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

I table a supplementary explanatory memorandum relating to the government amendments to be moved to this bill and seek leave to move the government amendments (1) to (7) together.

Leave not granted.

I move amendments—

The CHAIRMAN: One at a time.

(5), (6) and (7) on sheet HV130 as minor technical amendments which will ensure the smooth and efficient implementation of the Emissions Reduction Fund. The amendments ensure consultation processes are not duplicated, while, at the same time, maintaining the important role of the Emissions Reduction Assurance Committee to undertake an assessment of the emissions reduction methods. The amendments will allow projects to go in quickly and participate in the Emissions Reduction Fund.

The CHAIRMAN: Before I put that, Senator Milne was on her feet. On a point of order, Senator Milne?

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

No. I am seeking to ask some general questions before we go into specific amendments.

The CHAIRMAN: Can you take me to which amendment you moved, Minister.

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

Amendment (5).

The CHAIRMAN: I am not clear which amendment you are talking about.

It would have been helpful to move amendments (1) to (7) on sheet HV130 together to assist the chamber; however, given that leave was not granted, I move amendment (5) on sheet HV130:

(3) The Emissions Reduction Assurance Committee:

  (a) is not required to comply with section 123D in relation to the requested advice; and

  (b) must not advise the Minister to make the methodology determination unless the Committee has considered any submissions mentioned in subparagraph (1)(c)(ii) of this item that were received within the time limit mentioned in that subparagraph; and

  (c) must publish on the Department's website any submissions received within that time limit.

This is as a minor technical amendment which is part of a series of amendments which will help ensure the smooth and efficient implementation of the Emissions Reduction Fund.

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

Chairman, can I get clarification from you. Because of the haste in which—and it is not a criticism of you, of course—we have proceeded, I have a number of questions for the committee as a whole on some preliminary matters. I believe Senator Milne may have some preliminary questions to raise. I wonder whether we could deal with those before we deal with the amendments, because that may have some bearing on the consideration of the amendments. Would the minister be prepared to facilitate that?

The CHAIRMAN: If the minister wishes to indulge the chamber, otherwise we will deal with amendment (5). But before I call on other amendments to be moved, we will deal with some general questions. Let us deal with amendment (5) first.

The CHAIRMAN: The question is that government amendment (5) on sheet HV130 be agreed to.

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

I did ask Senator Cormann to respond and he only gave half an answer in his summing-up of the second reading. The government has said that its intention is to abolish the Clean Energy Finance Corporation and the Australian Renewable Energy Agency, but it has been reported in the deal between the Palmer United Party and the government that the Palmer United Party has agreed that the abolition legislation can be brought on after 31 December this year. I was seeking clarity from the minister or the Palmer United Party: what is the deal in relation to the Clean Energy Finance Corporation and the Australian Renewable Energy Agency?

In relation to another matter, and this is quite important for later developments, the bill leaves the definition of 'prescribed eligible carbon unit,' in section 3, untouched, including the classification:

It is immaterial whether the unit was created in or outside Australia.

My understanding of that is that all the minister has to do is to prescribe CERs as an eligible unit and the government can then spend any amount of the Emissions Reduction Fund on foreign permits. I am interested to know whether the government has intentionally given itself the power to purchase as many emissions as it wants to from overseas, despite the public statements.

The second question is: would a big polluter, under the baseline system, be able to buy cheap international permits if the minister prescribed CERs?

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

My answer in relation to the Clean Energy Finance Corporation and the Australian Renewable Energy Agency was very clear. The government's position is that we are committed to the abolition. But we have also been very clear that, in the remaining weeks that we have in terms of sitting weeks before Christmas, our priority is to deal with a series of high priority and outstanding budget measures. We do not anticipate that legislation in relation to the abolition of the Clean Energy Finance Corporation will come back before this chamber before the end of the year. In fact, we do not intend to bring it back given the time available and given that there are higher priorities before Christmas. So we will pursue that ongoing commitment, which remains, to abolish both the Clean Energy Finance Corporation and ARENA early in the New Year. But when it comes to this proposition that, somehow, there is a sneaky conspiracy theory about trying to introduce international permits through the backdoor, there is absolutely no way. The Australian government is committed to achieving emissions reductions here in Australia through domestic efforts incentivised by our direct action policy and the Emissions Reduction Fund.

