Carbon Pollution Reduction Scheme Bill (No.2)
Mr HAWKE (Mitchell) (9:44 PM) —I rise tonight to speak on the government’s so called Carbon Pollution Reduction Scheme (Charges - Customs) Bill 2009 [No.2] and related bills that are before us. From the outset I want to make it very clear that I am strongly opposed to what I regard as the Rudd government’s proposals to implement a carbon tax, a new and complex tax in my view that will add to the size and scope like no other measure in Commonwealth history. You ought not to take my word for it. Terry McCrann, in his article of 8 August 2009, says that the ETS is a tax. He warns all Australians ominously:
It’s not called a tax, but if it waddles like one, quacks like one, and most pointedly raises money like one, it’s a tax. And not just any old tax—it’s a huge and continually growing tax.
For those who are concerned about the Liberal Party’s position in this debate and on this issue, I want to open my remarks by reinforcing in the strongest terms that the coalition joined with all other non-Labor senators to vote down the Rudd Labor government’s proposed emissions trading scheme. We are back here today with the same legislation because of the Labor Party’s determination to use this issue as the great wedge of our time. It is my view that Labor is now playing pure politics with the issue of climate change.
What we know is that the government’s emissions trading scheme is deeply flawed. I accept today that it is true that many people are caught up in the idea that an ETS could solve a perceived problem with climate change caused by humans. It is a thesis that I want to reject today in a number of ways. It is clear from what we have seen from the Rudd Labor government that politics appears to be the goal of the rush with this legislation. What we have seen is that principled operators in this debate, like the Greens in the Senate, have preferred to oppose the emissions trading scheme on the view that it will not achieve environmental outcomes. Indeed, they make a very valid point that going through all of the rigmarole that is involved with this legislation will not produce a demonstrable environmental benefit. In fact, there is a serious body of evidence that suggests that there will be a questionable outcome from the entire scheme.
When you have parties like the Greens saying that this is not an effective scheme and that it will not work the way that the government says it will, the Independents in this place saying that it will not work and the myriad of business and independent voices around Australia saying that they have grave concerns with the way that this legislation will operate, we ought to think very carefully here in this place about what we are doing. We ought to pause, we ought to reflect and we ought to have a debate about it. And yet we have this procession of Labor backbenchers telling us that we ought not to be having a debate; that somehow this is the moral imperative of our time and we ought not to question the detail of the scheme, how it will operate or how it will affect everyday Australians.
But when you look at this legislation—and it is a very big and complex piece of legislation—it is very difficult to drill down to what simply the government is trying to do. It is an oxymoron to say that you can have a simple explanation of the Carbon Pollution Reduction Scheme or the emissions trading scheme when you examine the size and complexity of what they are attempting to do. If you look at the bills in front of us, essentially they are trying to create an overall disincentive for people to emit carbon through the use of taxes, permits and other mechanisms. But the idea is that a disincentive will be created for the emission of carbon in the economy and in the daily lives of individuals by using all of these different mechanisms.
However, there is something that the government has failed to demonstrate. After it collects all of this revenue and tax that will be raised by all of their mechanisms, it will then proceed to subsidise heavy industries, heavy emitters, polluters and what they term low- and middle-income households. By the use of subsidy, they therefore remove the very disincentive that they are trying to create in the first place to reduce the emission of carbon. So you go through this massive churn in financial terms, in legislative terms, in taxation terms to produce an environmental benefit that is questionable and negligible. That is why there is pronounced opposition in the Greens and other parties to this type of scheme. It is one of the reasons why I oppose this scheme as well.
If you look at what the many business organisations and large enterprises consider will be the outcome of this, the Minerals Council of Australia, for example, showed that per capita revenue raised by our Australian scheme compared with similar cap and trade schemes in the USA and the EU, Australia comes out remarkably worse off. For example, a comparison of per capita revenue raised by competing schemes in the first full year of operation of a cap and trade scheme shows that Australia would raise $404 per capita, the United States would raise $57 per capita and the EU would raise just 80 cents per capita. That is $404 per capita compared with $57 per capita and 80 cents in the USA and the EU. As the member for Fremantle pointed out, we are sure punching above our weight in relation to per capita revenue raised.
From the evidence that we have seen, there has been little or no scrutiny of the Rudd Labor government on this scheme and the design of the proposed legislation that is before us. This is a very disturbing problem. From what we have seen, it is clear that the Minister for Climate Change and Water cannot explain the government’s own cap and trade system when asked about it many forums. The minister cannot explain their permit system, the role of voluntary measures in the system and how all of these measures would interact. On this point regarding the system of permits and subsidies, it concerns me greatly that the Minister for Climate Change and Water is not across the detail of how this scheme will operate. This adds to my already great concern about a measure that will give government the most unprecedented boost in its scope and its size in our Commonwealth’s history.
