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senate vote 2011-11-07#1
Edited by
mackay staff
on
2013-09-06 11:04:08
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Title
Bills — Clean Energy Bill 2011, Clean Energy (Consequential Amendments) Bill 2011, Clean Energy (Income Tax Rates Amendments) Bill 2011, Clean Energy (Household Assistance Amendments) Bill 2011, Clean Energy (Tax Laws Amendments) Bill 2011, Clean Energy (Fuel Tax Legislation Amendment) Bill 2011, Clean Energy (Customs Tariff Amendment) Bill 2011, Clean Energy (Excise Tariff Legislation Amendment) Bill 2011, Ozone Protection and Synthetic Greenhouse Gas (Import Levy) Amendment Bill 2011, Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Amendment Bill 2011, Clean Energy (Unit Shortfall Charge — General) Bill 2011, Clean Energy (Unit Issue Charge — Auctions) Bill 2011, Clean Energy (Unit Issue Charge — Fixed Charge) Bill 2011, Clean Energy (International Unit Surrender Charge) Bill 2011, Clean Energy (Charges — Customs) Bill 2011, Clean Energy (Charges — Excise) Bill 2011, Clean Energy Regulator Bill 2011, Climate Change Authority Bill 2011; in Committee- Bills - Clean Energy Bill 2011, Clean Energy (Consequential Amendments) Bill 2011, Clean Energy (Income Tax Rates Amendments) Bill 2011, Clean Energy (Household Assistance Amendments) Bill 2011, Clean Energy (Tax Laws Amendments) Bill 2011, Clean Energy (Fuel Tax Legislation Amendment) Bill 2011, Clean Energy (Customs Tariff Amendment) Bill 2011, Clean Energy (Excise Tariff Legislation Amendment) Bill 2011, Ozone Protection and Synthetic Greenhouse Gas (Import Levy) Amendment Bill 2011, Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Amendment Bill 2011, Clean Energy (Unit Shortfall Charge - General) Bill 2011, Clean Energy (Unit Issue Charge - Auctions) Bill 2011, Clean Energy (Unit Issue Charge - Fixed Charge) Bill 2011, Clean Energy (International Unit Surrender Charge) Bill 2011, Clean Energy (Charges - Customs) Bill 2011, Clean Energy (Charges - Excise) Bill 2011, Clean Energy Regulator Bill 2011, Climate Change Authority Bill 2011; In Committee
Description
<p class="speaker">Claire Moore</p><p>The question before the chair is that amendment (1) on sheet 7168, moved by Senators Birmingham and Xenophon, be agreed to.</p> <p class="speaker">Mathias Cormann</p>- <p>The Aye voters failed to pass an amendment to the Clean Energy Bill 2011 that would defer commencing the carbon price mechanism until after the election of the 44th Parliament.</p>
- <p>The Clean Energy Bill 2011 was part of a package of 18 bills to implement a carbon pricing mechanism. The mechanism has been alternatively described as a “carbon price” by the Government (the Australian Labor Party) and as a “carbon tax” by the Opposition (the Coalition). The Coalition maintained its opposition to the mechanism during both the 2010 and 2013 elections and says it will <a href="http://www.liberal.org.au/scrapping-carbon-tax-and-reducing-cost-living">“abolish the carbon tax”</a> should it be elected.</p>
- <p>The carbon pricing mechanism commenced on 1 July 2012. It is an emissions trading scheme that puts a price on carbon emissions. It applies to “liable entities” (a group that includes companies that emit a high level of greenhouse gases). Initially the price of carbon is fixed by the mechanism but from 1 July 2015 the price will be set by the market, though note that the Labor Government has <a href="http://www.climatechange.gov.au/reducing-carbon/carbon-pricing-policy">announced plans</a> to bring this forward to 1 July 2014.</p>
- <p>For more information on the carbon pricing mechanism and how it works, please see the Clean Energy Regulator’s <a href="http://www.cleanenergyregulator.gov.au/Carbon-Pricing-Mechanism/About-the-Mechanism/Pages/default.aspx">website</a>.</p>
<p>This is a very important amendment because people who live across Australia should be given an opportunity to have a say given the significant economic costs that the government wants to impose on the Australian economy. In that context, and given some of the statements that the minister has made during this debate and during question time today, I would like the minister to advise the chamber whether she stands by the government's own modelling of the impact of the carbon tax on the Australian economy—that by 2050 it will lead to a GDP which will be $100 billion lower, which will lead to real wages being nearly six per cent lower by 2050, which, of course, will lead to CO2 emissions being 43 million tonnes higher than they currently are. Do the minister and government stand by those findings of the government's own Treasury modelling?</p> <p class="speaker">Penny Wong</p><p>The government does stand by the Treasury modelling, which shows that Australia can put in place a price on carbon, grow jobs, grow the economy, grow national income and reduce emissions from what they would otherwise be.</p> <p class="speaker">Mathias Cormann</p><p>The minister cannot even get herself to concede the point that her government's own Treasury modelling shows that, by 2050, GDP will be $100 billion lower than it would be without a carbon tax and that real wages will be six per cent lower than they would be without a carbon tax. Is there any point in time in the future when the government expects that the reduction in real wages, compared to a scenario without a carbon tax, is going to plateau? I refer to chart 5-12 on real wages, which has been published on page 88 and just keeps going down and down and down. Is there a time when this downwards trending line, which is the change in real wages under the government's carbon tax, is actually going to plateau? Is it expected to then increase again or will it continue to reduce, reduce and reduce further? If so, why should people not be allowed to have a say on whether they are happy to have a carbon tax under which emissions will continue to increase, where real wages will be lower than they would be without a carbon tax and where the economy will be smaller than it would be without a carbon tax?