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

I continue my speech about the Carbon Pollution Reduction Scheme and what is proposed to this chamber. As I said when last speaking on this, Bayswater power station in the Hunter Valley in New South Wales produces 40 per cent of the electricity for New South Wales. The cost of their coal under the proposed emissions trading scheme, as they have reported to me, will rise from $350 million a year to a massive $950 million a year.

What cost will this put on business and what cost will this put on households? Sure, the government is saying that there will be rebates. There will be rebates until the government runs out of the money, and at the rate the debt is building that will not be long. I want to give you one example. Bindaree Beef, the abattoirs that I am so proud of for the way they carry out their business in Inverell, the town I live at, employs 600 people. Bindaree Beef pays around $160,000 a month for their electricity bill. If that is going to rise by 50 or 60 per cent, as the models have said electricity prices may well rise, that is going to be an extra $1 million a year for that abattoir just to pay the electricity bill.

But of course under the Waxman Markey bill proposed in America there are no such costs on the abattoirs in America. How does a value-adding business like Bindaree Beef compete and retain markets into places such as Japan and Korea when their overseas competitors do not have these extra costs lumped on them? This is a crazy situation we are facing. We are going to close down industries and increase unemployment—and we ask the question: what for?

The carbon dioxide levels in the atmosphere are currently around 380 parts per million. Assuming the rest of the world remains at balance on that, considering that places like China, India and Indonesia are most unlikely to make reductions, Australia could be billed for as much as $200 billion by the year 2020. That will have the effect of reducing the carbon dioxide levels in the atmosphere from 380 parts per million to 379 parts per million, which is a reduction of one part per million. As you would be well aware, if you have a big tub in front of you with one million dollar coins in it and you took one coin out, then the change would be miniscule, minute—call it what you like—it would be nothing. And it would be at the cost of some $200 billion to the Australian industry and the Australian people.

I just want to highlight the way that countries all round the world that are talking about cap and trade systems have excluded agriculture. But not in Australia—we will make a decision on that in the year 2013 and perhaps agriculture may be excluded or included in the emissions trading scheme and the CPRS. This is a crazy situation, however. Farmers, the very people who feed this nation, will be living in limbo until 2013. How do they plan their future, their cash flow, their borrowings, their investments, their expansions, when they do not know what their costs are going to be? Yet the Kyoto agreement does not recognise carbon in the soil, and it is one of the great things that our farmers can do. So farmers are going to face the bills, more than likely, but not receive the credits. As I said in my first speech to this place in September last year, do not take the supply of food in this nation for granted. Our farmers work hard against all sorts of odds and deliver high-quality, cheaply priced food.

In conclusion, what have we seen? We have seen politics introduced into this policy. We have heard Senator Wong say that we must act straightaway, that it is important we act straightaway to save the globe. So what do we do? We delay the introduction for 12 months because it is no longer really important. What is important is that we have an election before we actually start the program so that those industries that are moved overseas, those industries that are shut down, those people that are going to lose their jobs, will have to vote before it happens. Unfortunately, this is a politically driven scheme which is unrealistic, and we will certainly not support it. Thank you.

David Feeney (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

It is a great pleasure to rise to speak today on the Carbon Pollution Reduction Scheme Bill 2009 and related bills. This is one of the most important pieces of legislation to ever come before this parliament. I want to give an overview of why I believe the Senate finds itself in the position it is now in, apparently poised to reject a bill which the overwhelming majority of Australian people want to see passed.

Let us begin by remembering that those opposite were in office for 11 years. In those 11 years they did nothing whatsoever about climate change, despite years of warnings from scientists and economists both in Australia and overseas. Inaction was their only action. Despite statements of good intentions from successive ministers, including the current Leader of the Opposition, Mr Turnbull, this subject was ultimately just too hard for the Howard government. It was just too hard for a cabinet who apparently believed that the Arctic icecap was melting for no apparent reason, or that it was being caused by sunspots. It was a cabinet enthralled perhaps by Andrew Bolt’s blog. It was a cabinet who failed to take action on climate change and, in part, it was a cabinet no doubt motivated by the fact that there was too much resistance from the National Party. The National Party appear to believe that climate change will disappear as long as they resolutely keep imagining that it is not happening.

Those opposite were well aware of the mounting tide of evidence that dangerous global climate change was caused by human activity and that it was posing an increasingly dire threat to Australia’s economy, to Australia’s environment, to the Australian way of life and, in particular, to the future of Australians who live in rural and regional areas—regions which are of course most dependent on rainfall, river flows and healthy landscapes. Those opposite know all these things. Year after year, they have talked about climate change. They set up committees to study it. They promised that they would do something about it soon, but they did nothing for 11 years. And so it has been left to the Rudd government to take action in this area, as in so many other areas.

It took the Rudd government to sign the Kyoto protocol, committing us finally to take action on climate change. It took the Rudd government to get to grips with the science and the economics. It took the Rudd government to design a carbon pollution reduction scheme that will cut our carbon emissions without damaging our economy or increasing unemployment. It took the Rudd government to negotiate with all the industries that would be potentially affected by this dramatic change and by this very important scheme. It took the Rudd government to produce a green paper, a white paper, an exposure draft and, finally, the bill we have before us today. It took the Rudd government to listen to the concerns of the community and to engage in the process of creating and finetuning a scheme that can meet those concerns.

