Joe Ludwig (Queensland, Australian Labor Party, Manager of Government Business in the Senate) Share this | Link to this | Hansard source

I move:

That these bills be now read a third time.

Simon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | Link to this | Hansard source

Because this has been a very long and drawn-out debate, before we proceed to vote on these carbon bills I want to ensure that the coalition's position on this is well understood and is clear for those who have attempted to follow this debate which, given the parliamentary recess, has stretched for not just hours or days but indeed weeks.

It is with deep regret that the opposition casts a vote against this legislation but, sadly, this has been a botched process by the government from day one. The coalition supports the principle and has long been a champion of it and an advocate for the concept that we should pursue and encourage the increased abatement of carbon through our soils, through our landholders and through better practices of our farmers. We believe that is a sensible approach. But we regret that the development of this legislation has been terribly mishandled by the government of the day. We need only look at the fact that, from the very early days of these bills being released for comment and being considered by the Senate Environment and Communications Legislation Com­mittee, it was clear that there were a lot of gaps pertaining to the regulations that underpin these bills. There were a lot of gaps as to the methodologies that would be applied to different areas of abatement. Those gaps are serious matters that should have been resolved before this matter came to a final vote.

We should have seen the final copies of the regulations as they relate to the composition of the positive list, the list that will determine what activities will definitely be included within the scope of this carbon farming legislation. We should have seen the final copies of the regulations as they relate to the negative list, the list of those areas of activity that will not be allowed to participate in or proceed under the Carbon Farming Initiative. Sadly, we have not seen either of those. We saw some draft regulations tabled just last week by the Minister for Agricult­ure, Fisheries and Forestry in this regard. At the last minute he brought in some draft regulations around the positive and negative lists. That is just not good enough. Those regulations should have been there for the committee to consider. They should have been there for stakeholders to comment on. All along, we should have been looking at a complete and final package. But, no, we have been looking at something far from a complete and final package. Instead, we have been looking at a package that, as this government so often says, is simply built on the basis of 'Trust us.'

Well, we do not trust the government. We do not trust them to get things right. We believe that if legislation is going to pass through this place with so much that is so dependent on the regulation and that if an approach is adopted within that legislation under this government, then we need to see everything in detail beforehand. We need all the i's dotted and all the t's crossed. We need to see it all, because we cannot trust the government to deliver things that they promise they will deliver.

In this regard we need to see certainty around the methodologies that are to be applied. We had an extensive debate, stretching from last week into today's debate, about the landfill gas sector, a sector that has abated more than 4½ million tonnes of carbon equivalent in 2009. They make a huge contribution in terms of the work. Many of those businesses and activities were early movers. They were people who got into this industry, got into the sector and started to do their bit to abate carbon emissions at the very early stages. And yet they are at risk under this legislation, at risk under this approach, of suffering adverse consequences, of being left stranded high and dry. They are at risk, which we will see, particularly in regional areas, of landfill gas processes being shut down that have been there for a long, long period of time. That would be a very perverse outcome.

The minister has provided some comfort and some assurances to the industry and to the chamber that that will not be the case, but, again, that comfort and those assurances came just at the last minute. They came only by discussions with industry at the end of last week that were reported back to the chamber today. They were discussions that would not have happened were it not for the work of Senator Xenophon, the opposition and industry in bringing it to the attention of the government and the Greens and ensuring that there was a discussion and a dialogue to try to provide some certainty. The industry is willing—dare I say it?—to trust the government on this matter. I hope the landfill gas industry's trust is validated. We cannot provide such blank cheques or open-ended trust to the government, but I hope their trust is validated. I hope that they do get the outcome that will ensure those important projects can continue into the future. I hope they do get that outcome in the time line that the government has promised.

But they are not the only ones who are waiting for a methodology determination under this. They are not the only ones who would have been far better off making sure that we got this right—if all those matters had been resolved before this came to a final vote in this place. We just cannot sign these types of blank cheques with the 'trust us' approach. It is not that the opposition and the Australian community have been once bitten by this government—far from it; the opposition and the Australian community have many times been bitten by this government and are many times shy of the 'trust us' approach of this government. We have seen a litany of failures. These are not just failures such as their chronic failure of budget management and the failures of infrastructure projects such as the school hall scheme; there is a chronic litany of failures in the very space that this legislation pertains to, a chronic litany of failures in the space of climate change programs and their operation. We can rattle off a long list of them. The gold star award for these failures goes to the pink batts scheme, the home insulation scheme which wrought havoc on an industry and which had severe consequences for homeowners, industry, individual lives and for taxpayers who saw not just hundreds of millions of dollars but billions of dollars wasted under the program.

We saw the Green Loans program, another classic failure. If it were not for the home insulation scheme, the Green Loans program would have been the gold star winner for failure in terms of climate change policies by this government. Once again, the Green Loans scheme wrought havoc on the lives of thousands of people who wanted to do the right thing and provide environmental assessment but who saw a government get it so wrong. The government's 'trust us' approach simply let those people down.