</p> <p class="speaker">Penny Wong</p><p>I think there were two propositions. One was that I was being asked to give an indication of what might happen mid-century. Obviously, what I would say to the senator is that, whilst I have enormous regard for Treasury modellers, I think they would acknowledge that when you are looking at 2050 it is difficult to be completely precise about what will happen in that time frame. But I would also make the point that the findings of the modelling are as I outlined earlier: continued growth in the economy, jobs and income, as well as the reduction in emissions from what they would otherwise be. That is the consistent set of findings from this modelling and the previous modelling. I would also make the point that the modelling does cost the costs of climate change. So we do not have in that modelling the counterbalancing set of costs that the senator does not want to talk about, which are the costs of climate change to our economy, the costs of climate change in terms of the risk that future generations of Australians will have to contend with. I think that is an important point. We do not propose this set of legislation simply as an environmental policy. It is an economic policy. It is changing the way the economy works and it is providing an economic solution to what ultimately in many ways is an economic problem, which is that we externalise the costs of pollution, we do not trap them in any way; what we do is simply defer them to the next generation and beyond. I think the senator is speaking in relation to the opposition's amendment—or Senator Xenophon's amendment, which is the same. I make this point: this is an amendment about delay in relation to a policy where we know that delay increases the costs. In this chamber we are debating policy which has been the subject of debate in this country for almost two decades. There have been some 37 parliamentary inquiries since 1991 and a number of public reviews, including the Prime Ministerial Task Group on Emissions Trading, commissioned by Mr Howard, headed by Dr Shergold, which reported in 2007 and which led to the policy to price carbon through an emissions trading scheme, which the senator used to support. We have had debate in the context of the CPRS, which I think had 60-odd hours of debate—I might be wrong on that but I think that is about right. We have had lengthy debate and many Senate inquiries, including a number, I think, in which Senator Cormann was engaged.</p><p>I disagree with their position but I accept that the opposition oppose this. I do not accept the basis of their opposition. They used to support this when they were more sensible when it came to economic policy and policy more generally. They are simply trying to delay something they oppose. They have consistently done that in the course of this debate. The government's view is that it is time that the country acted, for the reasons we have outlined.</p> <p class="speaker">Mathias Cormann</p><p>This carbon tax will of course do nothing to prevent climate change from occurring. In fact, as we have argued before, this carbon tax in Australia, in the absence of an appropriate and comprehensive global agreement, might well worsen climate change to the extent that it will increase emissions in other parts of the world. I just want to go back to the question at hand, the question that the minister clearly does not want to answer: the impact of this carbon tax on our GDP. It is our job here in the Senate to get the government to answer some questions, and ultimately the Australian people should be able to have a say before an economic change of this magnitude is imposed on the Australian economy—which is, of course, what this amendment is all about.</p><p>The minister says that there is a cost of delay and that it is important to act now because, that way, action will be cheaper than it otherwise would be. That does not seem to be the conclusion of the Treasury modelling. If you compare the Treasury modelling of the impact of the carbon tax with the Treasury modelling of the impact of the CPRS, even though the government is now starting a couple of years later, according to the Treasury modelling, the cost of acting now, a couple of years later, compared to the cost of acting when the government put forward the CPRS, has actually gone down, if we are to believe the government's Treasury modelling. The cost is actually lower now than it would have been if we had acted three years ago, in 2008. If it is cheaper to act now than it was three years ago, how much cheaper is it going to be to act in three, five or 10 years time? Perhaps in other parts of the world they are not going to have the same difficulties, quite frankly, in transitioning the economy from one which is very export oriented, which is very emissions intensive and which relies on a significant resource endowment as one of its competitive advantages. Why would we go ahead of the rest of the world to this extent when clearly the longer we wait the more costs are going down?</p><p>Back to the question at hand: given that the Treasury's own modelling—and the minister says she stands by the modelling—shows that, by 2050, GDP would be $100 billion lower that year alone than it would be without a carbon tax, and given that GDP will be lower every single year between now and 2050 than it would be without a carbon tax, has the minister assessed the cumulative impact on Australia's GDP? Is the minister aware of what the cumulative cost to Australia's GDP is going to be between now and 2050, according to the Treasury's own modelling? Does the minister know what that cost is in today's dollars?