I take this opportunity to pay tribute to the Minister for Climate Change, Senator Wong. As well as developing an unmatched expertise in every area of this subject—something she demonstrated again and again when those opposite were brave enough to challenge her in debate—she has shown extraordinary patience and persistence in getting this bill before the parliament, in the face of very formidable obstacles—the least of which, I might say, are those opposite at the moment.

During April and May I, along with my colleagues Senators Cameron, Furner and Pratt, together with Liberal, National, Green and Independent senators, had the privilege of serving as a member of the Senate Select Committee on Climate Policy. As part of the workings of that committee, we travelled all over Australia and heard evidence from hundreds of witnesses. We received thousands of submissions. I want to restate my thanks to all those who participated in that committee’s inquiry—most particularly, the committee secretariat whose work made our inquiry, our report and, indeed, our findings possible.

During those hearings and the deliberations around them, the divisions that exist amongst members of the coalition parties became extremely obvious. It was, if you will, a small vignette of the greater disturbance in the force that seems to affect those opposite. It is these divisions that are preventing Mr Turnbull from taking a firm stand one way or the other on what to do about climate change. That is why, yesterday, in order to divert attention from his many other self-inflicted wounds about which we heard earlier and to cover up the fact that the coalition parties cannot actually agree on what to do about climate change, Mr Turnbull announced his own personal climate change policy. It is well described as the ‘magic pudding policy’. Apparently, Mr Turnbull has single-handedly discovered how to cut emissions while protecting all industries and saving everyone’s job—and all for free. Of course, this is nothing more than frantic improvisation from an opposition that is today in the market for finding an excuse, not a policy.

Senator Cash argued that even the majority report of the climate policy committee did not give enough credence to climate change deniers. Senator Boswell said that he could not decide whether climate change was real or not, because scientists themselves disagreed. This assessment flies in the face of the powerful scientific consensus—a virtually unanimous consensus that climate change is real, that it is dangerous, that it is accelerating and that it is caused by human activity. It was very striking that, when the climate change deniers in this Senate were give an opportunity at our committee hearings to come up with some qualified climate scientists to challenge the views put by the Royal Society, the Stern report and many other scientific bodies, they were unable to do so in any serious manner. They put before us a retired geologist and an engineer. Neither of these witnesses had any formal qualifications in atmospheric physics or other disciplines relevant to climate science and nor had either of them ever worked as a climate scientist. The arguments they put forward were the same old stuff that had been refuted by eminent climatologists many, many times before. Their views were refuted yet again by those scientists who did appear before us.

Then we had Senator Macdonald, who says that he is not a climate change denier and that he believes climate change is real but who of course does not want to do anything about it. He spent his whole time at the hearings trying to come up with reasons why we should not proceed with the Carbon Pollution Reduction Scheme, claiming that it would be the ruin of every interest group, every industry and every region—anything he could think of. But the thing that Senator Macdonald should be encouraged to think very seriously about is that his state of Queensland relies enormously on a tourism industry that in turn hangs upon a natural environment—the Great Barrier Reef, the forests and the coast lands. These assets of Queensland are under very grave threat. They are being devastated by climate change.

We all understand the numbers in this Senate. If a bill is opposed by the coalition senators and Senator Fielding, it will not pass. We know that Senator Fielding thinks that climate change is being caused by sunspots—and, frankly, that is pretty much all I can say on that particular subject. So it all comes down to the coalition senators. This is the time when they need to face up to the facts; put aside their anger, their disappointment, at not being in government; and put the interests of Australia, the interests of future generations of Australians, ahead of their various petty squabbles and disagreements both with us and with one another. It is not necessary that they agree with every part of the bill. We the government drafted the bill and we will be responsible if the bill turns out to be ineffective. That will be our responsibility. We are not a government that has shied from the responsibilities of government. But those opposite will be responsible if the bill is rejected and, as a result, Australia takes no action on climate change.

In December we will be attending the international climate change conference in Copenhagen. If coalition senators oppose this bill and they maintain that stand for the remainder of this year, they will put Australia in the position of going to Copenhagen with no bill passed by this parliament, with no plan in place to reduce our greenhouse gas emissions. What kind of influence do they imagine Australia will exert at Copenhagen if we get up and say, ‘Australia wants to see the world take tough action on climate change but, by the way, our parliament just voted to do nothing about it’? Australia would be a laughing stock and we would exert the same amount of influence going forward as we have over the last 11 years—that is, not enough.

The Australian Greens do not support our legislation because they think we should be going further, that higher target settings for reducing greenhouse gas emissions are in order. They would apparently prefer that we do nothing at all than embark upon Labor’s plan. ‘It’s our way or the highway’ is the Greens policy.

Senator Xenophon, by contrast, thinks that the CPRS goes too far too fast and that we should be following an entirely different strategy, not a carbon pollution reduction scheme. He has apparently now formed a united front with Mr Turnbull for some variant of his scheme—although Mr Turnbull, as I understand it, has not yet convinced all of you that this is worthy of being the Liberal Party’s policy. Whether, at the end of this united front, Turnbull becomes an Independent or Nick Xenophon becomes a Liberal remains unknown.

I respect the positions held by the Greens and by Senator Xenophon but I do not accept them. I think, on the basis of the evidence the Senate Select Committee on Climate Policy heard during our weeks of evidence, that the targets embodied in this bill are the most realistic and attainable targets for Australia at this time. Our message to the Greens and others is that we are a commodity based, trade-exposed economy. Our message to the opposition is that we must take action on climate change. The CPRS is the scheme that embodies both of these important targets.

