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

What an appalling thing we have just seen. We have seen Labor and the Greens combine to put a gag on a gag and to shut down debate on these bills in this place. Some weeks, if not months, ago the government parties—Labor and the Greens—voted to put in place a planned guillotine on this debate. The hours for the various stages of the debate were set down in advance with a time imposed for votes on each stage regardless of the need for further debate or consideration of the consequences of the single most massive government intervention in our economy ever contemplated in this country. The impact of this on the ability of this place to do its job as a house of review by cutting off the legitimate examination of the bills and their impacts and not allowing full consideration of the proposed amendments and so on was bad enough. But today we have seen that that timetable is to be slashed on short notice. This means that many senators who have their names on the speakers list will lose their opportunity to speak on the second reading debate. It also means that the time for consideration of the details and to assess the need for amendments has been more than halved, again meaning that the prospects of these bills being improved and presenting as the best possible legislation that they could be has been severely curtailed. The legislation was expected to be put to a vote by 21 November. However, the government has brought forward the vote to next Tuesday.

The government refused to give the community a say on the carbon tax at the last election by promising not to introduce it. Once more, the government is shutting down debate. The government is desperate to ram through this legislation because it knows that it is electorally unpopular. It wants to limit debate, because the more the carbon tax is debated and the more people want to understand how it will impact on their lives, the more people want to get rid of it. Instead of ramming the carbon tax through the Senate, the Prime Minister should take the bills to an election as a matter of urgency and decency.

Yesterday, before my comments were interrupted, I was responding to the interjections of government senators about core and non-core promises. I was saying that after the 1996 election the new coalition government found that the Keating Labor government had misled the public about the state of public finances. The fiscal position was nowhere near as rosy as the then Labor government had presented prior to the 1996 election—so much so that many of the promises made by the coalition in the lead-up to that election based on their understanding of the amount of money that was available simply could not possibly be delivered. This was not because the will was not there to do so but because the money was not there, a fact that only became apparent upon the coalition assuming the Treasury benches.

Accordingly, Prime Minister Howard had to prioritise those promises and identify those that were core to his program and those that were not. It was an agonising decision for a new government but one that was forced on them by misrepresentations by the previous Labor government. The promises were made in good faith but because of the deception of the previous Labor government could not in good faith be kept. There is very little good faith in either the promise made that there would be no carbon tax under a government led by the Prime Minister or in Labor's unseemly haste to abandon that promise in order to hang on to power after the election.

Similarly, the GST is a different case again. In that case, Prime Minister Howard went to the people to seek a specific mandate to introduce the GST, having released comprehensive detail on how it would work prior to the election. Compare this to the current Labor government's approach. The only mandate that they have is not to introduce a carbon tax, a mandate that they have blatantly rejected in order to do a dirty deal to hang on to power.

But let us set aside the incredible and blatant breach of public trust that this involves. What of the bills themselves? Will they solve the climate crisis? To what extent will they help reduce temperature- and climate-changing man-made emissions? Will they contribute to improved environmental outcomes? And can they do this without undermining the strength of our economy and costing Australian jobs? The reality is that these bills will not achieve any environmental benefit but will come at great economic cost and Australians—real people—will lose their jobs.

Proponents of the bills tell us that those who are opposed are wrong to object on the basis that Australia should not go it alone. They say that we should lead and show the rest of the world the way and that, as one of the world's highest emitters of carbon dioxide and equivalent gases per capita, we have a moral obligation to take action. Very noble indeed. But is it noble to take action that will simply shift emissions offshore at the cost of Australian jobs? Is it noble to take action that might mean Australia emits less than we might otherwise have done if it does not reduce the overall emissions across the world? I think not.

If the government is to be believed, the problem presented by climate change is clearly and without doubt a global one and only a global reduction in emissions can address it—that is, if there is no net reduction in global emissions to keep CO2 down to the specified parts per million, then the doomsday predictions of flood and pestilence will eventuate. So how noble is it to take action on Australian emissions that does not guarantee a net global reduction and, worse, that is likely to actually increase global emissions? It might help government and Greens senators to sleep better at night because Australia has done its bit, but has it actually contributed to addressing the problem? I think not.

I was very careful a minute or so ago to talk about how these bills are intended to reduce emissions from where they might otherwise have been. This was deliberate, as it is important to remember that, even under the government's own modelling, the implementation of these bills will not actually reduce our total emissions. Indeed, Treasury modelling shows our emissions continue to increase throughout the period modelled. The bills are intended only to slow the growth of those emissions.

Even with carbon pricing, the government's own predictions show our emissions going up from 578 million tonnes to 621 million tonnes, leaving an abatement shortfall of up to 100 million tonnes, which is going to have to be met by purchasing permits from abroad. That is right: the way that the government will reach its emissions reduction targets is by buying carbon credits from offshore at a cost to Australian taxpayers of billions of dollars. Australian businesses will have to spend more than $3 billion a year purchasing abatements from abroad and this is just when the scheme starts. The government's own modelling shows that the value of permits will rise to the value, in 2010 dollars, of $57 billion in 2050. Incidentally, these will need to be purchased by Australian companies, and the secretary of the Department of Climate Change and Energy Efficiency, Mr Comley, has acknowledged that the cost of these billions in international permits will be passed on to all Australians by those companies.

It is absolutely clear now that major economies like the US, India, China and Canada are unlikely to introduce as far a reaching carbon pricing scheme as the one we are debating here today, if at all. Recent statements by international leaders, like the Canadian foreign minister, confirm this as fact. Lightweight arguments posed by the government and its senators in this place that other nations have a price on carbon—a shadow carbon price, I think Senator Wong has called it—without a specific carbon tax or ETS are 'own goal' arguments that just serve to bolster what we are saying, which is that there is more than one way to reduce emissions. Despite that, given the lack of equivalent carbon pricing and trading schemes in our competitor nations, it is difficult to imagine where all these carbon credits are going to come from. If, by implementing a carbon pricing scheme in Australia that goes so much further and harder than anything even contemplated elsewhere—and that includes the European Union, New Zealand and individual states in the United States—we cannot reduce our emissions enough to domestically meet our targets without buying credits from elsewhere, how are other nations going to produce surplus credits that they can sell and still reduce their emissions? How will their approach to carbon dioxide and equivalent reductions deliver them enough abatement to meet their targets and have surplus when our heavy, comprehensive scheme still allows our emissions to go up? It may add up on the unknown but apparently highly favourable government assumptions in the Treasury modelling, at an Australian level, but it just does not seem to add up at a global level. I remind you, it is ultimately irrelevant how it adds up in Australia: it is at the global level that the problem exits and at the global level that the problem must be addressed.

That fact highlights again the main problem with the scheme proposed through these bills: in the absence of coordinated global action—at least amongst those nations with whom we compete on imports, exports and import and export substitution—adding extra costs onto the cost of doing business in Australia can only make Australian businesses less competitive compared with those located elsewhere. This may mean that Australian businesses choose to up stumps and set up in lower-cost alternative locations. It may mean that Australian companies can no longer compete against cheaper imports. And it may mean that Australian goods and services exporters can no longer compete against competitors from other nations.

The potential for reduced comparative advantage as a direct result of this tax, and the flow-through of the higher costs it imposes on everything that has an energy or transport cost, is real. It will add costs that would not otherwise exist and which are not imposed by our competitor nations. It will be the straw that breaks the camel's back for many of our businesses and will force cost savings in other areas for many others just to survive—cuts leading to losses of jobs that will be replaced magically by 'green jobs' in Australia but will be replaced by even higher-emissions jobs in our competitor nations.

The net effect on emissions will be like squeezing a balloon—and the bit that is squeezed is comparable to Australia. Emissions might be less than otherwise; but they have just been forced into another part of the global balloon—so, for the production of like for like, emissions will increase. I have heard examples in this place and across Australia of how the production of a given amount of aluminium, zinc, steel, cement clinker and so on can be achieved with far less carbon dioxide and equivalent emissions in Australia compared with elsewhere, particularly compared with nations where they are likely to be produced when the carbon tax shifts that production offshore.

