Gary Humphries (ACT, Liberal Party) Share this | Link to this | Hansard source

I move:

That the Senate take note of the answer given by the Minister for Climate Change and Water (Senator Wong) to a question without notice asked by Senator Moore today, relating to the grocery prices.

Any Australians listening to, or watching, question time today would have to have been rather worried. We had here the Minister for Climate Change and Water asked a question: ‘How much will grocery prices rise?’ under her emissions trading scheme. She gave an answer—a rather exceptional circumstance in this place. She said the prices rises would be in the order of 0.1 per cent. It was put to the minister that this was at variance with the estimates made by others in the field, particularly the Australian Food and Grocery Council, of a five per cent rise in grocery prices. Indeed, some members of that organisation, some larger retailers, are estimating increases of up to seven per cent in the price of groceries as a result of the emissions trading scheme.

That is a very alarming difference. That is a difference of some 6,000 per cent or more between the estimate the minister has given the chamber and the estimate given by those people who are actually selling the groceries, or representing those who are selling the groceries, to the overall majority of Australians. Who are we to believe?

The minister says that her figures are based on modelling. We have not seen that modelling. We do not know what the modelling actually says. We only have the minister’s word that it accurately and appropriately reflects a scheme which delivers a mere 0.1 per cent rise in grocery prices.

Those in the field say that their estimates are much, much greater. They point out that grocery prices make up about 20 per cent of the average household budget each week, and that a hit of around five per cent—what they call a price shock—for Australian made food and groceries will be a significant impost on Australian families. And so it will. It will be a very significant impost because, as they point out, this is not just a hit to the bottom line of Australian families; it is also a very serious hit to Australian food producers because that five or seven per cent increase, which the sellers of food in this country say is likely to occur, is a hit on those who—

Gavin Marshall (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

Based on what?

Gary Humphries (ACT, Liberal Party) Share this | Link to this | Hansard source

Based on their estimates of their flowthroughs. It is based on the fact that that is going to be an impost on Australian producers of food and groceries, whereas those producing food and groceries that are imported into Australia will not have to face that kind of increase. So bananas produced in the Philippines, or other products produced in Indonesia or Malaysia or Thailand, will not be affected immediately by these increases because those countries do not have the prospect of emissions trading schemes any time soon. Those prices will not be affected by emissions trading schemes in those countries or, therefore, in Australia, but Australian made goods and services will be and that of course includes food. That indicates a very serious impact on the capacity of Australian agriculture to produce goods and services and to keep Australian produced goods and services within reasonable price ranges.

The Prime Minister once said that he did not want to be the Prime Minister of a country that did not make anything. But, with respect, what his hasty, ill-conceived, badly thought through emissions trading scheme has potential to do is precisely that: to remove incentives from Australians to produce their own food.

This is effectively a GST on food. I remind those opposite that they campaigned against a GST on food.

Gavin Marshall (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

But you supported that!

Gary Humphries (ACT, Liberal Party) Share this | Link to this | Hansard source

Maybe so, but we did not do so in circumstances that were going to push up prices without compensation. And what compensation have you got in place? You have a compensation for energy increases. You proposed a compensation scheme for those increases in energy costs for Australians, but not, at this point at least, a proposal for increases in compensation to cover the cost of food and groceries.

The fact is that this emissions trading scheme has not been well thought through. The implications are inadequately identified and compensated for, and it is a result of the fact that this emissions trading scheme that this government has advanced is in fact a political exercise, not a policy exercise. The inability of the government and the minister in this place today to put any flesh on her bald assertions about price rises, and the fact that she has had no consultation with the industries concerned, reflects on the government very badly and suggests we are going to be facing very serious increases in those costs in the future. (Time expired)

Gavin Marshall (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

The failure of the opposition to have any form of coherent policy on emissions trading has left them with only one opportunity, and we have seen that opportunity today. It is one based on misinformation, one based on fear, one based on beat-ups. It is a shame that they cannot reach a position, because we on this side of the chamber know that the cost of doing nothing now will cost our children, our community, our economy and our environment substantially more into the future. That is what we are faced with. We actually want to do something now; we want to get on with it.

I know the hallmark of the previous government was to do a lot of talking about these sorts of things but take no action. They finally got to a position, after doing nothing for 12 years, of going to the last election with a cap-and-trade carbon scheme, an ETS, but they had not done anything about implementing it. They went to the election with it. They had done nothing for 12 years, but it was their policy that they went to the election with. We had a policy which we went to the election with and we want to introduce that. They have no policy and no position; they are an opposition—absolutely divided about this crucial matter—that want us to sit on our hands and do nothing. They want us to delay, to do nothing and ultimately to cost future generations an enormous amount more than it would cost to do something today.

