Mitch Fifield (Victoria, Liberal Party, Manager of Opposition Business in the Senate) Share this | Link to this | Hansard source

I rise to move:

That the Senate take note of the answers given by the Minister for Finance and Deregulation (Senator Wong) to questions without notice asked by Senators Cormann, Sinodinos and Williams today relating to the carbon tax.

There was something which was apparent in Senator Wong's answers to questions today, that she is finding our questioning on the carbon tax a little bit tedious and a little bit wearing. I have got to be honest and say we are actually finding asking those questions a little bit tedious and a little bit wearing because we continue to get no answers from the minister. It is also a little tedious because the facts remain unchanged, that this carbon tax is a massive hit on the Australian economy and that this carbon tax represents a breach of faith with the Australian people and represents a lie. So she had better get used to getting these questions because we will continue to ask them, no matter how tedious and no matter how repetitive, because answers to these questions deserve to be on the public record.

We want to continue to make the point, as Senator Cormann did in his question, that in the first three years of this carbon tax it is going to rake in $18 billion of revenue. We want to continue to make the point that Australia's 23 million people are going to be paying on average $115 million per week in comparison to the 502 million people in the EU who will only pay $23 million per week. The carbon tax burden is five times higher in Australia than that in the 13 nations of the EU ETS, a grouping whose GDP is 14 times that of Australia's. This is comparatively a massive burden compared to what Europe is being confronted with. We also had a question from Senator Sinodinos to Senator Wong pointing out that in a survey 66 per cent of small businesses indicated that they were absorbing the cost of the carbon tax rather than passing it on to their customers. Small business is in an invidious position. Do they take it on, absorb it, reduce their profitability and reduce their own viability or do they pass the carbon tax on to their customers, potentially driving customers away, pricing themselves out of the market that they operate in and, again, potentially affecting the profitability and viability of their business? It is a very invidious position to be in.

I want to give you a bit of an indication, Mr Deputy President, of the attitude of the Australian Labor Party to business. I was at a gathering in Dandenong of the South East Melbourne Manufacturers Association last year and the guest speaker was Mr Mark Dreyfus QC on the subject of 'why the carbon tax is good for your business'. I have got to tell you the people there, the manufacturers from Melbourne's south-east, were wanting to strip flesh from the body of Mr Dreyfus but they were very restrained and they were very polite in the question-and-answer session.

One manufacturer stood up and said, 'Mr Dreyfus, my business is that we are a manufacturer and my power bill is going to go up by $100,000 a year,' and Mark Dreyfus's response was, 'Well, that just proves my point, that the effect of the carbon tax is modest.' Mr Dreyfus was asked another question by a manufacturer of medical devices who said, 'Look, our main product costs $1,500 to produce and we only have a margin of about $15 on that and the carbon tax is going to completely wipe out our profit on this product,' and Mark Dreyfus's response was, 'Well, I think what that tells me is that your business has other problems, doesn't it?' That was the response of Mark Dreyfus QC, man of the people, in touch with local business, in touch with his constituents! He has no idea. I think Mr Dreyfus probably takes some lessons from the Senator Wong school of empathy with the Australian business community.

Mr Deputy President, you only need to talk to Australian businesses, be they small or medium, to find out that in the real world, in the real economy where people actually employ individuals and try and make money to provide for their families, this carbon tax will have a devastating effect. We await with bated breath answers from Senator Wong to the questions we posed.

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

I rise in response to the taking note of the answer this afternoon. I have to say I am a little disappointed, Senator Fifield, you are not taking note of the answer to Senator Mason's questions, but perhaps we will get on to debate about education at some other stage because we do it much better on this side of the chamber.

I am happy to talk about the impact of carbon pricing and particularly on small business. Senator Wong's contribution to this chamber day after day is diligent and thorough. What she does tire of is people on the opposition side continually asking her questions where the facts in their questions are inaccurate or they ask—as Senator Sinodinos did today for the modelling on small business to be tabled—and Senator Wong's response is, 'It has already been made public.' So again we get an opposition that are unprepared, have not done their research, are not really aware of what they are asking. If they had done just little bit of work with a little diligence they would have found that the modelling was a public document and perhaps would not have embarrassed themselves so badly by asking for it.