The fact is that Australian industry has become very efficient over the past 10 to 15 years at doing what it does in terms of its carbon dioxide emissions. I have seen evidence of massive improvements in all sorts of industries. As such, we are world leaders in emissions efficiency in many emissions-intensive industries. For example, we can produce a tonne of aluminium with fewer emissions than anywhere in the world except for Japan. But if it that tonne of aluminium is shipped from Japan to Australia then, by the time it arrives here, the emissions involved will exceed the emissions that would be produced if that tonne had been produced in Australia. This makes Australian-produced aluminium, if it is used in Australia, the most globally efficient in terms of emissions.

Clearly, to address the emissions challenge at a global level, it is better that we produce that tonne in Australia. But this tax will make that far less likely and may well render it impossible. And it is not like we do not need aluminium, or steel or concrete or zinc. They will all still be produced, just elsewhere—employing people other than Australians and with the consequence of higher emissions at a global level.

I have said in this place before, and I say it again: if we are serious about addressing the climate change challenge at a global level—where, I remind you, it must be addressed, we should be looking to attract more high-emissions-intensive industry to Australia because, in many cases, every extra tonne produced here means lower emissions released into the global atmosphere. We should be looking to set our policy settings at a level that encourages emissions-intensive industry to set up in the location that leads to the lowest possible emissions per unit of production. If that means setting them up in Australia, we should not shy away from that fact. Of course, chasing more emissions-intensive industry because we can produce here with lower emissions would increase our emissions per capita—and that would not be a look this government would want. But it would make sense in terms of reducing global emissions and actually tackling climate change head-on.

The approach taken in these bills is simply not the answer to the challenge of climate change. If Australia is to do its bit—if it is to lead the world and show the way—it must come up with a scheme that will effect an absolute reduction in emissions in a global sense. The coalition's direct action plan does just that: it delivers an absolute lockup and reduction of harmful greenhouse gases, not just a token slowing down of growth of emissions at the expense of higher emissions elsewhere. The government's plan of shifting emissions out of Australia just does not cut it, especially if Australian jobs go with them.

When members of this place are considering a set of bills that will have such a far-reaching impact and consequence as these purport to do, it is vital that we have full disclosure of all information available to be able to make fully informed decisions, properly understand intended and unintended consequences and be able to prudently test the contentions of the government. The government has failed dismally to provide senators in this place with the information to be able to do that. The bills should be rejected.

Helen Kroger (Victoria, Liberal Party) Share this | Link to this | Hansard source

Madam Acting Deputy President, I seek leave to incorporate the second reading speech of Senator Scott Ryan on the Clean Energy Bill 2011 and related bills.

Helen Polley (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

Madam Acting Deputy President, I seek leave to a short statement.

Leave granted.

Under the extenuating circumstances of Senator Ryan, we are quite happy for his speech to be incorporated.

Claire Moore (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

Leave is granted for that incorporation.

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

(Victoria) (): The incorporated speech read as follows—

I thank the Senate for being granted this opportunity to have these remarks regarding the Clean Energy Bill 2011 and related bills incorporated into Hansard.

These bills represent the most significant repudiation of the Australian people in generations.

Despite making a clear, unambiguous promise not to do so only days before the last election, the Labor Party and their Green allies, with the connivance of certain opportunistic and so-called independent members of the other place, are attempting to levy a new tax on all Australians.

There was no qualification when the Prime Minister stated, directly into the camera, 'There will be no carbon tax under a government I lead.' And no justification has been provided for this breach other than the excuse that circumstances have changed.

It is a statement of the obvious that circumstances had changed, that is why we have elections—to allow the people to bring about that very change.

So when the non-elected Prime Minister led the Labor government to an historic defeat, losing a majority on the floor of the House after less than three years, that change was the result of the people rejecting the Labor agenda.

Yet Labor claims this rejection as a justification to cut a deal with ideologues who brag about rejecting the results of elections and opportunistic independents to see the introduction of the a measure explicitly and unambiguously ruled out.

When the trust of the voters is so profoundly breached, no excuse, obfuscation or parsing of words will succeed in washing away the stain that remains with this package of bills.

These bills will be the focus of the next election, as they should be, for the people have spoken—but their voice has not been heard.

Despite the attempts of Labor and their Greens allies to prevent the people's voice being heard with unfounded scare campaigns regarding the constitutional status of these bills; despite the threats of the Prime Minister and Senator Brown to oppose that voice being reflected in this Parliament; the Opposition is happy to let the people judge this policy.

As every student of Australian political history knows, repudiating the right of the people to determine major policies will only end in tears for those who do so.

These bills truly do represent an attempt to transform the Australian economy. But not in the manner the spin merchants of the government, nor the rent seeking interests that comprise the Greens and the modern-day Labor Party portray.

These bills put into place the aspiration of the former Prime Minister and current Minister for Foreign Affairs—they put government at the heart of the economy.

Through the imposition of new taxes, redistribution to preferred individuals and groups, the granting of concessions and economic privilege to select industries—government is truly inserting itself into our most basic economic activities.

The government and Greens, although from this point I might just refer to the government as they march in lock-step on issues like this, pretend it is not a tax, claim it is merely a price on carbon. Yet it is a tax with all the dead-weight costs that entails, until it becomes a trading scheme, with all the transaction costs that entails.

This is not a market mechanism at all—this is a fictional market, created and administered by bureaucrats, based on a so-called property that is not property in any traditional economic sense.

There has been a trend in recent years amongst the progressive left, to use so-called 'market mechanisms' to achieve social or other objectives that their previous commitment to planned economies failed at. Especially amongst the Greens, this is no more a commitment to the market than the commitment of the long-dead eastern European people's republics was to the human rights outlined in their constitutions.

On this side we believe the market is not important simply as a tool to achieve the most efficient outcomes, but it is also an expression of individual will and preferences. Despite the alleged commitment of those opposite to so-called market solutions, although I doubt both the understanding and level of commitment, no government, no group of bureaucrats can capture the expressed preferences of millions of individual transactions.

Similarly, no government plan can truly capture technological development. There is an old economists' saying, 'The stone age didn't end because they ran out of stones.' With respect to these bills one could add that it didn't end because stones were made more expensive by a stone tax. New energy technology will not develop because of this tax on what is today more efficient and less expensive.

Technological development occurs as a result of human ingenuity, it then diffuses and proliferates through the application of capital and labour. Good ideas succeed; expensive, inefficient and poor ones eventually fail.

This is how a change in our energy mix will occur—not through the unilateral action of a nation that represents a tiny proportion of global emissions. And not through government fiat that somehow, things shall simply change.

This government no more has the capacity to limit global emissions growth than it does to alter the weather. Yet the proponents of this legislation lack the humility to see the limits of their own knowledge or capacity.

One of the furphies of this debate is that somehow Australia needs to be a 'first mover' in the field of renewable energy, that somehow we have to develop and own the technology. While this has an emotional attraction it lacks a serious economic analysis.

As a nation with cheap, abundant carbon-based energy, Australia has a comparative advantage in the production of energy as well as its use. This comparative advantage has been one of the bases of our economic success.

There is no evidence that being a first-mover in this field has a major advantage. The economic costs that these bills entail are enormous—the dead weight costs of the tax and trading scheme, the opportunity cost by directing capital to less efficient uses.

Despite the duplicity of the government refusing the release the modelling for comparative work, and failing to admit the obvious—it cannot be denied Australians will be worse off with this tax than if these bills do not pass.

Throughout economic history since the industrial revolution, cases abound where the diffusion of technology has provided much greater economic benefits than those delivered to its developers or inventers. It is through the application of new technology on a wide scale that the major economic benefits occur.

Consider the development of railways, electricity, the telephone and information technology.

In all four cases the economic benefits flowing from the diffusion and application of those technologies across the world far outweighed the economic gain flowing to the initial inventers.