If this bill is passed, Australia will go to Copenhagen in December with a commitment to reduce our emissions by 25 per cent by 2020 if we get a commitment from other—

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

India, China, all those places?

David Feeney (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

good on you, Wacka!—if we get a commitment from other countries to do the same. It may be that in the period after Copenhagen a consensus will emerge that higher targets are needed if climate change is to be arrested. When and if that happens this government will of course deal with that in a responsible way, but at present the government’s view is that the targets in this bill are the most realistic and the most attainable, and I think the evidence clearly supports that view. I also think that the Carbon Pollution Reduction Scheme in this bill is the best model of the various models on offer for attaining these important targets.

As Senator Xenophon knows, I was happy to listen to a presentation of his alternative scheme—but I was not persuaded. If we were to drop the CPRS now and embark on a totally new scheme, it would entail many months, maybe years, of further delay and it would also put us out of sync with other countries that are adopting emissions trading schemes similar to the one found in this bill. What those opposite need to remember as they look at Malcolm Turnbull’s fig leaf of an input—not a policy but an input—is that it would mean that Australia would embark on a model no other nation has embarked upon and we would design a scheme incompatible with any being developed across the world. That in itself makes it a nonsense.

Ultimately, it does not matter what the Greens do; they have chosen to be spectators rather than participants in this process. It ultimately does not matter what Senator Fielding and Senator Xenophon do. The fate of this bill depends on the coalition senators. Their negative and obstructionist attitude, which their weak and indecisive leader has been unable to reverse, will seriously impede this country’s ability to play an important role at Copenhagen and to play its proper role in action on climate change. Australia did nothing about climate change while those opposite were in government, and now they are trying to ensure from opposition that Australia continues to do nothing. Every opinion poll tells us that the Australian people want this government and this parliament to take strong action against climate change. Those opposite are very keen to demand more and more modelling of every possible consequence, every possible change and every possible permutation of the CPRS.

Michaelia Cash (WA, Liberal Party) Share this | Link to this | Hansard source

It’s called responsible government. It’s called responsible policymaking.

David Feeney (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

It is not responsible policymaking; it is the art of delay. It is the art of delay from an opposition that are determined to find questions to hide the fact that they are opposed to there being any action on climate change. The tragic political truth is that your obstructionism has imprisoned your leader politically in an unsustainable position—and, to be honest, I do at times find that as delightful as you do, Senator Cash; I genuinely do. But the bill before this parliament has consequences which are far too important for us to play these small and irrelevant opposition games, even when they are as entertaining as this.

I have done some political modelling. I think, to be fair, the inputs into my political modelling are the same sorts of inputs that have occupied the minds of those opposite in recent days. There are some interesting findings. One of the consequences of the political modelling is that the opposition are going to crush the tiny remnant of their leader’s credibility. But those opposite do not care about that, and I suppose, in the final analysis, neither do I. But the Australian people want this bill passed, and my political modelling shows that if those opposite persist in being the Dr Noes of Australian politics then there will be a reckoning. There will be a reckoning. As Tony Abbott has implored you, you must see sense, because this is simply an argument that the Australian people will punish you for prosecuting. You stand in the face of a government mandate, you stand in the face of the will of the Australian people and you stand in the face of a global determination to take action on climate change.

The political fate of those opposite is, while fascinating and at moments delightful, not the most important consequence of their causing the Senate to reject this bill. Far more important would be the fact that as a result of the Liberal and National parties having made Australia irrelevant to international climate change policy for 11 years—11 years during which carbon accounting schemes were designed that do not operate to the best effect for Australia, and we heard extensive evidence of that in our committee deliberations, and 11 years during which we failed to exert the influence we needed over this very important piece of policy—we would tragically continue to not exert the policy influence over those systems going forward.

Despite the fact that this government ratified the Kyoto protocol, the opposition remain resolved to making us irrelevant in this important debate for another 10 years. By preventing Australia putting a carbon pollution reduction scheme in place, they are putting us behind the pack in action on climate change, in transforming our economy and in taking the steps that everyone now understands need to be taken. Future generations of Australians will contemplate the damage done to our economy, to our environment, to our tourism industry, to our agricultural industries and to our international standing by the position of those opposite and my political modelling says those opposite will suffer a grim fate as a result.

We have now had months and years of debate about climate change and the best way to tackle it. We have had Senate inquiries. We have had weeks of hearings, at which everyone with an opinion, and indeed some with an uncertain opinion, have had their opportunity to have their say. We have had several reports and those reports have given rise to important public debate. The time for delay has now ended. Australia needs action, the Australian people want action and, God forbid, the climate needs action. The future of Australia depends on the action of this parliament and the action we as senators take on this bill. If the bill is rejected, we will bring it back again and we will keep bringing it back until those opposite meet their responsibilities.

I commend this historic and important bill to the Senate and I implore those opposite to act not only in the country’s interest, not only in the interests of their own fragile and tottering leader, but indeed in their own narrow political interest because for them this may very well be a question of survival.