No-one on this side of the Senate suggests that there are not going to be costs associated with the introduction of an emissions trading scheme. Of course, through extensive Treasury modelling, we are aware that Treasury has indicated that, while it is not possible to map out the exact price increase of every type of good or service, we do know generally that household food prices could contribute up to 0.1 per cent, or around $1.50 per week on average, of the 1.2 per cent overall increase in household prices. This is equivalent to around $13.60 per week of the total expenditure for the average household over the first two years of the scheme.

The CPRS is expected to raise household prices by 0.4 per cent in 2011-12 and 0.8 per cent in 2012-13, with a $10 per tonne fixed carbon price in 2011-12 and a flexible carbon price in 2012-13. The modelling has been done on this massive program of reform. This is one of the country’s greatest reforms and needs to come into being. Senator Humphries referred to this and compared it to the GST. Unlike what you did with the GST, we have put in place compensation for low- to medium-income earners to alleviate any price increases. Instead of relying on some allegations by some grocery people who have been, quite frankly, putting prices up at quite an astronomical level recently—

Gary Humphries (ACT, Liberal Party) Share this | Link to this | Hansard source

Are you sure?

Gavin Marshall (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

Well, you look in the supermarkets; you look at the prices!

Alan Ferguson (SA, Deputy-President) Share this | Link to this | Hansard source

Order! Senator Marshall, I think you should address the chair.

Gavin Marshall (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

Through you, Mr Deputy President, Senator Humphries ought to go around and have a look at the price increases that are going on without the ETS, and he would understand that prices are going up in a lot of those areas. Maybe some of those people have an ulterior motive, but this government is actually going to provide significant support to low-income families. The government will provide upfront support to low- and middle-income households from 2011-12 through a package of direct cash assistance and tax offsets to help them to adjust to a low-pollution future. Again, Senator Humphries wanted to make the comparison with the GST; they did nothing like that when they were in government.

Pensioners, seniors, carers and people with a disability will receive additional support above indexation to fully meet the expected overall increase in the cost of living flowing from the scheme. We are doing everything we can as a government to ensure that those who cannot afford any sort of increase are actually protected, insulated or isolated from the impacts of the introduction of our ETS. But what do we see from the opposition? Any acknowledgement about those issues? Any serious policy contribution to solving the environmental effects that we are facing into the future? No, we see a rabble on that side of the Senate. We see a divided opposition that cannot get their policy together. They finally get around to commissioning a report and then they have the gall to wheel that out and say, ‘This is the way the government should go. But, by the way, we don’t think it’s good enough to actually adopt as our policy.’ They have no policy; they have no position—they are an absolute rabble. They are an opposition divided and they ought to get on board and do what is right for this economy and what is right for the people of this country.

Barnaby Joyce (Queensland, National Party) Share this | Link to this | Hansard source

No-one was divided the other day. In fact, the only people who were left by themselves were the Labor Party. It is one of the only issues that we can get the Greens, the Independents, the National Party and the Liberal Party together on, because it is such a ridiculous new tax. The Prime Minister is going to develop a new tax. I can just see it—yes, there is a bit of blue sky out there—he is going to develop a new tax to change that! It is Kevin from heaven—the Prime Minister from heaven, I apologise, Acting Deputy President—who is going to develop a new tax to change the climate!

It was interesting today to open the newspapers and see: ‘Food prices set to surge under ETS’. Isn’t that amazing? We have been saying all along that food prices are going to surge—and that is just attributable to the electricity component. Wait till 2013-15, when agriculture itself will come in. Wait for the tax when it is on cattle and sheep—the methane-emitting monsters, apparently, in society. Wait for the price of groceries then. Then you will be able to talk to the working families, because you will have Mr Rudd everywhere in your life. You will turn on the iron and there will be Mr Rudd on the power charge. You will get sick of ironing and you will turn on the telly to watch the football. There will be Mr Rudd coming through the TV. You will think, ‘Oh, well, I might as well do some vacuuming.’ and there he will be, with you vacuuming—vacuuming with the Prime Minister! There will be a tax on that. You will think, ‘I’ve had enough of this. I’m going to Cairns.’ But, hang on, the plane runs on aviation fuel. He is in the plane with you! He is going with you to Cairns! Then you think, ‘Well, I’ve had enough. I’m just going to go down to do some shopping,’ and there is Mr Rudd in the shopping trolley, the taxing monster! In every corner of your life: big business, big bureaucracy. What is it doing? ‘Oh, he’s changing the climate.’ I should have been lighting a candle in front of Mr Rudd! I never knew he could do that. He is going to change the climate for us. What an incredible person!