Indeed, it was often subsequent inventers that developed ways to diffuse the technologies and see them applied across communities.

This is not to dismiss the gains that can flow to inventers and developers—but it does mean that we need to determine the opportunity cost of directing resources into the development of preferred technologies.

It is at this point that these bills come particularly unstuck.

The idea that somehow Australia needs to 'own' new energy technology is based on an old mercantilist mindset. This is not to dismiss the efforts of those working in this field—they deserve every opportunity to do so. But it is 'opportunity' that is the key here. Weakening our economy, seeking to replace private effort with state effort, hinders rather than assists these efforts.

There is no agreement amongst economists that this is the best means to reduce carbon emissions. There has not even been a consideration of the opportunity cost of directing resources away from patently more productive activities.

In my maiden speech in this place I referred to the fatal conceit' that afflicted those with political power, a phrase not first coined or popularized by me but to which there has been no better application in this country in recent decades than the government opposite.

For through these bills this government is attempting to plan the economic development of Australia. For a government that could not organize roof insulation or the construction of school halls to claim a mandate and the credibility to undertake such a task requires a degree of hubris that would made Caesar blush.

Only a Labor government could boast about leading the world in the introduction of new taxes. The problem for the Prime Minister is that, if she looked behind her, she would realise no other countries are following. That may well be a parable for other political problems she is facing as well as she looks closer to home.

The Obama administration has shelved its plans for a cap and trade scheme. Despite some direct action on clean energy, China's coal-fired power production continues to soar, with a recent report finding that it is on track to exceed the United Kingdom in per capita emissions within a few short years. Yes, that's per capital

And the debacle of Copenhagen has shown us how absurd it is to hope for a binding global agreement on emissions reductions.

Ironically, by putting the Australian economy at a competitive disadvantage in relation to our competitors, the Prime Minister makes the prospect of a global deal still more unlikely.

Making energy more expensive through a carbon tax is not like free trade, where unilateral tariff reforms yield benefits even in the absence of reciprocal moves.

Any environmental effects of unilateral action are shared globally. Yet the costs are localised–only Australian businesses and households pay the tax.

The effect of unilateral action is thus to give our rivals a competitive advantage, one they would surrender if they joined us in taxing their businesses and citizens.

The only thing more absurd than wanting to be the lead lemming off the cliff will be our lonely, solitary descent when rival nations decide not to leap after us.

We know the Prime Minister understands how ridiculous this policy is. Indeed, it was the Prime Minister who persuaded her predecessor and putative successor, the Foreign Minister, to dump his own plan to price carbon. Why then does she pursue it?

Because the spin doctors of the Labor Party have told her that the real Julia needs to confect conviction, and the only way to do that is to champion an unpopular cause. Sometimes, however, causes are unpopular because they are wrong.

Like a drowning man grasping at driftwood, the Prime Minister is willing to latch onto anything. The carbon tax is wilful economic vandalism mimicking policy conviction.

Labor is bereft of ideas, bereft of governing philosophy and bereft of any reason for its very existence other than the retention of power and privilege.

It is willing to expend its political capital on a policy in which its leadership does not believe, simply because it has no genuine policy agenda to fill the political vacuum.

It is morally and intellectually bankrupt, so much so that it seeks to steal the wages and profits of Australian families and small businesses to bail itself out.

The modern Labor Party not only knows nothing about small business, it cares for it even less. I am passionate about my portfolio because small business is not just the heart of the economy, it is often the heart of our communities.

In the suburbs of our cities and in our regional cities and towns, it is the local small businesses that sponsor the footy and netball clubs, the neighbourhood watch programs, that provide the leadership of community organizations like Rotary and, in my home state, the CFA.

One of the various unfounded and misguided claims we have heard about this and the previous carbon tax is that somehow we have protected business, especially those who are export focused or import exposed.

But the truth is that this tax is another burden they must face.

How else could a minister simply telling small business that they must adjust to higher energy prices be explained? How else could billions be handed out to preferred industries, yet a paltry $40 million be allocated to fund what is basically an advertising campaign targeted at small business. This campaign is the equivalent of telling the frog in the slowly boiling water not to worry.

Thousands of small businesses will be hit by this, and all the government can say is 'deal with it.' How can a café on tight margins find the capital for new fridges, which will at best only keep its power bills from rising for a few years.

How can a small manufacturer, supplying components to a larger one, who is annually faced with imported competition face these additional costs?

The truth is that they cannot.

But this government does not care for small and family businesses.

They have no voice, they have no lobbyists to wander the corridors of power seeking favour. All they want is the opportunity to create, build and develop a business of their own. But Labor and the Greens do not understand this desire.

Despite Labor's attempts, and the threats of the Greens to ignore the people, the people will get to have their say on these bills.

Unlike the Labor Party, we will stick by our word—and as we promise to repeal this tax stained with dishonesty, we will do so.

Nigel Scullion (NT, Country Liberal Party, Deputy Leader of the Nationals) Share this | Link to this | Hansard source

Since I have been in this place there have been a lot of firsts for me, as you can imagine. But this morning a whole new precedent has been established. I have always thought that those on the other side were a bit lost, in many ways. But the level of duplicity, the level of dishonesty, we have seen today, not only to the Australian people but directly in this parliament, has left many of us on this side quite gobsmacked. There seems to be a constant theme in the government's behaviour with regard to the carbon tax and how we have gone about instigating the carbon tax. The theme is that everything seems to be done in the interests of the Labor Party. If it has the opportunity to move in the interests of our nation on the one hand or in the interests of the Labor Party on the other, every single time the government has said: 'We're going to move in the interests of the Labor Party'. The events of this morning are a slap in the face for every Australian; the Leader of the Government in the Senate, via a media release, has basically taken away any credibility the government had in this argument. We have had this big debate, but we need to have a look at this carefully. We need to have a look at a number of pieces of legislation that are going to have the most fundamental impact on the future of Australia, probably since Federation. They kept contracting that, but in a moment of contrition they said, 'No, we'll extend the sitting days by a week to ensure that we can have a proper debate and a sufficient period in committee to drill down and find out about each and every person's particular sectoral interests'—whether it is a spatial interest, particularly in the Territory, or some other sectoral interest. But that has now been denied to us, with them saying, 'No, we're going to truncate that until Tuesday.' There is no real reason at all for that, only that it is in the interests of the Labor Party because it is all becoming too grim. The media, including newspapers, and Australians are becoming more and more offended and inflamed by the truncation of the debate and the issues that the debate is bringing out.

It is no surprise that I rise today to declare I will not be supporting the bills to create this toxic tax. This is consistent with the position I have taken for some time. I spoke at length to the people of the Northern Territory on a whole range of matters prior to the election—I was on talkback radio, TV and all the stuff that politicians generally do—and I was quizzed at length about my position and my party's position on a whole range of matters. One of the fundamental matters people put to me was: 'Where do you stand on a carbon tax, Senator? What are you going to do about a carbon tax?' I said, 'Look, we're not interested in a carbon tax,' quite clearly. It was a bit of an issue.

I recall that much of the debate was all about whether the government would introduce a carbon tax. We said, 'It looks like they might.' 'Hysterical,' they said. 'Duplicitous,' they said. Labor said, 'These people aren't to be believed, of course we won't.' And then we had the historical comment by the Prime Minister, Julia Gillard: 'There will not be a carbon tax under a government that I lead.' It was a fundamental promise—absolutely unequivocal. The reason it was unequivocal is that she knew that the interests of her political party would not be served by losing an election. That election was there to be lost by them telling the Australian people that they were going to pursue a carbon tax. It was there to be lost. And when it came to the question of choosing between what is in Australia's national interest and what is in the interest of the Labor Party, for that bunch on the other side there was no question at all. Their response has always been to say, 'Let's increase the interests of our own political movement over the interests of this nation and our people.'

