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

The Minister for Climate Change and Energy Efficiency has provided the following answer to the honourable senator's question:

(1) The Minister is aware of the analysis contained in his media release of 2 March 2011.

(2) The Department considers that, based on the information available at the time, its analysis that the Coalition's Direct Action policy would be unlikely to achieve sufficient abatement to meet Australia's 2020 emissions targets remains valid. The Department's estimates of the fiscal cost of the Direct Action policy were based on the following public information sources from the Coalition and the Department:

The Department's analysis of the cost of the Coalition's Direct Action policy comprised two elements: the estimated cost of the Emissions Reduction Fund and the cost of purchasing international abatement to achieve the 5 per cent reduction.

(3) (a) The Department agrees with the Treasury that longer-term fiscal costings have a lower reliability than those over the forward estimates. The Department agrees with the Treasury that the fiscal estimate of climate change policies can only be prepared to budget quality over the forward estimates period.

  (b) The Department analysed the Coalition's Direct Action policy to the year 2020 in order to determine whether the policy would deliver Australia's 2020 bipartisan greenhouse gas emissions reduction target. The Department's analysis showed that the Direct Action policy could achieve approximately 25 per cent of the required emissions reduction. In the absence of further action, the Department considered the cost of achieving the shortfall in abatement through the purchase of international carbon permits.