In addressing these bills, it is important for us to ask why we should act before the rest of the world and ask about the experience of carbon trading where it has been developed to date. When you examine what has happened in other places in the world, the European experience with carbon trading has badly backfired. That demonstrates that an artificially carbon trading market has severe problems that quickly undermine the intention of the mechanism: to reduce the emissions of carbon. In Europe, for example, you have a dichotomy. Developing states in Eastern Europe are seeking to expand their economies and therefore in a way hijack the intention of the carbon trading scheme by offering freer and cheaper permits in those states, undermining the whole integrity of the system. In fact, when you look at the European experience, it is completely uninspiring.
It is my view that carbon trading could well represent the biggest distortion of the market and the biggest single intervention in the economy in modern history. There was a great article from Bloomberg on 17 July 2006 by Matthew Carr, who records the following:
When EU officials created a market for trading pollution credits they boasted it was a ‘cost conscious way’ to save the planet from global warming.
Five years later, the 25-nation EU is failing to meet the Kyoto Protocol’s carbon-dioxide emission standards. Rather than help protect the environment, the trading system has led to increases in electricity prices of more than 50 per cent and record profits for RWE,AG and other Utilities
This is a market distortion if I ever saw one. The government created market distortion which ought to frighten every Australian, considering the proposition that an ETS could be good for the economy—50 per cent increases in electricity is nothing to be taken lightly. Bloomberg conclude in the same article that the $44 billion a year market in carbon trading is an environmental and economic failure. That is according to Open Europe, a policy group that assesses the EU’s laws. So let us be clear. We represent 1.4 per cent of the world’s emissions and if we do nothing naturally that will fall to one per cent. In fact, if we shut everything down in Australia, growth in China would account for emissions in just eight months that take a year for Australia. So why would we pursue a policy mechanism that has demonstrably failed in Europe?
Certainly I accept the argument of my colleagues and many people in the community that we ought not be doing anything before Copenhagen and preferably ought not be adopting this system at all. But the Rudd government has had this obsessive mantra about passing a scheme before Copenhagen. It must be asked: why? A government that continually moans about artificial gases is forcing an artificial time frame on us. I believe that Copenhagen, to this government, is about opportunity. I question the motives of the Prime Minister in pushing this scheme before Copenhagen. The government claims it is a world-leading measure, but actually it puts our economy and the jobs and industries of Australians at risk. I do not believe that Australia is well served by being locked into a course of action when the major world emitters are not and when we represent only 1.4 per cent of the world’s emissions. I do not accept the argument of the member for Wills that there is a moral imperative for us to do something when we are so insignificant. If we did not act, it would not of course make any difference to the world’s carbon emissions.
When you examine the impact of how this legislation will affect many sectors in our economy there are great concerns. I highlight some big ones here today, particularly the areas of agriculture—basic areas that have always been so primary to Australia’s role in the world as a producer of food. I think our role as a producer would be seriously threatened under this legislation. I quote Senator Heffernan, my friend and colleague, who has a prescient feel for agricultural issues. He says:
As an opposition it is imperative that a more practical solution be achieved which does not put our nation at a disadvantage nor burden consumers and small businesses with large increases in electricity prices. One of my key concerns about the Rudd government’s proposed legislation was its refusal to rule out putting agriculture into the ETS after 2015. If our farmers were subject to an ETS, whilst the United States and European Union have exempted their farmers, not only would they be at a competitive disadvantage but many would become insolvent overnight, particularly beef, dairy and sheep farmers.
The idea that many farmers would become insolvent overnight is something that the government must take into account in the design of this legislation and what it is proposing. It is a very serious matter that agriculture, so primary to this country’s production, be considered and treated in a way that is not to its detriment.
I want to raise my own area of concern and that is small and medium sized business. To me one of the greatest areas of concern is what will happen to business if this legislation passes this place. It was remarkable to hear the Treasurer come in here recently and say that some businesses may face higher input costs, as he put it. He said they would be modest increases. I feel that displays a rank contempt for small and medium business. Imagine going to many of the small and medium business operators in my electorate and saying: ‘You are going to face an increase in your electricity prices. It will only be modest so don’t worry about it. There will be higher input costs in a range of areas, but you will survive somehow.’ The government does not have an answer for those small and medium enterprises that will face higher input costs and higher electricity costs as a result of this legislation.
We will see a reduction in employment. We will see a reduction in investment. We will see a toughening of the environment for small and medium enterprises. I think it was remarkable to hear the Treasurer of the Commonwealth saying that these simply represent modest increases with no other explanation for small and medium enterprises. In some respects, what would you expect from someone who thinks that entering into $300 billion of government debt was a beneficial thing for our economy?
