Stephen Parry (Tasmania, Liberal Party) Share this | Link to this | Hansard source

I have received a letter from Senator Fifield proposing that a definite matter of public importance be submitted to the Senate for discussion, namely:

The Gillard Government's plan to damage business and consumer confidence through the introduction of a carbon tax.

I call upon those senators who approve of the proposed discussion to rise in their places.

More than the number of senators required by the standing orders having risen in their places—

I understand that informal arrangements have been made to allocate specific times to each of the speakers in today’s debate. With the concurrence of the Senate, I shall ask the clerks to set the clock accordingly.

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

It is indeed a pleasure to speak to a letter put to the Senate by Senator Fifield. It is true: there is a crisis of confidence throughout the business and consumer sector. I do not think there is any doubt about that. All the indi­cators demonstrate that there is crisis of confidence throughout the business and con­sumer sector. There is absolutely no question that the introduction of a carbon tax is a sig­nificant element in that crisis of confidence.

We have seen in recent weeks the complete crisis that runs through the manu­facturing sector at this moment. In fact, Mr Paul Howes, one of the four people respon­sible for choosing our Prime Minister—or deciding that the last one should be dethroned—said that Australia's manufactur­ing is in its deepest crisis since the Great Depression. If that is not an issue of crisis of confidence, I do not know what is. The published polls also talk about the crisis of consumer confidence and business confi­dence. In fact, in my home state of Tasmania confidence is the lowest I have seen it for a long, long time.

We see now the spectre of this country, under the governance of the Gillard govern­ment, being considered a global sovereign risk. We all know that finance is very mobile. It will pick its best point to go to. I have not heard since the early 1990s, when the Labor-Greens government came into power in Tasmania, the strength and the vehemence of concern being expressed by business and the community around the sovereign risk that relates to government. Not only do we have that crisis of confidence in Tasmania but, unfortunately for Australia, we now have it nationally. We have global financiers looking twice before they invest in this country because they are concerned about this country's sovereign risk.

We have seen the issues around this carbon tax that the government proposes to introduce providing considerable confidence concerns to industry. We know that indust­ries overseas are not going to be subjected to the globe's biggest carbon tax. This carbon tax is going to raise something on the order of $9 billion just in its first year. It is going to increase power prices by 10 per cent in the first year, and they will go up by more than that afterwards. It will increase gas prices by nine per cent just in the first year, and it will be more and more every year after that.

I do not know what has specifically been happening in other states, but in my home state of Tasmania we have had a 40 per cent increase in energy prices over the last two years. That is projected to increase another 20 per cent in the next 12 months. The government is going to impose a 10 per cent increase in energy prices over and above that. Tell me why there would not be a crisis of confidence. Tell me why there should not be any concern in the local community about the capacity of people to pay their power bills. Why is it that the elderly are staying in bed rather than paying their power bills, so that they can keep warm? Why is it that consumer confidence is so low? Why is it that business confidence is so low? It is because of the performance of this govern­ment and governments like this, particularly governments that are dependent upon the Greens to stay in power, such as the govern­ment in Tasmania.

That is why the economy is so soft. That is why manufacturing and consumers are so concerned that at a time when things are tough, particularly for manufacturing, the Gillard government is giving us an additional cost—a carbon tax that is applied across the economy, that trickles down right through the economy and will cost $9 billion a year. Yet the actual cost of abatement is less than $2 billion. Applying a $9 billion cost to the economy when the real cost of abatement is less than $2 billion does not make sense, and the community understands this. The business community certainly understands it. That is why it is saying it is concerned about investment and about the future of manu­facturing. And that is why Mr Paul Howes says that Australian manufacturing is in its deepest crisis since the Great Depression.

When manufacturing is in that sort of crisis, why would you add the additional burden of a carbon tax? It just does not make sense, but it reinforces the fact that this gov­ernment is so far out of touch. I was on King Island for a couple of days last week, talking to the community over there and hearing their scepticism about the promised impact of the carbon tax. The Prime Minister dropped in there on her way to Tasmania a few weeks ago. When confronted in the street she said, 'But the impact is less than one per cent.' She forgets that the impact in a remote regional community like King Island is actually magnified because of the addi­tional costs of living in that community. She forgets that the only way for those commun­ities to get on and off the island is to fly, and 30 per cent of the overhead costs of the airlines that service the island is for fuel.

Scott Ryan (Victoria, Liberal Party, Shadow Parliamentary Secretary for Small Business and Fair Competition) Share this | Link to this | Hansard source

They can swim.

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

Perhaps they might like trying to swim, Senator Ryan, but I can assure you they prefer to fly if they can. But 30 per cent of the overhead costs of those airlines is fuel, which will go up by 10 per cent. The Prime Minister says that if a business puts up its prices by more than one per cent she will send the ACCC after them. Why wouldn't a business be concerned about having the ACCC banging on their door because their business costs have necessarily been driven up by more than one per cent? For those airlines with overhead costs of 30 per cent for fuel, a 10 per cent increase in the fuel price will put up their prices by three per cent. It is not difficult to do the mathematics. But Prime Minister Gillard says, 'If they go up by more than one per cent, we'll send the ACCC around to have a look at them to see what the circumstances are.'