We have seen the government's flawed judgment in its other policies in this space. It was not so long ago—in fact, only 12 months ago—that the Australian people were being asked to re-elect this Gillard Labor government on a platform of policies such as the cash-for-clunkers scheme and the citizens' assembly on climate change. These ridiculous policies show the flawed judgment that those opposite have and what errors they are capable of making. They show the ridiculous decisions this government wants to put in place. That is why we cannot just sign a blank cheque and accept the 'trust us' approach of this government. We cannot go along with the approach of 'We'll fill in the blanks later when it comes to the regulations and methodologies that apply under this legislation,' because the judgment of this government is flawed, and it has been proven time and time again that when it comes to the crunch it gets these things wrong. And the consequences of getting this wrong will be too great.

We have just had a debate about matters of permanence during the committee stage, and that highlighted the fact that projects undertaken in the scheme will, in instances, be subject to 100-year time lines. It is not often in this place that we debate 100-year projects. It is not often we look at things with consequences that will stretch so far into the future. That is why we need to make sure that we get every aspect of this right. Should the government get it wrong, the conse­quences—consequences to access to land for agricultural production; consequences to water rights, water access and water availability; consequences to biodiversity management and land management; conse­quences to employment and economic activity in local communities; the conse­quences in all those areas that have been debated during a very lengthy committee stage—would be serious and have long-term implications. That is why we cannot just allow this government to go through and fill in the blanks later.

As I said at the beginning, we support efforts to encourage farmers and landowners and others to increase abatement of carbon. We would like to see, and hope, that ultimately this scheme works. We hope that is the case. We would have liked to have seen a scheme that, when we walk out of here today, we could have had 100 per cent confidence in, and we cannot have that; we do not have that. We do not know about too many aspects of this. It is the lack of that 100 per cent confidence that sees us having to vote against this scheme, with regrets. Even at the end of the debate we had during the committee stage, the final amendment that we debated and voted on addressed the review of the operation of this scheme. The government proposes that that review be undertaken by the Climate Change Authority. Senator Xenophon wisely pro­posed with the support of the opposition that instead it should be undertaken by a joint task force coopted from the CSIRO and the Productivity Commission. We felt that was the right way. Why? Because the CSIRO and the Productivity Commission are proven experts, have proven independence, have proven skills, have a long track record and enjoy the trust of legislators, the Australian community, policymakers, commentators and others. They are the people who could, of course, have ensured that we actually had a review that was comprehensive, that balanced the scientific and environmental aspects with the regulatory and efficiency aspects, and came up with advice to ensure that this scheme worked effectively in the long term.

But that sensible amendment was rejected and rejected in favour of the as yet unestablished, unproven and untested Climate Change Authority to instead under­take the review—an authority the opposition believe is part of an unnecessary $400 million new bureaucracy that the government are going to create as part of their carbon tax regime. Of course this is just more gross waste by this government in their approach to the expenditure of taxpayers' money. We think this is another example of government legislation that is based on a wrong approach by the government and another example of their flawed judgment.

In closing, let me restate that it is regrettable and disappointing that we find ourselves in this position. Had the government taken a more thorough and more diligent approach from day one, it would not have come to this. Had the government ensured that there was adequate consultation and engagement with all stakeholders from day one, it would not have come to this. Had the government provided final copies of all the regulations required by this bill for consideration throughout the process, it would not have come to this. Had the government provided certainty to those sectors such as the landfill gas sector about the methodologies that would be applied, it would not have come to this. But they have failed on all those counts. They failed to address a number of recommendations that their own senators made in the committee inquiry into this report. There has been a litany of failure and a botched process from day one by this government. We will see this bill pass—and I accept the numbers in the chamber. It will pass with our best hopes that it will work out, that it will not have adverse consequences and that it will not have perverse outcomes. Sadly, it will not pass with our confidence that all those things will occur and that is why we cannot support its final passage.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I rise to say how pleased I am that the Carbon Farming Initiative is going to pass the Senate. I wish to convey to the Senate how much so many people in rural and regional Australia are looking forward to this initiative. Recently I was in Darwin speaking with Indigenous communities and they see this as the best hope for a very long time for longstanding, permanent jobs, particularly in remote communities. The methodology for the different savanna burning regime is already underway and those communities can see there is enormous opportunity. Already people are moving into the Northern Territory and changing the manner in which they manage large areas of land. That too will provide Indigenous communities with work.

I am very pleased that the government accepted the Greens amendment to extend the carbon rights beyond exclusive native title holders to non-exclusive native title holders so that we expand the number of Indigenous people who not only will be able to get work as part of the Carbon Farming Initiative but will actually benefit as part owners or full owners of the carbon rights associated with the development of some of these projects. I have been in other parts of Australia where for years farmers have lamented that they cannot get any support for stewardship programs that they want to undertake on their own land. They want to restore degraded forest on their land. They want to be supported to plant biodiverse plantings. They want to be able to deal with feral animals and weeds. This Carbon Farming Initiative will enable them to develop projects where they can actually do those things.