Michaelia Cash (WA, Liberal Party) Share this | Link to this | Hansard source

I also rise to speak on the Carbon Pollution Reduction Scheme Bill 2009 and the series of cognate bills that are before the Senate. No matter how shrill those opposite are—and we have had a lot of shrieking from the other side claiming that Rudd Labor has a strategy to tackle climate change—the only strategy that Labor has is a political strategy that falls apart when subjected to closer examination by the Australian people. This has now been further confirmed with the release of the independent economic research commissioned by none other than those people who are actually serious about making policy in this country—the coalition and Senator Xenophon. This demonstrates that the Rudd government’s emissions trading scheme ‘will unnecessarily drive up electricity prices, destroy jobs and expand the size of government in Australia’. What we have had to date from the Labor government is policy on the run. It has taken the easy, the cheap and the popular decision, but not the right decision. For goodness sake, it is those of us on this side of the chamber who have had to go and commission Frontier Economics to undertake the modelling that those on that side of the chamber refused to undertake because they knew what the results of that modelling would be. The results have proved yet again that their scheme is diabolically flawed. Those opposite have told the people of Australia that regardless of its consequences, regardless of the fact that there will be no positive benefit to the environment—in fact it has been proven that carbon leakage will be the end result—Australia must have the Rudd ETS, no matter how flawed.

These bills represent just another one of the many stepping stones that Mr Rudd is using to gain himself celebrity status on the world stage. These bills are nothing more than political convenience aimed at portraying Mr Rudd in a positive light at the expense of the Australian people. I will never agree with, and I will never be a party to, taking action at the expense of the Australian people. That is what Labor is asking us to do with this legislation—take action at the expense of the Australian people. Labor’s scheme puts at risk thousands of Australian jobs but, worse still, may have the perverse outcome that, if this scheme is implemented in Australia, it will actually lead to an increase in global CO2 emissions. That is completely contrary to the promise made by Mr Rudd prior to the 2007 election that, if elected, his party would introduce a scheme which would ‘produce deep cuts in CO2 emissions but would not disadvantage Australia’s export and import competing industries’. What a joke! The evidence now clearly proves that this government’s scheme fails to reduce carbon pollution at the lowest economic cost, fails to put in place long-term incentives for investment in clean energy and low emissions technology and, worse still, fails to contribute to a global solution to climate change.

One of the major flaws of Labor’s scheme is the stubborn rush by this government to introduce an ETS before the rest of the world. As is perfectly apparent to all serious policymakers, and we could hardly accuse Mr Rudd of being one of them, there is no unilateral solution to climate change; there is only a global solution. As a serious policymaker, I would have thought it was significant that our ally and trading partner the United States, in its draft emissions trading legislation includes very specific provisions providing 100 per cent protection to US export and import competing industries in any emissions trading scheme until 2025. But, further than that, the draft bill also provides that these industries will only see a reduction in their protection when more than 70 per cent of global output for that sector is produced or manufactured in countries that have a scheme equivalent to that operating in the United States. As I am sure senators in this chamber will appreciate, the provisions in the US draft legislation may mean that the rest of the world will never see a reduction in protection in relation to some US export and import competing industries. Unlike Mr Rudd and those on the other side, President Obama cares about his country’s competitiveness, cares about the fact that Americans need jobs and is not about to subject his country to risk through flawed emissions trading legislation. In contrast, the Labor Party is prepared to impose higher taxes and charges on Australian industry without restraint, which will result in Australians losing their jobs.

The United States is but one country, albeit an extremely significant one. We also need to understand what other countries are doing to reduce their emissions. In December this year Copenhagen will host an extremely important multilateral forum to discuss emissions trading, emissions targets and what can be done globally to reduce CO2 emissions. Until the Copenhagen conference has a chance to negotiate the many complicated issues that will arise from setting carbon abatement targets, it is sheer folly for Australia to prematurely legislate—that is, to do so before we find out what our international trading partners and competitors are doing.

With Australia’s emissions at just 1.4 per cent of global carbon emissions and declining, is it honestly likely that we are going to lead the debate in Copenhagen especially with a scheme that may or may not be compatible with what is negotiated in December? I think not. In fact, the Institute of Public Affairs gave said the following in its submission to the inquiry by the Senate Standing Committee on Economics into the exposure draft of the legislation to implement the CPRS:

With only one per cent of world GDP, we are neither prominent among world nations nor particularly influential within world councils … Accordingly, it is pure hubris for Australia to attempt to take the lead in abatement activity.

We have no way of knowing what the international community will be doing, whether or not they are going to decide to move in the same direction as Australia. But, if the international community miraculously does, you can be sure that it will be after considered discussion, not because we in Australia arrived at our position first. Unlike Mr Rudd, other world leaders see the issue of climate change as a serious global challenge and not just as an opportunity to promote themselves on the world stage. Our international trading competitors must be rubbing their hands with glee at Mr Rudd’s insistence on strutting the world stage rather than protecting Australian jobs.

Evidence that this legislation is being run to a political timetable, as opposed to one that exhibits good public policy, is reflected in Mr Rudd’s arbitrary decision to delay the start date by 12 months. I can only wonder how the Minister for Climate Change and Water, Senator Wong, the ETS vigilante, felt as she tirelessly trumpeted the government line that there would be a commencement date of 2010 but was then ambushed by the Prime Minister. That the minister can stand in this place and not laugh when she argues for the revised start date shows that consistency of argument will never ever get in the way of selling Mr Rudd’s message of the day. Minister Wong’s claims that this legislation must be passed to provide momentum to the crucial UN negotiations in Copenhagen in December are absurd. What momentum? The only momentum that Minister Wong is looking to achieve is the momentum for the Rudd spin machine to go into further overdrive.

