Lisa Singh (Tasmania, Australian Labor Party, Shadow Parliamentary Secretary to the Shadow Attorney General) Share this | Link to this | Hansard source

I move opposition amendment (3) on sheet 7506.

(3) Schedule 1, page 4 (line 1) to page 70 (line 21), omit the Schedule, substitute:

Schedule 1—Amendments

Australian National Registry of Emissions Units Act 2011

1 Subsection 66F(2) (paragraph (b) of the definition of prescribed amount for the financial year in which the compliance deadline occurs )

  Omit "31 July 2014", substitute "31 October 2014".

2 Subsection 66F(2) (paragraph (c) of the definition of prescribed amount for the financial year in which the compliance deadline occurs )

  Repeal the paragraph.

3 Subsection 66F(4) (paragraph (b) of the definition of prescribed amount for the financial year in which the compliance deadline occurs )

  Omit "31 July 2014", substitute "31 October 2014".

4 Subsection 66F(4) (paragraph (c) of the definition of prescribed amount for the financial year in which the compliance deadline occurs )

  Repeal the paragraph.

Clean Energy Act 2011

5 Section 4

  Omit ", 1 July 2013 and 1 July 2014", substitute "and 1 July 2013".

6 Section 4

  Before "1 July 2015", insert "1 July 2014,".

7 Section 5 (definition of fixed charge year)

  Repeal the definition, substitute:

  fixed charge year means:

  (a) the eligible financial year beginning on 1 July 2012; or

  (b) the eligible financial year beginning on 1 July 2013.

For the purposes of paragraph (b), the months of July, August and September 2014 are taken to be part of the financial year beginning on 1 July 2013.

8 Section 5 (definition of flexible charge year)

  Repeal the definition, substitute:

  flexible charge year means:

  (a) the eligible financial year beginning on 1 July 2014; or

  (b) a later eligible financial year.

For the purposes of paragraph (a), the months of October, November and December 2014, and January, February, March, April, May and June 2015, are taken to be the financial year beginning on 1 July 2014.

9 After paragraph 14(2)(b)

  Insert:

  (ba) if the regulations declare the carbon pollution cap, and the carbon pollution cap number, for the flexible charge year beginning on 1 July 2014—must have regard to any report that:

     (i) was given to the Minister by the Climate Change Authority under section 60 of the Climate Change Authority Act 2011; and

     (ii) dealt with the carbon pollution cap for that year; and

10 At the end of subsection 15(1)

  Add "(other than regulations that declare the carbon pollution cap, and the carbon pollution cap number, for the flexible charge year beginning on 1 July 2014)".

11 After section 15

  Insert:

15A When regulations must be tabled—2014 -15 flexible charge year

Scope

(1) This section applies to regulations that declare the carbon pollution cap, and the carbon pollution cap number, for the flexible charge year beginning on 1 July 2014.

When regulations must be tabled

(2) The Minister must take all reasonable steps to ensure that the regulations are tabled in each House of the Parliament under section 38 of the Legislative Instruments Act 2003 not later than 31 August 2014.

(3) The regulations must not be made, or tabled in a House of the Parliament, after 31 August 2014.

Reasons must be tabled

(4) If, on a particular day (the tabling day), a copy of the regulations is tabled in a House of the Parliament under section 38 of the Legislative Instruments Act 2003, the Minister must:

  (a) cause to be tabled in that House a written statement setting out the Minister's reasons for making the recommendation to the Governor-General about the regulations; and

  (b) do so on, or as soon as practicable after, the tabling day.

12 Section 16 (at the end of the heading)

  Add "—later flexible charge years".

13 Subsections 16(1) and (2)

  Omit "31 May 2014", substitute "30 November 2014".

14 Subsection 16(3)

  Omit "of May that is 14 months before the start of a particular flexible charge year beginning on or after 1 July 2016, no regulations made for the purposes of section 14", substitute "of November that is 8 months before the start of a particular flexible charge year beginning on or after 1 July 2016, no regulations to which section 15 applies".

15 Subsection 16(3)

  Omit "that May", substitute "that November".

16 Subsection 16(4)

  Omit "the May", substitute "the November".

17 Section 17 (heading)

  Omit "2015-16", substitute "2014-15".

18 Subsection 17(1)

  Omit "1 July 2015", substitute "1 July 2014".

19 Subsection 17(2) (formula)

  Repeal the formula, substitute:

20 Subsection 18(1)

  Omit "1 July 2016", substitute "1 July 2015".

21 Section 93

  Before "1 July 2015", insert "1 July 2014,".

22 Subsection 100(1)

  After "following table", insert "(other than an exempt item)".

23 Subsection 100(1) (table items 5 and 6)

  Repeal the items.

24 Subsection 100(1) (table items 7, 8 and 9)

Repeal the items, substitute:

25 Subsection 100(1) (note)

  Omit "Note", substitute "Note 1".