I have just heard the coalition talk about a litany of failure. I am glad that Senator Birmingham is now on the record opposing this bill. He says that he hopes there will not be perverse outcomes. If it had not been for those of us in this chamber supporting this legislation, the perverse outcomes would be everywhere because the coalition moved to remove the negative list so that there would not be anything on the negative list. If you want to avoid perverse outcomes with this bill then you need the negative list in order to do it. Furthermore, the coalition are out there in rural Australia saying, 'Let's go with soil carbon.' What is their proposal for actually getting the methodology work done? Where is their regulatory authority that will impose the methodology and work out how those carbon permits, or whatever they are going to call them, and how the tonnes of carbon in the soil are going to be measured and rewarded? Who is going to measure and monitor permanence?

The coalition do not want a climate change department. It does not want to have a regulatory authority. It has said it will abolish those. They will have no department, no regulatory authority, no monitoring and no assessment, just a lot of hot air with farmers saying: 'Look at us. We're coming to buy your soil carbon out of your landscape.' If you speak to Mr Greg Hunt from the lower house, he does not know what this is going to cost—but it will come out of the budget anyway. The coalition are going to raid the budget. Having abolished the Department of Climate Change and Energy Efficiency and having abolished the regulatory authority, they will take the money out of the budget to pay for the soil carbon so the polluters can keep on polluting. There will be no payments from the polluters; it will come out of the budget.

Once the coalition have abolished those public servants, the money will come out of the health and education funding because that is the majority area of the budget. Australians will realise that the coalition are not going to charge the polluters, that they are actually going to take it from taxpayers to pay for these things so the polluters can keep on polluting. And we have those people who stand in here and say, 'What a litany of failure.' For the last several months the Greens worked extremely hard with the government, the bureaucracy and a number of constituents from across Australia on the Carbon Farming Initiative because we wanted to make sure that we did not get perverse outcomes. That is why there is a negative list. That is why it precludes managed investment schemes. That is why it says that plantings for harvest cannot be included. I know Senator Colbeck wanted them included. Well, they are not, and for very good reason: we want to maintain permanence in the landscape. We do not want to have the next rush of managed investment schemes and people ripping off the system. What we want is long-term investment in carbon in the landscape. I can tell you that NRM groups across the country are delighted because they are now going to get money to bring their NRM plans up to a certain standard, and those NRM plans are going to be consulted when Carbon Farming Initiative projects are put into the scheme. Local communities will be able to say, 'Our NRM plan would preclude that; we need to have a discussion,' and so on.

For the last several months we have sat down and consulted with people to try to avoid the perverse outcomes. Meanwhile, the coalition have been out there saying nothing. There has been no policy development—not a policy that can stand up. There is no funding for a policy, no capacity to develop a methodology and no capacity to employ that methodology in rural and regional Australia. It is a lot of hot air. Telling people that 60 per cent of the coalition's effort in reducing greenhouse gas emissions is going to come from soil carbon when they have none of those things in place—not a methodology and not likely to have one in the foreseeable future—and the whole idea that they are going to reduce greenhouse gas emissions by five per cent by 2020 is a joke. It is an absolute joke in carbon terms and people know it. That is why they cannot get out and defend it. That is why every time Mr Hunt gets up to try to defend it, he gets himself into trouble because he cannot actually identify how much they are going to pay for this 60 per cent of the effort coming from soil carbon, or where the money is going to come from.

This legislation is now internally consistent, it has addressed the issue of perverse outcomes and it recognises that there are at the moment simultaneous crises—a water crisis, a climate crisis, a food security crisis and an energy crisis. This legislation recognises all those things are happening at once, and it has built in a number of ways to address those tensions so that you do not have a disproportionate level of funding for one against the others and the perverse outcomes that happened under the coalition's pushed and promoted 2020 forest plantation plan and the managed investment schemes that went with it.

Who has put the work into policy development? Who has put the work into consulting rural and regional Australia? Who has given thought to improving Australia's biodiversity outcomes at the same time as creating jobs in the regions? Who has put the thought into long-term productivity in rural and regional Australia in terms of managing the landscape for productive outcomes? It is the people who have worked on this Carbon Credits (Carbon Farming Initiative) Bill and who are putting it through here today. The people who have opposed it at every turn are still opposing it. When we get to see this rolled out in rural and regional Australia, we are going to find people standing up and saying this is a good thing. Yet, this is another one of the things that the coalition will abolish and roll back, according to them, if they ever get into government. I will be very interested to see how many people in rural and regional Australia think it will be a good thing to abolish the Carbon Farming Initiative. It will be the only source of funding available to people in rural and regional Australia to give them long-term income from the stewardship of the landscape and the enhancement of carbon in the landscape that they have been asking for for so long.