Senator Fifield stands up and gives us some examples of when he met businesses in the Dandenong region more than 12 months ago. It would be interesting, Senator Fifield, to go back and talk to those businesses now that the carbon legislation is through and those businesses are dealing with that legislation.

Mitch Fifield (Victoria, Liberal Party, Manager of Opposition Business in the Senate) Share this | Link to this | Hansard source

Mr Deputy President, this is not a point of order. I am just outrageously grabbing the microphone to say that I have revisited businesses and they are still unhappy.

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

Order! You have no point of order, Senator Fifield. Senator Crossin, you have the call.

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

I think that just reiterates and reconfirms what I have been saying for the last two minutes—that the opposition are extremely irrelevant, are totally unprepared, provide no research and knowledge in this debate, but they do provide an alternative policy. Senator Fifield, I wonder if you had enough stamina to stand up at the forum that you were in last year and explain to those small businesses that in fact your policy position was that you wanted the same outcome that we want in terms of climate change. You have the same target and period of time—five per cent by 2020. But did you actually tell those small businesses that they would be paying a higher cost than they are now, that the consumers that walked through the door and bought product would be whacked with $1,300 a year in their household budget?

At the end of the day, what you do not tell the Australian people and do not front up to and are not honest about is that not only do you want the same target in the same yearly outcome that we do but you going to do it so vastly differently that you will take from families and give that money to the big polluters in this country. You are entirely disingenuous when you talk about repealing this legislation. You are entirely disingenuous when you talk about the impact this is going to have on families and households. Perhaps Mr Windsor in the other chamber was absolutely honest and correct last week when he admitted that members of your party, Senator Fifield, came crawling to him begging to form a government, saying they would do anything whatsoever.

Senator Fifield interjecting—

You see at the end of the day Mr Windsor did not believe you would be honest enough. He did not put any trust in you and wanted to ensure that this country was going to be governed by a government that he could trust and work with. So a condition of his forming government was that he wanted to see climate change tackled through a price on carbon, then a move to a trading emissions scheme.

What you are on the other side is unprepared, unresearched and uninformed about what is in this debate. Your lines will continue despite the fact that people are now living with this on a day-to-day basis. Families are being compensated for their needs in terms of what is happening with the carbon pricing regime. What you also rely on is the front pages of the newspapers to write your questions each day for question time. (Time expired)

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

You have to chuckle listening to that submission from Senator Crossin. You can see why she wanted us to take note of answers on education. She would not know one end of a business from another, having been a former union official for the National Tertiary Education Union in the Northern Territory. It does beg the question: has she ever worked a day in her life in a business, whether a small business or a medium enterprise? Has she ever worked a day in a business to ascertain what it is about?

It is just laughable for her to suggest that Senator Fifield and the coalition are disingenuous in their protestation over the introduction of a carbon tax and our pledge—which we will live up to—to repeal the tax. The Australian public know that we are deadset and we mean this. It is not something that we support in any context whatsoever and, should we be elected into government, as our leader the honourable Tony Abbott in the other place has said, the first thing we will do is repeal this carbon tax and so we will.

The other point that Senator Crossin was foolish enough to suggest was that we will not engage with the business community. Twelve months ago, Senator Fifield went to an event. He is engaged in Isaacs and many other electorates, as am I.

I would like to draw Senator Crossin's attention to a number of things that the local businesses in the electorates for which I am duty senator say about the carbon tax. If there is anything that the coalition does, it is that we are connected to the business community. We understand and know their challenges because many of us have not only worked in businesses but have actually run and managed them and know the challenges that are faced every day by them. I refer to a cabinet maker in Croydon, Deakin, who has worked in the industry for 18 years. I was there only two weeks ago with the Deakin candidate, Michael Sukkar. This is what we do: we actually go out and meet businesspeople when parliament is not sitting and talk to them about the things that are making their life difficult. He told us that, after having been in the industry for over 18 years, he can no longer employ apprentices because of the escalating cost of doing an honest day's work, and it is becoming increasingly harder.

