Trish Crossin (NT, Australian Labor Party) Share this | Link to this | Hansard source

A letter has been received from Senator Fifield:

Pursuant to standing order 75, I propose that the following matter of public importance be submitted to the Senate for discussion:

The Government's determination to exacerbate cost of living pressures for Australian households through the introduction of the world's biggest carbon tax on 1 July

Is the proposal supported?

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

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

Marise Payne (NSW, Liberal Party, Shadow Minister for COAG) Share this | Link to this | Hansard source

In speaking to this motion on the government's determination to exacerbate cost-of-living pressures for Australian households through the introduction of the world's biggest carbon tax on 1 July, there are a number of points that I think are well worth making. I will start by referring to an old political aphorism that would be known to those who have been hanging around the game of politics for some time. It is about what politicians usually need to do to get a message out—that is, talk to the people. It is along the lines of: just when you become bored with saying it, they probably have not even started listening so you should keep saying it. Those of us who have worked in campaigns over many years would have heard this, used it and hopefully listened to it.

What is intriguing in this instance is that we have to reverse it. We have a government that is not listening to what the people are saying, even though the people keep repeating the message that they do not like the carbon tax and they do not want it to be introduced. It seems to me that, although people are probably quite bored with saying it—but they will keep on, I suspect—the government simply is not listening to them So even the aphorism in reverse is not working for this government.

It does not matter where you are in Australia, what you are doing or what you are engaged in: in the forums that members of the coalition have been holding all over the country to discuss issues that are predicated on the carbon tax, people are raising their concerns about it before the member raises the subject. It is raised when you are in shopping centres. In fact, the piece de resistance was someone raising concerns about the carbon tax with me last week while I was at the State of Origin football game at ANZ Stadium in New South Wales. I was proudly wearing blue for the Blues—who, I might note for the record, won. A gentleman sitting a couple of rows in front of me and my Queensland colleague Senator Barnaby Joyce made his views very clearly known. As a political representative you cannot go anywhere in this country without being stopped to hear concerns about the carbon tax raised with you.

In regard to exacerbating the pain that Australian households are feeling, this government is going to win a gold medal. You would have thought that they had already caused enough pain with their particular spending habits, but, no, Australian families will be hit again on 1 July.

The Prime Minister and other members of the cabinet can try to use nice, benign language like 'putting a price on carbon', but let us not make any error about this. This carbon tax is going to hit the hip pockets of all Australians. It will affect the price of everything, and many Australians are very concerned about its impact. It does not matter whether we are speaking about housing, electricity, health, education or something as simple as council rates. Every time Australians open their mail at the moment there is a new piece of correspondence from a utility company or from their local council or from another agency in their community saying, 'As of 1 July we will be forced to pursue a price rise.' It makes for sad and sorry reading at the end of a busy working day. It will penalise, for example, in one of my shadow portfolio areas, new-home builders, for cutting emissions by building homes that are more energy efficient than existing homes—because, frankly, the carbon tax will increase the cost of building the average new home by $5,200, even after compensation, according to the estimates of the Housing Industry Association. And the Housing Industry Association have been at great pains, and gone to great lengths, to raise their concerns with government representatives and within the community as to the impact that this will have on new home construction in this country. New-home builders already have to comply with state based energy efficiency schemes, so how on earth will penalising builders of energy-efficient homes save the environment and reduce the national housing shortage that has increased to 228,000 homes, as at 1 July, according to the latest National Housing Supply Council key indicators 2012 report? The answer is pretty simple: it won't. And those numbers are not getting any better. We waited a very long time for the National Housing Supply Council to be reconstituted by this government, all the while concerned about where the figures were going in relation to the building of new homes vis-a-vis the demand. What is clear to us is that increasing the cost of building new homes is only going to impact even more negatively on those figures.

We have subcontractors all over Australia, in all aspects of the construction industry, who are very concerned about actually losing their own businesses, about being driven to the wall. Independent subbies do not receive any compensation for the increased costs that are going to result from the carbon tax. The scarcity of subcontractors is already a challenge for home builders—and, as they become more scarce, it will increase the cost for home builders. In growing parts of Australia, particularly like Western Sydney, where many areas are being opened up for development, this is a very significant challenge. But what about the challenge it presents to the subcontractors themselves, to their families and to their businesses? It appears to be something that the government has absolutely no regard for.

So building is discouraged through higher costs. We have a carbon tax coming in on 1 July which will only exacerbate the housing shortage and hurt even tenants, who are already facing rents that are rising well above inflation. That puts very significant pressure on marginal renters on low incomes, on those in accommodation like caravan parks, and increases the pressure on homelessness services. Those of us who have, in our own capital cities and communities, seen the recent business and CEO sleep-outs that either have happened or are going to happen, will know only too clearly how difficult that environment is.