It is a toxic tax. There is no doubt about that. It has been acknowledged by those opposite—for what little they can be believed, and by what little modelling they have released—that this is certainly going to have a significant impact on the cost of living—over $500 a year increase. As Australians we all know that, wherever we live, the cost of living is acute. Electricity prices have risen by 51 per cent since 2007, gas prices have risen by 30 per cent, water and sewage rates up by 46 per cent, health costs up by 20 per cent, education costs up 24 per cent and rent up 20 per cent. It affects individuals and communities. It is a tax that is going to put up prices. Just like the 10 per cent increase in electricity prices and the nine per cent increase in gas prices—all of these things are going to go up again. If you thought you were doing it hard today then after this tax it will certainly be an awful lot harder.

Those on the other side have pontificated on the adjustments. They say that it is going to be all right. In her contribution, Senator Crossin said that if you are a pensioner in the Northern Territory it is going to be okay because a couple would get an extra $255 a year each. I am not sure where they are going to splash their extra $5 a week but it is not going to go too far. In the same contribution, she said that items were only going to go up by 10c each. You do not get too many items in the bottom of your shopping trolley before $5 a week is exhausted. She also went on to say: 'I don't know what we're worried about. If you get a truck that goes from Sydney to Melbourne, it's only another 35 bucks or 7c a litre. It's nothing.' As a Territorian, I am not surprised she is quoting Sydney prices for fuel! Anybody who lives in Darwin or elsewhere in the Territory will say that it is going to be an inordinately worse issue if you are trying to purchase fuel in Darwin. By the way, Senator Crossin, it is a bit further from Adelaide to Darwin than it is from Sydney to Melbourne. These are all increases in prices and this is a toxic tax on remoteness. The further you are away from the capital cities the more you will pay, as if you are not paying enough already.

This is not a fixed tax. For the pensioners who will be 'delighted' with their 70c a day—thanks a lot for that!—the tax is going to go up. Whilst their adjustment is apparently locked in—their last lock in—we know that the carbon tax is going to go up. We are told by the government modelling that it is going to creep up and by 2016 it is going to be $29 a tonne and by 2020 it is going to be $37 a tonne. There are other economic modellers who say it is going to be $49 a tonne by 2016. The Greens believe that if it is not $50 a tonne it is not going to make any difference. So you can guarantee the compensation will be fixed and the pain will be flexible and only going one way. This could not really happen at a worse time. If you asked anyone around the world, 'If you could pick a year when you would impose an economy-wide tax, what would it be?' I do not think there would be any surprises to any clear thinking Australians that the answer would not be 2011, right now. Globally we are looking down the barrel after the sham in Europe. A week later it is already falling apart. We know that there is massive uncertainty in the global economy. And this is the time we have chosen to put an economy-wide tax on Australians.

If you go back to why we are doing it, it just seems crazy; it is nuts. It is not because we are worried about Australia; it is because we are worried about the Labor Party. The only way the Labor Party could have been in power is with the handshake of the Greens. The Greens said, 'We are not going to sit with you and give you government unless you promise us a carbon tax.' I do not believe anyone on the other side. They have been so duplicitous. They have a history of disinformation and duplicitous behaviour. But that is not why I do not believe them. In their eyes I can see they do not believe in a carbon tax. They did not believe in a carbon tax before the election and they do not believe in a carbon tax now, but it is in the interests of the Labor Party to be in power and so they have sold Australia out. The only issue is about timing. That is the only thing that they have been thinking about.

I remember one quotation from a senator opposite. She said, 'I am very pleased to be standing supporting the package of clean energy bills because the rest of the world is acting and our economy and our environment will be badly damaged unless Australia acts too.' It is a special quotation out of the Labor dirge. But I am not so sure whereabouts on the planet it is that Senator Crossin says they are acting. Perhaps, as we all suspect, it is a different planet, because there is no country in the world that is imposing an economy-wide carbon price. This is a fact. The United States, one would think, is a comparable economy, with pretty big numbers. It has an impact and is a major trading partner. Are they moving to a carbon price? They have abandoned their cap and trade and could not be standing further away from it. We are always making comparisons with Europe. They actually have a price on carbon, but it is not economy wide. Many industries in fact get free permits, so there is not a lot of comparison there. Instead of the size we are looking at, theirs is $500 million a year, against a $9 billion-a-year imposition, a $9 billion tax. It just beggars belief. We have heard: 'China is acting. China is out there, a big economy. They are only going to increase their emissions by 500 per cent by 2020.' We breathe a sigh of relief.

What were you thinking? Sorry, that's right: you were thinking about yourselves. You certainly could not have been thinking about Australians, our communities, our families, our individuals. You once again took the easy line and just thought about your own interests.

As part of the debate, this side of the chamber has had direct action. That side of the chamber has said, 'We want a price on carbon.' They have lied about it to the Australian people. But both sides agree that by 2020 we would have a five per cent reduction. Our five per cent reduction is ordered and we know we can get it; there is no question about that. But those on the other side have decided to weld themselves to a process whereby there is going to be a carbon market from 2016. There is going to be a carbon market under which we can buy credits. In fact, we are not actually going to reduce emissions in Australia; we are going to increase the amount of our emissions by 43 million tonnes. That is what this government is going to do. They said, 'We are going to increase by 43 million tonnes, and we have been a bit lazy about that, but it's okay, because we're going to buy carbon credits.' I have to say that carbon credits are probably not the most universally credible piece of currency around the place. Europe is awash with fraud and convictions; that is well known. But we are going to buy these from someone. Not only are we going to buy them from someone but we are going to buy them in a market that does not exist. It is all a little strange.

Again, I am not surprised that they come to this place to say, 'We were going to give it full scrutiny for another week', because there has been a bit of argy-bargy. We are talking about the carbon tax and people are starting to focus on it a bit. I am not quite sure exactly how the conversation went but I am sure it went something like this: 'Well, guys, do you think we really need a committee stage? It might ventilate the issue a bit and we are not doing very well. Why don't we just cut the process of transparency out? What if those nasty buggers on the other side start asking us questions about the impact on our national interest? What if they start asking some questions about the basis of the assumption that there is actually going to be a market to sell carbon in?'

There was an excellent article by Greg Sheridan in the Australian. He interviewed the Canadian foreign minister, John Baird and asked Baird whether Canada would join an international carbon trade. He said, 'There is nothing to join. Where is it going on today?' I know that those on the other side have got the earmuffs on and have locked themselves down in Dalek mode, but the rest of the world knows what is going on and is not acting. There is not going to be a market for carbon. You will not be able to throw away Australia's $3.5 billion—and that rolls off the tongue so casually—in all sorts of weird places to buy weird pieces of paper. That is not even going to be able to happen. Do they have a plan B? I am not surprised that they do not really want to open themselves to that sort of level of scrutiny in terms of the committee stage. There is no doubt at all in my mind that the Greens are fundamentalist lemmings that are racing towards the cliff of reality. There is no doubt about that. But at least they have been consistent. The glint I see in their eyes is the glint of passion about what they believe in. But the glint I see in the eyes of those opposite is a glint of self-interest and of duplicity. I frankly cannot understand why they do not get that the Australian people are in the sports stores not to buy funny hats; they are there to buy baseball bats and they are waiting for the election—they cannot wait. I am constantly harassed by people saying, 'Why do we have to wait?' People say: 'Can't we just get a tank, Nige? They're doing it in the rest of the world.' They are all so frustrated. And this level of frustration comes because Australians themselves know that they are going to be the ones to pay for this duplicitous behaviour. Those on the other side I notice are shaking their heads. Senator, did you tell your electorate before the election that you were going to support a carbon tax? I am sure Hansard and every record in your electorate would say that you stood up, with Gillard, and said 'No, no, they're making it up.'

Helen Polley (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

Madam Acting Deputy President, I raise a point of order. The good senator is well aware of the protocol of referring to people in the other place and he should at least show respect to the Prime Minister. I ask him to use her proper title.