The provisions that Senator Milne was referring to relate to an amendment foreshadowed by Senator Xenophon. It is not initiated by the government. In order to give effect to what Senator Milne is suggesting, the government would have to regulate that way and we have been absolutely crystal clear that the government has absolutely no intention whatsoever of regulating that way. We will, as we have been very clear, remain totally focused on pursuing emissions reductions through this legislation and through the policy framework more generally—domestically here in Australia and not by using international permits.

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

I thank the minister for that clarification. I understand from that that even though the existing act does say that the prescribed eligible carbon unit means a prescribed unit that is issued under a scheme relating to either or both of the following, the second one being the avoidance of emissions of one or more greenhouse gases, it is immaterial whether a unit was issued in or outside Australia. I take it from your answer that the regulations accompanying this bill are going to specifically say that they cannot be sought from outside Australia. If that is not correct, then I will ask the minister to clarify.

On the second point, I have just heard the minister say that, as far as the government is concerned, the Clean Energy Finance Corporation and the Australian Renewable Energy Agency are still up to be abolished and that it will not reintroduce the legislation to abolish them before the end of the year but could well do it early in the new year. So I ask about the status of this agreement between the government and the Palmer United Party, where the Palmer United Party is saying that it has saved the Clean Energy Finance Corporation and ARENA. You are saying there is no such agreement and you intend to move on the abolition legislation in the new year. So, perhaps someone from the Palmer United Party could clarify the understanding of this agreement that you have supposedly reached.

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

I could not have been more explicit: the government remains committed to the abolition of the Clean Energy Finance Corporation and ARENA for the reasons that have been well and truly articulated over many, many hours of debate in the past and for some time. We do intend to revisit that legislation early in the new year. In relation to the passages that Senator Milne referred to in the actual bill, let me also, again, say emphatically that the government will not make any regulations to facilitate or allow the trading in international permits. One hundred per cent of our emissions reduction effort through this legislation will be a domestic effort. It will exclusively be a domestic effort. We will not be providing, in regulations, for the capacity to trade permits internationally.

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

One other thing: in the agreement with the Palmer United Party there is an agreement for the Climate Change Authority to do a review. That is not foreshadowed anywhere by way of amendment to the Climate Change Authority Act. So I am asking whether it is the intention of the government to put that into legislation. Is there anything in this bill or the Climate Change Authority Act that guarantees that this review will actually be carried out? And under section 57 of the Climate Change Authority Act the minister can issue directions to the authority. Will the government be actually issuing those directions under section 57 of the act? Or where in the Climate Change Authority Act will that be? Why don't we have any amendments in relation to that act to give effect to this supposed undertaking that has been made?

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

Senator Milne actually provided the answer to her own question in the second half of her contribution. There is already provision in relevant legislation for the minister to be able to give a direction to the Climate Change Authority. The government has publicly stated unambiguously that we will be giving that direction. There is no need for further amendments to the legislation in those circumstances.

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

According to the minister this morning, direct action does not target big business polluters. He described direct action as:

… incentives on a competitive basis for groups such as Indigenous land management groups, farmers, families, small businesses.

So apparently direct action targets families and ignores the major polluters—

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

I never said that; what do you mean?