A greengrocer that I visited in Ringwood East is bracing for their next electricity bill, because the highest overhead, the most expensive overhead, in running their business is the cost of electricity. They are in fear of what that electricity bill will look like. In order to make that business viable they can no longer employ anyone. There is an incredibly fine line for a small business between not making any money, or actually making a loss, and having the books in the black. So, where they once employed casual staff, they are now reducing the number of staff whom they can employ and covering the hours themselves. This is what small business do. They set up enterprises not only to try and support their immediate families but also for their kids for times to come.

There are a many of these small businesses. Over the last fortnight, while we were not sitting, there would have been 12 businesses that I visited with John Nguyen, the candidate for Chisholm, and Michael Sukkar, the candidate for Deakin, and the message that we were told time and time again by businesses was that they will not be able to withstand the imposition of the carbon tax. There are so many examples that I could iterate. Senator Sinodinos raised some again today that are in New South Wales. A butcher at the Oakley markets has the same problem with the increasing costs of refrigerants. This tax is an imposition that we will repeal. (Time expired)

Mark Bishop (WA, Australian Labor Party) Share this | Link to this | Hansard source

Today we had a little cameo performance from Senator Fifield that was really a proof-positive demonstration of the intellectual wasteland, the intellectual desert, that the opposition chooses to inhabit with its position on the carbon tax. Senator Fifield popped up and said two things; he enunciated two sentences. Firstly, he said: 'I want to take a point of order. Then he said: 'There is no point of order.' Doesn't that exactly reflect the attitude of the opposition throughout this whole debate on the issue of carbon pricing and the introduction of a carbon price post June of this year?

Today's questions to Senator Wong from a range of opposition senators had a set, a seriatim, of big lies that the opposition chooses to peddle post the passage of the carbon pricing legislation in late June of this year. What were the lies that they managed to put out there today? There were four in particular: firstly, Australia is introducing the biggest carbon tax in the world; secondly, it will not achieve anything in terms of a cut in emissions; thirdly, it will not achieve anything anyway because we are only a fraction of global emissions in the world; and, finally, there was the continuing generalised set of misrepresentations that occur as to price. If I have time to come that, I will highlight the error in Senator Kroger's contribution.

The first myth that is peddled by a range of speakers is that Australia is introducing the biggest carbon tax in the world. Let me just say: not true; incorrect; factually unsound. People who make this claim, as Senator Cormann did in his lead-in to this debate, miss two things. Firstly, a whole range of countries already have carbon prices similar to but in most cases higher than that of Australia. Senator Wong took the trouble to go through eight of them in her response to Senator Cormann. I happen to have that list here, and I will again put it on the record. Norway's carbon tax on petrol is $61. Switzerland's carbon tax on certain fuels is 36 Swiss franks, which is the equivalent of A$36. Sweden has a fuel tax of $138. Ireland has a carbon tax of 20 euros, which equates to A$24. Finland's carbon tax is $36 to $72. In Canada, the carbon tax is up to $29. And the UK has introduced a floor price for the electricity sector.

Secondly, and the more critical point made by Senator Wong in her response, is that while Australia's carbon price starts at $23 a tonne, the government is giving extensive assistance to industries that compete in international markets. Industries like steel, aluminium, oil refining, paper making, flat glass manufacturing and cement—I just note in passing that nearly all of them are based on the east coast, in New South Wales and Victoria—will effectively get up to 94½ per cent—think about that: 94½ per cent—of their carbon permits from the government for free. So free carbon permits will be issued to a range of firms that work in those industries.

What does that mean in terms of the effective price that those firms will pay for the carbon tax? Presumably, to some degree, they will pass it on to their consumers, to their clients, to their customers. Those firms will be paying not $23 a tonne, not $15 a tonne, not $10 a tonne; they will effectively be paying $1.30 a tonne.