Nigel Scullion (NT, Country Liberal Party, Deputy Leader of the Nationals) Share this | Link to this | Hansard source

I was in fact referring to you, Senator—no-one else.

Sue Boyce (Queensland, Liberal Party) Share this | Link to this | Hansard source

Please sit down, Senator Scullion. Senator Polley.

Helen Polley (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

He referred to 'Gillard', and it is totally inappropriate.

Sue Boyce (Queensland, Liberal Party) Share this | Link to this | Hansard source

I did not hear that reference.

Nigel Scullion (NT, Country Liberal Party, Deputy Leader of the Nationals) Share this | Link to this | Hansard source

I believe I did say that. I withdraw it and I refer to the Prime Minister. Senator Polley, I was referring to—

Sue Boyce (Queensland, Liberal Party) Share this | Link to this | Hansard source

Senator Scullion, the other point is, of course, to direct your remarks through the chair.

Nigel Scullion (NT, Country Liberal Party, Deputy Leader of the Nationals) Share this | Link to this | Hansard source

Through the chair, I was directing my remarks at Senator Polley—and all those on the other side. I did not hear one of you say before the election: 'By the way, I am going to be standing in the Senate saying: I absolutely support a carbon tax. I couldn't get a carbon tax in quick enough.' In fact, we have to get it in so quickly, we have to truncate the processes of the Senate, so we cannot actually question you properly.

Senator Polley interjecting—

Senator Polley, any time you want to stand up in here and tell me what you told your electorate before the election, you can do so. In fact, there is an opportunity for you to give a speech in this place to clarify for your electorate exactly how you are going to vote on this matter.

It is with great sadness that I stand in this place somewhat confused. We have reached an all-time low not only in how the government treat parliament but, through that process, how they treat their nation. It is with the utmost arrogance that they believe they will somehow get away with this. They will somehow go through this process and all will be forgiven. It will be all right. They think that they will get to the election and Australians will forget what they have done to them and will forget that they put their personal interests and the interests of their party before this nation. Let me tell you: they will not.

This is a toxic tax that does nothing for our national interest. It is a toxic tax that does absolutely nothing for the global environment. It is a toxic tax that does absolutely nothing for individuals, for families and for communities that are currently doing it very, very hard. They care, and they care sufficiently, and they understand all those things. They were very concerned about that before the election. As I said, I commend the Greens for their consistent approach: lemmings but consistent. But those on the other side, who have said to Australians, 'We are not going to have a carbon tax if you vote for us' lied to the Australian people, and the Australian people cannot wait to get to an election. I cannot support this toxic tax. (Time expired)

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

I have long supported action on climate change. I believe that there are real risks that if you do nothing the risks are great. I think anthropogenic climate change presents Australia, and indeed the world, with a very serious and complex policy problem. British sociologist Lord Anthony Giddens said that it is a paradox that politicians will not often take action on a problem when the impact is many years away, but when the impact of the problem becomes apparent it could well be too late to do anything about it. That is what I think has been broadly referred to as the Giddens paradox.

I think it is absolutely crucial, however, that any scheme that is introduced into an economy to combat climate change needs to be credible internationally and sustainable domestically. It needs to make a real difference to the environment. I want to pause to reflect on the process not with rancour but with disappointment. I understood that we were going to have all of next week to deal with the committee stage of the carbon legislation. My understanding is that that will no longer be the case. I think that is a mistake. The Clean Energy Bill 2011 and related bills are important legislation. Whilst the numbers may be certain—and I respect that—for the passage of this legislation, I think it is important to ventilate as fully as possible such a huge policy change, and I believe I am consistent on these positions, whatever side of the debate I am on, in that you should not unnecessarily constrain debate. I for one would have been not so much happy but willing to attend this place on a Friday, a Saturday, a Sunday—however long it took—so that there would be no suggestion that debate was in any way constrained. I am afraid that there will be that very strong suggestion. I know this is an issue that we have debated on many occasions, but this is an important piece of legislation. It is complex, it is technical and I think there are legitimate questions that need to be asked.

I thought that the process that we had with the CPRS a couple of years ago was a good process in the sense that it was adequately ventilated and everyone had a fair go to raise their concerns. I acknowledged then that I thought that Senator Wong, as the minister responsible, the minister in charge of the legislation, did do a magnificent and dignified job in dealing with the issues, even though that legislation was ultimately defeated. I believe that if we choose the wrong scheme—if it causes irrevocable damage to our economy or does little for the environment, or both—then it is not legislation that we should support. I believe that this legislative package currently before the Senate will be damaging to the economy, will do little for the environment and could well serve as an excuse for other nations, particularly nations in our region, not to act, because of the design of the scheme. There are some seminal, fundamental issues that I want to address shortly—the issue of a mandate or in fact a reverse mandate.

It is fair to say that, contrary to the opposition's claim, we are not going it alone when it comes to action on climate change. There are a number of other countries that act on climate change. The United Kingdom, the European Union of nations, the United States, New Zealand and Japan, to name but a few, are taking action, but the scheme design varies widely, the impact on the economy varies widely and the targets vary widely. So the question today is not whether we should take action on climate change but whether this scheme will ensure that true environmental benefits are achieved without damaging Australia's economy or disadvantaging local industries. And of course there is that mandate issue as well.

I believe that imposing large adjustment costs in the economy with no prospect of incremental global abatement gain is simply not an efficient or economic proposition and is not responsible. I have long advocated for an intensity based scheme, as proposed by the economic consultancy Frontier Economics, where heavy polluters pay and those who keep their emissions below the benchmark in their industry are credited for their cleaner approach. Senator Wong in estimates and in other forums gently teases me, saying that she admires my loyalty to Danny Price of Frontier Economics, who I have dealt with for many years and who I have found to be uncannily accurate in his predictions. He is someone who has an enormous amount of credibility. My loyalty is not to Danny Price; my loyalty is to good public policy. Good public policy would be to seek the will of the people. Good public policy would be to adopt an intensity based approach.

The modelling was done when Mr Turnbull was opposition leader. We jointly commissioned Frontier Economics to undertake the research, and the modelling was undertaken by the same economic modellers using the same model used by federal Treasury. It found that with the Frontier scheme you could actually have deeper cuts, a 10 per cent target rather than a five per cent target, with much less cost to the economy because you do not have the same level of recycling of revenue, which is inherently inefficient and causes damage to the economy. It is important to have an approach that is a combination of carrots and sticks, rewarding those who do the right thing and punishing those who do not, and to do it in a way that does not involve the same level of recycling and the same price effects. Therefore, there is not the same need to compensate as much, because you do not have the distortion effects in the economy.

I believe the government's approach will result in much economic pain, with very little environmental gain. I note that this target is the same as the target that the government put up in the CPRS, which all non-government parties and senators rejected just two years ago. I believe a higher abatement target can be pursued under an intensity based scheme due to the economic cost savings and because the scheme will result in lower energy prices, which will make the low-carbon transition more acceptable to consumers.

This is all about transition. How do you best transition your economy to a low-carbon future? This bill will not do it. I note the comments of Professor Garnaut, the government's key adviser on climate change. He has said that if you want to bring about reform you need to have tax reform and a whole measure of reforms in place in order to allow for that transition. I do not believe that this package does that in any way, shape or form. I note the comments of the Productivity Commission, who have expressed concerns about having a dedicated fund in the way that is being proposed to deal with the issue of abatement, and Professor Garnaut has echoed those concerns. That is something that can be discussed later, at the committee stage. I believe in an intensity based approach. The Frontier approach preserves the same intention the government has, to reduce Australia's emissions, but it would not unnecessarily raise tax revenue or prices for consumers in the same way the proposed carbon tax or the proposed emissions trading scheme that will follow it will.