26 At the end of subsection 100(1) (after the note)

  Add:

Note 2: For exempt item, see subsections (13A), (13B) and (13C).

27 Subsection 100(2)

  Omit "item 7, 8 or 9", substitute "item 7, 8, 9 or 10".

28 Subsection 100(3) (heading)

  Omit "items1, 3 and 5", substitute "items1 and 3".

29 Subsection 100(3)

  Omit "item 1, 3 or 5", substitute "item 1 or 3".

30 Subsection 100(4) (heading)

  Omit "6, 7, 8 and 9", substitute "7, 8, 9 and 10".

31 Subsection 100(4)

  Omit "item 2, 4, 6, 7, 8 or 9", substitute "item 2, 4, 7, 8, 9 or 10".

32 Subsection 100(6)

  After "subsection (1)", insert "(other than an exempt item)".

33 At the end of subsection 100(6)

  Add:

Note: For exempt item, see subsections (13A), (13B) and (13C).

34 Before paragraph 100(9)(a)

  Insert:

  (aa) the eligible financial year beginning on 1 July 2014;

35 After subsection 100(13)

  Insert:

Exempt item

  (13A) The regulations may declare that item 8 of the table in subsection (1) is an exempt item for the purposes of this section.

  (13B) The regulations may declare that item 9 of the table in subsection (1) is an exempt item for the purposes of this section.

  (13C) The regulations may declare that item 10 of the table in subsection (1) is an exempt item for the purposes of this section.

36 Subsection 100(14)

  Omit "31 May 2014", substitute "31 August 2014".

37 Subsection 100(15)

  Repeal the subsection.

38 Before subsection 101(1A)

  Insert:

  (1AA) Subsection (1) does not apply to carbon units with the vintage year beginning on 1 July 2014 that are issued as a result of auctions that are conducted by the Regulator during the financial year beginning on 1 July 2013.

  (1AB) The Regulator must ensure that not more than 40 million carbon units with the vintage year beginning on 1 July 2014 are issued as a result of auctions that were conducted by the Regulator during the financial year beginning on 1 July 2013 if there are no regulations in effect that declare the carbon pollution cap, and the carbon pollution cap number, for the vintage year.

39 At the end of subsection 111(3)

  Add "However, for the eligible financial year beginning on 1 July 2014, the charge for the issue of a carbon unit may not be more than $25.40.".

40 Subsection 121

  Omit "first 5 flexible charge years", substitute "first 6 flexible charge years".

41 Subsection 123A(3)

  Omit "1 July 2015", substitute "1 July 2014".

42 Subparagraph 123A(6)(a)(i)

  Omit "1 July 2015", substitute "1 July 2014".

43 Subparagraphs 123A(6)(b)(i) and (ii)

  Repeal the subparagraphs, substitute:

     (i) if the eligible financial year begins on 1 July 2014—6.25%; or

     (ii) if the eligible financial year begins on 1 July 2015, 1 July 2016, 1 July 2017, 1 July 2018 or 1 July 2019—12.5%; or

     (iii) if the eligible financial year begins on or after 1 July 2020, and the regulations do not specify a percentage for that year—12.5%; or

     (iv) if the eligible financial year begins on or after 1 July 2020, and the regulations specify a percentage for that year—that percentage; and

44 Subsection 123A(7)

  Omit "(6)(b)(ii)", substitute "(6)(b)(iv)".

45 Subparagraphs 133(7)(a)(i) and (7A)(a)(i)

  Omit "1 July 2015", substitute "1 July 2014".

46 Subparagraph 133(7A)(a)(ii)

  Omit "4", substitute "5".

47 Subparagraph 133(7E)(a)(i)

  Omit "1 July 2015", substitute "1 July 2014".

48 Subparagraph 133(7E)(a)(ii)

  Omit "4", substitute "5".

49 Subparagraph 133(7F)(a)(i)

  Omit "1 July 2015", substitute "1 July 2014".

50 Section 160

  Omit "each of the next 3 financial years", substitute "the financial year beginning on 1 July 2014".

51 Subsection 161(2)

  Omit all the words from and including "On each" to and including "the following formula", substitute "On 1 September in the eligible financial year beginning on 1 July 2013, the Regulator must issue a number of free carbon units equal to the number worked out using the following formula".

52 Subsection 161(3) (formula)

  Repeal the formula, substitute:

53 Subsection 196(1AA) (heading)

  Omit "11 months", substitute "8 months".

54 Subsection 196(1AA) (definition of number of units issued as the result of auctions )

  Omit "11-month period", substitute "8-month period".

55 Subsection 196(1AA) (definition of total auction proceeds )

  Omit "11-month period", substitute "8-month period".

56 Paragraph 196(1)(a)

  Omit "May 2016", substitute "May 2015".

57 Paragraph 196(2)(a)

  Omit "November 2015", substitute "November 2014".

58 Paragraph 196(3)(a)

  Omit "1 July 2015", substitute "1 July 2014".