That is the price impact on the major emitters in the major industries that I outlined on the east coast of Australia—$1.30 a tonne. For that we have had this huge debate over the last two or three years. I have only half a minute left for my contribution in this debate so I will go straight to Senator Kroger's point that the electricity cost for a retail grocer in Ringwood in Victoria is the highest cost in that grocer's business—conveniently forgetting the cost of stock, the cost of product, the cost of labour, the cost of the lease. Every time a small business organisation comes to speak to you, what do they want to talk about? 'We need labour market deregulation, the costs are high; we need you to attack the property trusts that own shopping centres; we need you to address the cost of stock that we have to purchase.' They do not mention carbon tax because it is about two per cent or less of their costs, but Senator Kroger thought it was the highest cost. (Time expired)

Arthur Sinodinos (NSW, Liberal Party) Share this | Link to this | Hansard source

Lies, lies and damn statistics. Honestly, what we have just heard from Senator Bishop itself constitutes lies because he is flying in the face of the field evidence that has been provided even this very day by the Australian Chamber of Commerce and Industry with their report on trading conditions in the small business. They talk about the trading conditions being below the average of the last five years, which also include the period of the global financial crisis. Their survey talks about the decline in various economic indicators of the health of small business. Also, Senator Bishop—through you, Mr Deputy President—the survey talks about how taxes and charges are the No. 1 issue for small business. You may be cynical and say people do not like taxes, but the fact of the matter is you are not shooting the opposition, you are shooting the messenger in small business. That shows what you think of small business. Instead of being out there giving succour to small business, instead of being out there asking, 'How can we help you to get through this?' you are blithely saying, 'Well, they're not actually subject to the carbon tax and in any case they can always pass this on.' The fact is that this survey is field evidence, it is facts not lies, and it shows that small businesses in Australia today are doing it tough—and that means they do not have the capacity to pass on big price rises.

We talk about the impact of the carbon price, including on gas refrigerant and other things that are going up quite markedly. The fact of the matter is that this is all coming at a time when other costs are going up for small businesses. They have the superannuation guarantee starting to go up. They have electricity prices also going up for other reasons, as has been mentioned. So small businesses are doing it tough at the moment. They see the carbon tax, something which is a discrete government decision, and they say to themselves, 'Why is government making it any worse for us than it already is? And government says, 'Well, you can just pass it on.' But, as Senator Kroger so eloquently indicated, if you do not understand small business you do not understand the competitive environment that small business faces. It is not easy to pass costs on. Your choices are these: lower your profits, lower your employment, lower your investment. Lower profits will ultimately lead to either lower employment or lower investment in small business, the engine room of the economy. This is the dilemma we face.

I want to take up the issue of what the modelling said or did not say about the impact of the carbon price on electricity costs and other costs facing small business. Contrary to what Senator Wong said, there was no discrete modelling of the impact on small business. I wish Senator Crossin was still here to hear that. There were estimates made through the modelling about the macroeconomic impact of the carbon tax, in terms of its impact on the CPI and the rest. There was modelling done on discrete sectors, but by firm size that modelling was not done, contrary to what Senator Wong said—and that was the point of my question.

We have to consider that small businesses are being hit by bigger businesses which are directly subject to the carbon price and are passing their cost increases back through the supply chain to their suppliers and people who are customers of theirs. That means that small businesses cop it in the neck because big businesses are asking them to take up the slack when it comes to the impact of the carbon tax. Of course, because small businesses are unable to do that or they are forced to do that in order to retain the custom of big businesses, you have this situation where small businesses are being squeezed.

I have been surprised in the time I have been here about the extent to which the government does not talk about small business in a positive way, only in a defensive way: 'We may have imposed X on them over here but we are giving this or that particular concession.' As I noted earlier, these concessions are occurring at a time when a broad range of costs are going up for small business, so the challenge that lies ahead for any future government is how to take the burden off small business in a sustainable way. The coalition have indicated that that will be done by, first and foremost, taking the carbon tax off the backs of business, including small business, but we need to go further. As my colleague in another place noted today, more than 18,000 regulations have come in since this government has been in office and fewer than 90 or so have been repealed. We have a deal of work to do in that whole regulatory space because small business does not have the overheads to deal with the burden of regulation. That regulation is at the Commonwealth, state and local levels and it is a real issue. It is not the merits of an individual regulation; it is the fact that each individual regulation comes on top of so much new regulation. The coalition are committed to finding a way through that. As I reiterate today, small business is being affected by the carbon tax. The government should not have their head in the sand.(Time expired)

Question agreed to.