Another small business that I am aware of in my hometown of Devonport is an alu­minium powder-coating business. They have done their numbers and their power price will go up by 10 per cent. They also use gas, which is going up by nine per cent. Their baseline costs will also go up by three per cent, coincidentally. So will that small alu­minium powder-coating business have the ACCC coming in to talk to them? What about the vegetable processor at Forth whose power bill is $600,000 a year? This will cost them an extra $60,000. But what will they get for that? What will be the impact on the environment for that $60,000? There is a vegetable processor down the road a little further whose power bill is $1 million a year, so that will be an extra $100,000 on top of their costs, just for the carbon tax. They also have a $1.4 million fertiliser bill but they have not been able to determine what the additional cost for the carbon tax will be because that information is not available to them, yet here we are starting to debate the legislation in the parliament this week.

There is another major vegetable proces­sor who is about to spend $17 million, albeit with some assistance from the Common­wealth and state governments. After having spent that $17 million to mitigate it, they will still have an annual bill of $1 million on top of their operational costs. We all know that that will most likely go back to the farmers. They cannot charge the supermarkets be­cause they will not bear the cost. I could give you a number of examples. There are dairy farmers who will pay $10,000, on average, per dairy farm and an additional $8,000 to $10,000 in costs coming back from the processor.

There is no doubt that there is a crisis of confidence. All of the economic indicators demonstrate that there is a crisis of con­fidence, and the carbon tax is playing a significant role in generating that crisis of confidence.

Anne Urquhart (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

There is one side of this place that has a plan to damage business and consumer confidence and it is not my side of this place. There is one side that come in here day after day after day, ranting about how our way of life is being ruined. They forget that Austra­lia's economy is outperforming the world. We are in our 20th year of economic growth, which is a record unmatched by any other advanced economy. They forget that through Labor's quick action during the global financial crisis and the resilience of our economy we are now in a strong position. They forget that Australia's GDP is signifi­cantly higher than its pre-GFC level while many advanced economies are still strugg­ling to make up for lost ground. They forget that our unemployment rate is lower than all but one major advanced economy.

They always forget that Australia has lower government debt and lower budget deficits than any of the major advanced economies and that we will return to a budget surplus sooner. They forget that, in the May budget, real growth in spending averaged one per cent a year over the five-year forward estimates. That is the lowest average growth rate in any five-year period since the 1980s. They forget that, in contrast, real spending growth averaged 3.7 per cent a year in the last five years of the former coalition government. The Gillard Labor government understands that it is important to keep government spending growth low so as not to crowd out private sector invest­ment, something the former government seemed to forget in its final years. They forget that there are currently severe economic problems across the world, from the Mediterranean to the United States. Their focus is so insular that they forget that these global issues weigh on the minds of busin­esses and consumers, resulting in movements in the confidence of these groups.

It is clear that the opposition have lost their way and are stuck in a deep hole of negativity. They concentrate on blustering negative anecdotes, and the facts are blatant­ly against them. The facts are that, under this Labor government, Australia has low unem­ployment, strong job creation, record terms of trade and an unprecedented pipeline of business investment. And whilst our fund­amentals are strong, the government has a clear plan to maximise Australia's oppor­tunities by getting back in the black by 2012-13, investing in productive capacity and boosting participation, moving to a clean energy future and advancing tax reform.

Today we focus on Labor's plan to cut carbon pollution and drive investment in clean energy technologies and infrastructure like solar, gas and wind. It will help build a clean energy future for our kids and our grandkids. Labor is committed to cutting carbon pollution because climate change is an issue that is not going to go away. Treas­ury estimates that if it does not put a price on action now, a price over $60 a tonne would be required to make the necessary cuts in carbon emissions.

It is unfortunate that those opposite have come in here today to completely misrepre­sent the Gillard Labor government's goal in this space. Today, they have put forward a matter of public importance that states:

The Gillard Government's plan to damage business and consumer confidence through the introduction of a carbon tax.

Let us examine that for a moment. Those opposite are so disingenuous that they pur­port that this Gillard Labor government has a plan to damage business and consumer con­fidence. They also purport that those on this side of this place have come here with a wrecking ball, seeking to destroy the way of life of hardworking Australians. There is one side of politics that has the wrecking ball out and it is definitely not this side. We have a plan for Australia's future and we are the party standing up and making the tough decisions. Labor are the party saying yes to taking action on climate change, not hiding behind two letters found consecutively in the middle of the alphabet.

Every cent raised from the carbon price will help businesses to make the transition to a clean energy economy, assist households and tackle climate change. The Gillard Labor government will support small businesses through the transition to a clean energy future, as we appreciate the important contri­bution small businesses make to the econ­omy and to supporting jobs. The carbon-pricing mechanism will not apply to small business. It will apply to around 500 of the biggest polluters who will be required to pay for their pollution. Small businesses will not have to count or monitor their carbon pollu­tion or electricity use. They will not have to fill in a single form as part of the carbon price reform.