59 Subsection 196A(18) (paragraph (c) of the definition of designated 6 -month period )

  Omit "November 2015", substitute "November 2014".

60 Subsection 212(2) (paragraph (b) of the definition of prescribed amount for the financial year in which the compliance deadline occurs )

  Omit "31 July 2014", substitute "31 October 2014".

61 Subsection 212(2) (paragraph (c) of the definition of prescribed amount for the financial year in which the compliance deadline occurs )

  Repeal the paragraph.

62 Subsection 212(3) (paragraph (b) of the definition of prescribed amount for the financial year in which the compliance deadline occurs )

  Omit "31 July 2014", substitute "31 October 2014".

63 Subsection 212(3) (paragraph (c) of the definition of prescribed amount for the financial year in which the compliance deadline occurs )

  Repeal the paragraph.

64 Subsection 289(8)

  Repeal the subsection, substitute:

Report

(8) The report of the first review must set out recommendations relating to the level of carbon pollution caps for each of the following flexible charge years:

  (a) the eligible financial year beginning on 1 July 2015;

  (b) the eligible financial year beginning on 1 July 2016;

  (c) the eligible financial year beginning on 1 July 2017;

  (d) the eligible financial year beginning on 1 July 2018;

  (e) the eligible financial year beginning on 1 July 2019.

This is the main body of Labor's amendments, which brings forward an emissions trading scheme. The amendment I am moving introducing an emissions trading scheme will ensure a cap on pollution and ensure that Australia moves towards a clean energy future.

The introduction of an emissions trading scheme in Australia has been a longstanding policy of the Labor Party, along with policies to drive the expansion in renewable energy. There is now a point of agreement between Australia's two major parties that the carbon tax should be terminated as soon as practicable but—and I stress the 'but'—there is a profound disagreement about what should replace the centrepiece of Australia's action on climate change. An emissions trading scheme is Labor's policy. It is what creates a genuine market. The ability to trade pollution permits mean that businesses work out the cheapest way to operate within the national pollution cap.

One of the most recent of a long list of falsehoods argued by the Liberal Party is that an emissions trading scheme and a carbon tax are the same thing. They are not the same thing; that is far from the truth. Those arguing that case are either deliberately trying to mislead the community or simply do not understand the basic economics of these two models. Let me make the difference between the two very clear: a carbon tax seeks to change behaviour by imposing a price signal without any other legal discipline on that behaviour—in this case, carbon pollution; an emissions trading scheme changes behaviour through the discipline of a legislative cap on pollution and then lets business work out how to operate within that cap.

The effective price on a tonne of carbon pollution under the emissions trading scheme would only be one-quarter—and I stress 'one-quarter'—of the current carbon tax. So the different paths before us are: on the one hand, an emissions trading scheme; and, on the other hand, the vacuous policy of the Liberal Party's so-called Direct Action.

I would like to stress that I have not been able to find any economists that support Direct Action. But it is regarded by economists as not the cheapest and most efficient way to reduce carbon pollution—far from it. In fact, we saw just this week—from the conservatives' own side of politics—Lord Deben from the UK slam the backward action of this government on climate change. Lord Deben is a conservative. He is from the conservatives' own side. He is not from the Greens; he is not from the left side of politics; he is a conservative. He has laughed out the government's actions on climate policy. I ask the government: how can it justify its current inactivity on climate change when all the world is taking action and when one from its own side is deploring its actions?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

Thank you, Chair, and congratulations on your elevation to that august position. The government does not support this amendment. We have a clear commitment and mandate to scrap the carbon tax—not to modify or rebadge it. This amendment is in fact a carbon copy of an amendment that was proposed by the member for Port Adelaide, Mr Butler, in the House of Representatives, and it was rejected there. The opposition's amendments mean that we would not be abolishing the carbon tax, but rather rebadging and modifying it. We have made it very clear that we are committed to repealing the carbon tax in full. It is in the best interests of families, pensioners and businesses across Australia, because it will bring down the cost of electricity; it will bring down the cost of living; it will bring down the cost of doing business in Australia; and it will help us to build a stronger and more prosperous economy and create more jobs.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I am standing today to discuss the opposition's amendment to effectively move to flexible pricing of an emissions trading scheme and to do so as soon as possible. The Greens are going to support this amendment, and I want to explain to the Senate why that is. The first thing is that we already have an emissions trading scheme in legislation, and that is why it is possible to change dates and so on as this amendment suggests. We have one now. Unfortunately, Australians thought that we had a tax and, unfortunately, that is because the coalition told that lie for long enough and because former Prime Minister Julia Gillard conceded on a television program something she should never have conceded—that it was a tax. It never was a tax; it was a fixed price. However, we should have been able to go to flexible pricing on 1 July next year, but now it is quite clear that the numbers no longer exist for transitioning from a fixed price to a flexible price next year.