The cash handouts that are supposed to compensate for this tax are not going to fool homeowners, they are not going to fool investors, and frankly they are not going to fool poor tenants who are struggling on a daily basis. We are seeing the government insulting the intelligence of the Australian community by trying to make a calculation of how much better off or worse off individuals will be, but the thing that we do know for certain is that, no matter what the calculations are, the carbon tax will keep prices and costs going up. It will cause electricity prices to skyrocket. In my own area of Western Sydney, IPART in New South Wales has indicated that electricity prices will increase by 11.8 per cent by 1 July. There is not a single household or a single small business that will not be impacted by those rises. They will be paying on average an extra $208 a year in electricity prices for households and an extra $270 a year for businesses.

I talk to people, as I know all my colleagues do, who are struggling to meet their staff payments, let alone their rental payments, let alone their utilities payments, and struggling to keep Australians employed. How they are expected to continue to do that after 1 July is probably the greatest mystery of 2012 at this point. We have increases in gas bills, and we will find ourselves paying the world's highest electricity prices for the world's largest carbon tax, and the government will not even tell us what it will do for the environment ultimately.

The happy reminder—and I use the word 'happy' with great irony—is that, every time families turn on the light switch, they will be asking, 'How can I afford to pay this bill?' And in some cases they are not turning on the light switches or the heating, in parts of Australia that are very cold and very lonely places if you are fighting these sorts of challenges.

Our message is that there is absolutely nothing right about this carbon tax and the electricity price increases it will cause—for example, talk to a local hospital. I noticed that recently in Sydney the Daily Telegraph ran a few headlines, 'Even schools and hospitals feel the carbon tax' and 'Carbon tax bill $46 million for hospitals and schools'. I was at Westmead hospital last October, with the shadow minister for health, the Hon. Peter Dutton, a member of the other place, talking to locals about the impact on that hospital—which, based on the assessments that they have made, could face up to $728,000 a year in electricity costs, putting extra burdens on local suppliers. It is inconceivable that a hospital struggling to meet its budgets now has to be asked to re-manage its allocations to incorporate those sorts of costs. Think about the number of staff they could have on the floor for that. Think about the sorts of impacts it is having on local families. Think about the communities that are looking at this challenge from 1 July, looking at the impact it will have on their lives, on their children, on their aged parents—on whatever part of the community you care to look at. You hear it every single day. (Time expired)

Matt Thistlethwaite (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Here we have it again: yet another piece of misinformation, another missive from the Orwellian motion-writing department of the Liberal Party of Australia. In that great tradition of anti-reform, anti-change, do-nothing conservatives, here they are again, dishing up in the Senate the same old scaremongering, the same old attempts to terrify the Australian public into believing their scare campaign around the important public initiative of pricing carbon in our economy. Those on that side are well and truly glass-half-empty people—to borrow a phrase used by the Governor of the Reserve Bank, Glenn Stevens last week—because here they go again with their scare campaign around the important policy of pricing carbon.

Let us get to a few of the facts about carbon pricing in Australia. The first fact is that both the coalition and the Labor Party have the same target for emission reductions in our economy: five per cent by 2020. We have the exact same target. With that in mind, the question then becomes: what is the most efficient, effective and, importantly, the cheapest way of reducing emissions in our economy over time? There has been a lot work undertaken to answer this question. In fact, no fewer than 37 parliamentary inquiries on that question have been undertaken in this place since 1992. They include the Shergold report, which was established by none other than former Prime Minister John Howard. John Howard asked Professor Shergold to inquire into that exact question—the most efficient and effective and the cheapest way of reducing carbon emissions in the Australian economy. All 37 of them, including the Shergold review, recommend a market based mechanism as being the cheapest, most efficient and effective method of reducing emissions in our economy—the same scheme that Labor is implementing with its clean energy future package.

Another fact is that not all Australians will directly pay the carbon price. The 500 biggest polluting companies in our economy will bear the direct liability for paying a cost associated with their carbon emissions. Initially, it will be $23 per tonne before we move to a market or floating price in three years time. There will be indirect costs; we know that. We have been upfront with the Australian people about that. Some of the 500 biggest companies will pass on their costs and that will result in an increase in electricity costs and other expenses for households and small businesses. But what we have done is asked the Treasury to undertake a modelling exercise to estimate what those costs will be for families and for small businesses in our economy—and they have done exactly that. It is the biggest economic modelling exercise in this country's history. It is even bigger than the GST modelling that was undertaken in 1998.