I also have concerns about the clean energy legislation package because, based on existing modelling that has been provided by Treasury, taxpayers may face a multibillion-dollar shortfall. Treasury has assumed a carbon price of $29 per tonne in 2015. However, analysts with Bloomberg energy futures—200 analysts around the world including here in Australia, people who live and die forecasting the price of carbon—have assumed a per unit carbon price of $16 per tonne in the international market. As compensation to households, which under the government's proposals is in the form of lump sum compensation, will not change in line with the carbon price, the concern is that if Bloomberg's forecast is correct carbon revenue will fall to about half of what has been predicted. This means that households would in effect be overcompensated and the government would see a significant deficit—a shortfall in revenue. For example, revenue from the sale of permits in 2014-15 is expected to be $8.6 billion. If the price in 2015-16 is $16, as predicted by Bloomberg, not $29 per carbon unit, then this revenue will fall to approximately $4.7 billion, close to a $4 billion shortfall to the budget.

I put these questions to Treasury during the recent Senate estimates and it came down to a question of what the price per carbon unit will be in 2015. The fact is, if the price is anything less than $29, as modelled by Treasury, there will be a revenue shortfall. Under the intensity based model proposed by Frontier Economics, this would not be an issue, as compensation to households would fall with the carbon price. It would not be fixed as it is in the case of the government's legislation.

I indicate now that I will be introducing a number of amendments that will adapt the government's legislation to a model that is in line with the scheme proposed by Frontier Economics, and I am grateful for the good, impartial advice of Danny Price and of his colleagues Matt Harris and Amar Breckenridge, who work in this field extensively giving advice to governments, to industry and to NGOs. I know that those individuals are concerned about getting the right policy response for effective action for climate change. Whilst these changes will not be a baseline and credit model, which was the basis of the GGAS model designed by Danny Price and Frontier Economics—that model was all carrot and no stick, and that is not appropriate if you want to deal with this in the long term and on an effective basis—it will adapt the carbon price to work with the same effect based on energy intensity and it will provide the transition that this economy needs. It is worth commenting on the coalition's direct action plan. I believe that plan is grossly inefficient. It carries with it risks to fiscal policy. It carries with it risks to the budget bottom line. It is incredibly clunky. It is about, in a sense, picking winners. I do not support that plan. The only advantage I see of that plan is that you can switch it off more easily and adapt to a much more efficient emissions trading scheme—that you will not be locked in. That is the only advantage. In a sense, I am damning the coalition's plan with very faint praise, but the ability to switch it off ought to be acknowledged.

The amendments I will move will be, firstly, to increase the target reduction of emissions to 10 per cent less than 2000 levels by 2020. Those emissions reductions are achievable at a lower cost because you will not have the revenue recycling. You will not have the inherent inefficiencies in what is being proposed. I believe we can achieve this higher abatement by 2020, and it is a better springboard for greater reductions. I also believe that the establishment of a clean energy standard will provide incentives for the electricity generator sector to reduce emissions. By allocating a number of free units each year and using a formula to reduce the number of permits issued under a benchmark for each year until 2030, this will encourage the electricity sector to reduce their emissions without substantially increasing energy prices to consumers, and it will give certainty to the electricity sector, as I think it must.

My great fear is that we will face a critical energy shortage in this country in the coming two to three years, and that will have enormous effects on our economy. We are not getting the investment that we need. The investment ought to be skewed, of course, to cleaner energy, but I just have real concerns about that. Wind power, whilst welcome, is not an answer to the baseload electricity generation that we require.

I also believe that amendments to establish a national energy efficiency scheme, or a white certificate scheme, would promote and recognise those who are introducing commercial and domestic efficiency measures. I note the advocacy of Senator Milne and others in the Australian Greens over a number of years for this. I believe that is appropriate. The white certificate scheme is the approach that we should take. These schemes are successfully operating at some level in Australia; they are also common in Europe. It would lower compliance costs for electricity retailers already facing multiple energy efficiency schemes across different states and would support an increased emissions reduction target.

I also believe we should recognise voluntary action. It is important that the government recognise and provide incentives for voluntary action without reducing the obligations of emitters. Voluntary action by the Commonwealth, states and territories and by local government bodies, other entities or individuals to reduce or offset greenhouse gas emissions, which is not otherwise accounted for under the scheme, should be rewarded.

The government's proposal provides for emissions-intensive trade-exposed businesses to receive assistance, and I will move an amendment to provide that they receive 100 per cent assistance, not the 86 per cent that is currently provided for in the legislation. But I also believe that there must be a quid pro quo. If there is industry assistance, that should be tied to getting better outcomes in energy efficiency in terms of reducing emissions. It should not be a blank cheque. I believe that there ought to be greater compliance by these emissions-intensive trade-exposed industries to receive this assistance.

I have a fundamental, seminal issue in relation to this legislation. Unlike the opposition, I do not believe the Prime Minister lied when she made the statement shortly before the last election that there would not be a carbon tax. I believe she did not lie—that she told the truth at the time. That was her intention at the time. But she changed her position after the election, given the realities of minority government. I understand that. I also understand that the Australian Greens have been entirely consistent in their position on this, and I commend them for their consistency and indeed for their environmental advocacy. But I have a fundamental problem, in that, when a government say just before an election that they will not do something and after the election they turn around to say that they will do the opposite of what they said, in a way that could well have materially influenced the outcome of the election, and I think that is axiomatic, given that we now have a minority government.

I think it is incumbent on the government to go back to the people to seek a mandate. That was my position in my time as a member of the South Australian Legislative Council. I stood up to the then Liberal government to oppose the privatisation of the state's electricity assets because then Premier Olsen said just before the 1997 state election that there would not be a privatisation and a few months later he changed his mind. He was entitled to, but he should not have privatised the state's biggest assets in the absence of endorsement by the will of the people. My position is entirely consistent in relation to that. We might have a new paradigm, but that paradigm needs to have the will of the people acknowledged in terms of that.

That is why I will be moving an amendment for the proclamation of this legislation to occur only following the next federal election and after the 44th Parliament has met. My colleagues, my constituents in South Australia and the wider public know that I believe that we need to have responsible action on climate change—not this scheme and not the opposition's scheme; there is a better way to achieve outcomes, but you need to bring the people with you. There are many people I speak to who I believe have been traditional Labor supporters, and they are angry that they were told one thing before the election and that something different is being done now. Even though I get hissed and booed sometimes, I do not believe that the Prime Minister told a fib. I do not accept the opposition's assertion. I believe she acted in good faith in what she said just before the election. But, having said that, because circumstances have changed, you need to get a mandate from the Australian people.

I believe the Frontier Economics scheme, carefully modelled, carefully researched, using the same modelling as the Australian government's modellers used, would achieve a more ambitious carbon emissions reduction target and would be more attractive in managing adjustment concerns because the scheme has lower cost properties in it. This would be desirable from an environmental perspective and in terms of sending a more credible signal internationally.

I look forward to debating my amendments during the committee stage. I get the feeling, however, that I will be quite lonesome with those amendments, but it is important that they be debated, because we cannot avoid the debate about having the best possible way to reduce emissions in this country. There is also the fundamental issue of obtaining the consent of the Australian people for such a monumentally significant piece of legislation. Because of the seminal issues that I outlined, I cannot support the second reading stage of these bills. I also have real concerns about the processes involved—and I say that again without rancour. I just do not think that this sets a good precedent. I think it would have been much better if we had slugged it out here in the chamber for a few more days. That way the process would have been much fairer, and I think, indeed, that many Australians would demand that process for such an important piece of legislation. I look forward to the committee stage of this legislation, and I assure my colleagues that I will participate in that stage constructively and in good faith. But I do worry that this legislation, this approach, is not the right way to go.

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

Bad policy is always bad policy. That is why political parties who are true to their convictions should stand against bad policy from opposition and be willing to replace it with good policy in government. The Clean Energy Bill 2011 and related bills represent bad policy. That is why the Liberal and National parties are standing against them in opposition and, should the electorate endorse our position, it is why we would replace them with better policies in government. Above all else our approach to these issues demonstrates respect for the electorate. Labor ramming this carbon tax through the parliament demonstrates their complete and utter disregard for the electorate. Just because Julia Gillard's broken promise that there will be no carbon tax under a government she leads has been frequently referenced in this place and is widely understood throughout the Australian community does not mean it is any less relevant to this debate. In recent Australian political history the only comparable circumstance of a political leader making a crystal-clear, black-and-white promise to the Australian electorate only to do the exact opposite after forming government was Paul Keating's infamous l-a-w law tax cuts. Labor senators would be wise to remember how that act of electoral betrayal ended at the ballot box.

