Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

I present the final report of the Select Committee on the Scrutiny of New Taxes on its inquiry into the carbon tax entitled Secrecy and spin cannot hide carbon tax flaws, together with documents presented to the committee.

Ordered that the report be printed.

by leave—I move:

That the Senate take note of the report.

This final report by the Senate Select Committee on the Scrutiny of New Taxes on the carbon tax follows the interim report tabled about a month ago, which was entitled The carbon tax: economic pain for no environmental gain. This final report draws on further information that has come into the public domain since that time and also on some of the reflections that came out of the Joint Select Committee on Australia's Clean Energy Future Legislation, which was of course dominated by government and Greens members of parliament.

We have to remember that this Labor-Green carbon tax is a bad tax based on a lie. It is a tax that will push up the cost of everything, although the government does not really want us to know by how much. It is a tax that will be bad for our economy, although the government does not really want us to know by how much. It is a tax that will reduce our international competitiveness and will cost jobs, although the government does not really want us to know that either. It is a tax that will result in lower real wages, although the government does not really want us to know how much lower real wages will be.

Despite all of that, under the carbon tax emissions will continue to go up, even according to the government's own modelling. There you have it: this carbon tax will have a massive effect on the economy. It will impose significant pain on the economy without actually doing anything to help reduce global greenhouse gas emissions and without doing anything to help reduce the temperature of the globe. But the government does not want people across Australia to know how bad the impact of this carbon tax will be on the economy. What did the government do? The government asked Treasury to do some modelling. In going through the modelling process Treasury of course acted at the direction of the government. In doing this modelling the government set the assumptions that Treasury had to follow, including some very contestable assumptions around what other countries are likely to do, which lack credibility.

At the basis of the Treasury carbon tax modelling there is an assumption by the government that countries like the US will be part of comprehensive global carbon trading, which is never, ever going to happen in any sort of relevant time frame. Why is that? Why has the government directed Treasury to use assumptions that are lacking in credibility? It is because the government does not want people across Australia to know the true impact of the carbon tax on the cost of living, on the economy, on jobs or on real wages. The government does not want people across Australia to have the full picture of how this tax will push up the cost of everything while real wages will go down over time and emissions will continue to increase. The government wants people to believe that this is a tax that will somehow solve all of the issues associated with climate change, will lead to massive reductions in domestic and global greenhouse gas emissions and will not cost anything. People will not feel anything. It will not hurt anyone. That is of course completely unbelievable.

What this final report has done is look at some of the information in relation to the modelling, which the government has refused to release. You might recall, Mr Acting Deputy President, that the Senate Scrutiny of New Taxes Committee severely criticised the government for its failure to model a scenario in which Australia imposes a carbon tax but its major resource competitors do not. That is a major failing in the government's modelling. We also criticised the fact that the government refused to release all of the modelling-related information. The government wants us to believe that, somehow, they have released more information than they have ever released before and that, somehow, this is the most comprehensive modelling ever done and that all the information is out there. Well all of the information is not out there. This government is keeping secret very important information that is necessary to scrutinise the credibility of the Treasury modelling. I point here to evidence by the Australian Bureau of Agricultural and Resource Economics and Sciences, which made that very clear during Senate estimates. I asked a direct question of Mr Glyde, who is the Executive Director of ABARES:

Is it your view that an independent third party would be able to obtain sufficient access to the GTEM model now to run the same modelling scenarios that Treasury ran to produce its carbon tax modelling report?

Mr Glyde, the Executive Director of ABARES, the government's own agency, said:

Probably not, in that the third party would need to obtain the GTAP database, which, as we have discussed, is done through a relatively straightforward licence arrangement. But to capture all of the modifications to the database that have been made over the years by ABARES and Treasury—the amplifications for different industry sectors—they would need information that has not yet been publicly released. Therefore, I do not think anyone could replicate the results at the moment.

So I asked the obvious question:

You are saying that, on the basis of the information that has been released so far, the Treasury carbon tax modelling cannot be properly scrutinised by third parties?

Mr Glyde's response was:

At the moment it is not possible to take the current version of GTEM, its data and the assumptions that are there inside it and run the model.

That is really the crux of the issue. The government do not want anyone to scrutinise the credibility of the modelling that they have asked Treasury to conduct. This runs completely counter to everything that has ever been done before. When the Productivity Commission conduct modelling such as this, they make all of their modelling, all of their models, all of the assumptions, all of the databases and all of the underlying information available for proper scrutiny by independent third parties. In fact, before the last election, Minister Sherry, when he was minister with responsibility for the Productivity Commission, sent the Productivity Commission some terms of reference about some modelling they had to do in the context of assessing the impacts and benefits of the Council of Australian Governments' reforms. In his letter, of 18 June 2010, the minister said:

The frameworks should be transparent, and subject to independent assessment. As far as practicable, the frameworks should be made available for wider use.