Let us put this into context. The GST was modelled by the same people in Treasury in 1998. They said that the price effect from the introduction of the goods and services tax would be 2.49 per cent on the consumer price index—in other words, prices in our economy would rise by 2.49 per cent. Guess what the figure came in at when the GST was introduced? The price effect, the CPI, rose by 2.5 per cent. They were spot on then and they will be spot on now. What they have said this time, after undertaking the modelling, is that the price effect of the government's clean energy future package will be 0.7 of one per cent on the consumer price index—in other words, prices will rise by less than one per cent. That is one fifth of the effect of the goods and services tax when it was introduced in 1998.

Another fact is that if companies try to price gouge, if they do try to increase prices, we have given additional powers to the Australian Competition and Consumer Commission to investigate and prosecute those organisations. Let me tell you: it is working. I had a mate of mine who works for a construction company ring me a few weeks ago. He said, 'Mate, this doesn't sound right. A contractor that we use has attempted to push their prices up and to use the carbon price as an excuse.' I said to him, 'Mate, go back and ask them to put it in writing and tell them that, if they are not comfortable with it, you will refer them to the Australian Competition and Consumer Commission and get them to check whether or not this particular company is taking the mickey, so to speak.' He did that. He rang back a couple of days later and said, 'You know what, mate, thanks for that advice because it worked. They've changed their tune. They wouldn't put it in writing and they've reduced their prices.' They know that they will be prosecuted if they seek to price gouge under the new scheme.

We know that there will be price effects, but we believe that the economic decision that is being made by this country is in the best interests of our country. We are transitioning from an industrial economy to a clean energy future. It is the equivalent of the economic transformation that occurred in our economy over 100 years ago, when we moved from an agricultural society to an industrial society. During that period it was a difficult transition, but we supported families and we got through it. In the end, it was better for our economy. It resulted in changes in capital flows and it also resulted in increased investment in new technology, new industries, jobs growth and wealth creation for this country. We are about to enter the next phase of our economic development and again there will be new investment, research and development, jobs growths and growth for our economy.

We are providing assistance to households to make the transition. This is what peeves me about the opposition's motion. We are doing all we can to support households and families with cost-of-living pressures. There are elements of the household assistance package which support most Australian households in this country. If you are a single pensioner, you will get a $250 increase in your pension on an annual basis. There will be $380 for couples to help them make the transition to a clean energy future. If you are a student, you will get $190 per year in assistance to help you make the transition to a clean energy future. If you are a job seeker, you will get $180 as a single and $300 as a couple in assistance from the government to help you meet those cost-of-living pressures. We are providing tax cuts for most Australians. Anyone who is earning less than $80,000 a year will get on average a $300 a year tax cut. We are tripling the tax free threshold from $6,000 to $18,000 to ensure that it is a massive tax break for low-income people in this country. In the recent budget, we announced a schoolkids bonus because we understand the cost-of-living pressures that families are facing with sending kids to school—the cost of school uniforms, shoes, books, bags and all those sorts of things. There is $410 for each primary school student and $820 for each high school student. This is support for families in their bank accounts to help them meet these cost-of-living pressures. We are increasing the family tax benefit, up to an extra $600 for families under this government to provide support to help meet cost-of-living pressures.

  We live in the real world. We know that people are facing cost-of-living pressures associated with increasing electricity and gas prices, but people have to be conscious—and this is why the opposition's motion is a complete fabrication—that the carbon price has not started yet. You cannot possibly blame the carbon price for the increases in electricity costs which have been imposed on families to date. We all know that the reality behind increases in electricity costs is state governments upgrading the network infrastructure, particularly the high-voltage transmission wires that transport electricity from a power station to a substation in the local area. These wires have been upgraded in New South Wales. State governments have undertaken the process of upgrading the network and there have been quite high increases in electricity costs associated with that.

  In New South Wales over the last 12 months there has been an 18 per cent increase in electricity costs, all due to network upgrades. If you read the decisions of the Independent Pricing and Regulatory Tribunal, IPART, they point to the fact that network upgrades have been associated with increasing costs. In the coming year there will be a 20 per cent increase in electricity prices in New South Wales. Some of that is because of the carbon price but, guess what? We said that the cost effect would be 10 per cent. We were upfront with the Australian people: a 10 per cent increase in electricity costs because of the carbon price. The Independent Pricing and Regulatory Tribunal confirmed the Treasury's figures. In their most recent decision to increase electricity prices by 20 per cent they admitted that the cost of the carbon price will be 10 per cent or lower, not greater, consistent with the Treasury modelling. Yet here we have the opposition again coming into this place trying to blame the carbon price solely for increases in electricity costs. Most increases have been due to network upgrades undertaken by state governments.