However, a broken promise is not in and of itself a satisfactory reason to oppose a policy or a package of bills. We should always consider legislation against the basic principle of whether it delivers on its stated objectives in the most effective, efficient and fair way possible. This legislation does not. The explanatory memorandum to the primary bill in this vast legislative package, the Clean Energy Bill, argues that Australia needs to reduce its emissions of greenhouse gases, or carbon pollution as the government tries to emotively describe such emissions. The coalition agree with this objective. We share the commitment for Australia to reduce emissions by five per cent from 2000 levels by 2020. We stand ready, if a real global agreement to do more can be reached, to do more as part of a coordinated and integrated global effort. The Prime Minister's second reading speech describes this legislation as, 'A plan to cut carbon pollution by at least 160 million tonnes a year in 2020.' However, there is an act of trickery here because all modelling demonstrates that this package does not reduce Australia's emissions. Even if all of the government's policies and all of their optimistic assumptions go exactly as planned, Australia's emissions will still rise from 578 million tonnes of CO2 equivalent gases in 2010 to 621 million tonnes of CO2 equivalent gases in 2020. These are not my numbers; that is the assessment of the government's own advisers at the Treasury.

This legislation fails the basic test of actually meeting its stated objective. It has been sold through a multimillion-dollar taxpayer funded campaign in which it has been presented as delivering Australia a clean energy future. This is simply misleading. Labor is trying to con the Australian electorate into believing this package delivers something that transparently it does not. However, many Australians have not been conned and they rightly ask this simple question: if the carbon tax does not reduce Australia's emissions, what is the point of it? It is a fair question indeed and one that Labor senators have failed to confront head-on during this debate. Labor only manages to claim that this package reduces emissions by outsourcing action and responsibility to the rest of the world, not by taking action in Australia. This does, however, come at a great cost to Australia. The same Treasury modelling shows that in 2010 prices Australian companies will spend $2.7 billion in 2020 and $57 billion by 2050 on purchasing overseas permits annually. Assuming inflation of 2.5 per cent annually, this results in actual spending by Australian businesses on overseas abatement permits of $3.5 billion in 2020 and a staggering $153 billion in 2050. Not only is this a massive outsourcing of action and responsibility, it also sees Australia placing multibillion dollar bets on global carbon markets that have already been found to be susceptible to fraud and manipulation, and, as the Canadian foreign minister described them just the other day, resemble a pyramid marketing scheme. This is spending that is additional to the cost of Labor's carbon tax or trading scheme in Australia, which domestically starts off raising and costing around $9 billion per annum.

It is remarkable that the Greens and others who call for the transformation of emissions within Australia accept and go along with this trickery and go along with the sleight of hand that sees this massive outsourcing of action. We constantly hear claims, from the Greens in particular, about Australia having amongst the highest emissions per capita in the world, not that this is actually a valid consideration as considering emissions against GDP or domestic consumption are more valid approaches. Nonetheless, the ongoing failure of the Greens to explain why it is acceptable to them, even with this carbon tax in place, for Australia to continue to have the highest emissions per capita in the world speaks volumes about the fact that the Greens approach to this legislation is more about politics than good policy. This legislation simply does not meet its stated objective of reducing emissions in Australia. That alone should warrant its defeat in this parliament. But matters of climate change are not just an Australian issue—quite the opposite. As I told the Senate in November 2009 during contributions on the previous CPRS debates:

Global action is essential, for unilateral action by Australia will not make any notable difference.

That statement is as true today as it was then. The science surrounding climate change makes it clear that addressing this issue requires all countries to act in an agreed way, especially those countries responsible for large volumes of emissions. Stabilisation of greenhouse gas concentrations in the atmosphere requires everyone in every country to do their bit. It cannot be achieved by some acting while others around the world continue on a trajectory of emissions growth.

In that 2009 debate I went on to state:

Global agreement is not easy and the pathway or processes towards it are messy, and we have seen that in recent weeks in the lead-up to Copenhagen.

If I thought the lead-up to Copenhagen was messy, it is hard to describe just how untidy, unsatisfactory and unseemly the outcomes of Copenhagen actually were. It was a debacle that has set global agreement back an indeterminable length of time. The Copenhagen conference collapsed. It produced no agreement on a second commitment period for the Kyoto protocol, nor did it produce any agreement on a new treaty structure to limit global emissions. Instead it produced a flimsy three-page accord under which some countries have proceeded to pledge a range of non-binding, non-measurable and non-verifiable emissions targets or emissions intensity targets. The same group gathered in Cancun last year, but again failed to make any meaningful progress towards a binding pathway forward on global emissions. Next month they will gather in Durban, where nobody, including the Gillard government, seems to expect any further progress.

If the Labor Party and the Greens get their way we will see the perverse situation next year where, just as the first commitment period of the Kyoto protocol expires, leaving the future of global emissions mitigation decidedly unclear and with no legally binding global framework in place, Australia will embark on a carbon tax and emissions trading regime that imposes a legally binding framework on Australian businesses with greater scope and higher targets than anywhere else in the world. Labor justifies this apparent madness by claiming the world is acting, citing the pledges made under the Copenhagen accord and a scattering of carbon pricing schemes, all of which have much less scope and impact than is proposed by this legislative model.

Rather than taking Labor's word for it, it is worth checking what the rest of the world thinks about the extent of complementary global action on climate change. The World Bank's Carbon Finance Unit recently surveyed market participants regarding the likelihood of an international agreement being reached for the post-Kyoto protocol period that we enter next year. They found:

Survey respondents were not optimistic that a binding international agreement could be achieved in the short term.

Asked how confident these global carbon market participants were of there being a new legally binding multilateral framework, similar to the current Kyoto protocol, with legally binding commitments to reduce emissions, close to 90 per cent of respondents were pessimistic or slightly pessimistic of any such framework being reached before 2015. More than 65 per cent of global carbon market participants remained pessimistic about there being a legally binding replacement to Kyoto agreed before 2020.

The Copenhagen accord has seen a limited number of countries register a broad range of noncommittal targets and actions of varying forms, a veritable mixed bag of absolute reductions against business as usual trajectories versus changes to intensity limits, many with varying base years, some with quantified emissions reductions and others without. While there is little consistency and barely any comparability between the pledges made under the Copenhagen accord, the most important question should be: do they, or could they, achieve the aims of controlling or averting human induced climate change? The 2010 United Nations Environment Program's The emissions gap report estimates that developed and developing country pledges are 60 per cent of what is needed by 2020 to place the world onto a trajectory that will keep global temperature rises to less than two degrees Celsius in comparison to preindustrial levels.

The International Energy Agency concurs, stating that the two-degree goal will only be achievable with a dramatic scaling-up of effort from countries around the world in advance of their Copenhagen commitments. Even when the promises are voluntary, non-binding, non-measurable, non-reportable and non-verifiable, as is the case under the Copenhagen accord, the world is a long way off making commitments that justify the Gillard government's optimistic modelling of the impact of their carbon tax.

Despite the pessimism that surrounds the prospects for global agreement and unified global action, the coalition believes Australia should do its bit so as to maintain credibility for our bipartisan position in international negotiations to achieve an effective global agreement. That is why we remain committed to achieving the target of a five per cent reduction in emissions by 2020 against a 2000 baseline. However, there is no point applying policies that assume and pretend things are happening elsewhere when, quite frankly, it is the opposite. This carbon tax plan is based on a dream-world scenario, not a real-world scenario. In an ideal world, where the action among all major emitters is comparable, and the policies of those countries to restrain emissions enjoy a strong level of consistency and interoperability, there is a place for some type of carbon pricing.