Specifically, the Gillard Labor govern­ment is delivering a small business assist­ance package worth $1.3 billion in the 2013-14 income year to businesses with an annual aggregate turnover of less than $2 million. Ninety-six per cent of Australian businesses, approximately 2.7 million small businesses, fall into this category—hardly the wrecking ball those opposite continue to somehow believe. Further, while most small businesses will not be materially affected by the carbon price, the Gillard Labor government reco­gnises the huge contribution small businesses make to our economy, so we are extending the small business instant asset write-off threshold to $6,500. This will boost cash flow and help small businesses to grow and invest in assets.

The Gillard Labor government will also establish a $40 million program to provide information to small businesses and commu­nity organisations on practical measures they can take to reduce their energy costs. Being able to get clear information from trusted sources is vital to small business. This pro­gram will be delivered through grants to industry associations and non-government organisations which have established rela­tionships with small businesses and commu­nity organisations.

The Gillard government will also provide additional funding to improve delivery of clean technology advice and other non-grant business support programs to small and medium businesses. These include the supp­lier advocates and Enterprise Connect. Enter­prise Connect advises small businesses on knowledge, tools and expertise to im­prove productivity, increase competitiveness and realise their growth potential. I have seen the benefits of Enterprise Connect's work first­hand where their services resulted in an expansion of the Hivotech workshop in Burnie, Tasmania. That is one example, of many, of the fantastic work undertaken by Enterprise Connect, a program that those opposite have threatened to axe, a program that actually solves a problem with industry: where small and medium sized business owners do not have the time or expertise to take their business to the next step, Enter­prise Connect provides advisers with real business experience to facilitate the next steps in a business's journey. Additionally, all businesses in the food-processing, metal­forging and foundry industries will be able to apply for grants for energy efficiency impro­vements under the $200 million Clean Technology Food and Foundries Investment Program.

This Gillard Labor government sees assisting households through the transition to a clean energy future as vital for both consu­mer and business confidence. The initial carbon price of $23 per tonne will have a modest impact on overall household living costs. The Treasury estimates that it will trigger an increase in the consumer price index of 0.7 per cent, or $9.90 per week in average household living costs, of which about half is due to higher household energy bills. That is why nine out of 10 households will get assistance under the Household Assistance Package, to support them through the transition but to also support those small businesses that rely on household expendi­ture. In fact, almost six million households will get assistance that meets or exceeds their expected average price impact.

Those opposite do not see supporting households through the transition to a clean energy future as important. Not only will their plan to cut emissions, which one can only hope they still hold, cost the average household $1,300 per year but they will also rip away the government's entire Household Assistance Package. So not only will those opposite seek to slug households with a $1,300 new tax that they will give to some polluters, whom they have chosen, but they will rip away any assistance that includes any increases in the pension, unemployment benefits and family tax benefits. So much for looking after consumer confidence! Just yesterday, the Australian Council of Social Service said:

ACOSS has long accepted the overwhelming scientific consensus that climate change will affect us all, and are motivated by the stark reality that people who live in vulnerable situations and on low incomes will be affected first and worst.

This is the reason we have argued that effective and equitable action is vital to reduce carbon pollution and we are keen to work with all parties to help build a community consensus around the solutions.

It then went on to say:

ACOSS is satisfied that the householder assistance package will provide people on low incomes with sufficient compensation to cover the anticipated modest increases in costs flowing to consumers.

Under the Gillard Labor government, assist­ance is permanent and it will increase. The extra payments are indexed to any future consumer price increases. (Time expired)

Scott Ryan (Victoria, Liberal Party, Shadow Parliamentary Secretary for Small Business and Fair Competition) Share this | Link to this | Hansard source

Senator Urquhart, in her address, took exception to the motion as submitted by Senator Fifield and its reference:

The Gillard governments' plan to damage business and consumer confidence through the introduction of a carbon tax.

I suppose Senator Urquhart objected to the use of the word 'plan' in particular, as if the government had an intention to do this, so that has prompted me to think of something. I am genuinely unsure as to whether it is a plan by the government in the sense that I think Senator Urquhart referred to because, while it seems comprehensive and it seems orchestrated and it seems to be implemented with gusto in terms of negative impacts upon small business, I am not quite sure if it was actually intended in that particular way. But let us go through the list of measures that have been undertaken and have made life more difficult for small businesses and have attacked them as the very basis of our econ­omy and, most importantly, have attacked small business people, not just as the basis of our economy but as the basis of our commu­nities. I do not disparage those who work in larger companies—I have myself—but when you go down to the local footy club—whether it be rugby, rugby league or Aussie rules—or when you go to the local netball club, the banners around the footy field or the netball field are those of the local sponsors. They are the people who tip in a bit to actually help those community organ­isations work and the people who often make up the CFAs in my home state of Victoria. Often the local leaders in our community are small business people. This is one of the most objectionable facts about what Labor has done to the small business community: it has attacked these people who are the fabric of our community. But let us go through the list. We cannot start without mentioning the carbon tax. It is the point of today's debate. But then, of course, there was the promise that there would never be an increase in the superannuation levy, which was announced before the last election in part of the tax ambush of the Australian community. There is the reregulation of the labour market. There are the attacks in this budget particu­larly on contractors—because, God forbid, we actually let people become contractors and work at a pace that they wish to and do projects that they wish to. I note Senator Cameron has just taken a note, and I am sure he will have something to say about this. This budget launches an attack on a most basic right, and that most basic right is to choose when and how one works.