What has been the response of the New South Wales state government? Bear in mind what I said earlier about the fact that the federal government is conscious that there are cost pressures associated with electricity and gas prices. Our response in the recent federal budget was to introduce a supplementary payment to assist families to meet costs associated with electricity and gas prices. It is $210 for singles and $350 for couples, to help them meet increasing electricity prices. Compare that to the New South Wales Liberal government. Its response to electricity price increases, solely the result of network upgrades undertaken by that particular government, has been a $75 rebate—a measly $75 announced in their recent budget, compared to $350 support from the Australian government. That is a stark reminder of the difference between our parties when it comes to supporting families with meeting cost-of-living pressures in our economy.

What is the response of those opposite to some of these issues? How are they going to support families into the future? The answer is simple: we do not know. The Australian public would not have a clue, because those opposite will not announce any of their policies; they will not come clean with the Australian public about what plans and services they intend to cut. As usual, we have had some leaks from those opposite, from their shadow cabinet. They indicate that those opposite are planning $70 billion worth of cuts to services when they come to government. That will be their welcome present to the Australian public if they get elected in this country—$70 billion worth of cuts to services.

What will those cuts to services do to cost-of-living pressures and support for households and families? When we came to government we increased the childcare rebate from 30 per cent to 50 per cent—a great support for families to help meet the cost of sending small kids to childcare and getting an important start on education. Is that on the chopping block? Who knows? It possibly is. Medicare, support for universal health care, something that families rely on to ensure they make ends meet, is that on the chopping block? Perhaps it is. They will not tell us. We have programmed increases in the pension. During the 11 years of the Howard government they did not increase the pension once but since we have come to government we have done it twice. What is the prospect for increases for pensioners? We have already seen Joe Hockey begin to back away from the National Disability Insurance Scheme, which will provide a lot of support for people who are living with disabilities and their carers to meet their cost-of-living pressures. (Time expired)

David Johnston (WA, Liberal Party, Shadow Minister for Defence) Share this | Link to this | Hansard source

In supporting this matter of public importance I want to begin by looking at where the government is on this. This Australian Labor Party, with its long history, is travelling with a primary vote of less than 30 per cent. In Western Australia it is about 26 per cent and I think it is about 25 or 26 per cent in Queensland. Why is that? Many Labor senators say it is because the coalition is running a scare campaign. It is pretty scary when you are confronting a cold, hungry, penniless winter, when you cannot afford electricity, you cannot afford to travel, you cannot afford water. In Western Australia the biggest on-grid user of electricity is the Water Corporation. It is pretty scary. Yet I hear senators on the other side say, 'The government's been upfront with the Australian people.' When was it upfront? 'There will be no carbon tax under a government I lead'—that is very upfront. The Treasurer, 'This is a hysterical allegation.' That is right upfront. This crazy government is embarking upon economic suicide for this country.

They will not mention this tax, they dare not mention its name: the carbon tax, putting a price on carbon. Who thinks the Australian people are that dumb? Putting a price on carbon—it is a carbon tax; call it a carbon tax. Have a modicum of decency and honesty: you are going to tax the living daylights out of industry and business and you are going to send the cost of living through the roof like a skyrocket. But you do not care, because you want the money. You have spent every cent you had; you want more. This is the Labor Party in action. It is pretty scary. And people are scared. They are scared of the cold, hungry, penniless winters they have to confront with a carbon tax.

Why did the Prime Minister deny there would be a carbon tax—'There will be no carbon tax'—instead of saying, 'A carbon tax will provide a clean energy future for all of us and we will all be better off'? No. She did not say that. She said, 'There will be no carbon tax.' And the Treasurer said, 'This is a hysterical allegation. We're not doing it.' Why not? Could it be that the cost of living will go through the roof like a skyrocket? Business, especially small business, will be under siege in terms of cost inputs. There will be a devastated economy. People will not spend, because they will be paying so much more for electricity. The price of petrol will be up by 6.5c a litre; the price of gas, 10 per cent a year; the price of groceries, particularly in regional Australia, will go through the roof because, in 2014, the cost of transport will be brought in, depending on where you live; and there will be electricity price hikes of $300 to $400 a year. But a carbon tax is a hysterical allegation; it was never going to happen. Within months we have a carbon tax. And the Labor Party are wondering why people do not believe them when they say, 'We've been upfront with the Australian people.' They have been everything but upfront with the Australian people. They have misled the Australian people and they know it. The Australian people have woken up to the sad sorry dawn of these misrepresenters—these fakes—who will say anything if they think the front page will keep their posteriors covered.

