David Fawcett (SA, Liberal Party) Share this | Hansard source

I rise to address this matter of public importance because the public are concerned about things that work or do not work, and this carbon tax—let us call it what it is, not necessarily a 'clean energy future' or any of the other names that have been given to it—does not work. It stops work and it is a work of false testimony, for which this government and all of its members and its coalition partners in the Greens need to be held to account.

Why doesn't it work? One place where it has been tried, for example, is the European Union. The European Union has an ETS of a limited nature, but it is an ETS and it is one that the Gillard government has frequently called our attention to as an exemplar of why Australia should go down this path. One of the largest banks in Switzerland and one of the world's most respected banks released a report last year on the carbon price. Its very title gives us most of the information we need to know. The report was titled 'Carbon price to collapse: €210 billion wasted'. They highlighted that the carbon price has had 'limited benefits and embarrassing consequences, including billions of euros of windfall profits and fraud'. They highlighted that the carbon price in Europe has been responsible for creating double-digit increases in electricity prices and yet has done nothing—I repeat, nothing—for the environment. It has had zero or 'almost zero' impact on emissions. However, if the money had been used on direct action—that is, replacing their dirtiest plants—emissions could have dropped by nearly 43 per cent.

That goes to the heart of some of the coalition's beef with the government over this, in that people who care for the environment also want action that is effective. As UBS has shown, carbon pricing does not work. Labor actually are aware of that, because Penny Wong, when she was the Minister for Climate Change and Water, said:

A carbon tax does not guarantee emissions reductions.

So, even a couple of portfolios ago, Senator Wong—and the government—knew that a carbon tax did not necessarily guarantee that it would have the desired effect on the environment.

Families know that it does not work. In South Australia at the moment, we are heading towards the most expensive electricity prices in the world. The Energy Users Association, which compares household prices across 92 countries, showed earlier this year that South Australia had the third highest prices; and it is saying that, when the carbon tax comes in, increasing the average residential power bill by more than $150 in its first year, South Australia will have the highest power prices in the world. So families know it will not work. Logic tells you that it will not work in the long term. It will not work for the environment and it will not work for our nation. When it becomes an emissions trading scheme, the price will float according to the market. One of the factors that the UBS report highlighted is that the carbon price in Europe has had, in their words, 'a dramatic decline' of about 40 per cent and they anticipate that it will crash. If 40 per cent is just a reduction, a crash will be dramatic—and we are talking in the order of $4 per tonne, rather than the $23. So, if the subsidies that Senator Singh and the members opposite have been highlighting are going to be paid to Australian factories and families to compensate for this government's carbon tax and yet the price is dropping from $23 down to $4, that is a long-term structural problem for our economy. Conversely, if the prices increase to the levels that have been forecast, which are into the hundreds of dollars—according to those who say that the carbon tax is a good idea—then clearly the compensation that is being paid will be woefully inadequate to shelter those people and those businesses that are exposed. In the long term it does not work, which is possibly part of the reason that most of the people from the government who are speaking about the carbon tax, although they will not use that word, are not talking about its environmental impacts, but are talking about the money.

Our Prime Minister, on Twitter with the hashtag 'cashforyou', is more concerned about highlighting the bribes, the payments to people, than the long-term impacts of this tax on our economy. Nor are the government highlighting the fact that it will do nothing for the environment. So it does not work. It also stops work. The Nyrstar smelter in South Australia came out quite strongly against the carbon tax when it was announced, highlighting that it stood to cause some 1,500 people to lose jobs. They said:

If our competitors in Asia do not have a price on carbon in exactly the same way then the proposed policy makes us non competitive. It is sufficient not only to make those businesses unviable, it will be the cause of the exit for our Australian operation.

As we have talked about this lack of competitiveness with other manufacturing industries, many people have emphasised things like, 'Well, we've got a strong dollar,' or, 'Demand is low at the moment.' Anyone who has spent any time in the business world knows that factors vary: demand does go up and down, and our currency goes up and down. Business will factor those things in; they will take a considered risk. But what the carbon tax does is put in a structural impediment to competitiveness. That is the tipping point. As companies look forward—and they are used to dealing with the other things that go up and down—they go, 'We've now got low demand and a high dollar and a structural thing that we cannot cope with into the future.' That is why people are now starting to baulk at investing in the future of their infrastructure in Australia. That is why some people are moving already and that is why many are concerned about the viability of their sectors.

This government has made much of the global supply chain, particularly in the defence sector, and all the opportunities that are there for small to medium enterprises to link into global supply chains. What it does not mention is that each of those opportunities is a competition based opportunity and so our companies have to be able to compete with people overseas if they are to win that. This government has the lowest level of spending on defence after this budget since 1938, and that comes on top of a long period of deferring approvals, which means that small to medium enterprises are cash strapped because we are not seeing procurement activity occurring in Australia. On top of that, the government is now putting in a structural impediment to the competitiveness for these people to link into the very markets that the government is saying should ensure their future. Not only does it not work; it also stops other people working and it is a work of false testimony.

This is a tax that this Prime Minister said would not occur. 'There will be no carbon tax under a government I lead.' It is not just the Prime Minister. Every member sitting opposite and every member of the lower house went to that election, standing shoulder to shoulder with the Prime Minister and saying 'there will be no carbon tax'. When we look at the voting record, we see that every Labor and Greens member and senator voted for the carbon tax. In South Australia, when people are looking at the future of Nyrstar or other industries, they need to be asking questions of the member for Makin, Mr Zappia; the member for Kingston, Ms Rishworth; the member for Wakefield, Mr Champion; the member for Port Adelaide, Mr Butler; the member for Adelaide, Ms Ellis; or the member for Hindmarsh, Mr Georganas. They need to hold them to account, because they are the people who stood shoulder to shoulder with the Prime Minister and said, 'There will be no carbon tax. Trust us.' Yet they turned around and voted for a tax that UBS has shown does not work. It stops work and it is work based on false testimony, for which the Labor Party and the Greens should be held to account.