We have the destruction of sectors of the economy through ill-thought-out programs like pink batts. There was quite a sustainable home insulation industry before the govern­ment announced the pink batts program that turned out to be such a disaster. Many of those people were the ones who suffered and saw their businesses destroyed because of the disasters that this government announced and implemented after it was warned that their programs would cause substantial problems. You cannot throw out a few billion dollars to people in the economy without any conditions about entry into the industry, other than having a help line and a phone number that you ring up and get your cash from, and not have an impact on the industry that is there—that employs people. The businesses that were operating worked. But in order to meet the government's illu­sion of economic activity—it wanted to flap around and look like it understood what was happening with the global financial crisis—it destroyed an industry. What worries me is that more and more in recent weeks we are seeing this potentially happen in the renew­able energy space.

We have the budget deficits and the record levels of government borrowing that are having a direct impact upon interest rates. That has two impacts. The government is crowding out private sector borrowing, which is basic economics and which has been identified in reports from committees of this house. Not only does that mean the government is forcing up interest rates through massive demand for funds; it is also putting at risk the fact that our banks are huge importers of foreign capital—some of the largest in the world—and that our banks need the good credit rating of the Australian government, and that demand is putting pressure on the dollar. When the government is out there borrowing such funds and when interest rates are higher than they need to be because inflation is being fuelled by this government's completely irresponsible bud­geting, we also have a situation where that forces interest rates higher than they other­wise need to be, which forces the dollar higher than it needs to be. So any small business that is operating in an import competing space—where people can either buy offshore or substitute goods or substitute services—are having a more difficult time than they need to because of this govern­ment. It actually looks like a fairly compre­hensive list, and I have not even mentioned them all because of time constraints.

What this government has is a complete lack of understanding of the challenges faced by small business and particularly small business people. They are not just numbers on a spreadsheet. They are people who have a limited number of hours. They have the same 168 hours a week that you and I have, Mr Acting Deputy President, and every extra burden, every little bit of business whereby this government makes life more difficult for them, works out as less time in the business or less time with the family. But this govern­ment does not understand that. They do not understand the challenges and the ethic of small business people.

But the question is: is it a plan? I am not quite sure, because while this government has shown that it is appalling with imple­mentation, I suppose we could not deny the fact that it could be just an accident. It could be an accident that is simply based on inc­ompetence or indifference. So, whether it is a plan or not in the sense that Senator Urquhart used, I am not sure. The truth is that it is probably a combination of them all. But more important is this government's stubborn refusal to acknowledge the evidence. The evidence of damage to the small business community and to business confi­dence is nothing short of extraordinary. I will just go through some examples from over the last few months.

The June quarter ACCI-Westpac Survey of Industrial Trends showed a downturn in business expectations, sentiment and out­comes. It says that the imposition of new taxes and soft demand from the household sector were among the key concerns of the businesses that were surveyed. Profit expect­ations for the next 12 months were at their lowest level in two years, with business facing rising production costs without the ability to pass these on to consumers. But I suppose the carbon tax will fix that, because we keep hearing about how the carbon tax is going to solve all the problems of the world. It is going to lead to new jobs and new industries in Australia. It is the first tax in the history of humanity that has created jobs, as if there is no deadweight economic loss to a tax.

If we ignore that, then let us go to the next one. In July the Sensis Business Index showed that business confidence fell from 44 to 28 per cent in one survey—the second biggest drop in the 18-year history of the index. I suppose the only pity about that is that we did not have a similar survey during 'the recession we had to have' in 1991. Small business support for Labor was down at levels not seen since the dying days of the Keating government. But this government did not listen to that. In July 2011 the ACCI Survey of Investor Confidence showed that business conditions had fallen to a level not seen since the survey began in 1998. In August, the Australian Retailers Association survey found that 83 per cent of retailers are expecting consumers to spend less as a result of Labor's carbon tax, with a further 85 per cent believing the carbon tax will have a negative impact on business profitability. But that is okay because the Labor members opposite know more about small business than do the people surveyed.

Let us make an important point here about Labor's so-called renewable energy package, which we all know is a euphemism for the carbon tax: they did not model the impact on small business. They did not model the imp­act on small business at all. There is nothing in that package that talks about what is going to happen to the critical sector of the Austra­lian economy that employs roughly half our people—nothing, except $30 million or $40 million to advertise to try and make small business not be as worried. But they are not as silly as the government thinks. In August, the ACCI Small Business Survey confirmed that small business conditions and expecta­tions continue the trend of the previous 12 months and continue to fall. Profit growth, sales revenue and selling prices all declined as well as investment, most importantly, in building structures and equipment. If we go back to the eighties—and I remember read­ing and hearing speeches from then Labor ministers—the key driver of the future of the economy was business investment. When that starts to decline, it is the beginning of a very long tail that will lead to declining investment. The government might say they are investing, but that is no substitute for private sector investment. The government is levying a new tax, shelling it out to its favoured industries and prohibiting other industries—like trying to clean up coal use. The government using the power of patron­age is not the path to having future strong investment, particularly in small business.