The Liberal Party has a very different view in relation to small and medium enterprises. The Liberal Party is the party of enterprise and freedom and it is because of our belief in these things that I cannot in good faith support a new tax that will so heavily impact on so many small and medium enterprises across our country. It is these people, many of them in my electorate—self-employed people, people who have worked to create their own businesses, the innovators, the creators and the producers—that this massive new taxation scheme threatens the most. It is this base of self-reliance, ingenuity, innovation and hard work that stands to lose the most from this unfair new tax. I reflect and record very clearly here that my electorate, in contradiction to what some of the members opposite have said, have been contacting me expressing concern mainly about how this massive new taxation scheme will impact on them and their small and medium sized businesses. Mitchell is home to so many small business people who innovate, manufacture, produce and employ. The more people who come to understand an ETS and understand that it really represents a tax, the more they make clear to me their concern with the proposed legislation and their ability to pay any new tax of the nature proposed.
I have no doubt that the Labor Party is using climate change as its most potent political weapon to win elections and it may be that Australia ends up with an emissions trading scheme no matter what any opposition party does. However, it is vital that the government take into account the serious concerns in many sectors of the Australian economy and that those concerns are well founded on costs and the ability of business to survive under such an oppressive regime. There is increasing concern about the science, conflict about the figures and a growing number of people who are concerned that the climate change debate has been deliberately hijacked for political purposes worldwide. We have seen commentators like Janet Albrechtson in her column today highlighting the contribution of Lord Monckton, who was warning that the aim of the Copenhagen draft treaty is to set up a sort of transnational government on a scale the world has never seen. It is a thought that I think should be seriously reflected on at least.
We have seen world leaders like Vaclav Klaus, who wrote a book called Blue Planet in Green Shackles, who essentially started saying that today’s debate about global warming is essentially about freedom and points out that much of the environmental moral imperative that is suggested behind this legislation is coming from a political perspective. We have seen people like Andrew Bolt, perhaps one of the strongest critics challenging populist opinion on this topic, suggest there are serious concerns that ought to be taken into account by many credible and reputable scientists—serious and measured professionals. We have seen works from people like Professor Ian Plimer, who penned a great contribution called Heaven and Earth. We have seen a movie just released in Australia to much fanfare, Not evil just wrong. It makes an important and ongoing contribution to the ordinary debate about the ongoing causes of climate change. And it is good to see that there is a genuine debate that is being considered on both sides of this argument, in short shrift to the contempt that is being shown by some people to other people’s points of view.
We should also heed the warnings of respected figures like the Hon. Ian Callinan AC QC, High Court Justice from 1998 to 2007, who said:
Emissions regulation offers government an irresistible opportunity to centralize and control every aspect of our lives; on our roads, on our travels, in our workplaces, on our farms, in our forests and our mines, and, more threateningly, in our homes, constructed as they will be compelled to be, of very specific materials and of prescribed sizes. It is not difficult to foresee a diktat as to how many lights we may turn on and when we must turn them off: the great curfew. The new regime has the capacity to make the wartime National Security Regulations look like a timid exercise of government restraint.
I read that quote out because I feel it is a very powerful and compelling warning from a respected figure in our nation’s history who points out that his examination and his intelligence teaches him that these proposed bills seriously threaten our freedom.
Governments, in all their forms, have been trying to run our lives one way or the other for all of human existence. Since the advent of capitalism and free markets, governments have been limited and rights for citizens have offered us protection against unbridled government. The true story of Australia’s success since its European settlement is a story of rugged individualism and the unbridled ingenuity of its citizens in overcoming a harsh and brutal climate, a story of hard work and achievement that has produced one of the highest standards of living in the world. This high standard of living now faces a most serious assault from a Labor government determined to use a green veneer to impose a tax on every form of industry, activity and human endeavour in our country.
From the design and intent of this legislation before us, it appears our historical protections are no longer enough to stop government from interfering in an unacceptable way in our daily lives. Under this carbon tax, will you need a permit to conduct your life in the way the government requires? A permit to conduct your business the way the government deems valid? A permit for yourself and your family to exist on the terms the government thinks appropriate? Forcing Australians to apply for permits or live off subsidies from government for working to produce a higher standard of living for themselves and their families is a system I cannot and will not support.
I reject these bills. I reject the premise of these bills: the premise that the government can impose a system of taxation on every sector of our economy that will make a true difference to the climate of the planet. I reject the premise that a Labor government can artificially create a carbon market that will reduce the emission of carbon in a way that will alter the climate of our planet. In fact, every Labor intervention in our economy has resulted in higher taxes and more government. There is no evidence before us to suggest this legislation will be any different. And in rejecting these premises I also reject these bills. I reject the Labor Party’s unprecedented program to expand the size and scope of the Australian government.