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

My question is to the Minister representing the Minister for Climate Change and Energy Efficiency, Senator Wong. I refer the minister to ongoing reports about the dramatic drop in European carbon prices to around A$9, forecasts indicating the European ETS is likely to keep trading at lows for years to come, and about today's report from Bloomberg regarding a likely sustained slump in the value of certificates under the UN Clean Development Mechanism to as low as A$5. I ask the minister, are there any circumstances at all in which the government will reconsider the fixed $23 starting price of Labor's carbon tax, the operation of the three-year fixed price period or the application of the $15 floor price for a subsequent three-year period?

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

The government has very carefully designed the clean energy future package to ensure that we preserve the competitiveness of Australian industry whilst we also ensure we give the right incentives for investment in the clean energy jobs of tomorrow. Those opposite might recall that one large component of the Jobs and Competitiveness package in relation to the emissions intensive and trade exposed sector was actually the design that was originally negotiated by Mr Turnbull which, for a period of time, they supported. It is the case that a very substantial amount of assistance is being provided through the Jobs and Competitive package, which reflects the importance of supporting the competitiveness of Australian industry. I would also make the point that today we saw not only the Bloomberg report to which the senator referred but the release of the Climate Institute study which laid out the risks to the economy of not pricing carbon and the risks of falling further behind. That report found that Australia is among more than 100 nations which have climate policies targeting pollution limits and clean energy. I also note that report indicated the expectation that Britain would have a carbon price of $24 to $34 a tonne; Sweden $130 a tonne; Switzerland $30 to $60 a tonne; Norway $53 a tonne and Ireland $24 to 37 a tonne. As I said, the government is very much of the view that you need to preserve the competitiveness of Australia's industry, at the same time giving incentive for investment in the clean energy jobs of tomorrow. That is what the package we have negotiated, which has been passed by this chamber, does. I have no doubt those opposite us will continue a fear campaign. That is their only answer when it comes to climate change. The government is very clear about why this is important long term. (Time expired)

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

Mr President, I ask a supplementary question. I refer the minister to the statement on page 89 of the Treasury modelling of the carbon tax:

From the start of the flexible price period to 2050, Australian carbon prices will rise by an average 5 per cent per year plus inflation, reflecting growth in the foreign currency carbon price ...

Does the minister accept that the government got the global carbon price wrong when setting the $23 fixed carbon tax for this year and the forecast wrong on the assumptions of where global prices will go in future?

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

I would make a couple of points. Firstly, the fundamental propositions of the Treasury modelling that the opposition quibble with are simply this: we can grow our economy, our incomes and increase the number of jobs in this country with a carbon price. No fear campaign from those opposite can avoid the reality of that proposition. I would also make the point that the Bloomberg report to which the senator referred, in the same newspaper article talking about that report, also predicted the price in the largest carbon market, the European Union, to be reaching around $40 by 2020. There is a range of propositions out there about where the carbon price might go, just as there is a range of propositions about what might happen to equity markets and a range of propositions— (Time expired)

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

Mr President, I ask a further supplementary question. Would the minister explain how Australia having a carbon tax many multiples of those globally applied—to use the minister's own words—preserves the competitiveness of Australian industry? How can the minister continue to turn a blind eye to the impact of incorrect assumptions about global carbon pricing when these errors will have a real impact on the competitiveness of Australian industry, jobs, cost of living and the Australian budget?

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

Firstly, the opposition continue to ignore the substantial number of free permits which the government is providing to highly carbon exposed industries, for the very reasons I have outlined—they continue to ignore that. The second point I made is this: if those opposite care about the effect on the economy, why are they supporting a policy to achieve the same outcome which will cost Australian families more—$1,300 more in extra tax to be paid by Australian households? That is what they support. Why do they want to support a policy which will impose a greater cost on Australians and a greater cost on the Australian economy? That is the reality and that is the question they never want to answer. Mr Turnbull has made clear time and time again what is wrong with the opposition's policy. It does not work, it is too expensive, but most of all it hits working families with extra tax.