The ETS is nothing more than the ‘employment termination scheme’ for so many working families that you should be supporting in the Illawarra, in the Hunter Valley, in Central Queensland, in Mackay and in Gladstone. What are you doing to working families? You are putting working families out of work—that is what you are doing to working families. If it is not the ‘employment termination scheme’ it is just the ‘extra tax system’—you just have to grin and bear it. You have got to put up with it—like a carbuncle on your backside, you have got to put up with it and live with it. Now they have changed the lexicon because they are worried about ETS. It is now called the CPRS. CP stands for the ‘cunning plan’ to get them to a double dissolution. That is what CP stands for. And RS is what our economy will be if this goes through—that is what RS stands for! That is what we have got. This is the new super-duper plan coming to you from the enlightened, the illuminati, of the Left and the Greens. This is what we have got.

I think the Australian people are waking up. I have just been doing talkback radio in Sydney and, I tell you, they are awake up to you. It is a new tax. You know it and they know it. It is another moralising tax. It is always the same: ‘Teenagers drink too much. Let’s tax them.’ Did it stop teenagers drinking? No. They are drinking more than they did before. Then it was: ‘The world is going to end, so Mr Rudd is going to give you a tax.’ That is all it is, with this moral bulwark at the front of it—always the same moralising bulwark. What are they doing? They say: ‘But we are going to collect the money and then we’re gonna give it back to other people. That’s what we’re going to do—collect this $11 billion and give it back to other people.’ Because they know best! They know who to give it to. They are going to give it to all the people who voted for them; that is who they are going to give it to. This is the rent-seeking mentality that comes into play. We have been consistent on this. The National Party said right from the word go that we would not support this—and the Liberal Party are saying they will not support it, and the Greens are not going to support it and the Independents are not supporting it. No-one is supporting it except the Labor Party.

Who will be the benefactors of this? It was interesting to see that the Business Council of Australia have split between the paper pushers, who stand to make an absolute goldmine out of commissions, and the people in our nation who actually produce things. The people who produce things do not like this. The people who just collect a commission on the way through love it. But I am afraid Australian working families cannot eat commissions. They can eat beef, they can eat mutton, they can eat vegetables and they can have a job, but they cannot eat paper contracts, because that would be the biggest thing that we will get out of this—a mountainous bureaucracy, a bankers’ and bureaucrats’ bonanza given to you by Mr Rudd. (Time expired)

Doug Cameron (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Talk about methane-eating monsters! I did not know I was about to follow one! This is just the typical coalition fear factor. Here they come. They did nothing for a decade. You had a decade of lost opportunities to try to deal with the biggest political, economic, social and environmental challenge facing this country and what do you do now? You give us the usual fear campaign. You get the fear campaign from the Libs and the fear campaign from the National Party. You have simply been running this line for all you are worth. Senator Joyce’s contribution is one full of cliches and one-liners designed to try to get the next headline. He is not prepared to deal with the real issues facing this economy—the real issues facing all Australians. Australians understand the issue. They understand better than the coalition that we are faced with a future of more storms, more droughts and rising tides if we do not deal with carbon pollution.

Yet we have the coalition deniers and sceptics—an absolute rabble who cannot agree with anyone on their own side. They are fighting each other in the party room and are out here trying to scare the population by saying that dealing with the future of this country will mean that prices will go up and jobs will be lost. It is quite interesting. I have been on all of the committees that Senator Joyce has been on and I have heard all the arguments that he has put up. Yet the sugar industry said to the RET inquiry hearing, ‘We want to be in this because it will create jobs in the bush; it will create jobs from Grafton in northern New South Wales right up to Mareeba.’ That is where the jobs will be created. Why do they say that? They say that because they want to engage in the opportunities that the CPRS and the RET scheme give them to create jobs in the bush. They are planning five mill upgrades in Far North Queensland, providing 71 megawatts of installed capacity in that area; three mill upgrades in Herbert in northern Queensland; two mill upgrades in Mackay, in the Whitsunday hinterland; four mill upgrades in the Wide Bay-Burnett southern region; and a further mill upgrade in northern New South Wales.