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

according to Minister Hunt. So, on that account, my question is in relation to Clive Palmer, who you have done the deal with in relation to this policy. I want to know whether Clive Palmer might stand to yield more from this deal on direct action than just simply an inquiry into an emissions trading scheme. I understand that today in question time the Prime Minister was unable to rule out whether Mr Palmer's companies would receive any taxpayer dollars under direct action—the $2.55 billion that is part of the Emissions Reduction Fund. We know that Mr Palmer's Queensland nickel refinery, which is one of Australia's biggest polluters, may be eligible for a grant under the ERF to reduce its carbon pollution. I would like to know whether Clive Palmer, the member for Fairfax, is eligible for a grant under the ERF.

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

Firstly, let me just confirm what Senator Singh—sort of, not very eloquently but nevertheless—sought to quote from earlier today. Senator Singh, you are quite right: rather than impose a punitive damaging carbon tax, we are providing positive incentives to businesses and individuals across Australia to come up with the best possible ways of reducing emissions. And we are doing it through positive incentives. We are doing it through a genuine market based system. Through a market based open tender system we are inviting businesses across Australia to deploy all their—

Sam Dastyari (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Oh come on Mathias, not even you believe this.

The CHAIRMAN: Order!

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

creative energy to the come up with the best possible opportunities for emissions reductions and the best-value opportunities for emissions reductions. And of course that is what our market based system is all about—positive incentives to achieve emissions.

Sam Dastyari (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Is this your market based solution?

The CHAIRMAN: Order!

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

Senator Singh then wants to go into a political argument targeting one particular member of the Australian parliament. Let me just make a general point here to put some context around this debate, because these issues have—

Senator Dastyari interjecting —

The CHAIRMAN: Senator Cormann, could you please resume your seat. I must draw to the attention of senators that when they are not sitting in their places they have no entitlement to interject. Interjections are disorderly in any case, but I would certainly ask senators who are not in their place to not contribute.

Ian Macdonald (Queensland, Liberal Party) Share this | Link to this | Hansard source

Throw him out.

The CHAIRMAN: That also includes you, Senator Macdonald. You are not in your place.

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

I will make a general point that seems to be forgotten by the Labor Party and the Greens from time to time when they are pursuing political attacks on individuals. That is that when we make laws in this place, we make these laws for all Australians, and we are all equal under the law. All of us are income taxpayers, yet we make judgements in relation to income tax arrangements. All of us are in varying superannuation arrangements. We make laws in relation to superannuation arrangements that apply to us and to people across Australia.

The proposition that you are not allowed to exercise your rights and responsibilities as an elected member of parliament in this chamber because something might potentially have an impact on you in an adverse way or in a beneficial way is fundamentally undemocratic. The implication of the question that Senator Singh just put is that, because we are considering a law that applies equally to everyone, an individual member is not allowed to participate in the public policy debate in relation to these matters if they might be impacted in a different way by that law due to their individual circumstances. That is fundamentally undemocratic. That is a fundamentally flawed argument. I know that it serves the base political objectives of a Labor Party under the leadership of Bill Shorten. But that is not an appropriate public policy argument to make. That is essentially all I have to say in relation to these matters.

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

Minister, you have not answered the question. I will put another question. But, firstly, it was not an eloquent answer in itself to my question. It was not an answer in itself at all. My question was very specific. It was in relation to the member for Fairfax and his nickel refinery in Queensland, which is one of Australia's biggest polluters, and whether that would be eligible for a grant under the ERF. What you termed as an answer was to say that me asking that question was 'fundamentally undemocratic'. They were your words. It was for reasons of democracy that I asked the question because the member for Fairfax has just done a deal with the government for $2.55 billion of taxpayer's money, which he may—and I am giving you the option to rule out whether this is correct or not—be eligible to apply for part of in a grant for his own business establishment, the Queensland Nickel refinery, which is one of Australia's biggest polluters. That is the question that I was asking. The Prime Minister refused to rule it out and you have now refused to rule it out.