The benchmark set by Minister Sherry is not the benchmark that is followed by Treasurer Swan and Minister Combet when it comes to carbon tax modelling. Why is that? Because the government has something to hide, because the impact of the carbon tax on the cost of living will be higher than what the government wants us to believe, because the impact of the carbon tax on jobs will be worse than what the government wants us to believe, because the impact of the carbon tax on real wages will be worse than what the government wants us to believe and because the slowing in the growth of domestic greenhouse gas emissions will be even weaker than the government wants us to believe.

It is important to note that there are no legal commercial barriers to the release of that information. Both the Productivity Commission and ABARES have released the same economic models and underlying information that the government has used for its carbon tax modelling for public scrutiny in the past. The government has not given us any valid reason why it refuses to follow that practice. We as a committee have consistently recommended that the government release all of its modelling before the Senate is asked to vote on the carbon tax and that there should be no legislation before proper investigation, particularly of the government's contested claims about the impact of the carbon tax on the cost of living and the economy.

If a car salesman refused you a test drive or did not let you look under the hood, you would walk off. But the Gillard government is not letting the Australian people look under the hood of its carbon tax modelling. What has the government got to hide? Australians are being denied a vote on the carbon tax and now the government is denying them their right to even look into the basis for the government's assertions underlying the cost of its carbon tax.

We have to remember that, even under the government's own contested global action assumptions, Labor's carbon tax is due to cost the Australian economy $1 trillion over the next 40 years—a figure, incidentally, that was confirmed in Senate estimates by Ms Meghan Quinn. She said 'about $900 billion', which is close enough to the $1 trillion cost to the economy that Professor Ergas talked about in our committee. These are the reasons why the government does not want anyone to be able to properly scrutinise this carbon tax modelling. Treasury is embarrassed by the government's action. Treasury and ABARES are now pointing to the government, saying that it is a decision for the government. But this secretive government wants the Senate to pass judgment on this carbon tax without all of the information, and that is an absolute disgrace.

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

This report of the Select Committee on the Scrutiny of New Taxes Secrecy and spin cannot hide carbon tax flaws, presented by the opposition, continues the fraudulent fear campaign undertaken by the opposition on the issue of carbon pricing. They rolled out their tame economist, Professor Henry Ergas, to tell us how we should run the country, to tell us how we should—

Ron Boswell (Queensland, National Party) Share this | Link to this | Hansard source

Madam Deputy President, I rise on a point of order. That reference to Professor Ergas as a 'tame economist' is offensive.

Louise Pratt (WA, Australian Labor Party) Share this | Link to this | Hansard source

Senator Boswell, there is no point of order.

Ron Boswell (Queensland, National Party) Share this | Link to this | Hansard source

Madam Acting Deputy President, there is; you cannot call someone tame, which implies that he is on the take.

Louise Pratt (WA, Australian Labor Party) Share this | Link to this | Hansard source

Senator Boswell, you are now putting words into the senator's mouth. It is not a point of order.

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

The coalition rolled out their tame economist, Professor Henry Ergas, to present an argument against the Treasury modelling. This is the same Professor Ergas who tries to tell us how to run the economy, who tries to tell Treasury where they have it right and wrong, and it is the same Professor Ergas who could not even run his own small business and ended up in liquidation. So I do not really think that Professor Ergas has got much credibility to lecture the Treasury or the government on how to run the economy, when he could not even run his own business. What an absolute joke. This is the same Professor Ergas who wrote the coalition's tax policy that never saw the light of day. It was so good that it was ditched. So I really do not take much notice of Professor Henry Ergas as some guru, telling government or the Treasury how they should be doing business. That is the first point.

The second point is that climate change denial by the coalition continues. They attempt to build up some conspiracy theory that the same Treasury which did the modelling for the GST, the same Treasury which used the same modelling on the GST, is involved in some kind of conspiracy against the Australian public. I know Senator Birmingham always gets agitated when we talk about climate change, because Senator Birmingham used to actually believe in doing something.

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

Do you support the GST? Answer the question.

Louise Pratt (WA, Australian Labor Party) Share this | Link to this | Hansard source

Senator Cameron has the call, Senator Birmingham. Make your interjections through the chair, please.

Senator Cormann interjecting—

Senator Cormann, Senator Cameron has the call.

