Australia. I do not know what the profits of Toll or Finemore or the smaller companies are, but I would doubt that they would make that much profit in total. I know that the transport industry is a tough industry with huge costs, and it has been since the seventies when I was driving in the transport industry. And we are going to put more costs onto our truckies. As I said, there will not be a truckie out there, especially an owner-driver, who will support the Greens or the Labor Party come next election, because they do not want that extra $510 million tax on their fuel.