We in Western Australia have massive freight infrastructure costs coming with this carbon tax. Thousands of kilometres are travelled by transport companies to deliver basic staples—groceries, bread and milk. The prices of these things will go through the roof. A little town where I spent a lot of my younger days, Kalgoorlie, depends entirely upon Perth for its water, 600 kilometres away. How does the water get there? By electricity. You do not think people in Kalgoorlie are going to pay a hell of a lot more for their water? Our energy is generated by coal at Collie. I cannot believe I have to give a lesson like this. We have a desal plant providing water for Western Australia. Where does the energy come from? Electricity.

The biggest on-grid user of electricity in the Perth metropolitan area for the movement of potable water and sewage is the Water Corporation. People in Perth will be hit with their electricity bills and then their water bills.

But what about the economy generally? Victoria's manufacturing base, the heartland of manufacturing in Australia, has been built upon low cents per kilowatt hour from Gippsland. That has been our massive economic advantage. What are we doing to it? We are going to chop it off at the knees.

This crazy government does not understand anything about economics. This carbon tax will be ruinous. By 2020, $3.5 billion will have been spent each year on foreign carbon credits. It will rise by 2050 to $57 billion—that is, money offshore, to Upper Volta and Niger. That is the equivalent of 1.5 per cent of GDP. That is what we are currently spending on defence. This will take the defence portfolio out of our GDP. That is what it amounts to.

Do you think the government care about pensioners and people sitting in homes, in cold climates such as Tasmania and Victoria, desperate to be heated, desperate to cook their food where the price of electricity goes up and up, because they cannot make their sums add up? We only had to see the defence minister four days before the budget rip $5 billion out of the defence budget like an ATM because the calculator would not come up with the right number. This is the worst piece of public administration. Labor senators do not care. In New South Wales, we have seen electricity prices going through the roof. The carbon tax will come in and they will have to pay it, so they are trying to get some capital on the table so that they have the money to pay this tax. Electricity prices in South Australia are going up 18 per cent and 24 local government councils have received 'please explain' letters: 'We're naming and shaming you; we want you to pay the tax.' People who receive their rates in 2012-13 will wonder why on earth they have gone through the roof. Landfill sites, the collecting of rubbish—all of these things—are in the frame. But Labor just does not care about people's standard of living.

This carbon tax will be one of the greatest underminers of Australia's economic capability. And guess what? China is not having a bar of it. Canada is not touching it. The miners of Canada do not have to do anything, so their nickel, copper, lead and zinc will be a lot cheaper than ours. Japan and the United States are not touching it.

So here we are trying to compete, exporting everything we produce, with countries that do not have this massive carbon tax eating away like a cancer at their economic base. Towards the end of my time to speak, I say that, frankly, the minister has not said very much in her time, to my knowledge, but one thing she did say in 2009, about a carbon tax, a carbon price, was this. She said:

The introduction of a carbon price ahead of effective international action can lead to perverse incentives for such industries to relocate or source production offshore. There is no point in imposing a carbon price domestically which results in emissions and production transferring internationally for no environmental gain.

There, in her own words, she has told us exactly what the Labor Party is doing. Let us look at those words again. She said:

The introduction of a carbon price ahead of effective international action can lead to perverse incentives for such industries to relocate or source production offshore. There is no point in imposing a carbon price domestically which results in emissions and production transferring internationally for no environmental gain.

We know that without those other countries doing anything there is zero environmental gain, and here were the Labor Party being upfront with the Australian people and telling us what they are not going to do. Yet then they went right ahead, as they like and as clear as day, and imposed exactly what they said they would not. So they were telling us how bad it would be but they were still doing it.

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

We have really heard it all now in relation to the opposition's position on climate change and their terrible opposition towards pricing carbon, which they really cannot cope with because they are so divided on whether or not they even believe in doing something in relation to climate change—so much so, of course, that the hardliners, the sceptics like Senator Eric Abetz, and perhaps Senator Johnston falls into that category as well, continued to deny the facts right up until the time that they decided to roll their leader at the time, Malcolm Turnbull, on the subject because they simply could not live with the fact that pricing carbon was something he wanted to do, because they could not believe in it. That was despite the overwhelming science. We know how much science is out there and we also know that for decades in this parliament—and this goes for other parliaments across the world—we have been in conversation about the need to tackle climate change. Even their own former Prime Minister, John Howard, was willing to tackle climate change. He actually said an ETS was the least-cost option for families, that pricing carbon was a major reform and that you could not reduce emissions without a carbon price. That was their leader, their Prime Minister, but now that he has left the other place they are happy to walk away from coalition policy which was, in fact, addressing climate change—and addressing it with an ETS. Why are we doing the ETS? Because we know it is the most cost-effective option, as opposed to the opposition's so-called direct action policy. The ETS is the most efficient way to reduce emissions as well, with targets to meet our obligation to reducing carbon dioxide by five per cent by 2020 levels.