The current Labor line is that this unseemly rush to put the legislation to a vote is all about giving business certainty. Well, let us look at comments made by the Chief Executive Officer of Anglo Coal, who said, ‘We don’t want the certainty of a bullet.’ And what about the economic cost to business of Labor’s scheme? In asking the Senate to pass this legislation before the international community has collaborated, the Rudd government has decided to impose a massive taxation burden on Australian industry. This legislation will seriously damage the competitive position of many of our industries and will see Australian jobs, investment and CO2 emissions exported to countries where no price is being imposed on carbon. Goodbye, Australia, and hello, China! Let me spell out the problem for business. The Labor government is imposing on Australian businesses a significant new tax, either directly or indirectly, that their competitors will not be paying. How is that good public policy? Those on the other side of the chamber seem to have forgotten that employers, business and industry create jobs and that governments do not create jobs. What governments can do, though, is create an environment which is conducive to creating jobs or, alternatively, as with the legislation before us, an environment that will inevitably result in job losses.

Let us have a look at what has been stated on the record in relation to job losses. The Minerals Council of Australia have stated that the CPRS legislation in its current form will cost over 66,000 Australian jobs in the minerals industry over the next 20 years. In my home state of Western Australia, an Access Economics report has been reported to confirm that the Labor ETS would cost 13,000 jobs in WA alone and more than 126,000 jobs nationally. Remarkably, the Access Economics report was commissioned by the state premiers, who all bar one are Labor.

Mathias Cormann (WA, Liberal Party, Shadow Parliamentary Secretary for Health Administration) Share this | Link to this | Hansard source

Bar a good one!

Michaelia Cash (WA, Liberal Party) Share this | Link to this | Hansard source

Bar a good one in Western Australia—thank you, Senator Cormann! It would seem that even Mr Rudd’s most senior Labor colleagues are worried about the impact of the ETS on jobs in their home states. Otherwise they would not have commissioned the modelling that was undertaken in this report. I will stand up for Western Australia, even if those opposite will sell it out to a spin-driven political timetable. I will not stand by and vote for a scheme that will destroy jobs in Western Australia and negatively impact on my state’s economy.

As a senator for Western Australia, I would now like to highlight a further flawed area of this legislation insofar as it relates to the Western Australian electricity market. The WA energy market, in which gas power is dominant, has not been distinguished from the eastern states energy market in the determination of ESAS assistance, insofar as the Treasury modelling uses the same competitive spot market assumptions for electricity sales for all states. This fails to distinguish the unique circumstances in Western Australia. The WA energy market has fixed priced contracts which do not allow the sector to pass on the increasing price of carbon, which generators will bear. This is not the case for the eastern states, where the price of electricity is based on a competitive spot market, allowing the additional cost of carbon to be passed on to consumers through the market clearing price. There have been several sensible suggestions put forward by Griffin Energy to deal with the unique circumstances that apply in Western Australia.

While I am aware that the energy sector is in talks with the government, it is patently wrong and commercially ludicrous for Western Australians that the federal Labor government should demand that the Senate vote on this legislation before the vital issues that have been raised by Griffin Energy are resolved. But in Western Australia we have not only problems with the federal government not recognising the unique circumstances that apply to the WA energy market but also concerns, as raised by Griffin Energy and by the Western Australian Department of Mines and Petroleum in a letter dated 15 June 2009 to Dr Martin Parkinson, Secretary of the Department of Climate Change. There is concern that the open-cut coal industry at Collie in Western Australia is being wrongly treated because of an apparent error in the National Greenhouse and Energy Reporting (Measurements) Determination 2008. As Mr Noel Ashcroft of Griffin Energy stated in a letter to me:

We find that in October 2008 we were allocated a default coal mine methane fugitive emissions factor in the greenhouse gas statutes (Determination) which bears no relation to the reality of the situation, that is, that WA Collie coal does not have methane, as is the case with Queensland. Nor have we any idea how it got there as there was no consultation.

In the past we were assumed to have the same default fugitive emissions factor as Victoria and South Australia but without reference to us this was changed last year to the equivalent of Qld and NSW at the last determination. It is well known that Qld and NSW have significant methane.

As this factor is to be used as the penalty emissions factor for CPRS it will cost us—

Griffin Energy—

well over $1.25 million per annum and rising as the mining increases to accommodate new projects.

As previously set out in a letter from The Griffin Group to the Department of Climate Change dated 11 May 2009, Collie coal does not have methane, a fact borne out by its absence from the WA mining and safety legislation and supported by the Geological Survey and the state Mining Engineer. Nonetheless Canberra is effectively saying we have to do very expensive research/drilling to verify that we have a low methane situation. It seems that they have adopted a position of “guilty until you prove yourself innocent” in a regime where the cost of proving what is well known is exorbitant!!

What other errors are being made in relation to Western Australia in the formulation of the CPRS and the associated bills? As a senator for Western Australia I reiterate that it is patently wrong and commercially ludicrous for Western Australians that the federal government should demand a vote on this legislation before such vital issues are resolved. Prior to the 2007 federal election the Prime Minister, as then Opposition Leader, said:

In taking the lead before an effective international agreement is in place, it is also vitally important that a domestic scheme does not undermine Australia’s competitiveness and provides mechanisms to ensure that Australian operations of energy-intensive, trade-exposed firms are not disadvantaged.