The sugar industry know what the issues are; they know what the opportunities are. They say thousands of jobs will be created. I asked them a specific question: ‘Are these green jobs?’ They said: ‘Yes, these are green jobs, because we are taking the opportunity that these schemes provide to build jobs in the bush.’ Yet all you get from Senator Joyce’s contribution is more methane emissions; methane emissions, rhetoric and fear are all you get from the National Party, supported by some in the Liberal Party. Do you know what is going to happen? You are going to be overruled. The coalition are going to have to accept the reality of climate change and all the troglodytes, all the dinosaurs and all the rabble that make up the people that you are speaking for, Senator Joyce, are going to have to give in. You are going to have to give in because the interests of Australia demand that you give in. The interests of Australia say that the jobs that will be created in the future will be green jobs. The jobs that will be created will be in the bush, and all your fear campaigns, all of your rhetoric will stand for nothing. The Australian population know the issues that are important. The Australian population will reject the coalition rabble that you represent—a rabble with no ideas, a rabble with no future and a rabble with a very temporary leader. (Time expired)

Christopher Back (WA, Liberal Party) Share this | Link to this | Hansard source

I refer to the answer provided by the Minister for Climate Change and Water when I asked her, firstly, whether she was aware of and concerned about the impact on agriculture of a delayed decision or no decision on introducing farmers into the emissions trading scheme and, secondly, whether or not this would have a disastrous impact. The point she made was that she did not understand and was not sure of the answer to either. I am not sure whether she is concerned about the impact on farmers arising from the confusion relating to the failure to make a decision on whether agriculture will be introduced or not, but the minister should be aware that farmers are always undertaking business plans into the future and are appearing before their bankers and other financiers in relation to that.

Senator Cameron and his colleagues, particularly Senator Conroy, probably do not know about business plans, because we have gone forward with National Broadband Network, a $43 billion project, without there being any business plans at all. Farmers, of course, have to submit a business plan. As they submit them to their bankers, the first thing the bankers say to them is, ‘Do you know what’s going to be happening beyond 2013, 2014 or 2015 with regard to this shocking emissions trading scheme impacting on agriculture?’ Of course, they are going to have to say, ‘No, we don’t.’

The minister also did not seem to be clear on whether farmers in other countries are going to be excluded. She ought to be aware of this, because I cannot find another country that is intending to include farmers and agriculture in its ETS. Even New Zealand have now changed their position to take account of what will happen in Australia. We know the Americans have decided that agriculture will not be included in their ETS. We know the Europeans have made that decision. In China, where there are 180 million cattle and large numbers of sheep producing the methane that the other side is so concerned about, there will never be an emissions trading scheme including agriculture. India will be exactly the same, as will be Indonesia to the north of us—country after country. The other point that needs to be taken into account—because all of these countries are our competitors, along with the South American countries and South Africa—is that their governments actually pick up the cost of quarantine inspection. So not only do we have an unfair playing field; we have a field of opposition, because those countries are protecting their agricultural exporters.

What will the impact be on our agricultural production? If it is introduced, it will be horrific. My first point relates to dairying. We think the impact on dairying across Australia will such that it will shrink the industry to the extent that it will become, to all intents and purposes, uneconomical. The beef industry is a very, very significant and growing industry in this country, particularly with our exports of live cattle to the Indonesian and other markets, where these are having a significant positive impact on improving nutrition for the people in those countries by providing protein foodstuffs. The beef industry has already told all sides of parliament what impact this ETS would have: it would decimate the beef industry. We then looked at other forms of agriculture, including cropping. Australia is a very significant wheat, other cereal and protein producer, so the ETS would have a massive effect.

It was a shame that the minister, in responding to my question, made the comment that she could not see any reference in the Frontier Economics model, as proposed by the coalition last week, that there would be any benefit. What a shame that she did not—because what she would have read about, had she or her advisers considered what was in that report, was the positives that agriculture in this country may be able to address and contribute to this debate. If she had understood the Frontier Economics modelling she would have seen, for example, that agriculture can make a significant contribution to abating levels of carbon and carbon dioxide. Not only can it contribute to it, but agriculture can earn revenue from it—particular, for example, carbon sequestration into the soil, further tree planting to overcome the shocking salinity problems we have, and biofuels. Salinity is a problem that needs to be addressed in this chamber.

Question agreed to.