</p> <p class="speaker">Matt Thistlethwaite</p><p>I find it quite amazing that we are still, at this stage, debating these issues of delay and the costs associated with the scheme, because we have been over this issue so many times in this place. The fact is that all of the expert advice from economists and scientists states that the longer we delay taking action on carbon pricing, the greater the cost for our economy. The fact is that the cheapest, most efficient means of reducing emissions in our economy is through a market based mechanism, a philosophy that used to be believed by those opposite but, since there has been a change in the leadership, no longer is the policy of the Liberal Party. There have been numerous studies, many of them parliamentary in nature—37-odd inquiries—where the issue has been canvassed: the fact that carbon pricing is the cheapest way to go, and the delays associated with that. And of course there are studies from economists.</p><p class="italic">Senator Cormann interjecting—</p><p class="italic">Senator Wong interjecting—</p> <p class="speaker">Claire Moore</p><p>I remind people on both sides of the chamber that we are working through a debate and Senator Thistlethwaite is speaking.</p> <p class="speaker">Matt Thistlethwaite</p><p>Thank you, Madam Temporary Chairman. We can go back to the Stern review, which was the pacesetter, really, in terms of international studies and the economics associated with pricing carbon and the costs associated with delaying. That was six years ago, and we are still debating this issue here in the parliament. The Australian public is still waiting for action. Australian businesses are still waiting for action to ensure that there is certainty. Senator Cormann has questioned the minister in respect of costs associated with delay. This is an issue that Senator Cormann should be well versed in. It is an issue that has been canvassed and discussed in detail in the Senate Select Committee on the Scrutiny of New Taxes inquiry into the carbon pricing legislation, which he chaired. I think there were four occasions on which Treasury officials appeared before that committee and they underwent quite rigorous and detailed questioning from all sides, particularly on questions associated with the modelling.</p><p>I draw Senator Cormann's attention to the final report of the Scrutiny of New Taxes committee into a carbon pricing mechanism and, in particular, to the government senators' dissenting report where the issue of delay and the costs associated with that is highlighted. I also draw Senator Cormann's attention to the questioning that was undertaken during that process when Ms Quinn and other Treasury officials appeared before the committee and the issue associated with delay was put to Ms Quinn. The question was: 'Had Treasury done any analysis of the costs associated with delaying the introduction of a carbon scheme in the Australian economy?' Ms Quinn's quite detailed response illuminated the fact that there were costs for the Australian community and economy—households and businesses—associated with delaying the introduction of a carbon pricing mechanism in our economy. She said:</p><p class="italic">The analysis that we did suggests that a delay in global action by three years adds around 20 per cent to the first year of global mitigation costs and delaying entry by a further three years adds a further 30 per cent to the first year of mitigation costs. This suggests that, as you delay, the costs only get greater through time ...</p><p>This is the evidence that Treasury officials gave to Senator Cormann's committee, to the Senate, associated with the issue of delaying entry of a carbon pricing mechanism. It accords with all of the studies that have been done by economists. It accords with all of the scientific evidence. It accords with the view, I might add, that previously existed in the Liberal Party under the leadership of John Howard, the Shergold report and other inquiries—</p><p class="italic">Senator Ian Macdonald interjecting—</p><p>The TEMPORARY CHAIRMAN: Senator Thistlethwaite, I am going stop you again. Senator Macdonald, you do not have the call unless you are standing.</p><p class="italic">Senator Ian Macdonald interjecting—</p><p>The TEMPORARY CHAIRMAN: You know that is not right. Senator Thistlethwaite, try again.</p><p>Thank you, Madam Temporary Chair. It accords with all of the credible economic studies, the credible modelling—</p><p class="italic">Senator Ian Macdonald interjecting—</p><p>The TEMPORARY CHAIRMAN: Senator Macdonald, you know that you cannot interject like that across the chamber.</p><p>It accords with all of the studies that have been undertaken both internationally and domestically. It accords with the modelling that has been conducted by a number of credible modelling agencies. It accords with the government's overall view of the reasons behind this policy. It accords with the Treasury's analysis of why an emissions trading scheme and a market based mechanism is the most efficient means of reducing emissions for the least cost in our economy. Of course, it accords with that typical traditional Liberal Party philosophy that markets work efficiently, which has not been adopted by those opposite under the leadership of the Leader of the Opposition, Tony Abbott.</p><p>In all respects, Senator Cormann is aware of what the modelling shows on this issue. He is aware of the international studies which suggest that delaying the scheme increases the cost. He is aware of the fact that, if we are going to be serious about introducing a scheme that will provide incentives across the economy, we need a market based mechanism. That is borne out in the evidence of Ms Quinn to the inquiry chaired by Senator Cormann. So I find it quite amazing that we have had eight hours of debate on this issue in the committee of the whole and we are still tossing around the platitudes and the rhetoric associated with this issue. It is about time that we got onto debating the actual amendments.</p> <p class="speaker">Fiona Nash</p><p>I understand that Senator Cormann was expecting a response to the question that he had asked the minister. I did not know that she wanted to finish before I jumped up.</p><p>The TEMPORARY CHAIRMAN: You jumped first, Senator Nash.</p> <p class="speaker">Penny Wong</p><p>I am happy to respond, but you jumped, Senator.</p> <p class="speaker">Fiona Nash</p><p>Thank you.</p> <p class='motion-notice motion-notice-truncated'>Long debate text truncated.</p>
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