Well, it would seem that Mr Rudd was a little loose with the truth. When held up to scrutiny the Rudd Labor CPRS fails on all counts: it will cost Australians their jobs, it will kill investment in Australia and it will do very little, if anything, to reduce CO2 emissions. The only action that a government should take to reduce carbon emissions is responsible action. Action taken at the expense or to the detriment of the Australian people should not be supported. The government’s current CPRS, if agreed to in its present form, will result in action being taken at the expense of the people of Australia. But worse than that its implementation in its present form is likely to achieve the perverse outcome of Australia contributing to an increase in global emissions. As a proud Western Australian I will not be selling my state out to indulge Mr Rudd’s appetite for celebrity status on the world stage. This legislation must not be supported.

Catryna Bilyk (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak on the Carbon Pollution Reduction Scheme Bill 2009 and related bills. By voting to support these bills, we will be able to stop the rise in carbon emissions in Australia and begin the trip along the path to a low-pollution future. This has to be done because, quite simply put, climate change threatens Australia’s way of life, the environment and ultimately the economy. Now is the time for reform and essential to that is placing a limit and price on carbon emissions.

The design principles for an emissions trading scheme have been around for a long time, and the Rudd government has held to these principles. This scheme has not been developed simply for today; we are thinking of the future of Australia. Our proposal will change the way our economy and the market work, ensuring that economic decisions in the future factor in the climate. The Rudd government has had a clear picture of what we want to achieve in this area—that is, to significantly reduce emissions at the lowest economic cost but with the potential to drive growth, establish jobs and build up new industries. The Carbon Pollution Reduction Scheme will see the most significant environmental and economic reform in Australia’s history. The CPRS aims to reduce the carbon footprint of each Australian by one-third as a minimum over a 10-year period. The Rudd government understands the effects of climate change and knows that action must be taken now for the benefit of generations to come.

The Implications of climate change for Australia’s World Heritage properties report commissioned by the ANU and released recently finds that 17 of Australia’s iconic World Heritage properties are at risk from climate change. Sites such as Kakadu National Park, the Great Barrier Reef and the Tasmanian wilderness in my own home state, to name just a few, have been identified as particularly vulnerable to the effects of climate change by reduced rainfall, higher sea or land temperatures, rising sea levels or more severe storms. The collapse of our World Heritage areas would be a severe loss to both local and global communities. We need to take action now to make sure they are safe in the future. The Rudd government is committed to decisive action on climate change both at home and globally. The Rudd government recognises that building resilience to climate change is critically important. The Rudd government acted early by ratifying the Kyoto protocol, which the former Liberal government failed to do. Now we are acting by introducing the CPRS.

The Intergovernmental Panel on Climate Change, which consists of over 1,250 scientists from across the world, cites Australia’s vulnerability to the vagaries of climate change, with our water resources, coastal communities, natural ecosystems, energy security, health, agriculture and tourism all to be seriously affected if temperatures across the globe rise by three degrees Celsius or more. As we all know, Australia is a massive continent, with the majority of its population living in the coastal regions. This means that most Australians are at serious risk if the ocean level continues to rise, with homes and businesses likely to suffer. It is credible to say that the water level may rise by one metre before the turn of the century. The recent Copenhagen synthesis report found that climate change was accelerating and the risks were more serious than previously thought. Changes to Australia’s climate are already occurring over and above natural predictability, and these changes are expected to have an impact on Australia’s biological diversity. The Third assessment report of the Intergovernmental Panel on Climate Change concluded:

Australia will be vulnerable to the changes in temperature and rainfall that are projected to occur over the next 100 years.

The report also identified that natural resources and biodiversity conservation are likely to be strongly affected by climate change, as climate change is likely to add to the existing substantial pressure on these areas. There is a growing catalogue of documented changes that are consistent with climate change predictions, and there is reasonable scientific consensus on the expected types of impacts on species and the ecosystems from future climate change. A significant loss of biodiversity is expected by 2020.

Climate change is a stress to Australia’s biodiversity and ecosystems, which are already under pressure from human impact. Although our plants and animals have evolved to cope with large year-to-year climate variability, there are many species that have narrow long-term average climate ranges. These species and ecosystems could be highly vulnerable to the rapid and sustained increase in long-term average temperatures of one or two degrees Celsius, which have been projected under climate change scenarios. The reality is that climate change is with us and unless we act now it will only get worse.

Responsible management of climate change is also responsible management of the economy. The two go hand in hand. The earlier the government acts on climate change, the less expensive that action will be. The former Howard government had 12 years to act but, despite much research and many reports, failed to do so. The Rudd government is making up for lost time. Treasury modelling has shown that countries that delay action will face costs 15 per cent higher than those that act now. Such a significant saving is just another reason why we need to take action now. The Liberal Party argue for a lower deficit but will not support this opportunity to save some money in the long term. The present global financial crisis has made life tough for Australians but has not lessened the effects of climate change or the benefits that taking action will bring. In fact, the GFC has made it even more important that we act now to manage the economic challenges we are facing. At greatest risk are the agriculture and tourism industries. We need to act responsibly to ensure that these industries are protected. Failure to do so will certainly mean a significant number of jobs will be at risk or lost. One of the many positions that the Liberals has involves Mr Turnbull wanting no less assistance for Australian industry than will be offered by the United States for industry there.