I will go on. In September, the ABS figures revealed that retail was continuing to soften. Finally, earlier this month, the latest Sensis Business Index showed that small business profitability fell during the current quarter and again with expectations continu­ing to fall in the next 12 months. Business confidence in the current government fell from 28 to 15 per cent and support for the carbon tax was a record minus 48 per cent. If the government will not listen to small business people, if it does not care about small business people, then the very least it could do is to start listening to the evidence. That is only a number of business surveys and ABS surveys from June to September and the evidence is overwhelming. Whether it is a plan or a result of their incompetence, I will not try to peer into their souls but I will say that a refusal to listen and being ignorant is just as negligent as not knowing at the beginning.

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

While I am always pleased to follow Senator Ryan, and I am always pleased to deal with the arguments that Senator Ryan puts up, I give more respect to Senator Boswell, Senator Joyce and Senator Williams who do not believe in climate change and make no bones about it. There is a basis for their opposition to the government doing the right thing because they do not be­lieve there is anything happening in climate change. They are climate change deniers.

But that is not the case with Senator Ryan and it is not the case with Senator Birming­ham and Senator Colbeck, and that makes it even worse. The hypocrisy to actually come here and argue against something that you know needs to be resolved is the worst kind of hypocrisy, and that is the problem with the argument that Senator Ryan has put up. I just happened to stumble across some remarks of a would-be senator, Scott Ryan, at the Victorian Senate candidates climate change debate back at the Elgin Inn in Hawthorn on 7 November 2007.

You do not want to be reminded? Senator Ryan has bolted! Senator Ryan has gone; he does not want to be reminded of what he said. Well, I will put it on the record because I am sure he will not put it on the record. This is him trying to become a senator, trying to argue, 'Vote for me because I am such a great person on the environment'. He said he agreed 'there is a scientific consensus that climate change is occurring and it is human induced'. You would not think so from that lot that we just heard from him. He said:

The Liberals' policy is based on four main planks.

The first one is:

What he has just come out with will not do anything for that. He went on to say:

He should tell Senators Boswell, Joyce and Williams. It is great that we have actually got a scientist in the National Party now. It is a real plus—a scientist in the National Party, Senator McKenzie—and I have asked her to give some basic scientific lessons to the leadership of the National Party in relation to climate change. It really is a big job for her and I hope she takes it up. I do not like her chances with Senator Boswell, Senator Joyce and Senator Williams but she should at least give it a go. She said she is a scientist and deals in scientific fact.

Let's come back to Senator Ryan. He said the third point was that the Liberal Party had:

How often have we heard those on the other side argue that we are only a small player? We should not be doing anything on climate change; we should just bail out to pollute all we like because we are a small country. Senator Ryan seems to have forgotten what he said back at the Elgin Inn in Hawthorn on 7 November 2007. He went on to say:

Then he has the hypocrisy to come here and support a direct action approach, the so-called 'direct action', which we know is the most expensive approach to deal with climate change. Every economist worth their salt says this is a nonsense. We know that the former Leader of the Opposition, Malcolm Turnbull, now says it is nothing more than a fig leaf. It is a fig leaf from the opposition so they can ditch any approach to climate change as soon as they have the opportunity.

Senator Ryan went on to say on 7 November 2007:

The Liberals' policy on climate change is based on: grants to assist the development of low emissions technology; expanding the mandatory renewable energy target to 30,000 gigawatt hours by 2020, equivalent to 15 per cent of Australia's electricity production.

He goes on:

We will introduce a comprehensive and world's best practice emissions trading system.

Jan McLucas (Queensland, Australian Labor Party, Parliamentary Secretary for Disabilities and Carers) Share this | Link to this | Hansard source

Did he?

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

He did say that. He said that on 7 November 2007 and the hypocrisy of Senator Ryan beggars belief. When he was trying to win the support of environmentalists in Victoria to become a senator, he said, 'We will introduce a low-cost best-practice emissions trading system'. I do not hear him saying that now that he is in here. He has his backside on the red leather and he is running a mile from his promises and running a mile from his posi­tion. I say it again: he said that the Liberals would introduce 'a comprehensive world best practice emissions trading system'. They have gone a long way from that.

So I do not really place much weight on the arguments from Senator Ryan. As I said, at least with Senator Boswell you know that he is a climate change denier, you know that he does not believe in the science and you know why he has taken the position he has taken. But from the hypocrisy of those who would go out in 2007, like Senator Ryan when he was trying to get the Victorian public to elect him to public office, and say all these things and then run away from those principled positions when they are in the Senate trying to claw their way up to the front bench of the Liberal Party, we know there is a problem. We know there is no credibility in terms of his position and we know that the scientific position is just ignored.

