Carbon Pollution Reduction Scheme Bill 2010

Jason Clare, Member for Blaxland

I rise to speak on the Carbon Pollution Reduction Scheme Bill 2010 and cognate bills.

This is the third time that this legislation has come before this House. It has now become a debate of two competing plans: the plan detailed in this legislation and the plan announced by the Leader of the Opposition last week. The plans are very different but ultimately the objective is the same: to cut carbon pollution by five per cent. This is no easy task. The key question here is whether they will work. This legislation puts a cap on carbon pollution. It makes polluters pay. It compensates working families for the 1.1 per cent increase in the cost of living. For the average family that is $12 a week or $624 per year. Nine out of 10 households will receive assistance. On average they will get $660 a year. Pensioners, carers and people with a disability are fully compensated. This legislation works because it puts a cap on the amount of carbon dioxide that the economy will produce, and that ensures that we can cut emissions.

The opposition’s plan, the Abbott plan, involves spending about $10 billion over 10 years on an emissions reduction fund, soil carbon, tree planting, solar panels and hot water systems. It sounds simple, but it has some problems with it. The main problem is it does not work. It does not work because it does not have a cap on carbon pollution. It has some other problems. It does not make polluters pay. It makes taxpayers pay-something like $1,000 a year per household-and it provides no compensation at all when the companies that they fine under the Abbott plan pass on these coststo consumers. Instead of capping the amount of carbon pollution that we will produce, the alternative plan, the Abbott plan, tries to cut emissions by picking projects to subsidise. This is a fundamental flaw. In his contribution, the former Leader of the Opposition yesterday said that that was ‘a recipe for fiscal recklessness on a grand scale’ and ‘a slippery slope which can only result in higher taxes and more costly and less effective abatement of emissions’. That is not the government saying that; that is the former Leader of the Opposition, Malcolm Turnbull, the member for Wentworth.

The main problem with the Abbott plan is it will not work. It is like a brand-new car without an engine: it looks good but it will not work. It will not get you anywhere. It will not even get out of the driveway. That is the basis upon which these two competing plans must be judged. Which one will work? Which one will cut emissions? On that basis, the Abbott plan fails because it cannot cut emissions by five per cent. In fact, it will not cut emissions at all. The advice of the Department of Climate Change is that under the Abbott plan carbon pollution will go up, not down. It will go up by something like 13 per cent. To work, the Department of Climate Change advises that the opposition would have to triple the amount of taxpayers’ money they spend on their plan. Instead of slugging taxpayers $10 billion, they would have to slug taxpayers $30 billion.

The department are not the only ones saying this. We heard in question time today from the Minister Assisting the Minister for Climate Change, where hequoted David Pearce, the director of the Centre for International Economics, who last year conducted a review of greenhouse policy on behalf of the coalition. He said this:’… the apparent simplicity of the coalition plan would soon disappear if it were ever implemented … The cost of the scheme could also rise significantly once details such as penalties and assignment of risk were taken into account … ‘ That is from David Pearce, former adviser to the coalition on climate change. In his analysis in the Sydney Morning Herald last week, Ben Cubby also outlined problems with the opposition’s plan: ‘By failing to address the sources of rising greenhouse gas emissions, even the federal government’s minimum target of 5 per cent cuts by 2020 would be likely to spiral out of reach, potentially exposing Australia to punitive action from other nations that are able to meet their targets. A 15 or 25 per cent cut by 2020 could no longer be contemplated, passing on much steeper costs into the following decade.’

We have heard from the Department of Climate Change, which says the Abbott plan would not work. We have heard from former advisers to the coalition on climate change who said it would not work. But perhaps the most important contribution to this debate in determining what plan would work is the comments of the former Leader of the Opposition in this place yesterday, where he said this:  ‘This legislation is the only policy on offer which can credibly enable us to meet our commitment to a five per cent cut to emissions by 2020 …’ This is the important thing. This is a debate about which plan will cut emissions by five per cent by 2020, and that is the basis upon which in the first instance we need to compare these two plans. What the former Leader of the Opposition told this place yesterday is that there is only one plan that will do this, and that is this legislation. The Abbott plan will not.