More recently we have had the Palmer United Party say that they support an emissions trading scheme. We had Mr Palmer stand up with Al Gore and say that he supports an emissions trading scheme. Well, we have one, and so this is really to test whether the Palmer United Party is really committed to emissions trading or not. We have a scheme; it is in the law; and, if we were to vote for this amendment, it would mean we would abandon the fixed price and transition immediately to a flexible price. That is possible; we could do it. It means the price would go from $25.40 to around $8, which is the European price—because we are currently linked to the European Union scheme.

Mr Palmer said he supported emissions trading and the Palmer United Party supports linking with our trading partners. This will really test whether that is fact or fiction—whether they support it or not. If they do not support this amendment, then they do not support an emissions trading scheme. Otherwise, they only support it as a notional view some time into the future. That would be giving up an effective framework of legislation now for something which may or may not ever happen. Given that the Abbott government has said they would never accept an emissions trading scheme or a carbon tax—if indeed it was a tax—that means it will not happen. This is the opportunity for the Palmer United Party to deliver on what Mr Palmer told Al Gore he believed in—an emissions trading scheme.

On 31 May this year the default setting kicked in, meaning that we now have in Australia an emissions reduction target of around 18 per cent. That is effectively what the Climate Change Authority recommended in their report in February. If we were now to move to allow that emissions trading scheme to operate as a flexible price, we would have a default cap set at 18 per cent and we would have a price of around $8—depending on what the European union price is at any time. If the Palmer United Party supports that, it would mean that we would have an effective, legislated emissions trading scheme that would go immediately from a fixed price to a flexible price—reducing the carbon price from $25 to $8.

I do not like doing that because I want an effective carbon price in Australia—a price that will drive transformation. If you are serious about bringing down emissions, you need to maintain or increase the price. We are now at the point where we keep the scheme or we do not. That is why I am calling on the Palmer United Party to put legislation where their mouths have been, as evidenced by the stand up with Al Gore and Mr Palmer in this parliament only a fortnight or so ago. That is the opportunity. It would effectively mean an end to a fixed price and the immediate start of flexible pricing. I have taken advice on this, and it could be done very quickly. There is a cap in place; previously we had no cap in place; we only had a default but it did not kick in until 31 May. Now that the default has kicked in, everything is ready to go. It would only take us a week or two at the longest to make it happen. I am calling on the Palmer United Party to explain why, if they believe in an emissions trading scheme, they would not support this amendment and make it happen.

On another matter, we have ARENA, the Australian Renewable Energy Agency, to be considered here today. The Greens want to keep the Renewable Energy Agency. We were part of setting it up, through the clean energy package. It is a statutory authority and it is supporting early research and development in Australia in renewable energy and energy efficiency technologies. It is doing a fantastic job, together with the Clean Energy Finance Corporation, in supporting early research and development projects. For the benefit of the Senate: already, with a $673 million contribution from ARENA, we have supported a total project value of $2 billion for 186 projects around the country. There are 152 projects in the pipeline, with $26 million being sought from ARENA but $5.6 billion in total investment for those projects. It would make no sense whatsoever for the government to gut ARENA, which is what they are trying to do. They are trying to do it before the legislation to abolish ARENA comes through the House, because they are trying to remove the funding from ARENA. That is what the government are doing in this schedule. That is why we should be getting rid of schedule 5 of the legislation, so that ARENA can continue.

On the subject of ARENA, I have written to the minister, and I would seek the support of the Senate to make sure that the government does not proceed with winding up ARENA, effectively. Two of the board members lost their positions on 30 June, and the final two are to go on 15 July. So, before we have even had the legislation, the government is going to allow this to happen to the people who know what is going on with all the 186 projects that have already been approved. They are the ones that especially need to be looked at, and we need to keep the existing expertise. We need to keep the money for ARENA, and the minister needs to make sure that the term of those existing personnel is extended until the parliament determines the future of ARENA.

I will be interested to hear the specifics from the Palmer United Party about their amendment. I will get to questions on that in a moment, but the main point here today is to say that we have an emissions trading scheme and it is operating. It can go to flexible pricing, with a target of 18 per cent reduction of greenhouse gas emissions by 2020. And it can drop the price. I do not like that, but nevertheless that is the effect it would have. It would go from $25 to $8. I put to the Palmer United Party: are you serious about keeping an emissions trading scheme or is the amendment to the Clean Energy Act just cover—putting it off till some time in the future? That is in fact what the Abbott government argues: that, at the point when the rest of the world acts—and they will determine when that is, and it is never—they will act. Are we just seeing this put off until next week to give cover to voting down the only effective policy framework for bringing down emissions we have got in Australia, the legislation that is here before us? I want to put very firmly on the record: this is the opportunity for the Palmer United Party to show us, once and for all. Since Al Gore has put himself on the line around the world in support of emissions trading, let us see it.