I turn quickly to what Senator Colbeck said. He said that capital is mobile and there is a sovereign risk because we are putting a price on carbon. I am on the Senate Select Committee on Scrutiny of New Taxes—for my ills, but I am there. We have a submi­ssion from the Investor Group on Climate Change. Who is on that group? AMP Capital Investors—and I would listen to them before I would listen to Senator Ryan—Australian Super, BT Investment Management—and I would listen to them before I would listen to Tony Abbott and the coalition—Cbus, Colonial First State Global Asset Manage­ment, Deutsche Bank Equity Research, Insti­tute of Financial Services, Goldman Sachs, Merrill Lynch, Perpetual and UBS Invest­ment Bank. What do they say? They say that we have to deal with climate change because to not deal with climate change is a problem and that that creates the sovereign risk. The biggest sovereign risk is not dealing with this, and the longer we delay dealing with it the more expensive it will be to deal with. They go on to say, 'The Leader of the Opposition's position on direct action is not a policy that is reasonable or will deliver.' They say that investors represented by the IGCC consider the coalition's policy:

... to be ... costly and ... unviable for capping national emissions.

So not only is it the complete opposite of what Senator Ryan said when he was trying to win public office and what he is now denying; the people who actually advise where you should invest say it is costly and not viable in capping emissions. They say, 'It will be a direct cost to the taxpayer.' And we know that that cost will be $1,300 for every taxpayer. The polluters will be told, 'You just pollute; we'll just tax.' That is their line: 'You just pollute and we'll just tax.' It will cost every taxpayer $1,300 to fund a policy that the market says is unviable and the market says is costly. Instead of doing what we are doing, looking after the Australian public, these people are taxing them and pushing a policy that is unviable.

Finally, the hypocrisy from Senator Ryan knows no bounds. He was out there telling the Victorian community that he believed in climate change, that he will do something about it, that he will put in an emissions trading scheme and then as he climbs up the greasy pole he runs away from that.

David Bushby (Tasmania, Liberal Party) Share this | Link to this | Hansard source

I am extremely disappointed in what we have heard from the two government senators—I hope that Senator Singh does a better job. Neither of the government senators went to the trouble of actually addressing the issue before the chamber. Senator Cameron spent the first eight minutes of his 10-minute spiel attacking the man. He did not once mention the issue of the impact of the government's plans on business, small and large. He spent eight minutes attacking Senator Ryan. He spent eight minutes recounting past state­ments made by Senator Ryan and made no mention of what the government's plans will do to small business. It smacks of a govern­ment that is trying to hide from the challenge and divert from the issue. The last two minutes he spent talking about one submis­sion to the Senate Select Committee on Scrutiny of New Taxes. Senator Cameron, I am also a member of that committee—

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

You never attend.

David Bushby (Tasmania, Liberal Party) Share this | Link to this | Hansard source

I have read all the submissions and I have been to a number of the hearings. That one submission that you referred to may well have said what you said it did, but the vast majority of submissions to that inquiry have said that the government's approach will not work and it will come at great cost to small and large business. Of course, the submitter that you referred to represents financial interests. Why wouldn't financial interests welcome the introduction of a new tradeable market? Of course they would like it. There is money to be made from it. They are going to love it.

Senator Urquhart harked back to the fact that we have had 20 years of unbroken eco­nomic growth. Of course we have. We have had an amazing period of economic growth that has come on the back of reforms under­taken by both the Hawke government and the Howard government. The Hawke govern­ment reforms, major reforms like floating the Australian dollar and opening up the Australian banking industry to foreign com­petition, were all made with the full support of the coalition at the time. The major positive economic reforms under the Howard government were opposed by the then Labor opposition. The reality is that the reforms that were made under the Hawke and Howard years were what set the Australian economy up to withstand the 2007 global financial crisis and what occurred after­wards. It was not the appalling decisions made under Rudd and Gillard; it was the fact that we went into that so far ahead of every other developed nation in the world. So it is not surprising that we came out ahead of every other developed nation in the world.

Senator Urquhart also claimed that we have lost our way. She spent half of her time attacking us over what we were doing and the way we were talking down the economy. If we have lost our way and that is a problem, what does she say about the Prime Minister who upon becoming Prime Minister said that her government had lost its way and that that was why she was needed at the helm at the time? The way she has led Australia since she became Prime Minister is only leading to one outcome—that is, the loss of jobs and an increased cost of living.

Senator Urquhart also cited Treasury modelling and used that as some form of justification for the amazing positive benefits that are going to flow from this new toxic carbon tax. The fact is that the government will not release the Treasury modelling. We have no idea what assumptions are in the Treasury modelling. We are not even sure that the forecasts in the modelling are based on the carbon price that the new tax will start with. They cannot confirm that. They will not tell us. But, if you have to look at modelling, there is modelling and there is modelling. I had many discussions with then Secretary of the Treasury, Ken Henry, about the veracity of forward modelling. He admit­ted over and over again that you cannot put a lot of store in the actual figures, that all they are is an indication of where things might go based on the assumptions that you plug in at the time. If you are going to look at model­ling, you can look at the state model­ling that we have seen in New South Wales, Victoria and Western Australia. In all cases it shows massive job losses in each of those states. That is modelling conducted by the treasur­ies in each of those states. Whether they are right or the federal govern­ment modelling is right I guess time will tell, but the reality is that you cannot just stand there and look at modelling and say: model­ling says there will be XYZ; therefore, that is what is going to happen. It is not going to happen. It is entirely dependent on the assumptions that are built into the modelling in the first place and then the circumstances that actually apply to what you are modelling as you move forward.

