Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern Australia) Share this | Link to this | Hansard source

My question is to the Minister for Climate Change and Water. Is the minister aware of the quite devastating news that Cement Australia has today been forced to advise its employees at the Rockhampton cement plant that the plant will be closed down? Is the minister further aware that one of the reasons given to workers for the closure is Labor’s proposed emissions trading scheme, which has, to quote Cement Australia’s media statement ‘meant the long-term prospects for the plant have been undermined’?

Penny Wong (SA, Australian Labor Party, Minister for Climate Change and Water) Share this | Link to this | Hansard source

I thank the senator for the question. Can I say this: rather than rushing to try and use this business decision for political gain, I think it is important that we get the facts clear. The first fact, about which the government is very pleased, is that the company has indicated that the 31 employees will be offered employment elsewhere. It is also important to recall that, as a result of the global recession, published data—I think it is the Cement Industry Federation’s own data—has indicated a drop in demand for cement of some 25 per cent. I think any business operating in that kind of environment obviously has had to manage that fact imposed by the global recession.

The other fact that it is useful to put before those who want to rush to use this is that the CPRS is actually not law, because those opposite voted against it. Under the Carbon Pollution Reduction Scheme, clinker production, which is obviously the most emissions-intensive activity in the cement-processing sector, would be eligible for some 94½ per cent of free permits. As a result of other decisions the government has made, the scheme does not commence until 2011. So the context is that the government has put forward a proposition for 94½ per cent of free permits for clinker production and we know that the global recession has imposed a 25 per cent reduction in demand in the cement sector.

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern Australia) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. I ask the minister if she has read the publicly available media release about the issue, where it is clearly indicated that the Labor government’s CPRS was one of the causes of the closure—along with, I might add, a substantial increase in taxes by the Queensland Labor government. Is the minister aware of that? Has she read the media release? Will the minister also assure cement and other energy-intensive industries in Australia that any future emissions trading scheme will be designed in such a way as to avoid the additional costs and taxes on Australian industry that are not borne by competitors in other countries, such as those in South-East Asia? Does the minister understand the severity of what is happening to Australian workers’ jobs?

Penny Wong (SA, Australian Labor Party, Minister for Climate Change and Water) Share this | Link to this | Hansard source

I have read the press release. I have also read Mr Truss’s press release. As I said, the industry is eligible for 94½ per cent of free permits issued. I will give some indication, for Senator Macdonald’s edification, of the sort of cost impact that is therefore reduced. In 2011-12, under the fixed carbon price, the government’s package would reduce the carbon cost from under $8 per tonne of cement to around $1 per tonne. This is in relation to a product which I think has been identified by the industry as selling for about $120 a tonne. So the government’s policy, through the CPRS in the first year, reduces the impost from about $8 a tonne to $1 a tonne, in the context of the 2007 cement price of $120 a tonne. It is the case that in the second year there is a floating price. (Time expired)

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern Australia) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. I ask the minister if she has bothered to read the evidence given to any number of Senate committees where this type of action was predicted. It has been predicted very, very accurately. Is she aware that business after business has indicated that investment in these industries would fall off with the Rudd government’s ETS? Is the minister aware, from evidence given at a Senate committee, that the three-quarters of a billion dollar Cement Australia plant in Gladstone that was to begin construction this year has also been shelved? Do you have any feeling for those working Australians in Rockhampton and Gladstone who are now without a job, to a large degree because of Labor’s incompetence in Queensland, with the increase in taxes, and your own emissions trading scheme, Minister? Will you now admit that it has been disastrous for Australian workers? (Time expired)

Penny Wong (SA, Australian Labor Party, Minister for Climate Change and Water) Share this | Link to this | Hansard source

We have dealt very closely with Australian industry in the design of the scheme, which is why the Business Council and the Australian Industry Group have called for the passage of a scheme this year. I am also aware that there are those in this debate who believe that fearmongering, rather than sound policy discussion and constructive negotiation, is the way to go. I would remind the senator that as a result of his leader agreeing, in the context of the renewable energy target, to the CPRS assistance models, essentially the Leader of the Opposition and the opposition have today voted for exactly the same assistance models as exist under the CPRS, which are described by Mr Turnbull as being ‘appropriate protection’.