From the outset, the Rudd government has committed to a cap-and-trade system. This is the only approach that can give Australia the assurance that carbon pollution will be reduced. Australia has committed to clear targets that enable us to be part of the global solution. The CPRS will best manage the economic impacts of transition to a carbon constrained economy, and the G8 summit in Italy reinforced that this is the way the world is moving. To ensure fairness and the greatest cost-effectiveness in spreading the burden of reducing carbon emissions, our scheme should have the greatest possible coverage. Our scheme will link internationally in order to enhance opportunities for Australia and to strengthen global carbon reduction efforts. And, importantly, we have committed to supporting industry’s transition to a low-pollution future and assisting households to adjust to the impact of putting a price on carbon.

According to CSIRO research, taking action against climate change now may create as many as 340,000 jobs in the transport, construction, agriculture, manufacturing and mining industries over the next 10 years. Within the agricultural industry, failure to act on climate change could see exports fall by up to 63 per cent in the next two decades. By 2050 exports may have decreased by up to 79 per cent. Under the CPRS there will be no cap—that is, no limit—on the number of free permits available to emissions-intensive trade-exposed industries. To start with, more than 25 per cent of all permits will be free and that number will automatically rise as necessary with growth in these industries. Under the CPRS, Australian emissions-intensive trade-exposed industries will receive a greater proportion of free permits than is being proposed in the US, and the US proposal is firstly to cap and then to reduce free permits. It is wrong for the Liberals to say that the Waxman-Markey proposal is more generous than the CPRS. Where industry in the US will have to share in the 15 per cent of free permits being allocated at the beginning of the scheme, in Australia industries will have certainty on the number of free permits they will receive over many years.

Businesses largely recognise the unavoidability of a carbon price and last year rejected the US approach on emissions in consultations. We accept that businesses need to know, and have every right to know, how the price will be determined. In order to make investment decisions, it is critical that businesses know how the price of carbon emissions will be determined. The CPRS will make it possible to set a price through market mechanisms. This certainty is needed to protect not only jobs but the economy as a whole. The Business Council of Australia and the Australian Industry Group recognise the importance of having this certainty. Businesses want the government and the coalition working together to provide this certainty. Unfortunately, though, the coalition have been doing everything possible to hinder the passage of this legislation. They think Australia should wait and see what the United States does with regard to this issue. Deferring decisions until after this issue is resolved in America will only lead to ongoing uncertainty for Australia and Australian businesses.

The Australian government has clearly indicated what will happen and has set aside money in the Climate Change Action Fund to help make the transition smoother for all concerned. In Australia, all the money that comes from the permits will be used to help both businesses and households manage the increase in everyday living costs. In 2009-10, the government has put $200 million into the Climate Change Action Fund. Initially, the CCAF money will be used to help businesses to identify areas where efficiency can be improved and to help make those improvements a reality.

Yet another position of the Liberal Party is that they want the Productivity Commission to review the CPRS. This is pretty ridiculous, as the commission has already undertaken a review and that review contradicted the apparent views of the Liberals. So I am not quite sure why they want the commission to review the scheme again, other than as another delaying tactic. It is beyond me but, as I say, it is yet another delaying tactic.

Australia is in the leading group of nations when it comes to understanding and acting upon climate change. Australia will continue to be a world leader under the Rudd Labor government. The coalition are clearly wasting time by refusing to pass this legislation. If they really believed the government’s policy was wrong, they would offer an alternative, but they have not—or at least they have not offered a policy agreed to by the party. They are a political party in turmoil. Refusing to put the best interests of the Australian public first is reason enough to conclude that the opposition are not suitable to govern this country. Of course, there are numerous other reasons to arrive at this conclusion, but I will not go into those in the short time I have left.

The Australian public obviously agreed with this sentiment in November 2007 when they voted for the Labor Party to act on this and many other issues. The business community has been given more than adequate notice about this legislation and the impact it will have if it is given royal assent. The finance industry has said that the impact on businesses will be minimal. In their analysis, Goldman Sachs JBWere stated:

… Far from putting companies in financial trouble, the CPRS will have negligible financial impact on Australian Companies.

The government stands behind the CPRS and the research that has been used to draft the legislation, including the modelling undertaken by Treasury that shows that the CPRS will cause major industries to see considerable increases in employment by 2020. I reiterate: The Rudd government is committed to being a world leader on climate change. The CPRS is the first step towards tackling the serious problem that is climate change. This legislation is backed by solid research and is supported by the business community. The opposition are without a doubt divided on this issue and, as I said, have not put forward any credible alternative policy. On one hand they extol the virtues of mirroring the US emissions trading scheme, but on the other hand they want us to consider the completely different approach that was put out by Mr Robb recently of an untested baseline and credit. The Liberal Party lack credibility, especially economic credibility. They lack cohesion, they lack detail and, most of all, they lack relevance. A party that cannot determine its own policy is no alternative government for the people of Australia. This is the most important environmental and economic reform in Australia’s history. Those in the Liberal Party know what they should do: they should vote for it.

In my conclusion, I would like to point out to members on the other side that yesterday a report was released that shows Australia’s carbon pollution will continue to rise if the Carbon Pollution Reduction Scheme does not become law. The Tracking to Kyoto and 2020 report shows that without the scheme in place emissions will be 20 per cent above 2000 levels by 2020. The increase in carbon pollution that will occur if we do not put this scheme into place is equal to more than doubling the numbers of cars on our roads between now and 2020. Our commitment under the Kyoto protocol to limit the growth in carbon pollution against business’s usual projections is only a first step in taking responsible action on climate change. We need to actually reduce our carbon pollution, and this will not happen unless the Carbon Pollution Reduction Scheme is put in place. I commend the bills to Senate.

