Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Hansard source

Senator Singh asks why. This has been extensively debated for many years. Indeed, I was the Chair of the Senate Select Committee on Fuel and Energy, which conducted the first comprehensive inquiry into the Rudd government's Carbon Pollution Reduction Scheme. I see Senator McEwen sitting behind Senator Singh. She was a member of that committee, together with then senator Steve Hutchins, a very fine senator indeed. I think former senator Don Farrell joined us on that committee at some point too when he came into the Senate.

We travelled around Australia and we asked questions about how this and that were going to work. Do you know what our conclusion was? Our conclusion was that all Labor's carbon tax, Labor's emissions trading scheme—you know it; call it whatever you want—was going to do was push up the cost of living in Australia, push up the cost of doing business, make us less competitive internationally and make it harder for businesses to employ people. It was an imposition on people across Australia without actually doing anything to help reduce global greenhouse gas emissions. Do you know why? Because every time you push up the cost of doing business in Australia, you help a business in another part of the world become more competitive and take market share away from us.

Let us take aluminium for example. Aluminium production in Australia is more emissions efficient than in China yet, by imposing an emissions trading scheme or a carbon tax, we are helping manufacturers in China take market share away from us. What we are doing is shifting production to China and other parts of the world where, for the same amount of output, emissions will actually be higher than they would have been here in Australia. So what we are doing is increasing emissions in the world through the scheme you are promoting.

I see Senator Bullock here from the great state of Western Australia. The emissions trading scheme that Labor put forward was going to make it harder for Australia to help reduce global greenhouse gas emissions. Do you know why? Because it was going to make it harder for LNG production to expand. Guess what? More LNG production in Australia, even though it means more emissions in Australia, actually helps us reduce emissions by more in other parts of the world because every bit of LNG that displaces coal and other energy sources in China or Japan actually helps to reduce emissions in the world by more. Yet your emissions trading scheme, your carbon tax, was making it harder for us to grow our LNG industry.

I said in this debate some years ago that if we are serious about wanting to reduce global greenhouse gas emissions then we should have a conversation about how Australia can best help the world reduce emissions. Do you know what? The way we can best help the world reduce emissions is by producing more LNG and using it to displace coal in other parts of the world, particularly where the coal is more emissions intensive than the good quality black coal that we have here in Australia. If we are serious about reducing emissions then we should boost our uranium production so we can export that to other parts of the world—to India and other places—where it can displace energy sources that are less emissions efficient.

The point here is that your emissions trading scheme in isolation of an appropriately comprehensive global agreement to put a price on carbon will actually hurt Australia, will hurt Australian families, will hurt Australian pensioners, will hurt Australian businesses and will be an impost on people without actually making a positive difference. You asked me why our position has changed since 2007-08. Do you know what? It changed because of Copenhagen. You might remember that former Prime Minister Rudd went to Copenhagen thinking he was going to be able to negotiate a global deal. Remember the descriptions that he used about our friends in China. I think he described the activity of some little creatures—and I will not use the words because they were particularly coarse and inappropriate. The previous Prime Minister went to Copenhagen. What became very obvious in Copenhagen was that there was no prospect of an appropriately comprehensive global agreement to price emissions. In that circumstance, our judgement about the national interest of Australia is that the best way that we can right now contribute to global emissions reductions in a proportionate way is through direct action.

Incidentally, Senator Singh mentioned the United States. Guess what? When then Prime Minister Rudd pursued his Carbon Pollution Reduction Scheme, the modelling he released at the time was based on the assumption that the United States would have a fully-fledged emissions trading scheme in place by 2010. It never happened. When the next modelling came out in 2011, in the context of the carbon tax under then Prime Minister Gillard, we were told that the United States would have a fully-fledged emissions trading scheme equivalent to the Australian scheme in place by 2016. It will not happen. What President Obama is doing in effect is pursuing direct action policies. That is what Australia is doing. That is what we are putting on the table. Unless you can have an appropriately comprehensive global agreement to price emissions then all you are doing is exposing our export oriented economy to distortions in terms of our international competitiveness. You are helping businesses in other parts of the world, many of whom will be more emissions intensive than our businesses here in Australia, take market share away from us.

As part of the Senate fuel and energy committee—and I am not sure whether Senator McEwen was there with us—we visited a nickel refinery out of Townsville as part of our research. The same proposition was there: if the production did not happen out of Townsville because it was becoming uneconomical to do so because there was a cost of production here in Australia that was not faced by our competitors in other parts of the world, then the business would just go to other parts of the world. We would lose the business and there would be fewer emissions in Australia but there would not be fewer emissions in the world. And guess what? If you really want to reduce emissions, sure, you can always reduce emissions by reducing economic activity. When East Germany and West Germany reunited and shut down a lot of economic activity in eastern Germany, guess what? There were fewer emissions because there was less economic activity.

We need to have a sensible debate about these things, but the truth, of course, is that this debate has been taking place for a very long time. This is a debate that has been going on now for the best part of the last seven years. The reason people voted against the carbon tax at the last election is that they know it does not work. In fact, the reason then Prime Minister Gillard went to the 2010 election promising that there would be no carbon tax under a government she led, the reason then Prime Minister Rudd went to the 2013 election promising that he had removed the carbon tax and the reason the Labor Party are all over the place in relation to this is that they know that people across Australia understand that this carbon tax does not work.