Lisa Singh (Tasmania, Australian Labor Party, Shadow Parliamentary Secretary to the Shadow Attorney General) Share this | Link to this | Hansard source

I want to make some comments firstly in relation to the Greens' support for Labor's amendment. I have to say, with all honesty, it is five years too late. The Greens had the opportunity to do this five years ago, when we were debating this through the CPRS legislation. If they had supported Labor then, we would not be here today. It seems to me that it is only now, when Australia is becoming the only country in the world to go backwards on climate change policy, that the Greens are starting to actually back down from their approach of all care and no responsibility. That is good, and I am pleased that the Greens are supporting Labor's amendment to implement an emissions trading scheme, but we were debating this very same amendment only a few months ago in this place, in March, and the Greens did not support it then. They did not support it then. They did not support the CPRS. But today they are supporting it, when the chips are really down, because we know that, in the next little while, unless we get the support of three more senators in this place other than the Greens and Labor, we will no longer have anything in this country when it comes to tackling carbon pollution. We will not have an emissions trading scheme. All we will have, going forward, is a policy that has been laughed out by every scientist and economist, and even conservatives, across the globe. So I am pleased the Greens are supporting an effective price on carbon in Australia, but I do make that point that it is a little bit too little, too late.

Having said that, I hope the Palmer United Party do listen to the comments of Senator Milne and the comments from Labor about the importance of this amendment. They have made it very clear that they are supportive of some sort of emissions trading scheme. It may not be exactly the one that Labor has brought forward today, but there is an opportunity for them right now to join with those senators that are supporting this amendment to actually save the baby, so to speak, and ensure that Australia can have a legal cap on pollution going forward, something that Clive Palmer has said that he does support in some way, shape or form. So I urge Palmer United Party senators to support this amendment. We know that, if this amendment is not passed in this place, an emissions trading scheme in Australia will disappear. That will be it. With that, the Prime Minister would truly be throwing the baby out with the bathwater.

The obvious way forward, we know, for business and for households, is for the Prime Minister to swallow his pride and the parliament to work together for an emissions trading scheme—to put politics aside for once and recognise the importance of putting a price on carbon pollution in this country for our children and our children's children.

This is about things beyond our time in this place. The history books will go back and see the way people voted: who voted in support of reducing carbon pollution; who voted to do something about global warming; and who voted to look at the fact that the scientific evidence is paramount when it comes to climate change and global warming.

I urge all senators in this place to support this amendment but, in saying that, I want to look slightly towards what happens if this amendment is not passed and to ask the government about their Direct Action policy. I am unaware of what modelling the government has done to explain to the Senate, the community and industry how their ERF, Emissions Reduction Fund—or, as some may call it, a dressed-up sludge fund—will achieve Australia's five per cent targets. I understand there has been some modelling done on the ERF by the Monash University Centre of Policy Studies as well as SKM-MMA. Firstly, is the coalition aware of the negative findings of this modelling that was done by the Monash University Centre of Policy Studies on the ERF; and, if they are aware of it, why are they pressing ahead with this negative policy?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

This is actually not a question that relates to the amendments strictly speaking but, with an abundance of helpfulness, I will just say that the government is of course aware that there has been a lot of debate for a very long time about the alternative merits of a series of potential policy approaches to address climate change in the world and here in Australia.

The Australian people at the last election very clearly voted in favour of getting rid of the carbon tax, in favour of getting rid of the Labor-Greens failed approach, which is pushing up the cost of electricity, pushing up the cost of gas, pushing up the cost of living and pushing up the cost of doing business, which is making it harder for manufacturing businesses across Australia in particular to compete globally and costing jobs across Australia.

We have right now, as a result of the mismanagement of the previous government, an economy which is still growing below trend. We inherited a situation from the previous government with rising unemployment. We are working very hard to turn that situation around. Getting rid of the carbon tax—Labor's failed carbon tax—is a central part of our economic action strategy to build a stronger, more prosperous economy. Our Emissions Reduction Fund, our Direct Action policy, will help to achieve emission reductions in Australia in an affordable, economically responsible and environmentally efficient way, and the government stands by the policies that we took to the last election and that were endorsed by the Australian people.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Before I respond to the minister's claims a moment ago, I want to say to Senator Singh: it is really not very much help to come in here and repeat Labor Party mythology. Let me tell you a few things about the Carbon Pollution Reduction Scheme. It was worse than nothing. If it were in place, it would be the current CER price, which is 16 eurocents. There would be no Clean Energy Finance Corporation, no Climate Change Authority, no Renewable Energy Agency and there would be increasing free permits to the big polluters.

It was the worst designed scheme ever. It was negotiated between the Liberal Party and the Labor Party, and browned down to the point where it would have had zero effect in fact in transforming the economy, and we made those points at the time. What is more, for all this talk about a fixed-price period, Prime Minister Rudd had a fixed-price period with the CPRS—and let's not make any bones about that.

I also put on the record that the Greens, having identified it was worse than nothing ahead of Copenhagen, post Copenhagen offered the government of the day a compromise, which was actually a three-year fixed-price period. That is exactly what we negotiated, because Labor would not lift the level of ambition. Labor locked into a five per cent emissions reduction target, which is nowhere near what the science demands, and the difference between now and earlier this year, Senator Singh, is 31 May when the default cap kicked in. That is the point. As of that day, we got the default cap.