Senator Johnston talked—like he was some expert in the field—about how the rest of the globe are not introducing an ETS and how nothing is going on in relation to climate change. His comments could not be further from the truth. In fact, he has misled this place by stating that China, for example, is not having a bar of it. That is absolutely incorrect and I urge Senator Johnston to correct the record and to actually look at exactly what China is doing. He can go online and see very easily that, in their new, 12th five-year plan, from 2011 to 2015, China have launched an energy saving and emissions reduction plan, establishing carbon-trading pilot schemes across seven provinces and cities to start in 2013. Why are they doing that? They are doing that in order to establish whether they will then introduce a national ETS, to be ready by 2016. We are talking about the biggest polluting country on the globe taking action on climate change in the form of none other than an emissions trading scheme. So we have an emissions trading scheme on which action is being taken by a developing country that has recognised that it needs to improve its image, that it is the largest polluter now, that it has overtaken the US as being the largest polluter with its rising economic growth, that it does not want to continue on a path of growth at any cost and that it wants to look at growth at a sustainable level—sustainable so that it is meeting its economic development plans in a sustainable way. In doing so, it has allowed the emergence of NGOs and the media to monitor compliance with its ETS and other schemes.

This is the world's largest emitter of carbon, China, taking action—let alone the European Union, who have been active for a long time. The reason why China has delayed doing so up until now is that there is a belief in those countries of the developing world that we are in this global pollution situation because of the activities in earlier decades by the developed world—by Australia, by the US, by the EU nations—and that it is actually our responsibility to lead the way. That is exactly what Australia is doing, as we should. We should show those developing countries that, while we did do a lot of polluting in the past, not knowing the effects on our environment that those emissions were causing, now that we do know we are righting those wrongs of the past. We are leading by example and we are taking care of that responsibility in introducing an emissions trading scheme. In doing so, we encourage the developing world—which we need to be on board with us if we are going to reduce our carbon emissions and that is especially so with nations like China, who are the biggest polluter through their economic growth—to ensure that they do something about it too. So they are watching us to see what action we are taking.

Now, if the coalition had their way, China would not act. Some of those other developing nations would not act if developed countries did not do so themselves. So it is absolutely a furphy for Senator Johnston to come in here and say China is not having a bar of it. I ask him to do his homework and understand exactly what is going on in other countries, both developed and developing, in the world. Of course, the opposition want to roll back the numerous tax cuts that we are introducing through this package. Let us make it very clear, just in case the opposition senators have completely forgotten the way in which this package works. We will be taking the revenue that we receive from the biggest polluters and providing half of that revenue in assistance to households right across the country, including, as Senator Johnston alluded to, those Tasmanians who may be cold at night—including Tasmanians who need our support. In ensuring that we do so, how are we doing it? We are introducing a higher rate of family tax benefit. We are introducing an increase on pensions. We are introducing the tripling of the tax-free threshold. We are introducing other benefits and allowances to help households with the modest cost-of-living impact of the carbon price.

If, as Senator Thistlethwaite said earlier, there are power prices that are increasing right now, that is because the companies increasing them need to do so because of their ageing infrastructure requirements. We do not have a price on carbon yet. It is not 1 July yet. But we are ensuring that, come that time, we can provide the necessary benefits and requirements to support those households in meeting that cost so it will be offset. It is really a no-brainer. It is a simple policy of providing support to those people who will need it, through offsetting the increase on their electricity through the carbon tax.

Why are we doing all this? We are doing all this because we know that it is the right thing to do for not just this generation but future generations. We believe in taking responsibility for our future and for our children's prosperity, and that is why we introduced the clean energy future bills. Once we are gone from this place, we will have done our bit to ensure that our nation's contribution to our planet has ensured that it is there for many, many, many millennia to come. The science tells us that our own increased emission of carbon into the atmosphere is having an impact. It is having an impact on our oceans. It is having an impact on our atmosphere. It is having an impact on our way of living. We need to ensure that we amend those mistakes of the past by introducing a price on carbon which will result in an emissions trading scheme which will change behaviour for companies, for business, for the way in which we live. It is something that we are already doing every day in the way we live to reduce our carbon footprint on this planet as much as we possibly can. Through our assistance, households will receive that increase of $9.90 a week, while the average assistance will be $10.10 per week, all assisting us to introduce this incredible reform policy by 1 July. It will ensure that we very much improve our standing globally and our standing as a nation, for us and our children, in relation to carbon pricing and climate change as we go forward into the future.