I am really pleased to stand here today and support the Carbon Credits (Carbon Farming Initiative) Bill and to make very clear to rural and regional Australia that they need to look at the detail and ask the coalition this: how are you going to deliver on your 60 per cent effort of the five per cent reduction coming from soil carbon in the absence of methodology or of monitoring or of any of the rigour that is associated with actually achieving it in the manner that you say you can? Further, it is time they went and told rural and regional Australia exactly how much is going to come out of the budget to pay for that 60 per cent effort on soil carbon, and where it is going to come from? Those are the questions that people really need to have answered.

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

More hypocrisy from the Greens political party—more inconsistency! To suggest that the Greens political party are looking after rural and regional Australia! I invite Senator Milne to slip down to the front of Parliament House and talk to real people from rural and regional Australia. She will see what they think about the Greens and their mates in the Labor Party in this dysfunctional govern­ment. For Senator Milne, as part of the Greens Labor alliance, to talk about where the money is coming from for some of the modest initiatives that the coalition has for the abatement of greenhouse gas emissions! Fancy the Greens political party asking those questions when they are part of a scheme that will raise hundreds of millions of dollars from the taxpayers in this carbon tax that we are about to be subjected to.

I also remind Senator Milne that it was her party that joined with the Labor Party to tax ordinary Australian men and women with a flood tax that they did not impose on BHP, Rio Tinto, Coles or Woolworths. They all got off scot-free, those huge multinational companies, thanks to the Greens and the Labor Party, while mums and dads and individual Australians, the corner butcher, the baker and the candlestick-maker had to pay the tax. Their competitors, Coles and Woolworths, did not have to do that, thanks to the Greens and the Labor Party. So the hypocrisy of the Greens to come in here and argue on carbon credits, the Carbon Credits (Carbon Farming Initiative) Bill or any other bill on the grounds that the alternatives will cost taxpayers dollars is just breathtaking.

I do not want to delay the Senate on finalising this bill. As Senator Birmingham has said, the coalition supports the principle of carbon farming. In fact, it is something that we initiated in different forms in government. It is something that Greg Hunt has done a lot of work on and it is something that will be done properly. But doing it in the way of this bill, where it is left to this government to bring in regulations to fill in the gaps that there so obviously are in this legislation, is something that the coalition cannot take the risk of. This is a government saying, 'Trust us,' when we simply do not trust this government.

Why don't we trust this government? I could spend the rest of the day telling you about that, but suffice it to say that this Labor government is led by a leader who just a year ago said, 'There shall be no carbon tax under a government I lead,' and here we are, one year later, dealing with a whole series of bills associated with this carbon tax. Before the Senate rises at the end of the year we will be dealing with the carbon tax legislation. This is the legislation that the Labor Party and the Labor leader and the Labor deputy leader, Mr Swan, promised us, just a year ago, would not be introduced under a government that Ms Gillard led. So how can we trust them on the Carbon Farming Initiative? How can we say, 'We accept you will bring in regulations to fill in the obvious gaps,' when we cannot trust Ms Gillard with anything? A year ago the Australian public trusted her when she said, 'There shall be no carbon tax under a government I lead.' She broke that promise with impunity so why would anyone in Australia believe anything this government and its leader, Ms Gillard, say or promise in the future?

That is why there are thousands of people who have come here, some in front of Parliament House and some, I understand, being held in convoys—and one must get to the bottom of why this happened—not allowed into this area. Apparently the ACT government or the federal government, who deal with the surrounds of this building, would not allow them in. There are thousands of people outside of this place and thousands of people all around Canberra who have come from rural and regional Australia, Senator Milne. Why do you think they are here? Because they like paying $400 or $500—or $4,000 or $5,000 in many cases—for fuel to get here to protest against this government, a government that Senator Milne says with this legislation, with her Greens-Labor alliance, is looking after rural and regional Australia? What absolute hypocrisy! What absolute stupidity! What an absolute lack of truthfulness in saying that! Slip outside, Senator Milne! Senator Feeney, hop out the front! See what rural and regional Australia think about your govern­ment and its Greens alliance partners and you will quickly see that people are in many cases spending their last cent to get here to try and make their voice heard so that the deaf people in this government might open their ears just a little and realise what is happening.

Senator Milne said that she was in Darwin a couple of weeks ago talking to Indigenous people and that they are looking forward to all the jobs that they are going to get out of the Carbon Farming Initiative. I am not sure where Senator Milne went in Darwin or anywhere in the north but I am sure if she had walked around anywhere in the north she would have been told by Indigenous Australians and non-Indigenous Australians that their futures and their jobs have been ruined by this government's stupidity on that live cattle export ban. What is the biggest employment generator for Indigenous people in the Northern Territory, in the north of Queensland and in the north of Western Australia? It is the cattle industry. A lot of very good cattle properties are owned by Indigenous groups and they employ a lot of people. They will not be in the future because they will go out of business.