The former Leader of the Opposition, the member for Wentworth, is not the only Liberal who realises the best way to cut carbon pollution is with an emissions trading scheme. This is the great irony of this debate: the Liberal Party are now opposed to the same thing they voted for under John Howard and promised to do if they won the last election. On 3 June 2007 John Howard said: ‘Australia will move towards a domestic emissions trading scheme … beginning no later than 2012. Australia will continue to lead internationally on climate change, globally and in the Asia Pacific …’ John Howard said this, John Howard did this and John Howard got his party to support this for two simple reasons: (1) because it works and (2) because it is the cheapest way to do it. This is the advice of Dr Peter Shergold, John Howard’s most trusted and senior adviser. The Shergold report, the report of the task group on emissions trading which John Howard commissioned, said this at page 6: ‘The Task Group is firmly of the view that the most efficient and effective way to manage risk is through market mechanisms. An Australian emissions trading scheme would allow our nation to respond to future carbon constraints at least cost. Emissions trading focuses on the ultimate environmental objective: to reduce emissions in the most efficient manner.’

That is what we are trying to do here: reduce emissions in the most efficient manner. I do not see this as a debate on whether climate change exists or not. You have two plans here whose objectives are to cut emissions by five per cent, and the basis upon which you have to judge them is whether they are effective in meeting that and which is the most cost-effective way to do it. Here you have the Shergold report giving advice to the former Prime Minister saying the most effective way to do it, the cheapest way to do it and the best way to ensure that you do do it is with an emissions trading
scheme. It goes on: ‘Emissions trading enables the market-not government-to decide which new or existing technologies will reduce emissions at least cost.’

That is why the Liberal Party promised hand on heart at the last election that they would introduce an emissions trading scheme. That is why a few months ago John Howard, when asked about this legislation, said it was ‘not all that different from the one I took to the last election’. That is why the member for Wentworth,when he rose in this place yesterday, said: ‘At their core, therefore, these bills are as much the work of John Howard as of Kevin Rudd.’

Who would have thought the Liberal Party thought John Howard was capable of such a despicable act? I am forced to ask myself why all this has happened. What explains this big shift in the view of the Liberal Party since John Howard left this place? What explains the shift in the last few months? It is to do with politics not policy. If you want to find the origins of this shift you have to go back to 3 June last year. This is when the national accounts data came out for the March quarter and it showed that Australia, unlike the rest of the major advanced economies around the world, did not go into recession. The economic ramifications of that, as we all know, were enormous-the political ramifications were even greater. It proved that the government had made the right decision to stimulate the economy and the Liberal Party had made the wrong decision to vote against it. That was the economic debate- it changed everything in this place. If you want proof of that, have a look at the number of questions the opposition asked on the economy before and after that event. Between 3 February and 2 June last year, the opposition asked the government 154 questions without notice on the economy. In the rest of last year after 3 June-five months-they asked only 51 questions on the economy-so before the data came out 154 and after the data came out 51.

Instead of asking questions on the economy, they had to look for something else and it did not take long for them to find it. On the very next day, 4 June, the former Leader of the Opposition asked his first question about a ute and we all know where that ended. The data which came out on 3 June shifted the whole debate in this country. The opposition had to look for something else to scare the Australian public. They moved from fear to smear. It also affected the way the new opposition leader approached this topic and this legislation. We all remember that in July last year the member for Warringah, now the Leader of the Opposition, was advocating a vote for this legislation. He said it should be passed. A couple of months later though he changed his mind. What explains this? Have a look at an opinion piece that the Leader of the Opposition wrote in October last year which explains why he changed his mind. He said: ‘A few months ago-before the 3 June data came out-the Liberals’ best bet seemed to be getting the ETS off the agenda and concentrating on debt and deficit.’

What changed? One thing changed-the economy. Australia did not go into recession, the stimulus plan worked and so the Liberals needed something else to campaign on, something else to give people a reason to vote for them, something else to scare the Australian public about. They chose this legislation. That is why this legislation is still here and why we are debating it for a third time. It is also why Malcolm Turnbull, the member for Wentworth, was killed off. It is not about policy; it is all about politics. If you want another example of this, more proof of why the Liberal Party have shifted positions on this legislation, have a look at the first speech of Senator Mathias Cormann in the Senate in 2007. We have just had a first speech. We all understand how important those speeches are and how they articulate your policy views. When Senator Cormann stood in the Senate for the first time in 2007, he said: ‘The government’s recent announcement of a national emissions trading scheme, including offsets for trade exposed industries, is a positive and sensible approach to addressing global warming.’ When John Howard announced this, he said it was a great idea. A couple of years later he quit his job and knifed his leader over exactly the same thing. It has nothing to do with policy; it is all to do with politics. It is about finding another issue, another reason to try to scare the Australian public and give the opposition something to campaign on. That is why this legislation is still here and why it was not passed by the Senate in December last year.