David Fawcett (SA, Liberal Party) Share this | Link to this | Hansard source

I rise to address this matter of public importance because the public are concerned about things that work or do not work, and this carbon tax—let us call it what it is, not necessarily a 'clean energy future' or any of the other names that have been given to it—does not work. It stops work and it is a work of false testimony, for which this government and all of its members and its coalition partners in the Greens need to be held to account.

Why doesn't it work? One place where it has been tried, for example, is the European Union. The European Union has an ETS of a limited nature, but it is an ETS and it is one that the Gillard government has frequently called our attention to as an exemplar of why Australia should go down this path. One of the largest banks in Switzerland and one of the world's most respected banks released a report last year on the carbon price. Its very title gives us most of the information we need to know. The report was titled 'Carbon price to collapse: €210 billion wasted'. They highlighted that the carbon price has had 'limited benefits and embarrassing consequences, including billions of euros of windfall profits and fraud'. They highlighted that the carbon price in Europe has been responsible for creating double-digit increases in electricity prices and yet has done nothing—I repeat, nothing—for the environment. It has had zero or 'almost zero' impact on emissions. However, if the money had been used on direct action—that is, replacing their dirtiest plants—emissions could have dropped by nearly 43 per cent.

That goes to the heart of some of the coalition's beef with the government over this, in that people who care for the environment also want action that is effective. As UBS has shown, carbon pricing does not work. Labor actually are aware of that, because Penny Wong, when she was the Minister for Climate Change and Water, said:

A carbon tax does not guarantee emissions reductions.

So, even a couple of portfolios ago, Senator Wong—and the government—knew that a carbon tax did not necessarily guarantee that it would have the desired effect on the environment.

Families know that it does not work. In South Australia at the moment, we are heading towards the most expensive electricity prices in the world. The Energy Users Association, which compares household prices across 92 countries, showed earlier this year that South Australia had the third highest prices; and it is saying that, when the carbon tax comes in, increasing the average residential power bill by more than $150 in its first year, South Australia will have the highest power prices in the world. So families know it will not work. Logic tells you that it will not work in the long term. It will not work for the environment and it will not work for our nation. When it becomes an emissions trading scheme, the price will float according to the market. One of the factors that the UBS report highlighted is that the carbon price in Europe has had, in their words, 'a dramatic decline' of about 40 per cent and they anticipate that it will crash. If 40 per cent is just a reduction, a crash will be dramatic—and we are talking in the order of $4 per tonne, rather than the $23. So, if the subsidies that Senator Singh and the members opposite have been highlighting are going to be paid to Australian factories and families to compensate for this government's carbon tax and yet the price is dropping from $23 down to $4, that is a long-term structural problem for our economy. Conversely, if the prices increase to the levels that have been forecast, which are into the hundreds of dollars—according to those who say that the carbon tax is a good idea—then clearly the compensation that is being paid will be woefully inadequate to shelter those people and those businesses that are exposed. In the long term it does not work, which is possibly part of the reason that most of the people from the government who are speaking about the carbon tax, although they will not use that word, are not talking about its environmental impacts, but are talking about the money.

Our Prime Minister, on Twitter with the hashtag 'cashforyou', is more concerned about highlighting the bribes, the payments to people, than the long-term impacts of this tax on our economy. Nor are the government highlighting the fact that it will do nothing for the environment. So it does not work. It also stops work. The Nyrstar smelter in South Australia came out quite strongly against the carbon tax when it was announced, highlighting that it stood to cause some 1,500 people to lose jobs. They said:

If our competitors in Asia do not have a price on carbon in exactly the same way then the proposed policy makes us non competitive. It is sufficient not only to make those businesses unviable, it will be the cause of the exit for our Australian operation.

As we have talked about this lack of competitiveness with other manufacturing industries, many people have emphasised things like, 'Well, we've got a strong dollar,' or, 'Demand is low at the moment.' Anyone who has spent any time in the business world knows that factors vary: demand does go up and down, and our currency goes up and down. Business will factor those things in; they will take a considered risk. But what the carbon tax does is put in a structural impediment to competitiveness. That is the tipping point. As companies look forward—and they are used to dealing with the other things that go up and down—they go, 'We've now got low demand and a high dollar and a structural thing that we cannot cope with into the future.' That is why people are now starting to baulk at investing in the future of their infrastructure in Australia. That is why some people are moving already and that is why many are concerned about the viability of their sectors.

This government has made much of the global supply chain, particularly in the defence sector, and all the opportunities that are there for small to medium enterprises to link into global supply chains. What it does not mention is that each of those opportunities is a competition based opportunity and so our companies have to be able to compete with people overseas if they are to win that. This government has the lowest level of spending on defence after this budget since 1938, and that comes on top of a long period of deferring approvals, which means that small to medium enterprises are cash strapped because we are not seeing procurement activity occurring in Australia. On top of that, the government is now putting in a structural impediment to the competitiveness for these people to link into the very markets that the government is saying should ensure their future. Not only does it not work; it also stops other people working and it is a work of false testimony.