The fact that you are refusing to rule it out raises suspicion as to whether he is eligible to apply. You have done the dirty deal with him. As someone who wanted to bring an amendment to another bill in this place for an emissions trading scheme, he has sold out. To agree with the member for Fairfax's request, that has now been reduced to a review of an emissions trading scheme, which the minister for the environment himself has called 'just a gesture', in order to get your $2.55 billion deal through the parliament. So I think it was incredibly democratic—not fundamentally undemocratic—for the people of Australia to know whether or not the $2.55 billion deal that you have done with the member for Fairfax is democratic and whether or not there is something within that deal that benefits the member for Fairfax in relation to his Queensland Nickel refinery. So would you like to answer the question, minister?

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

I am very happy to answer the question. What I might point out to Senator Singh is that under the Gillard government's Labor-Greens carbon tax Queensland Nickel was given $11.6 million in 2013-14, and I might just say—

An opposition senator: He was not the member for Fairfax then.

So, once you are a member of parliament, all of a sudden, everything changes. So, the Labor Party and the Greens can provide $11.6 million to Queensland Nickel.

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

Of course it matters.

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

That is interesting. Now, the truth is that Mr Palmer addressed this question in his press conference yesterday, and if you have got questions in relation to these matters, these are actually not questions for the government and the parliament. The parliament legislates for all Australians equally. That is the way the system works, and if you have got any further questions you should address them to him.

Ian Macdonald (Queensland, Liberal Party) Share this | Link to this | Hansard source

I rise on a point of order. Mr Chairman, I did not want to interrupt the questioner and the minister answering, but I refer you to standing order 193(3) where all imputations of improper motives are considered highly disorderly. Far be it from me to defend Mr Palmer after that outrageous committee set-up into Queensland, but, in fairness, I would ask, if Senator Singh is going to continue along this line of questioning, that you take into account reflections of improper motives which are clearly the course of Senator Singh's questions.

The CHAIRMAN: I was listening carefully and I do not think Senator Singh has breached that standing order.

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

I note that the feedback that I have received in relation to the creation of a strategic reserve of international emissions units has been very positive. Indeed, Innes Willox from the Australian Industry Group has been a strong supporter of that—the AiG has been a strong supporter of that. Can the minister explain why the government is taking such a position as to not support the creation of a strategic reserve, despite the fact that leading members of the business community in this country say that a strategic reserve such as this will make a very real difference in ensuring compliance, ensuring targets and indeed ensuring that Australia can reach higher targets, depending on what is agreed in Paris next year?

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

Firstly, it has consistently been our policy for a number of years now, and the reason for the policy is that we want to employ those resources to maximum effect here in Australia. We do not want to send money overseas. We want to ensure that we deploy those resources to maximum effect when it comes to achieving emissions reductions domestically here in Australia. That is a policy judgement that we have made. I understand, Senator Xenophon, that you take a different view. You might be quite happy to send these resources overseas, but, from an Australian government point of view, we have made a deliberate judgement that we are not prepared to do that and that we want to focus, quite deliberately, on investing all of those resources—100 per cent—exclusively here in Australia to achieve domestic emissions reductions here in Australia.

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

Has the government done any modelling on the benefits of a strategic reserve? And, before the minister answers that: I will not be misrepresented in respect of my position. If the policy intent of this legislation is to maximise emissions reductions then having a small amount of emissions reductions—I suggested a maximum of 20 per cent of this fund—for international emissions reduction units would have seemed to be good economic and environmental sense. But has there been any modelling done in respect of this?

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

No, we have not modelled this, because it is not our policy. Our policy is to deploy 100 per cent of our resources, in relation to this, here in Australia. Senator Xenophon, again, I appreciate that you have a different view, and we might just have to agree to disagree. I understand that your view might be that up to 20 per cent of those resources should be available to be allocated overseas. The Australian government has made a judgement—a considered and deliberate judgement—to deploy 100 per cent of our resources here in Australia in order to achieve the maximum emissions reductions available through our market based mechanism here in Australia.