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

Senator Birmingham, you are pathetic. You are not only pathetic in terms of your policy backflips; you are pathetic in terms of trying to tell the chair how to run the show here. It just won't work. No wonder you are all getting agitated, because what this report does is actually expose the climate change deniers in the coalition. They do not believe that we should do anything about climate change. They do not believe that anything is happening in relation to climate change. They listen to Alan Jones and they come back and regurgitate Alan Jones's rants on climate change. Senator Birmingham came into this Senate advocating to do something on climate change, but what do we get from him now? We get backflips—a big backflip on climate change. He has absolutely no credibility. I will not be lectured by Senator Birmingham on climate change or on any position on any issue in this parliament. One of the biggest backflips ever seen in this chamber was this backflip by Senator Birmingham.

When Senator Birmingham came into parliament he did support doing something about climate change. He would have supported the view of the former coalition leader, Malcolm Turnbull, that the market should determine how you deal with climate change. He would support that. But, unfortunately, when the extremists in the National Party—maybe they are one and the same thing—got together and rolled their former leader, Malcolm Turnbull, Senator Birmingham said, 'Well, I'd better ditch all my values, ditch all of the positions I've adopted on climate change and adopt direct action'—a position the coalition puts in this report, a position that has been condemned by anyone who looks at it as absolutely environmentally unachievable and as economic nonsense. That was what came out of this report—that direct action does not work.

We had many people giving evidence on direct action. We had the department basically say that the coalition's abatement figures were nonsense, that they were never going to get any abatement worth anything like what they were seeing. They were saying that their projections of 160 megatonnes of abatement would not be achieved, that their abatement figure is 20 million tonnes shy of reaching a five per cent abatement. What people have to remember is that the coalition have got the same target as the government. The difference between the government and the coalition is that we have got a plan and a policy that will deliver the abatement, and the coalition have got a con job. Malcolm Turnbull said that basically the best thing about it is that you could just close it down.

I know that the coalition always get a bit agitated when you mention their former leader, Malcolm Turnbull, who at least has some principle on this issue—far more principle than Senator Birmingham, who would backflip at the change of a leader. Change the leader; change the policy. That is Senator Birmingham's position—absolutely no credibility. But that is not unusual in the coalition. I respect the National Party because they do not make any bones about not believing in climate change. They do not make any bones about it. They say it is all a nonsense and they stand up and argue that position. Senator Birmingham knows their position is absolute nonsense but will not take them on in the party room, will not take them on in debates on this issue.

George Brandis (Queensland, Liberal Party, Shadow Attorney-General) Share this | Link to this | Hansard source

How do you know what goes on in our party room?

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

Because I hear a lot about what happens in your party room. We do know that your party room is riven with division on a whole range of issues. It is riven with division on economic issues, because the National Party are leading you by the nose on economic issues. Imagine: Senator Joyce might be running your economic policy. He demanded that he wanted to run the economic policy, and what happened? The Leader of the Opposition said, 'Oh, Senator Joyce, you can have what you like.' What happened? Six weeks later he had to be sacked. But Senator Joyce will be back. He will out-muscle the Liberals on this. He will be back trying to run the economic policy of Australia, and what a horror story that would be. Imagine the National Party holding the economic levers of this country. The supine, absolutely hopeless Liberal Party are allowing the National Party to drag them by the nose. We know what is happening in the coalition party room. We know there are debates about who is going to run the show and we know that Senator Joyce wants to run the show and that the Leader of the Opposition will do anything to maintain his position as Leader of the Opposition. The Liberals dislike the Nationals, the Nationals do not like the Liberals, and the Liberals do not like each other. That is the clear position of the coalition. They are an absolute rabble.

This report is simply about trying to ignore the environmental challenges and the economic challenges. It is the Liberals being led around by the nose by the extremists in the Liberal Party and the National Party, who do not believe there is a problem with climate change. You are an absolutely weak bunch of nonentities over there. You are never going to deal with the big issues for this country, because you allow Senator Joyce and the National Party to lead you about by the nose. You do not have the courage, you do not have the conviction and you do not have the backbone to stand up for your own principles.No wonder we call you Backflip Birmingham, because you have done the biggest backflip ever. You are a disgrace.

Ron Boswell (Queensland, National Party) Share this | Link to this | Hansard source

Madam Acting Deputy President, I have to take exception to Senator Cameron. If people are being led by the nose around this place it is the Labor Party being led by Bob Brown. He is the de facto leader of the Labor Party, unwillingly supported by all Senator Cameron's blue-collar workers, who think they are voting for the Labor Party but in real terms are voting for Bob Brown so he can go over and swan around in Durban and claim that he has solved the problem of a carbon tax.