This is a tax that this Prime Minister said would not occur. 'There will be no carbon tax under a government I lead.' It is not just the Prime Minister. Every member sitting opposite and every member of the lower house went to that election, standing shoulder to shoulder with the Prime Minister and saying 'there will be no carbon tax'. When we look at the voting record, we see that every Labor and Greens member and senator voted for the carbon tax. In South Australia, when people are looking at the future of Nyrstar or other industries, they need to be asking questions of the member for Makin, Mr Zappia; the member for Kingston, Ms Rishworth; the member for Wakefield, Mr Champion; the member for Port Adelaide, Mr Butler; the member for Adelaide, Ms Ellis; or the member for Hindmarsh, Mr Georganas. They need to hold them to account, because they are the people who stood shoulder to shoulder with the Prime Minister and said, 'There will be no carbon tax. Trust us.' Yet they turned around and voted for a tax that UBS has shown does not work. It stops work and it is work based on false testimony, for which the Labor Party and the Greens should be held to account.

Mark Furner (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

I would like to spend a few moments talking about what is happening out there in voter land. It is important to understand what people are saying out in the electorates. On Friday I was in Longman, talking to the parents of schoolchildren who are about to receive about $410 each under the schoolkids bonus, and out in Forde in the afternoon, talking to another lot of parents who were interested in what the government is doing with the carbon price household assistance. For example, out of the 54,000 taxpayers in Longman, 48,000 of them will receive assistance. At least 40,000 out of those 48,000 will receive a tax cut of at least $300. In the seat of Forde, out of 62,000 taxpayers, around 54,000 will receive a tax cut and, of those 54,000, 46,000 will receive a tax benefit of at least $300 as well. Let us cut to the chase; let us get to the hypocrisy surrounding this motion. We have just heard from Senator Fawcett. I am pleased that he raised the point of people baulking in investments. The hypocrisy of that statement is that there are people opposite and people in the other house who are investing in shares in the mining and resource industries. At least 30 per cent of those opposite are buying shares in those industries. Do not come into this chamber and cry, 'Doom and gloom! The earth is going to fall in! The ships are going to sail off the end of the world!' What a load of rot. What a disgrace you mob are.

Let us have a look at those opposite. Senator Gary Humphries, for a start, added a number of companies to his portfolio, including Matrix Composites and Engineering, which manufactures products for the offshore oil and gas and the iron ore industries. He also added Origin Energy. Let us look at Senator Sean Edwards, who in 2011 added Fortescue Metals Group to his interests and then, on 11 November 2011, added BHP Billiton and Newcrest Mining. However, in March this year he deleted Fortescue metals and BHP from his interests and in April deleted Newcrest Mining. There is the hypocrisy, Mr President. Those opposite come in here, saying, 'Doom and gloom: the earth is coming to end and jobs are going to be at risk,' yet they are investing so much in mining and resource sector shares. What a joke!

Let us have a look at what is happening in the House of Representatives. NineMSN reported that six coalition members of the House of Representatives purchased shares between 24 November 2011 and 21 March 2012. Out of that six, the member for Bennelong, John Alexander, bought shares in AGL; Paula Hunt, the wife of the member for Flinders, Greg Hunt, bought shares in Rio Tinto, Tiger Resources and Fortescue Metals Group; the member for Stirling, Michael Keenan, bought into Resource and Investment NL; the member for Flynn, Ken O'Dowd—a true blue Queenslander and National Party member—bought shares in Regis Resources and Hastings Fund Management Ltd; and the member for Fadden, Stuart Robert, invested in Evolution Mining and Oceanagold shares. Even Malcolm Turnbull—let us not forget the godfather of the opposition, who was so keen to introduce an ETS until he was stabbed in the back by Tony Abbott—has been making investments, in Veolia, Multiplex, Santos Finance and Renewable Energy Corporation.

As can be seen, it is clear; it is out there in the marketplace: people know what the legitimate circumstances are in this place. You lot over there are joke. You are hypocrites.

John Hogg (President) Share this | Link to this | Hansard source

Senator Furner, you need to withdraw that.

Mark Furner (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

I withdraw that comment. The information speaks for itself. Those opposite cannot come into this chamber claiming that the world is going to end when there are people in the opposition actively investing in the mining and resource sectors. It is just not a fair go when people out there are being led to believe that the world is going to end. That is not the case. We will sustain— (Time expired)

John Hogg (President) Share this | Link to this | Hansard source

Order! The time for the discussion has expired.