The point here today is not to go over history; the point here today is to recognise at this moment in time, we have an opportunity to get the numbers in this Senate to go to an emissions trading scheme flexible-price period away from an emissions trading scheme fixed-price period—that is the difference. That is the point of the opportunity we have here today, if the Palmer United Party will support it, and that is the interesting thing. Let's see if they will get behind an emissions trading scheme now. If not, why not?

Why, if you believe in emissions trading, wouldn't you take the route of keeping the scheme that we have got rather than something which may or may not ever happen into the future? That is the most sensible thing to do—and I heard Minister Cormann here a minute ago tell us that the Emissions Reduction Fund was effective. The department was unable to tell us exactly what percentage of the five per cent emissions reduction target, the pathetic and feeble five per cent target, would be achieved through the Emissions Reduction Fund.

So I put that question to the minister. What are you going to tell this parliament about what your Emissions Reduction Fund is proposed to do in relation to the five per cent target which we have pledged to the UNFCCC? We need to know, because Senator Xenophon and others have said that they will not support the abolition of an emissions trading scheme or the current legislation unless there is something better in its place. Frankly, there is nothing better in its place, nor is there likely to be with your Emissions Reduction Fund.

The very fundamental thing is that we know we can achieve much more, and have to achieve much more, than a five per cent emissions reduction target to meet the science and to meet our global responsibilities. The key thing about an emissions trading scheme—which I hope the Palmer United Party appreciate—is that it can be scaled up in terms of the level of ambition. You can set a higher and higher cap and drive the economy in the right direction, in a competitive direction, in the way the rest of the world is going. What the government is doing is taking the money out of taxpayers' pockets—taking it out of the pockets of the community—and giving it to the big polluters to support what effectively will end up being corporate welfare with the Emissions Reduction Fund.

I want to know from the minister how much of the five per cent you intend to get and whether you intend to scale up five per cent to anything like the 40 per cent to 60 per cent which the Climate Change Authority has said Australia will need to achieve by 2030, let alone net carbon zero by 2050. So let's get something on the record for the benefit of the senators who are going to make a decision on whether to get rid of the effective scheme that we have which is bringing down emissions. Perhaps the government can tell us now exactly what percentage of the five per cent they are going to get from their Emissions Reduction Fund and perhaps we can hear from the Palmer United Party as to whether or not they will support the emissions trading scheme that we have already got, notwithstanding that it goes to a flexible price. That is a reasonable compromise to put on the table. Let's hear it.

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

This amendment before the chamber does not relate in any way to our proposal for the Emissions Reduction Fund. As Senator Milne would be well aware, there is separate legislation that will deal with the Emissions Reduction Fund, and the chamber will have ample opportunity to debate the merits of that proposed measure when that legislation comes before the Senate. The amendment that is before us is an amendment that seeks to keep the carbon tax by slightly modifying it by slightly rebadging it. The government is already on the record as saying that we do not support the carbon tax being rebadged; that we are committed to scrapping the carbon tax.

In response to Senator Milne's final question in relation to emissions reduction targets, the government made a commitment to the Australian people at the last election and, indeed, at the election before that to reduce Australia's emissions by five per cent below 2000 levels by 2020. This is a target which is reflected in our international emissions reduction commitment under the Kyoto protocol. We will reach that target through the policies that we announced in the lead-up to the last election.

Lisa Singh (Tasmania, Australian Labor Party, Shadow Parliamentary Secretary to the Shadow Attorney General) Share this | Link to this | Hansard source

This amendment goes to a point that Labor has been making time and time again: that we support an emissions trading scheme and that Australia needs an emissions trading scheme. It is something, however, that has been stonewalled by senators in this place and members in the other place. I want to make it clear what this amendment will do. It will move us to an emissions trading scheme; it will introduce a cap on the amount of carbon pollution that can be dumped into the atmosphere; and it will allow business to work out the most effective way to reduce this pollution.

If this amendment is not supported in this place, we will have the repeal of the Clean Energy Act passing into law, which will then remove Australia's legal cap on pollution and instead we will have the Emissions Reduction Fund, which is part of Direct Action, which will have no legislative cap on pollution and will have no mechanism to deal with pollution reduction. I want to make it really clear that, if this amendment is not supported in this Senate, Australia's pollution reductions targets will not be satisfied. If the government would like to explain how they think our reductions targets will be satisfied, I would be very interested to hear that.

As recently as the last Senate estimates, the government was asked why it was going ahead with the ERF when its own department at Senate estimates was not confident that they could confirm that this policy would reach its targets. I understand that when the department was asked how much of that five per cent target Direct Action would deliver, the department could not answer that question. We also had the Senate inquiry into Direct Action, which did not hear from a single expert ready to support the government's plan or show any kind of confidence in its capacity to reach its targets. So why is the coalition going ahead with its flawed ERF and why is it not supporting an emissions trading scheme which is not flawed and which is supported by economists, supported by scientists and supported across the globe, including by a Conservative lord in the UK parliament?