Most of the cattle owners, the cattle producers, in the north are struggling. I have heard figures like 90 per cent of cattle businesses in northern Australia being in default to their banks. This was said at a conference between the industry and bankers in Georgetown and Cobbold Gorge just last week. Ninety per cent of northern Australian cattle interests are in default to their banks as a result of Senator Ludwig's stupidity. Can you believe that? It is difficult to believe. So they are in default to the banks and the banks are not being very supportive or very understanding and a lot of people are looking at where they will be this time next year. They may well have lost everything because of a decision of this government—and Senator Milne comes in here and tells us that she and her Labor mates are looking after rural and regional Australia and that Indigenous groups in Darwin are just waiting for this carbon farming initiative bill to come into force so they can get jobs! What about the jobs that Senator Milne and the Labor Party have destroyed in the beef cattle industry in northern Australia? What about the number of jobs in Indigenous com­munities? Indigenous organisations have been destroyed by the decisions of the Labor Party-Greens alliance.

We have heard during this debate, and I thank Senator Birmingham and Senator Colbeck for so ably leading it on behalf of the coalition, stories coming out about new bureaucratic organisations to be established such as the climate change authority and I think I heard in the debate of $400 million being set aside for that. Madam Acting Deputy President Stephens, with no disrespect to you or to others opposite, this is the philosophical difference between Liberals and Labor: Liberals believe that people are best placed to spend their own money; people should be encouraged to get ahead, work hard, reap the rewards of their efforts and spend them how they want to—subject of course to putting aside a bit for those in our community who are more disadvantaged than they are and who need some help; and that is fair enough. But the Labor Party and the Greens, and all socialist parties the world over, believe that government, Big Brother, knows better what to do with your money. 'Don't you spend it on that car. We'll tell you what car you can buy. Give us your money and we will spend it for you.'

Government Senators:

Government senators interjecting—

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

A market solution? A tax of billions and billions of dollars is a market solution?

Government senators interjecting—

And, I might say, it will make absolutely no impact whatsoever on the changing climate of the world. We were told all of these taxes are going to reduce Australia's emissions by five per cent, yet the figures in the government's own documents show that we are actually going to be emitting more tonnes of carbon at the end of the five years than we are now. We are introducing this enormous tax on everybody, increasing everybody's costs of living, making Australia uncompetitive so that we are sending workers' jobs over to Asia and to places where there is no carbon tax.

Government senators interjecting—

Hang on. We will get there. They are your figures. Have a look at your documents. You are imposing this tax on everyone, and at the end of the period, by 2020, the amount of carbon emissions will have increased. That is in your document. That is in the document that your Department of Climate Change and Energy Efficiency and the Treasury have modelled. They have put out the figures. They are out there. You are increasing the output and putting a huge tax on everybody.

It has little to do with climate change. You know, with Australia emitting less than 1.4 per cent of the world's carbon dioxide emissions, that reducing them by even five per cent, if you were to get there, is going to make absolutely no difference whatsoever. I challenge you: tell me how five per cent of 1.4 per cent is going to make one iota of difference. After going around and warning everyone in Australia that they should not be going near the seashore because the tide is going to rise and their houses will be inundated, what does Professor Flannery, your very highly paid person personally selected to lead the Climate Commission, do with the $180,000 you people are giving him for two days work a week? He buys some property right on the banks of the Hawkesbury River in one of the wealthiest areas of Australia. Great socialists! Great for the workers! Great for the underprivileged! Give Professor Flannery $180,000 a year for two days work a week and tell everybody: 'Don't buy near the water.' If you were a conspiracy theorist you might almost think: 'Why would you tell other people not to buy and then slip into the market when it falls because of the climate change boss's warnings on tidal increases?' Nobody else would want to buy those properties, would they? They would be inundated by the water! But suddenly Professor Flannery does not mind taking that little bit of risk. I think he said he will have moved on by the time the tide comes in and takes his house. But, come on—let's get serious about all this. We are going to set up this new Climate Change Authority—another $400 million.

The other thing I have to tell you, sitting opposite—and I mean no disrespect in this, either—is that when I look around I note everyone on this side of the chamber has worked in their own business. If you did not work you did not get a cheque at the end of the year. In your business, if you spent more than you earned and then you borrowed from the bank, the bank interest plus the repayments eventually caught up with you if you kept borrowing. There is a difference, with respect. It is no reflection on the fact that for all of your senators their whole life's work experience has been working for the Labor Party, working for the unions or working for another politician. The cheque comes in at the end of the month; it does not matter whether you work hard or you do not work hard. And if you have a problem in government you say, 'Let's just spend another $400 million and set up another bureaucracy.' If I did that in my business, if I said, 'Things are going bad. I think I'll spend'—in proportion—'a couple of hundred thousand dollars to set up a new element of my agency', where was I going to get that money from? Hey, if I borrow that I have to pay it back. But the Labor government just spends another $400 million. Where do you get it from? You write out a cheque to the Treasury and when the Treasury runs a bit dry you just put on another tax like the carbon tax.