Senator Urquhart also mentioned that there was $1.6 billion in compensation for small business. I am not entirely sure what that was, but she went on to say that there were 2.7 million small businesses that will be eligible. If that is the case, even if you accept that there is $1.6 billion available for small businesses to tap into—and that is $1.6 billion over two years—that works out to around $30 per annum per business. If you look at it, even on the government's figures electricity is going to go up 10 per cent. If you were, say, a small drycleaner, you might have an electricity bill of $16,000 or $17,000 a year. You would get a $1,700 increase in the cost of your electricity—just the electri­city—as a result of that 10 per cent increase. I do not think $30 a year compensation is going to go far in offsetting that $1,700 increase.

Senator Urquhart also mentioned that ACOSS was happy with the compensation. I can tell you that the compensation for households is a three-card trick. Even if you accept—which I do not—that the compen­sation that is being offered is sufficient to adequately cover the start price of $23 on this carbon tax, what happens when that $23 turns into $33 or $50 or $350, the figure that Treasury's own modelling predicts it will reach in 2050? CPI indexation is not going to match an increase in cost to $350 per tonne of carbon. There is no way that the compen­sation is going to catch up. I think ACOSS and anybody else who represents low-income earners who thinks that this compen­sation is going to be adequate to ensure that people on low incomes do not suffer as a result of the carbon tax need to go and have a good hard look at their figures and revise their position.

The fact is that this government is intro­ducing the carbon tax at the worst possible time. Australia's manufacturing sector is already under pressure. A carbon tax will increase costs, which overseas competitors will not have to pay. Jobs will go offshore to factories which in all likeli­hood will actually emit more emissions than Australian manu­facturers would in making the same product. Under the current econom­ic circumstances, business simply cannot afford another tax. Yesterday—and Senator Ryan has mention­ed some of this—the National Australia Bank put out its confi­dence index, which showed a dramatic fall in business confi­dence. Now is not the time to slap another tax on. Dun and Bradstreet yesterday relea­sed a report which showed that in the June quarter there was a 12½ per cent increase in insolvencies, and that followed 4½ per cent in the previous quarter—and this is at a time when, inter­nationally, insolvencies are at a record low. But in Australia in the last quarter they went up 12½ per cent.

Businesses cannot afford a new, big, toxic tax at the moment. It is the worst possible time. This is because it will put them at a major disadvantage. There will be no level playing field when it comes to the carbon tax, because no other country is planning to impose an economy-wide price on carbon. The Productivity Commission report of just a couple of months ago clearly stated that not one other country on earth is bringing in an economy-wide carbon tax or emissions tra­ding scheme—not one other country—and yet we are planning to do that. In the United States, all moves towards a national cap-and-trade scheme have been abandoned. While Europe has an ETS, it does not cover the whole economy and it provides many indus­tries with free emissions permits. Just by contrast, the European ETS raises only $500 million a year, while Labor's carbon tax will raise $9 billion in its first year. That is $500 million in the European ETS—

Senator Singh interjecting—

which, as I said, Senator Singh, did not cover the whole economy and provides many industries with free emissions. It is not a fair comparison. Australian industry, by being saddled with a $9 billion tax a year in a much, much smaller economy than Europe has, compared to a $500 million a year tax in the European ETS, is saddled with a huge competitive disad­vantage either when Australian businesses are looking to compete with businesses from Europe or, alternatively, when European businesses are looking to come into the Australian market. They will be able to undercut us and put our manufacturing industry, which is already under threat and suffering from a high Australian dollar, under great pressure. It can only be bad for jobs and for the economy.

Further, the government claims that China is acting to reduce its carbon emissions, but the fact is that China's emissions are forecast to rise by 500 per cent by 2020. We are looking at trying to reduce our emissions by five per cent by 2020. In the meantime, China's emissions are going to go up by 500 per cent by that same year. (Time expired)

Lisa Singh (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

Well, haven't we been enlightened in here this afternoon by those senators opposite regarding their understanding of business and consumer confidence when it comes to the clean energy package before us! They are the party who come in here and talk about business confidence when they are the party that business have no confidence in. You are the party which have developed your $70 million black hole, which business certainly would not have any confidence in, which talk completely of budget dishonesty, not honesty—

David Bushby (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Talk about your plan!

Lisa Singh (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

but, having said that, I am happy to talk about the plan, Senator Bushby. I am pleased that you, as a Tasmanian senator, contributed to this MPI today because it allows me to provide some insight into some of the holes in your arguments that you put forward. Firstly, I would like to congratulate the coalition again. Two days in a row now, you have set the MPI to provide the government with the opportunity for a positive contribution, in this debate, on the clean energy bills—to once again provide this place with an outline of our energy future legislative package.

