David Bushby (Tasmania, Liberal Party) Share this | Hansard source

I also rise today to speak on the matter of public importance: the unravelling of Labor's world's biggest carbon tax—a tax that on the government's own admission will not reduce Australia's emissions. On the contrary, based on the government's own forecast our emissions will continue to rise over the coming decades such that Labor predict the only way we will meet their emissions reduction targets is by buying permits from other countries—and billions of dollars' worth of them are needed. Again, this is on the government's own numbers. These will be bought from countries that may have far less stringent rules, regulations and oversights to ensure that those permits are truly representative of actual reductions in emissions. So I ask: what gain do we get from the pain that is being inflicted by this carbon tax?

Of course, we should always remember that this is the tax that was brought in on the back of a lie. This is the tax that the Prime Minister promised, hand on heart, that we would never see under a government she leads. Yet here we are, with a government she is leading and the carbon tax she promised we would never have. And the carbon tax is now unravelling before the government's eyes.

Senator Faulkner and Senator Urquhart both made the point that Australia is not the only country that is putting a price on carbon. They both talked about how many other countries have put a price on carbon. I recall some time ago, when Senator Wong was quite happy to be the spokesman for carbon tax and climate change matters in this place, that she was talking about a shadow price on carbon. My understanding is that when Senator Faulkner and Senator Urquhart stand up and talk about other countries having a price on carbon on the whole they are actually talking about the shadow price being on carbon. The shadow price is not an explicit carbon tax or an emissions trading scheme; it is things like renewable energy targets, it is things like putting money into specific green energy programs and renewable energy programs. The government look at all of those sorts of things in other places and they say, 'Look, other places have a price on carbon.' I say: prior to the introduction of this carbon tax, we also had a price on carbon, we also had a renewable energy target, and we also had large investments in renewable energy schemes. We already had a price on carbon, and so the arguments that both Senator Faulkner and Senator Urquhart made in regard to other countries having a price on carbon, we already qualified. We did not need to impose a carbon tax onto Australian business and Australian consumers because we already had that price there.

As I mentioned before, the carbon tax is unravelling. So even with the carbon tax we did not actually have to have—we have it, it took effect on 1 July this year—it is incredible to see the number of changes the government have made in the short period of time since it was introduced. Only two months into its implementation and already we have seen massive changes marked by chaos right across the board. The changes that have been made to this tax in that short time reflect the gymnastic skills of the Australian Olympic team. Rarely have Australians witnessed so many backflips, backdowns and changes of direction in such a short period. But the great shame is that none of these changes actually improve the toxicity of the tax, or the disastrous impact it will have on the competitiveness of Australian businesses, or the across-the-board increase of cost of living it forces onto Australians right across the country.

What these backflips have done, though, is introduce even more uncertainty, additional costs and more legislative conflict into the quagmire that is compliance with the requirements of this tax. Just today 13 New South Wales councils are finding themselves in legal limbo as they are unable, lawfully, to purchase carbon credits because they are considered a derivative. As this chamber may know, the previous New South Wales Labor government banned councils from investing in derivatives in order to protect their ratepayers from potential financial losses, which many of the New South Wales councils suffered during the period of the financial crisis. Accordingly, councils are finding themselves between a rock and a hard place as they have obligations to meet under this toxic carbon tax regime but are unable to purchase permits to meet those obligations. What a shambles! I commend the New South Wales government for their refusal to overturn a law that is in the common interest of the public in the face of a federal law that is detrimental to the public, is poorly thought out and which clearly will not achieve its objectives.

The confusion over this tax and its implementation does not stop there. Just last week, we saw the government abandon their own Contract for Closure program. This flip-flop was not surprising, as the Contract for Closure program was doomed from the start. On the one hand the government were providing the Energy Security Fund with $5.5 billion to help keep brown coal power stations in operation so that they could guarantee the continuity of energy and avoid blackouts and brownouts. But at the same time, the government set up the Contract for Closure fund to pay the same regulators to shut them down. Crazy stuff! The power companies then saw fit to accept the government handouts to keep conducting business as usual and pass on price hikes to businesses, pensioners, families and everyday Australians who are already doing it tough. Again, a complete shambles.

These continual changes, this flip-flopping is causing Australian businesses and consumers great uncertainty. It is difficult to budget, to plan ahead and to take steps and measures to ensure compliance with legal obligations when those legal obligations are continually changing. Of course, the flip-flops come with consequences and flow-on impacts. The scrapping of the Contract for Closure program means that the planned reduction in emissions that would otherwise have occurred will not be fully reached. So the government have to find another way of lowering them to meet their fictional targets. How will they do this, you may ask. By increasing the amount contributors will have to pay for the carbon tax. And the Gillard government have shown nothing but contempt for the workers and their families of power entities with whom they have been negotiating. Just yesterday, we found out that the negotiations between these power companies and the federal government had completely collapsed

All the government has delivered to the people of Australia in the face of this carbon tax is nothing but uncertainty. For example, on more than 11 occasions, this government stated how crucial the floor price was to maintaining stability. I will just have a look at a couple of those quotes. On 13 September 2011, the Prime Minister stated:

The bill also provides for a price cap and a price floor to apply for the first three years of the floating price period. This will limit market volatility and reduce risk for businesses as they gain experience in having the market set the carbon price.

On 9 November 2011, the Prime Minister also said:

We have set a floor and so there can be stability in pricing. But we did think it was appropriate because people are making very long-term investments to have a band in which the price will move.

When the Prime Minister was being interviewed by John Laws, she said:

Well we just thought for stability, particularly when we move to an emissions trading scheme where the market is setting the price that it was wise for a period to have bands, a ceiling and a floor.

The Minister for Climate Change and Energy Efficiency, Greg Combet, on ABC Radio National on 12 July this year, only a couple of months ago, said:

Well we've put in a floor price to provide some confidence over the first few years about the potential variability of the price.

The climate change minister said on 28 September 2011 that the price floor and ceiling would 'avoid sharp price spikes or plunges', and he went on to say:

This will reduce risks for businesses as they gain experience in having a market set the carbon price.

Mark Dreyfus addressed the Carbon Expo in November 2011 and said:

A price floor provides participants with greater certainty upon which abatement decisions to make. For those investing in abatement technologies whose value is sensitive to the level of the carbon price, a price floor helps reduce downside risk.

Mark Dreyfus also said when addressing the Australia-New Zealand Climate Change and Business Conference in Wellington in August 2011:

For the first three years of the flexible price stage, safety valves (price ceilings and price floors) will be built into the system to avoid price spikes or plunges. This will reduce risk for businesses as they gain experience operating in a carbon-constrained environment. This is particularly important in the early years when price uncertainty could be at its highest.

But what have the government done now? Another backflip, another change. Two weeks ago the floor price was scrapped by the Gillard government. Senator Urquhart came in here earlier and was talking about how good the carbon tax is and what a great thing it is going to be for the country, but the very first thing she started talking about was how they have scrapped the floor price and how they are now going to associate the price with the price in the EU scheme.

I have just read out to this chamber comments by the Prime Minister and relevant ministers, all of which explained why it was so important that we have a floor price: that we must have a floor price for certainty for business and to give confidence for business to invest in uncertain technologies in the early years of this carbon tax scheme. Yet, just two weeks ago, in a huge backflip the government scrapped the floor price. Why? Not because it is going to achieve better outcomes but because it will achieve better political outcomes. They are scrambling for their own political survival.