Money means nothing. It is so easy to spend other people's money. It is so easy to spend money when you never have to be responsible for paying it back. Whenever my colleagues and I borrowed money we actually had to pay it back. That is why we understand what thrift is about. We understand that you just cannot keep borrowing and spending and borrowing and spending—because in my business I eventually had to pay it back. But, in government business, the Labor Party just borrows, spends, borrows, spends, borrows, spends. Somebody will pay for it—the poor old mug taxpayer. As they did in the Whitlam and Keating days, the Labor Party will run up debt. In those days we used to think it was outrageous—$96 billion of debt. They did not care. They knew that the Liberals would eventually come along and pay off the debt, pay off the $96 billion, and put the Treasury in credit to the extent of—what was it?—$60 billion. The Liberals left the incoming Labor government with a $60 billion surplus, having paid off the previous Labor government's $97 billion deficit. We go a couple of years into it, and the Labor Party has wasted the $60 billion we set aside in surplus and they have run up—what?—$120 billion extra in debt. Have a look at Greece. Have a look at Portugal. Have a look at Spain. Have a look at Ireland. Senator, give it long enough and that is where your government will have Australia. Those socialist governments who did not understand the value of money would, if there was a problem, just throw money at it. They would borrow the money. Someone else will provide it. The Greeks are now finding out that they have got to pay it back some day.

Labor are lucky because they know that at the next election the Liberals will be back in power. They know that we will be prudent and fiscally responsible. They know we will pay back all of their debt. It is going to cost us both in money and in political terms because we have to take the razor out and slash their extravagance. I can assure them—and it is not my area of the coalition to be making these commitments on the run, but I will have a fairly good bet—the Climate Commission, the Climate Change Authority and the Department of Climate Change and Energy Efficiency will be the first to go. There is a saving of a billion dollars over a few years.

An opposition senator: $70 million.

That is a fairly good start, and I have identified it without any research! I have identified that in 30 seconds. It is going to be so easy to get rid of the waste, duplication, bureaucracy, red tape and regulation of your government, Senator, whilst, at the same time, looking after those people who cannot look after themselves. We will be spending our money on the defence of the country and disadvantaged people who need our help. We will be spending it on them. We will not be spending it on public service edifices like the ones that you have. The Climate Change Authority and the climate change depart­ment—that is just for a start. Good heavens! Sit me down with a pencil and paper for 10 minutes and I will give you a list of wasteful things. For example, we will not be spending $14 billion on putting in pink batts and then paying another $14 billion on removing them. There is a start. They are the sorts of things that a prudent, fiscally responsible government would do.

I have been deflected from my discussion on the carbon farming initiative bill by the interjections. Suffice it to say, as Senator Birmingham has clearly pointed out, we like the principle but the legislation is too open-ended and it has too many holes in it. There is also the fact that trusting this government to do anything is too high a risk, and we are not going to do that.

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

I too have watched with great interest as the debate on the Carbon Credits (Carbon Farming Initiative) Bill 2011 has moved from committee and now to third reading. I can assure you, Madam Acting President, there are no two countries watching this outcome more carefully or closely than China and India. They do so because they have absolutely vested interests—their vested interests being that both of them are running out of coal and both of them see Australia as a very, very successful and long-term supplier of the best quality coal in the world. From a carbon farming point of view, I think they would be looking at farming Australia for its product, and that is the coal. We saw only recently in India that one of its greatest concerns is its capacity to see its industries progress and to bring its populace from a lower socioeconomic to a middle-class level, and the way to do that is through the supply of power. I will come back to that from Australia's point of view, because we have been there.

What did we see just recently when the carbon tax was first announced? We saw the giant American company Peabody and none other than the largest steel manufacturer in the world, Mittal Steel, immediately leap in to purchase Macarthur Coal. This was parroted and trumpeted as being a great vindication of the carbon tax decision of this government. Of course, the truth lies elsewhere. The truth lies in the fact that Macarthur is already exporting the vast majority, if not all, of its coal. What might be the reason for Mittal and Peabody to want to jump in and buy Macarthur at a premium price?

Madam Acting Deputy President, time does not allow me to share with you my 10 years of experience of doing business in India and there would not be enough tissues or handkerchiefs in the chamber at the end of my presentation. So I will confine myself to the fact that, if Mr Mittal, the world's largest steel maker, wants to buy Macarthur Coal for a premium price, we had better believe that he has a very good reason to do so. His reason to do so is the statement by the current government that there will be a phasing out of coal powered electricity generation in this country. Therefore, where might be the opposition of the Foreign Investment Review Board or anybody else for that matter into the future for these companies to continue escalating the mining and exporting of our coal to those countries. There will be none.

One must then, of course, examine from a global perspective the morality of the question of why we would be making initiatives, with our little 1.5 per cent of the world's carbon, to reduce and cease the generation of power from coal whilst opening the floodgates so that the two giant countries of China and India can be unfettered in taking more and more of our coal to use in their coal fired generators to generate electricity for their communities. At the same time, this will be adding to the world's now demonised carbon dioxide. Where is the benefit of a little 1.5 per cent country stopping its generation of power from coal whilst accelerating the sale of its coal to other countries so that they can add to the world's carbon dioxide is absolutely and utterly beyond me.