First we have had Senator Urquhart already highlight the consumer confidence in this package, as supported by ACOSS—and which will be ripped out by those members opposite. But I would like to give you an example of how businesses are looking forward to this new clean energy future. In fact, Senator Bushby and Senator Colbeck, who also contributed to this debate, will be happy to know that it is actually a business in Tasmania. I was fortunate to attend the open­ing of a brand new Alstom Australia work­shop in Cambridge in Tasmania. Alstom's Tasmanian operations are part of a much larger organisation, but they are full of confidence and they always have been when it comes to a clean and sustainable energy future and the innovation that comes with it. That is why they are investing in Tasmania.

That is why Alstom have worked with Hydro Tasmania since 1994. They have broadened their core hydroelectric engineer­ing services to include the manufacturing, refurbishment and installation of components for the mining, metals-processing, forest-processing and ship-building industries. They have cultivated a skilled, experienced and flexible workforce because they believe in a clean energy future package. It has given them great confidence in the future of their company and the viability of clean, green energy—so much so that they have spent $11 million on a purpose-built workshop in Tas­mania. It is a 1.6-hectare site that includes space for future growth of their company.

That is business confidence. That is proof of business confidence in this government's package. And this investment obviously has spin-offs for other Tasmanian businesses. It is not only for Alstom but for all those busin­esses that Alstom will associate with. That is just in Tasmania, let alone all the other industries, businesses and areas in other parts of the country that will benefit from this package.

There is one other major beneficiary. The construction of the Alstom workshop was undertaken by a Tasmanian company called Derwent Park Developments. Derwent Park Developments employs more than 50 builders, subcontractors and suppliers. From Tasmania, Alstom services some of Austral­ia's largest hydro and thermal electricity suppliers—Hydro Tasmania, as I mentioned, Aurora Energy, Nyrstar, AGL, Stanwell, Eraring and Snowy Hydro. So I ask: how is this not a wonderful example of business confidence at work? This is just one story though. I have every confidence that there are many other stories of success and many more to come.

Australia can be only a better place if we encourage businesses like Alstom that are becoming sustainable. To support this, the Gillard government will establish a range of grants to assist businesses to take these steps. This is more positive news that those opposite would not want to know about. An $800 million Clean Technology Investment Program will provide grants to manufactur­ers to support investments in energy efficient capital equipment and low-pollution techno­logies. We also have the Clean Technology Food and Foundries Investment Program, which will provide $150 million over six years to be available to the food-processing industry.

I would like to raise something that Senator Colbeck and Senator Bushby have touched on, and that is the issue of industries overseas that will not be subject to a price on carbon. As Senator Bushby touched on briefly, there are emissions trading schemes in place overseas. We have 89 countries accounting for over 80 per cent of global emissions and over 90 per cent of the global economy that have pledged to reduce or eliminate their carbon pollution by 2020. Scores of countries have already started the transformation to a low-pollution economy. Thirty-two countries and a number of US states have already had emissions trading schemes. This is not something new. An emissions trading scheme is something that has been in place in other parts of our globe now for some time.

On top of that, those other big polluting countries—for example, the opposition members named China—are also introducing emissions trading schemes. The five trading partners of China—including Japan, the US, Korea and India—have implemented or are piloting emissions trading schemes or carbon taxes at the national, state and city level. They are all acting, as is this government. We are acting because we take the issue of clean energy seriously. We want to cut carbon pollution. We are acting on climate change because we believe the science and we understand the business confidence that follows from that, like the example that I have given of Alstom.

I encourage those opposite to read and to get their heads around this clean energy package. It might take a while; there are a number of components to this package. Perhaps they have not got their heads around all of it yet. But when they do over this week, next week and beyond they will notice that there is a lot of support for business. Senator Bushby would care about this, one would think, because he would know, com­ing from Tasmania, that we have a number of small businesses in Tasmania. In fact, 95 per cent of businesses in Tasmania are small business. That is why this government will be providing support to small business. On top of that, the Gillard government recogni­ses that the move to a low-carbon future poses some challenges, and that is why the carbon-pricing mechanism will not apply to small businesses. Instead, it will apply, as we have heard but as the opposition need to be reminded again, to around 500 of the biggest polluters in Australia. Small business will not have to count or monitor their carbon pollution or electricity use. They will not have to fill in a single form as part of the carbon price reform.

While most small businesses will not be materially affected by the carbon price, we recognise the huge contribution that small business makes to our economy and so we will extend the small business instant asset write-off threshold to $6,500. This will boost cash flow and help small businesses to grow and invest in assets which may be more energy efficient. The government will also establish a $40 million program to provide information to small business and commu­nity organisations on practical measures they can take to reduce their energy costs—more good news, Senator Bushby; more good news to those opposite that perhaps they do not want to know about, because we know they are the party of negativity. We know they are the party of nay-sayers who do not want to act, who want to stay in their conservative world of not acting on the big issues, the big reform issues that this country has to tackle and has to face, as they are doing in China, as they are doing in the European Union, as they are doing in parts of the US, in Japan, in Korea and in so many other current parts of the world, India and the like. All these countries are moving to cut their carbon pollution so that our children will enjoy a cleaner energy future.

Scott Ludlam (WA, Australian Greens) Share this | Link to this | Hansard source

The time for this discussion has expired.