Julia Gillard justifies her change of position on a change in circumstances. She is right to claim that leaders should change their position when circumstances change. However, it is equally right that a test be applied to ascertain whether the change in position is justified by and commensurate with the change in circumstances. In this position, it is most clearly not. Perhaps there would be a case if Julia Gillard had fronted the Australian public and said: 'Circumstances have changed. There have been dramatic positive developments from the major emitting countries.' Imagine if she had said that the United States had legislated a nationwide carbon pricing scheme or was even close to doing so, or that China had joined in and India had made firm commitments to reduce their carbon intensity over time. None of these things have happened. Instead, Julia Gillard's changed circumstances—

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

Senator Birmingham, you need to refer to the Prime Minister by her correct title. I have allowed you not to use it on a couple of occasions but please refer to her as 'Prime Minister Gillard'.

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

Instead, the Prime Minister, Julia Gillard, and her changed circumstances have nothing to do with the policy merits of climate change action and everything to do with the balance of power in the House of Representatives. In the real world, where we in the Liberal and National parties live, we believe policies should be based on reality. We believe it is foolish to base your policy on purchasing international carbon credits when a credible market for such international carbon credits does not exist. We believe it is foolish to spend billions on dubious overseas action when you can take direct action here in Australia. That is what our policy seeks to achieve, in contrast to the policy of those opposite.

This carbon tax does not just fail its primary test of reducing emissions and creating, as Labor and the Greens like to claim, a 'clean energy future' for Australia; it also fails the tests of efficiency and fairness. From Labor's own modelling, their own optimistic estimates, we know that this policy leaves millions of Australian households worse off—at least three million and many millions more if the modelling is at all out in its estimates. We know that the number of households left worse off will increase over time as compensation erodes over time. From Labor's own modelling—again, their own optimistic assumptions—we know that all Australians face dramatic price rises from the middle of next year: 10 per cent extra for their electricity, nine per cent extra for their gas, ultimately more for fuel and ultimately more for everything that everybody uses.

These costs are not faced just by households; they are not faced just by families, pensioners, retirees or singles, by young or old, rich or poor. They are equally faced by state governments, local governments, charities, schools, hospitals—the list of people who face these economy-wide price rises is as big as your imagination. Then there are businesses. Most will pay, with little or no option available to offset those costs. Again, in the real world, we on this side recognise that electricity is already a huge input cost for many, many businesses. They already minimise use wherever possible. Under the carbon tax it will cost them more, but that does not mean they have greater opportunity to minimise their use of electricity; it just means they will have to pay more.

There is no compensation under this carbon tax package for Australia's biggest employer, the small-business sector. Small businesses, whatever their industry, whatever their service, whatever they provide, will again just have to pay. Yes, some businesses do receive some form of compensation, particularly those known as emissions-intensive trade-exposed industries, but they are not totally compensated, and the compensation they get erodes over time and is frequently limited to only certain parts of their business operations. So even those businesses that are identified as the businesses most vulnerable to this carbon tax regime face the real prospect of their work going offshore, their businesses going offshore and of course their carbon emissions going offshore.

This policy simply fails. It fails to reduce emissions in Australia, it fails to ensure global emissions are stabilised, let alone reduced, it fails to ensure Australian families are no worse off, it fails to protect Australian industry and jobs, it fails to ensure the budget does not plunge deeper into deficit—it fails on every test anyone can apply to it. What we will witness of course in the final days of this carbon tax debate are yet more acts of betrayal by the Labor Party, a party that is trying to implement a policy for political convenience not for policy good, a policy based on a lie at the last election. A policy that is bad policy today will be bad policy tomorrow and, until we see any form of global agreement, bad policy for the indefinite future. That is why we on this side oppose it now and will continue to oppose it until we can get the right policy for Australia's future.

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

Like every other member of the Senate, I am not a climate scientist. There is not one of us who has spoken in this debate or is to speak in this debate with the professional expertise to assess the technical scientific debate—not one. But as legislators what we ought to be able to do is to make rational decisions about public policy.

I am prepared to accept that a clear majority of scientific opinion is of the view that anthropogenic global warming is a reality, and therefore I am also of the view that it is rational public policy to seek to address that problem. So the question becomes: does this bill address that problem? We know what the objective of the Clean Energy Bill 2011 is; we can see it from clause 3. The objective of the bill is:

(b) to support the development of an effective global response to climate change, consistent with Australia’s national interest …

The reason I cannot support this legislation is that there is no respect in which by passing these laws Australia will serve that objective. By how much will global temperatures fall, by how much will anthropogenic global warming be impacted, if the parliament, in defiance of an election commitment by the Prime Minister, passes this legislation? The answer is: not at all, not one iota.

I ask those who may be listening to this debate: if the objective that the legislation itself declares to be its purpose will not be served by it, why are we doing this? That, I think, is where the public find this debate perplexing, because nobody believes that the passage of this legislation will make one iota of difference to the earth's climate. Even Professor Flannery, the government's chosen advocate, has said that, if the parliament passes this legislation, it will have no measurable effect on the world's climate for 500 or 1,000 years. So this much we know: the legislation is a gesture.

The advocates of the legislation are reduced to this proposition: 'All right,' they say, 'if Australia embraces this carbon tax, it won't achieve the objective of reducing or affecting anthropogenic global warming, but Australia can at least set an example.' As you know, Mr Deputy President, when we had the debate in the Senate in 2009 about the Carbon Pollution Reduction Scheme, in advance of the Copenhagen Climate Change Conference, I was one of those who could see the point of Australia participating in a coordinated global effort. But, since the Copenhagen Climate Change Conference collapsed, there is no prospect of a coordinated global effort, not from the United States, not from Canada—as their foreign minister told the CHOGM conference only last week—not from India, not from Russia and not from China, which was accused by the then Prime Minister, Mr Rudd, of actually sabotaging the Copenhagen Climate Change Conference.

So it becomes an argument from vanity. Australia, with an inconsequential population, is going to lead the world. Who do we think we are kidding? If the Australian parliament passes this legislation, it will have no impact on global opinion whatsoever. It will make a lot of well-meaning Australians feel good about themselves, but at what cost to the millions and millions of Australians whose standards of living will be materially affected? Last Monday, the United Nations tells us, the world's population reached seven billion. Australia's population is 22.7 million, 0.324 per cent of the global population. Who are we kidding if we think we, with less than one-third of a per cent of the people in the world, are going to change the globe's attitude to climate change?

Lastly, and in closing, I want to make some quick remarks about what I have found the most disturbing aspect of this debate, and that is the contempt for scientific method by the proponents of this legislation. How often have we seen Senator Penny Wong shrilly call out to us across the chamber, 'The science is settled'? The science is never settled. I am a great fan of the late Sir Karl Popper, who in 1934 published one of the great classics of the 20th century, The Logic of Scientific Discovery, and of Thomas Kuhn, the American historian of ideas, who in 1964 published his classic, The Structure of Scientific Revolutions. What both Popper and Kuhn argued in those great classics of science was that the scientific method depends upon and operates by falsifiability—the falsification of existing propositions. Scepticism is the very spirit of science, because to question received hypotheses is the very mechanism by which the scientific method works. That is why every scientific advance has been described as a revolution. Galileo was a sceptic. Copernicus was a sceptic. Isaac Newton was a sceptic. Albert Einstein was a sceptic. Each of them challenged the scientific consensus of the time and, by propounding a better theory, advanced scientific knowledge and understanding.

There are few things that make my blood boil more than to hear the ignorance of those who say scepticism is anti-scientific. If you respect the scientific method, you would never settle for the proposition that there are no more questions to be asked, that the science is settled. But ignorance and zealotry and fear have characterised the conduct of this debate, in particular by Senator Penny Wong. I oppose these bills.

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

Senator Brandis, just to clarify: you do have more time allocated after other intervening business.

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

I will yield to other colleagues.