One of the arguments that is always put up in this debate is that this legislation will cost jobs. As Parliamentary Secretary for Employment it is an issue that concerns me, but it is also an argument that I have heard many times before. It reminds me of the debates that happened in this place in the 1990s about universal superannuation, when the Liberal Party would come in here and fight tooth and nail trying to stop the implementation of universal superannuation. They said it would cost jobs because businesses would have to sack people to survive. What happened? People did not get sacked; new businesses and new jobs were created. It proved to be one of the most important economic reforms of the last century. It created new industries which now have more than $1 trillion in funds under management, making Australia’s superannuation savings the fourth largest capital pool in the world. It also created jobs. A report released last year by the Association of Superannuation Funds of Australia estimated that 60,000 people are now directly employed in the superannuation industry. The fact is structural reform creates new industries and new jobs. This legislation is no different. Treasury modelling shows that employment will continue to grow strongly under an emissions trading scheme and that the scheme will create new industries and new jobs. Modelling published in the Intergenerational report projects that by 2050 the alternative energy sector will be 30 times larger than it is today. The Climate Institute has estimated that this will create about 26,000 jobs, mostly in regional areas.

A lot is also being said in this debate about Copenhagen and what it means. I have always said, irrespective of Copenhagen, one thing is certain-there will be a price put on carbon. If you assume this, there are strong reasons to support this legislation and there are strong reasons for this country to act now. Treasury’s advice is that, the longer we wait to set up an emissions trading scheme, the more it will cost. That is why it is in our interest to pass this legislation now and why both sides of parliament have agreed to a five per cent reduction in emissions by 2020 without international agreement. The longer we wait to do this, the longer businesses have to wait to find out what rules will govern their investment decisions. They want to know what the rules are so they can make long-term investment decisions that will create jobs. That is what leaders in the business community are saying.

When these bills were voted down in December last year, Carl McCamish, the head of policy and sustainability at Origin Energy, said: ‘Ongoing uncertainty risks delaying both the investment necessary to meet Australia’s long-term baseload electricity needs and the investment in lower-carbon technology required to gradually reduce Australia’s emissions.’ That is why this legislation is so important. If you accept that there will eventually be a price put on carbon then the longer we wait the more it will cost, the more it will delay these important investment decisions that business want to make and the more jobs it will cost.

I will end my contribution where I began. The Australian people have now been offered two plans to cut carbon pollution. Only one will work. Only one will cut carbon pollution by five per cent. That is an important difference. I will repeat what the member for Wentworth said yesterday: ‘This legislation is the only policy on offer which can credibly enable us to meet our commitment to a five per cent cut to emissions by 2020 …’ These are the words not of the government but of the bloke who was once the Leader of the Liberal Party, the person that they once wanted to become the Prime Minister of Australia. He says that this legislation is the only plan that works. If you apply this test, the question is an easy one. It is like choosing between DVD and Beta. Only one will work. The other one will not.

Of course, why would you expect a plan put together by a bloke who thinks climate change is ‘absolute crap’ to work? Why would he do anything about something if he did not even think it existed? What the Leader of the Opposition has presented here is a pretend plan for what he thinks is a pretend problem. I am reminded here of an article I read two years ago, in July 2008, by Phillip Coorey in the Sydney Morning Herald, where he quoted an unnamed Liberal MP explaining why he voted for John Howard’s emissions trading scheme: ‘We were staring at an electoral abyss. We had to pretend we cared.’ I have often wondered who that unnamed Liberal MP was. Who could it have been? I wonder whether it was the current Leader of the Opposition, who does not believe that climate change is real but suddenly has a plan to tackle it. This is pretend plan by somebody who does not even believe that climate change exists. They were pretending then and they are pretending now. That is why the member for Wentworth has said that this is ‘a con, an environmental fig leaf to cover a determination to do nothing’.

The last speaker quoted what a former member for Blaxland, former Prime Minister Paul Keating, said about John Hewson’s GST: ‘If you don’t understand it, don’t vote for it.’ As the current member for Blaxland, let me say this: if you do not believe in climate change then do not vote for this legislation. But, if you believe that climate change is happening-as most Australians do-and you want to cut carbon emissions, you will vote for this legislation, because it is the cheapest way to do it and, in this debate, it is the only plan that will do it. For those reasons, I commend these bills to the House.