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

Finally on this: does the minister acknowledge that the creation of such a strategic reserve could well reduce the pressure on facilities that will be subject to baselines under the safeguard mechanism if the safeguard mechanism is passed?

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

That is not the judgement of the government. The government has made a deliberate judgement that we ought to deploy 100 per cent of the resources available through this initiative here in Australia.

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

In the light of the minister's remarks that the entire abatement is going to occur in Australia, and that only $2.5 billion has been allocated—as I understand it, only $1.15 billion out to 2017—is it still the government's position that, if the five per cent is not achieved with the current allocation, as the Prime Minister has said, there will be no more money made available, and that will be it, regardless of whether the five per cent target has been reached or not?

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

As we have said many, many times, we are very confident that we will achieve the five per cent emissions reduction target. We have, of course, announced some time ago a policy, which this legislation is now giving practical effect to, which is fully funded, which is capped, and which is more effective than the system that the Labor-Greens government of the past pursued.

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

I just want to follow up on that. When you answered Senator Xenophon a moment ago, you said you had not modelled the proposition that he was making about a strategic reserve fund because it was not your policy. I asked you today in question time, and you didn't answer, and I will ask you again: have you modelled your own policy? Have you modelled this policy to determine whether it can achieve a five per cent emissions reduction? If so, who did the modelling? When was it done? And will you release it, given that RepuTex has said that you can only achieve 20 to 30 per cent of the five per cent with this policy, and Sinclair Knight has said you will not go anywhere near it? So there are two sets of modelling on your policy; have you actually done any?

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

We are very confident, as I said in question time very explicitly again today, that we will meet the five per cent emissions reduction target, and I would point out again what I said in question time today: Australia actually, for a very long time, has had an exceptionally good track record in meeting its emissions reduction target, unlike some of the more vocal countries in other parts of the world that are part of the agenda that Senator Milne is trying to propagate. I will also say again that, given her position of fighting for regular reductions in the real value of the tax on fuel, she really has no credibility coming into this chamber with these sorts of arguments. Senator Milne is fighting not only to ensure that there are regular reductions in the real value of the excise on fuel; she is also fighting for a windfall for big oil companies. The final point I would make is that the reason that we have not modelled the possibility of sourcing permits internationally is that we made a deliberate policy decision to deploy 100 per cent of our own resources domestically here in Australia, to maximise emissions reductions and the emissions reduction effort domestically, here in Australia.

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

I do have a question in relation to ARENA, but I will first address some of the issues that the minister has just raised. He says the government is very confident in reaching its target of a five per cent reduction by 2020 on this dud policy called direct action and that it is fully funded. You make those statements, as you say, based on no modelling and with no reserve fund. How can you make that statement? On what basis do you make that statement. There is no scientist and no economist that has given credence to your remarks on making that statement. You are either misleading this chamber by saying that Australia will reach its target of five per cent of reductions by 2020, based on direct action's policy of spending $2.55 billion of taxpayers' money, or you are misleading this parliament. It simply does not add up.

You also say that Australia has had a good track record of emissions reductions, but that has not been under your government. I made it very clear in my second reading contribution that according to the 2014 Global Green Economy Index, since the change of government, our performance now lags behind developing nations—not developed nations, but developing nations—such as Kenya, Zambia, Ethiopian and Rwanda. We are behind those developing nations. We have fallen sharply this year, coming last out of 60 countries for performance on political leadership and climate change and 37th overall, when in 2012 Australia came second out of 27 countries for political leadership and 10th overall for its green economic performance.

You are either misleading this parliament or you need to provide this chamber with where you are sourcing your data from when you say that you as a government are very confident of meeting this target, because no-one that I am aware of is backing you on your statement on that. It would be good to get an answer on that, but I would also just like to ask you for clarification in relation to your deal with the member for Fairfax and the Palmer United Party. Did you give a guarantee that ARENA will be saved and not abolished as part of that deal?