Cory Bernardi (SA, Liberal Party) Share this | Link to this | Hansard source

Let me get straight to the point and dispel some of the myths peddled by the Labor Party and the radical green movement. I am not a climate change sceptic. Historical evidence suggests the climate of our planet has continually evolved, and it always will. Thus I am 100 per cent sure that our climate is changing. Of course, that begs the question: what is driving that change? The government will have you believe that climate change is being driven by carbon dioxide—or, more specifically, that man-made CO2, which comprises less than one per cent of atmospheric carbon mass, is the culprit. Despite the plethora of evidence to the contrary, those committed to the anthropogenic climate change industry have too much of themselves invested in this new religion to admit they actually might have it wrong.

When I say there is a plethora of evidence refuting their claims, I mean there really is a tonne of the stuff. Firstly, we have the irrational claims made by the high priests of climate change themselves. Alarmist of the year Tim Flannery once stated that the seas were going to rise by 100 metres, not the one metre that Senator Bilyk just told us. He was wrong. Great video hoaxer Al Gore won a Nobel prize for producing a flawed and alarmist mockumentary that contained a litany of errors and that required a guidance note before it could be viewed by British children. For over two decades the shrill cry of the alarmists declared we only had five years to prevent a climate change catastrophe. I could go on and on. The extremist mumbo jumbo uttered by those who profit from fear, either financially or electorally—and one could call them the prophets of doom—gets louder and louder. They must raise their voices not because any of their predictions have been realised but simply because they have not. When confronted with the very inconvenient facts that they have been demonstrably wrong again and again they simply raise the decibel of their cry and the level of the hyperbole attached to their claims. Tonight I shall leave the rebuttal of their hysteria there. Suffice to say there are many examples of attempts to scare the public by the prophets of doom.

Yet, despite these very loose advocates, I do have an open mind on the bill before the Senate today. By an open mind, I mean I am genuinely undecided. I am unsure if this bill and the associated bills are the worst or simply the dumbest pieces of legislation ever dealt with in this chamber. Either way, the bills are built on flawed science, fuelled by unsustainable hysteria and lacking in any demonstrable benefit to our great nation. After all, ask yourselves: isn’t it the primary requirement of any government to act in Australia’s best interest? Isn’t that why governments are elected? Isn’t it to defend the country and its citizens by looking after their interests? I certainly hope most senators in this place agree with that comment. But, alas, the supporters of this bill seem unconcerned with the interests of our nation. If they were committed to acting in Australia’s best interests they would endorse a new tax that will impact on every man, woman and child in this country without any meaningful benefit. They would not advocate a scheme that will cost tens of thousands of jobs without any meaningful benefit. They would not champion a plan to export domestic industry, domestic jobs and domestic profits to foreign lands without any meaningful benefit.

How can I state so unequivocally that there will be no meaningful benefit? The stated aim of these bills is to address dangerous climate change. They fail to do that on several levels, and I would like to touch on just a couple. Firstly, the government’s own adviser, Mr Ross Garnaut, has given evidence that this scheme is flawed and might actually be worse than doing nothing. In response to this question by Senator Macdonald, ‘If the scheme were not modified, would it still be better than nothing?’ Professor Garnaut said:

That is a really hard question. Let me say it would be finely balanced.

It was further reported that Professor Garnaut said:

... it might be better to drop the proposed model and “have another crack at it and do a better one when the time is right.”

Secondly, the purpose of the wealth transfer scheme advocated by the leftists in charge of this is to change people’s behaviour. This scheme actually compensates a group of people in excess of the cost of the introduction of the ETS. This might seem like a generous gesture by the government, but to me it is further evidence that the scheme will not achieve what it is intended to do. Instead, this bill sets in place a bureaucracy that will have an insatiable appetite for transferring cash from industry to government.

The question for the advocates of this scheme is: why could anyone acting in the national interest actually endorse such a ridiculous proposal? Of course they will say it is to act on climate change, but it will not make any difference. Because it will not make any difference, you have got to ask, ‘What the heck are they doing it for?’ I am now reminded that Mr Rudd claimed this as the greatest moral issue of our time, where the cost of inaction is greater than the cost of action. Why, then, has the government delayed the commencement of this scheme? Has reality smacked the disingenuous Rudd government in both of its faces? If so, here is a little more reality for you to contemplate from your gilded cage: this bill will damage our economy. It will lift taxes, it will kill jobs and it will not make a jot of difference to the climate. Under the Rudd-Wong scheme Australian industry will be taxed an extra $12 billion over five years. Many of these industries will not be able to pass on these costs. Some will simply close down or move overseas.

The already struggling and, in most cases, poorly managed state governments will also suffer, with one estimate being that they will be $1.4 billion poorer as a result of this scheme. Even the most uninformed would have to realise that this would result in higher state taxes and charges, a decline in services or possibly both. This scheme will also affect wages. Treasury secretary Dr Henry has stated:

It is my understanding that in general terms the real wages in alternative employment would probably be lower than the real wages offered in the mining sector.

In other words, this scheme will force some people out of their current jobs into lower paid jobs—hardly the outcome designed to boost prosperity in an already damaged economy. According to the minerals industry, this scheme will impose costs of $2 billion per annum and seriously damage their competitive position. The grains industry, a very low emitter, will be slugged with an annual indirect cost of more than $500 million—hardly the stuff to support their international competitiveness in an already uneven playing field.

Debate interrupted.