To come back to my point about India: the Indians have always got a very good reason for doing anything. In fact, in my 10 years of doing business in India, I cannot recall anyone ever offering us a premium over and above what we actually undertook to do work for. I must put on record the fact that, as a small Western Australian IT company in the oil and gas industry, we are unique in our success in being able to deliver on the projects we did for Indian government companies. It did not, however, translate into us ever being paid in a timely fashion. So I am intrigued when I see Mittal Steel offering a premium for that particular activity.

But I go to a question that I have posed to young people when they have come into my office in recent times, remonstrating with me and asking me why we are not on board with this question, and I pose this question to anybody: how is it that our population of 23 million, in a landmass the size of the United States of America, is at the stage of per capita wealth that it is when compared with other countries, compared with high-popu­lation countries without a large landmass and compared with the United States of America, which is equal in landmass but with 10 times the number of people? Has anybody ever addressed themselves to that question in this debate? Has it been high iron ore prices? Of course it has not. It has been in only the last seven or eight years that we have seen an elevation in iron ore prices. Has it been gold? No; we are a reasonable producer of gold. What about grain? The United Kingdom produces more wheat than Australia does. We might be a large exporter of wheat in relation to what we produce but in terms of our production, one or two tonnes to the hectare for wheat production is a good figure in my state of Western Australia. If you did not get nine or 10 tonnes to the hectare in the United Kingdom and in Europe you would be regarded as a non-grower. Therefore, is it wool? Well, it once was wool. We grew on the sheep's back. But it is a long, long time since we grew on the sheep's back.

So I come back to the question in all seriousness and I ask: how is it that this small country in terms of population but with a massive landmass is so wealthy per capita? Two words: cheap energy. Cheap energy generated from coal is the one economic benefit that this little country down in the bottom right-hand corner of the world has. We have always had cheap energy from the generation of power from coal. But what are we trying to do? We are trying to diminish and stop the great economic benefit this country has always had. We are trying to pass that benefit on to countries that would dearly love our coal reserves and are willing to pay for them at a discounted price because they know that, should this tax be successful, should this government be successful in its drive, there will not be any imposition, unlike gas, for example, where our government says, 'You must keep some gas for domestic consumption but you can export the rest.' We now have a government that is saying: 'We don't want our coal. You are free to dig it out of the ground and put it on ships and sell it.' I ask the question again: why is it in this so-called smart country that we are digging up our iron ore and selling our coal so that other countries, particularly China but increasingly India, and one day Africa, will be able to turn our iron ore into steel, using our coal, and sell it back as a value-added product and we have no interest in that coal?

What are we doing to the economic benefit that for the last three or four generations has presented us in this country with the standard of living that we enjoy, with the capacity to help other nations and with the capacity to provide the sorts of social security underpinnings and umbrellas that we do for so many people in Australia? Why is it that we are such an attractive country? It is because we currently have cheap energy.

Look at the alternatives. Do we want to see alternative renewable sources? Of course we want to see alternative renewables. I say with some small degree of pride that I was running an island off the coast of Perth when wind generators were first introduced in Western Australia and someone said, 'There are four or five different products; let's put them all in the one place where the wind blows.' So all four of them were put there, and I had the undeniable pleasure of overseeing their management. The first two were eggbeaters, and they failed immediately. The third was the type of wind generator that we see now; its blades fell off and it never, ever generated power. The fourth one had exactly the same challenges we are seeing today—that is, when the wind blew we could actually collect some power from it, but at the times we needed it, lo and behold, the wind never blew. The other interesting thing, which has a similarity today—although this was in the early 1990s—was that, to be able to take this power on board from this renewable source from wind power, we had to turn our generators down to a level of inefficiency, where the efficiency lost exceeded the benefit of the actual wind turbine. It had its conclusion when a tourist bus with 35 overseas visitors was going past and one of the blades sheared off in a high wind and landed 200 metres in front of the bus. That was when I said to the renewable energy group within Western Power at the time, 'Just take it away.' So I do have some affinity with wind power.

Whilst that was a distraction, the point I want to make is that it will be a long time before renewables will ever replace the baseload demand for electricity generation. Having been a party to it, however small the island was—it is just a microcosm of the big one to the east of it—you still had to have your baseload generating capacity. You cannot say to the households and businesses: 'I'm sorry, all of the meat in the freezer has been spoiled because the wind didn't blow,' or the sun did not shine or we could not store the power.

I for one am very keen to see Australia continue particularly in the storage technology and long-distance transmission. Those are the two areas where Australia should make a contribution to global conditions. It is not digging coal out of the ground and sending it to China and to India, where they themselves will use our coal to take advantage and try to simulate what we did by way of cheap energy. Our contri­bution is to use our research and development skills to address those two issues: (1) the efficient long-distance transmission of generated power and, (2), storage. Until we get on top of those two, the contribution by renewables will not be great. What are we doing in this move that we are contemplating and debating in this chamber? It has been said before, and I am sure it will be said again before the debate is finished, that the first outcome will be to hamstring Australian industry and Australian business as they try to compete with overseas competitors upon whom no tax is placed. All of a sudden, if we are exporting, we are at a disadvantage with our competitors. If competitors are importing, they have an advantage because they do not have this particular impost. We threaten the jobs of Australian workers. I do not need to dwell on that because we see so much evidence of it here at the moment.