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

Let me just make one point very clear, again: Australia met its Kyoto emissions reduction target without a carbon tax. We were on track to meet and exceed the Kyoto emissions reduction targets during the period of the Howard government. Of course, the emissions reduction period happened to fall; it was the period from 2008 onwards. Guess what? That was after the long period of 11½ years of a coalition government with outstanding Ministers for the Environment such as former Senator Robert Hill, former Senator Ian Campbell and, my good friend and valued colleague, Malcolm Turnbull. Australia was absolutely on track then and in the subsequent period. It was evident that we did meet and exceed the Kyoto targets. That was without a carbon tax.

Senator Singh talks about modelling. I remember Labor's modelling in relation to the carbon tax, because I was chairing a number of Senate committees inquiring into the carbon tax. That is the carbon tax we were promised we would never get:

There will be no carbon tax under the government I lead.

Senator Singh is going to say that I am really relitigating the previous election campaign. That is right, because she is relitigating the previous election campaign: she does not accept the fact that the people of Australia have voted against Labor's failed carbon tax experiment.

The Labor Party modelling into their carbon tax showed that emissions in Australia were expected to increase, despite the carbon tax, from 560 million tonnes in 2010 to about 637 million tonnes in 2020. It was also showing that our economy would grow more slowly. In fact, by 2050, our economy was expected to grow more slowly to the tune of $1 trillion in 2011 dollars. That was nearly the whole GDP of the whole of Australia in order to pay for the Labor-Greens carbon tax. If you look to the effect of the Labor-Greens carbon tax according to Labor's own modelling, it was actually forcing everyone right across Australia to work for free for nearly a whole year in order to pay for the economic impact of Labor's carbon tax.

If you want to talk about modelling, your modelling certainly showed what a dog of a tax your carbon tax was. Everybody across Australia knows that Labor's carbon tax was an absolute failure. Emissions were going to continue to rise, the economy was going to grow significantly more slowly and real wages were going to be lower and reduce over time as a result of Labor's carbon tax. Labor was never quite open, honest and upfront about these things; but it is just important that I just remind people as questions about modelling are asked.

Now, the government's direct action plan will reduce Australia's domestic emissions by five per cent below 2000 levels by 2020. The good news is the government believes that Australia's abatement task under direct action is actually now going to be easier to achieve than previously thought. Australia's abatement task is now around 421 million tonnes to 2020 rather than around 755 million tonnes assumed in the 2005 projections. The fall is largely as a result of changes in the economy. It saddens me to say the part of the reason why the abatement challenges going to be easier to meet is because after six years of Labor, the economy was growing below trend. We inherited a weakening economy and rising unemployment. That is what we inherited.

If you want to reduce emissions, you can do it the Labor-Greens way and strangle the economy and get the economy to grow more slowly. That is a way that you can reduce emissions. That is not our way. That was Labor-Greens way. Our way to reduce emissions is to it in a way that is economically sensible; that will facilitate stronger growth, not less growth; and that looks after the environment at the same time as looking after the economy and looking after opportunities for people across Australia to get ahead. That is our approach to this area of policy.

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

I am pleased that the minister has said that Mr Turnbull is a good friend of his, because in saying that he would, I am sure, be very familiar with the opinion piece that Mr Turnbull published on 7 December 2009. I do not actually know whether I am entitled to say this in the chamber, but the title was 'Abbott's climate change policy is bullshit'.

The CHAIRMAN: I would prefer you did not say it, thank you, Senator Singh.

That was the title of the article, Chair, so I am just reiterating the title, but I will not repeat it. In that article—and I am sure that Senator Cormann will be very familiar with it, because he is a good friend of Mr Turnbull's—Mr Turnbull said:

It is not possible to criticise the new Coalition policy on climate change because it does not exist. Mr Abbott apparently knows what he is against but not what he is for.