Senator Ludlam interjecting—

We can read you guys like an open book. To get back to the case in point, we in Australia are taking a step that is going to cost $33 billion by 2020; that is the economic output by 2020. By 2050 that goes up to $1 trillion. They are not the National Party figures; they are the government figures. They are part of a Treasury source: Strong growth, low pollution: modelling a carbon price,chart 5.13. Australia is going into hock for $1 trillion. That is a lot of money. That is $400 for every man, woman and child. Yet, has that been modelled? Only the government and the Treasury know what the modelling is, and the government will not release that modelling. They are sticking to it and they will not release it.

Senator Cormann and I have woken up to them and we have been relentless in our attack to get the truth out. Professor Ergas said it took three months and 10 hours to show that the government would not release the modelling. But we hit a lucky streak. Senator Cormann asked Mr Glyde, who is an honest, straightforward person, whether the modelling could have been done by a third person and he was told no, the modelling could not be done by a third person; it was only Treasury that could have the modelling. Then Ms Quinn belled the cat when she said the most recent public release of the model by ABARES was the model documentation released in 2007. The government was not around in 2007—and if it was it did not have a carbon tax on its mind. What Ms Quinn said was that the model had not been released to 2007. So we have been told the model is not available firstly by Mr Glyde, secondly by Ms Quinn and thirdly by Dr Brian Fisher, a well-known, well-respected economist. Ms Quinn has told the Senate on a number of occasions that the modelling is available, but when people go to get the modelling it suddenly becomes unavailable. Dr Brian Fisher wrote to Ms Quinn and said, 'I'm prepared to buy the modelling. I'll pay for the modelling. You've said in Senate estimates that if a person goes down there he can receive the modelling', but the modelling was not available.

Why will the government not release the modelling? If the modelling came up with the same equations and the same predictions as the Labor Party and it was positive, I can tell you it would be in a shiny, glossy document and put out in a drop to every letterbox. But the government will not release the modelling because it knows that if someone else, like Fisher or McKibbin or Ergas, gets the modelling and they can put a different set of assumptions in there, then the modelling is going to throw it out—costs will go higher, more jobs will be lost, people will lose businesses, more business will go offshore. That is why the modelling will never be released.

How can anyone expect, when someone is going to spend $1 trillion—$40,000 for every man, woman and child—that it will not be audited? You would not sell $30 or $40 worth of anything unless that was audited in your stock. Why is the government so frightened? I will tell you why they are frightened: the rest of the world is avoiding this ETS like the plague. The foreign affairs minister from Canada was out here the other day. He called it pyramid selling. He said, 'I won an election on this. We wiped the opposition out by saying we won't have a carbon tax.' He said America is not going to do it, Japan is not going to do it, India is not going to do it, China is not doing it, nor are the Philippines or Indonesia. If this thing is to fly, everyone has got to do it. You cannot ask these people to put themselves permanently into a situation where they are completely losing money and it is going to cost them more—

An opposition senator: Poverty.

Complete poverty is the word I am looking for; thank you. That is why the government will not release the modelling. They know that once that modelling goes out and independent modellers use the modelling the game is up. Well, the game is up now. The 17 bills that we are debating today are the longest suicide note that the Labor Party has ever produced.

One thing I will say about the Labor Party is that they are loyal. They will follow a leader over the cliff. They will follow Bob Brown anywhere. Bob Brown is the leader. If anyone doubts that, Bob Brown wanted these bills to go through so he can go over to Durban, prance around at the climate change meeting and tell everyone how he led the federal government into the first genuine emissions trading scheme in the world. Well, he did it. He is the slickest salesman and he has the most vulnerable people following him around. They must have seen you guys in the Labor Party coming. They must have seen you coming, for you to fall for this. How could you fall for this? How could you betray your blue-collar workers? Everyone in parliament knows the reason Australia can employ people in industries is that we have always had low energy costs. That is why we have been able to employ people, but that is all going now.

This is almost fraudulent. In fact it is not almost fraudulent—it is fraudulent. People are asked to spend $1 trillion and no-one is allowed to audit the program. That is outrageous. That is unbelievable. Senator Cormann and I asked Senator Wong five times—I counted—whether she would release the modelling and five times she avoided the question. She told us she had released millions of pages, and she probably has. The more pages you release the better. It is an old trick to confuse people. The Labor Party are trying to confuse us. Instead of releasing the model, instead of giving the McKibbins, Fishers and Ergases the chance to model this, they are holding it close to themselves. If you tried to hide something from the auditor you would go to jail, and yet they are trying to hide $1 trillion from independent sources to stop them doing the modelling. There are many people who want to do this modelling—business groups, industry groups, mining groups, independent auditors, independent economists—but they cannot get it. They cannot get it because the modelling says everything will happen in 2016, everyone will be on board and everyone will have a carbon tax or a similar proposition. I seek leave to continue my remarks later.

Leave granted; debate adjourned.