We place insurmountable hurdles on Australian farmers. Why Australian farmers? Because, as I alluded to a moment ago, we are such a big exporter of what we produce, especially in my state of WA. Here in the Eastern States you consume somewhere between 50 and 60 per cent of the grain that you produce. My colleague Senator Williams would have those figures immediately. We in WA export 95 per cent of the grain. We cannot pass those costs on. Fertiliser costs, insurance costs, transport costs: all of these go up but the farmer cannot pass them on. They are insurmountable challenges.

We place at risk the financial security of those depending on superannuation insurance—pensioners, self-funded retirees, indeed everybody who is in the super­annuation insurance industry, and that is all of us. Why? Because we have a preference in Australia to actually invest in our own companies and our own businesses. In that particular case where we see these businesses placed at a disadvantage, we must inevitably see their economic wellbeing disturbed.

The other problem is commodity prices for our own consumers. We know very well that we are going to see electricity prices driven up even higher. Every state Premier has said this. Labor's Premier Bligh has said it. Premier Barnett has been saying so. Premier Baillieu and the Premier of New South Wales have said the same thing in this area. We have a circumstance in which there are no winners yet. Industry does not win. Employees do not win. Business does not win. Pensioners do not win. Self-funded retirees do not win. I want to reflect particularly on the future generations. As I alluded to earlier, it has been cheap energy that has made this country great. The intention, as I see it, is to remove the legacy that we have enjoyed and that our parents enjoyed. We are going to fail to pass it on to the next generation.

Whilst I was in East Timor recently I was asked by a young military officer, 'What is the impact of all this carbon tax and carbon farming?' There was a beautiful spray of flowers in the airport lounge, so I said to her: 'Imagine you are a producer and an exporter of Australian wildflowers. You have a wonderful business going. You have plenty of employees and plenty of contractors. All of a sudden, for whatever reason, a govern­ment imposes a tax on you to make your flowers less competitive. You are an exporter of wildflowers; therefore your competitors overseas have a free kick. Those competitors bring their product into Australia. All of a sudden they are at a price advantage to you. What do you do as this flower producer? You take jobs offshore and lose jobs in Australia, you close your business or you go into bankruptcy.' None of those activities are of any value to this country.

Worse than that in the flower analogy is the fact that overseas competitors then come to see our product and they start to say, 'If Australia is not providing it anymore, what might be the case for me?' We have seen this in horticulture with Israel. Sometime in the past they found that their production of our wildflowers exceeded our own capacity to produce wildflowers, so they became a net exporter of our product in competition with us. There is absolutely and utterly no validity to this activity. This carbon tax initiative as it is being presented to us will not work and for that reason I am pleased to make this contribution to the debate.

Richard Colbeck (Tasmania, Liberal Party, Shadow Parliamentary Secretary for Fisheries and Forestry) Share this | Link to this | Hansard source

I just want to add a few comments to the end of this debate about this piece of legislation and its effectiveness. Senator Milne made some quite spurious claims about coalition policy and coalition intention in relation to this piece of legislation, even to the extent of making up suggestions about what amend­ments we may or may not have moved, which shows how poorly she has followed the debate in this place. She made allegations about one amendment that we were supposed to have moved, but we did not actually move it. That just gives a demonstration of how poorly the Greens are actually following this debate. They would rather be out spreading their prejudice against some of Australia's wonderful industries.

Right from the outset the opposition has expressed concerns about the design of this legislation and the way that it will effectively work, or more importantly effectively will not work. That is one of the major things I see will be a result of passing this legislation. I am genuinely concerned that the govern­ment and the Greens are raising expectations in the community. We heard Senator Milne talking about the huge opportunities, the bonanza, that might flow from the passing of this legislation. I would caution her against making such broad claims because one thing that we do know is that the regulations that sit around this piece of legislation can be quite restrictive, even to the extent that the National Farmers Federation said as part of their submission that you cannot grow a shelter belt. If you want to put in a windbreak, because it is common practice, it does not fit within the regulations. Some of the things that Senator Milne was talking about, such as savanna burning, may not fit within the process, depending on how it is done, because it is common practice.

The issues around additionality and common practice are very important elements that the coalition were concerned about with this legislation, bearing in mind that we, as Senator Milne correctly said, support the concept of sequestering carbon dioxide in our natural environment. That is an important part of our policy. But we are really concerned about the design of the legislation. We do not believe that it will actually sequester much CO2 at all. In fact it will be very lucky to have sequestered a gram of CO2 by the time we get to the next election because of the processes that still have to be gone through before we get to the stage of accepting a methodology.

Debate interrupted.