On top of that, we know that there are a number of coalition senators and members of parliament who support an emissions trading scheme. I am sure they are ducking for cover today, but we know that in 2007 both the Labor and Liberal parties supported an emissions trading scheme. In 2008 there was support for an emissions trading scheme. Then we had the debacle of the 2009, and now coalition senators are certainly not wanting to talk at all about their past position in support of an emissions trading scheme. So we know, Senator Cormann, what a lot of coalition senators really do believe and understand when it comes to climate change policy. We know that a number of you really do support an emissions trading scheme. We know that Tony Abbott clearly does not and that he wants to play politics with climate policy. Instead, what you have come up with is a political point-scoring—although I do not think it is scoring you many points but at least it is political—policy in the ERF which does not address reducing our emissions. Why then is the coalition going ahead with this flawed ERF policy when the Senate inquiry committee recommended against it and characterised it as fundamentally inadequate? On top of that, I want to ask in particular how you can justify using the land sector structure to cover all of the industries pertinent to this Emissions Reduction Fund?

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

I have some questions for Senator Cormann and Senator Singh but if I would recap this for the benefit of the 57 people listening to us on News Radio. As I understand it, the Palmer United Party have indicated that they will support a dormant emissions trading scheme when other countries come on board. I think that is a fair summary: that they will support retention of the Clean Energy Finance Corporation, the renewable energy target—for ARENA I am not quite sure what the position is—and also the Climate Change Authority, which has an important watchdog role. I think that is a fair summary of the position of the Palmer United Party, to have some safeguards but not to trigger an emissions trading scheme. I would be grateful if Senator Lazarus could confirm that summary.

I would like an acknowledgement from Senator Cormann about power price rises, even though the government did not support the second reading amendment. I am very grateful to Senator Macdonald for supporting that second reading amendment. He has proved increasingly to be a truth teller on the coalition side on a number of common-sense issues. Senator Cormann, do you acknowledge that the Review of regulated retail prices and charges for electricity, 1 July 2013 to 30 June 2014, for the Independent Regulatory and Pricing Tribunal of New South Wales, indicated that there was more than a doubling of power prices for typical residential customers in New South Wales on regulated prices from 2007-08 to 2013-14, in nominal dollars, and that network charges made up almost two-thirds of those price increases? Do you acknowledge that the carbon price is important but network charges have caused a greater increase in power prices because we have let the networks run on their merry way to gold plate their networks and rip-off consumers? I would like a direct answer to that question, otherwise you are simply denying it. Putting it all on the carbon tax is not entirely fair; there are network charges as well.

In relation to Senator Singh, I agree that a market based mechanism is preferable but I do have concerns about linking it to the European scheme on this basis because there has been such volatility in respect of that scheme and that in itself causes investment uncertainty in carbon abatement. I ask Senator Singh to address that.

Finally, in respect of Senator Milne's comments about taxpayers paying for the Emissions Reduction Fund, Senator Milne is right, but if you can achieve abatement at a cheaper price with sufficient changes to the ERF, it means there will not be the same price fix. It might mean taxes but it will not be consumers paying more for power unnecessarily. It is a quid pro quo. I would be grateful if Senator Cormann could at least acknowledge that network charges are a bigger factor in terms of power price increases.

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

I thank Senator Xenophon for his contribution and this question. We have never said that the carbon tax is the only factor. We have always acknowledged that there are other factors at play. The purpose of this legislation is to reduce electricity costs for families and businesses by scrapping the carbon tax because the carbon tax has been a significant driver of the increases in the cost of electricity, even if it is not the only factor. In repealing the carbon tax, household electricity bills will be around $200 lower on average in 2014-15 than they would otherwise have been. In November 2012, the independent electricity rule maker, the Australian Energy Market Commission, put new rules in place to considerably improve the strength and capacity of the Australian Energy Regulator to determine the network price increases. The final rules were made following more than a year of consultation.

The new rules better equip the Australian Energy Regulator to ensure that consumers do not pay more than necessary for reliable supplies of electricity and gas. These new rules are, I am sure Senator Xenophon would be pleased to hear, already beginning to put downward pressure on prices. The transitional electricity distribution network decisions by the Australian Energy Regulator for 2014-15 provide a reduction in average annual charges for New South Wales and ACT residential customers of $38 and $19 respectively. That is why in our judgement it would have been premature to announce a further review of the rules at this time and that is the reason the government chose not to support the second reading amendment moved by Senator Xenophon.

Do we acknowledge that there are other factors at play when it comes to the cost of electricity? Of course. Do we consider that the carbon tax is a significant, self-inflicted, unnecessary and counterproductive factor in pushing up the cost of electricity? Yes, we do, and that is why we are moving to remove it and that is why we are commending the Senate to support the government's efforts to repeal the carbon tax.

Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I would be very keen to hear from Senator Cormann on a number of factors. Mid last year the Australian Chamber of Commerce and Industry came out in quite a high-profile series of announcements calling on the government to consider an emissions trading scheme and I would be interested to know whether Senator Cormann, then in opposition, discussed this with them then and also whether there have been any discussions with the big end of town about an emissions trading scheme.

I would also be interested to hear from Senator Cormann on how some of the Direct Action strategies, such as soil carbon and tree plantings will work without a price on carbon. It does not make sense that you could bring in a scheme that attempts to value carbon reduction without actually being able to put a value on that carbon. Of course, that is not just a volumetric thing but also a value thing, with a price. So I would be interested to hear about that as well.

My kids actually showed me a YouTube clip last month—going back to 2007—featuring our current Prime Minister in an interview, saying he supported a carbon tax but did not agree that an emissions trading scheme was the right way to go. No doubt that was some sort of short-term strategy for him to elevate himself within the Liberal Party which, of course, eventually happened when your party voted on an emissions trading scheme and the Prime Minister became the Leader of the Opposition. Senator Singh said the Greens stood against an emissions trading scheme. So for Senator Singh's benefit, I think it is worth considering her comment about whether we would have an effective emissions trading scheme now if we had implemented one back then.

What we have been reduced to today is the result of a concerted campaign by our Prime Minister, Tony Abbott, when in opposition, to undermine a good policy. I have absolutely no doubt, Senator Singh, that he as Leader of the Opposition would have done exactly the same thing against an emissions trading scheme had that been in place.

One of the main reasons for a fixed price period was to get the information from the polluters so that we could effectively issue 'cap and trades'—volume based measures—that were coming into place. Sadly, that did not happen in Europe. They overallocated permits and, given supply and demand, we saw a collapse in the price of carbon over there. So that was to be avoided.

I have no doubt that the reason we are here today and why the bells will ring very soon on a division is that this was a short-term political strategy of the coalition to grab power and get themselves elected. They saw an opportunity, which Senator Milne talked about earlier, around the word 'tax' and they have reduced this good policy and this transition to a new economy in this country.

We are the global leader of three-word slogans, which the coalition claim got them elected at the last election. But when those bells ring it is worth all of us asking—to use the words of Wilfred Owen—for whom the bell tolls and exactly what we in this country have given up and what we have signed up to. It is not just the loss of a policy that took years to put together, a policy that is working and has put us on the global leadership map in terms of climate action, along with our world-renowned scientists and the work they are doing on climate change; it is the symbolism of what this vote today will mean. It is worth focusing on that. It will mean for students of history and students of politics that a political party, for its own cynical, self-interested agenda, has been able to run a smear campaign, the most negative political campaign in Australia's political history, to put the interests of its party, the Liberal Party, ahead of the interests of this country.

Senator Cormann, if you think you got elected on the back of your campaign on the carbon tax, I would ask you to have a look at your result in Western Australia in the recent by-election where you stood up in this chamber—I do not know how many times—saying there was going to be a mandate on the carbon tax. In the end, it did not turn out to be that way.

I think today is a very important day, to be on the right side of history, and I am glad to have had the opportunity to stand up here today. I was listening to a lot of the debate and I want to respond to this comment from Senator Bernardi that he does not believe it is at all challengeable that the coalition got elected on the back of the carbon tax and the repeal of the carbon tax. I think the coalition got elected because it rose from the ashes of the Labor Party at the last election. In my first 12 months in the Senate, I witnessed the Labor Party, with their leadership struggles, tearing themselves to pieces. If you think you got elected because of the carbon tax, I think you need to have a good, close look at what has happened in this building in the last two years. You got elected by default. That is my firm opinion. And that is what underlies your arrogance on this budget that is in front of the Australian people—your lack of ability to compromise and to consult. You are so out of touch, because you have the arrogance to assume you got elected on the back of a carbon tax repeal agenda. It is not true. You got elected because this mob over here had a major stoush and it will take them a long time to recover from that. If you do not realise that and start focusing on what the Australian people want, which is strong action on climate change, then I hope we do go to a double dissolution and let the Australian people vote on this. If not, I am sure that, in 2016, this issue of getting proper action on climate change will be front and foremost of a political agenda in this country.

Now that I have had my rant, Senator Cormann, could you please answer whether you have had discussions with the Australian Chamber of Commerce and Industry and the big end of town and how a Direct Action scheme that values soil carbon and planting trees can work without a price on carbon?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

In responding to Senator Whish-Wilson's questions, I can assure him that the government consulted with a wide range of stakeholders in opposition and, of course, we took a policy to scrap the carbon tax to the last election. Importantly, we consulted with the Australian people, who gave us a mandate to abolish the carbon tax. In relation to the reference Senator Whish-Wilson made to statements by the Prime Minister—

Progress reported.