… … …

… The Liberal Party is currently led by people whose conviction on climate change is that it is "crap" and you don't need to do anything about it. Any policy that is announced will simply be a con, an environmental figleaf to cover a determination to do nothing.

Here Senator Cormann is finding himself in the position of having to defend a policy that his good friend Mr Turnbull knows is a con. And I have to say you are doing a pretty good job at it, Senator Cormann. However, through our time in this place we know that it wears pretty thin when you revert back to type, to the mantra, rather than answering the questions that senators in this place are actually asking you—specifically, about the bill before us, which, I have to agree with Mr Turnbull, is very much a dud or a con.

The government's latest estimates of Australia's future greenhouse gas emissions in its ERF white paper are that, on current trends, Australia faces a cumulative emissions reduction task of 591 million tonnes of carbon dioxide equivalents in the period to 2020. So after taking into account updated emissions data for 2013 and 2014, the cumulative emissions reduction task is around 420 million tonnes in the period to 2020. On the basis of the money available and the emissions required, I calculate that the $1.15 billion in the ERF in the budget papers could purchase 421 million tonnes at about $2.75 per tonne. Or, if you were to spend the entire $2.55 billion, it would cost around $6 per tonne or lower for the next four years to reach Australia's target—a target you are very confident we will meet. So can you tell me which projects could afford to bid in the CFI on this basis?

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

I am really quite disappointed that the modern Labor Party under Mr Shorten's leadership is so pessimistic about the ingenuity, creativity and energy of the Australian people. We happen to believe that things do not stand still. We do not happen to believe that there is such a thing as a status quo, and we believe that you provide incentives to people. The Labor Party understands all about penalising people and going after people because they have been too successful. We actually believe in providing positive incentives and encouraging people to deploy all of their creative juices and all of their creative energy to doing things better, more cheaply and more efficiently to achieve better outcomes with fewer resources. We are extremely confident that the Australian people and the businesses across Australia will rise to the challenge and that the investment that we are proposing to make through this market based mechanism will absolutely ensure that we will be able to achieve the five per cent domestic emissions reduction target by 2020.

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

What we have heard from the minister is that the only basis that he can provide for a claim that we will achieve a five per cent emissions reduction target, as pathetic as that is, is that he is 'extremely confident'. And he is the finance minister for this nation? What we have just heard is voodoo economics. Just because the finance minister is confident does not mean that anybody actually thinks that that is going to happen. In fact, there are more of us who think that some men just want to watch the world burn, and I would suggest that we are dealing with one of them here this evening.

I wanted to follow on from Senator Singh in relation to the costs. We had many Senate inquiries, and we had lots of evidence from people who are already involved in Carbon Farming Initiative projects. They have said that they need a price of at least $15, if not more, a tonne in order to be viable with those projects. The Carbon Farming Initiative, as I see it here under the Emissions Reduction Fund, is not going to go anywhere near that. What evidence do you have that you are going to pay a reasonable price to these Carbon Farming Initiative existing projects such that they can remain viable? Secondly, for new proponents, one of the issues is the costs of participating. One of the requests that has been made relates to how there are going to be mechanisms to help individual farmers or groups to aggregate so that they can actually bid in once with a project of a reasonable scale.

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

This is, of course, where the rubber hits the road, and where it becomes very obvious that Senator Milne and the Greens do not understand what a true market based mechanism actually is. The thing about auctions, the thing about the market at work, is that the outcomes of those auctions will be determined at the auction. So you cannot speculate in the way that Senator Milne is suggesting that we should speculate on what projects will win and on what basis. You are assuming that what you know is all there is. The truth is that the market at work will always generate so much more. The reason you have an auction is that you want to unleash those market forces. You want to unleash the ingenuity in the market, and that is what we are doing through our Emissions Reduction Fund. We are unleashing the creative juices of businesses across Australia in order to come up with the best possible ways, the most effective possible ways, of achieving emissions reductions. That is clearly a fundamental point that Senator Milne does not accept.