Emissions Trading Scheme Motion

30 September 2010

I welcome the opportunity to speak to this motion, because it is important for this chamber to be clear about the difference between the Labor government and those opposite when it comes to climate change. There is a huge gulf between the two. The Labor government acknowledges that climate change is real, and has been and will continue to be willing to take action on climate change.

Senator Boswell remarked on developing countries struggling to feed and clothe their citizens. What Senator Boswell failed to acknowledge is that these are the very people who are most vulnerable to the impacts of climate change. You need only look at the devastating floods in Pakistan, and to see the terrible impact that is having on millions of people, to appreciate that for us to be, as a developed nation, contributing to such catastrophes—as the science of climate change shows we have the potential to do—is a catastrophic thing. So I am pleased that the Labor government and the nation are acting on this important issue. Those opposite, you can continue to stick your heads in the sand about climate change and be climate change deniers. Because of your continued denial of climate change and its impact, you have no real solutions or ways of addressing what is a really serious and critical issue.

The Labor government accepts the climate change science that shows climate change is occurring. We accept that carbon pollution is causing climate change. We also know that our economy and our environment are at great risk of harm from climate change. That is the basis of our action. We believe the best and most efficient way to reduce carbon pollution is by putting a price on carbon. A price on carbon is an important reform for the Australian economy and it is an investment in the long-term future of our environment, our people and our economy. We know that there are sound economic reasons for putting a price on carbon. A price on carbon will create an incentive to reduce the level of pollution that we create. It is not a tax, unlike the opposition’s policies, which will need to be funded through taxes. It is a market-driven incentive to reduce the level of pollution that we create.

Australian businesses are calling for certainty. They know a price on carbon will create certainty for them. That certainty helps encourage investment in this country. We know that a price on carbon will help drive investment in renewable and low emission technologies and that this will help ensure our economy remains competitive. That is the reality: more jobs, especially in renewable and low emission technologies; more jobs to strengthen the economy and build a sustainable environment. But we cannot do this without consensus—a consensus that builds support for the implementation of a carbon price.

We have a number of policy options on the table that have been debated in the Australian community, but it is important to achieve a community consensus on a carbon price and the timing for its introduction. I am really pleased that we have taken a new direction on climate change that will see Labor establish the Multi-Party Climate Change Committee, as recently announced. It is a committee that is charged with helping build consensus on how Australia will tackle climate change, a committee made up of representatives from around the parliament. And the government has extended an invitation to representatives from the coalition, the Greens and independent members of parliament.

What Senator Boswell failed to acknowledge in his comments about the recent election was that the very problem of climate change is one of the reasons why some of those Independents chose to back the Gillard government. They know that it is a significant issue that their electors and other Australians want to see action on.

The Multi-Party Climate Change Committee will be chaired by our Prime Minister, and our Minister for Climate Change and Energy Efficiency, Greg Combet, will be its deputy chair. I am pleased that Greens senator Christine Milne will serve as co-deputy chair. I am also pleased that Mr Tony Windsor has already indicated his willingness to be a member of this committee. As members of parliament we will all have a chance to engage with our colleagues through this committee and discussions on these important issues. We know we must act with urgency if Australia’s contribution to the climate crisis is to be addressed, but we must also debate this issue thoroughly and get our response right. We now have an opportunity, one that we must act on. It is a new opportunity to explore options for the introduction of a carbon price—an opportunity that the coalition has been invited to participate in and one that it has rejected, choosing to keep its head in the sand and oppose meaningful action on climate change every step of the way. It is a crying shame, because I know that there are good members of the coalition who believe in the importance of addressing this issue.

As I said, I am pleased that Mr Windsor has agreed to participate in the committee. He made it clear that climate change, along with the NBN, was a major reason in his decision to back the Gillard government. He understands that climate change needs to be addressed and he has acknowledged the significance of the Garnaut review’s contribution to Australia’s discussion of these issues. It is interesting to look at Mr Windsor’s deliberations on a carbon price, his having voted both for and against the government’s CPRS legislation. I think this demonstrates his willingness to come at this with an open mind and engage with us on the issue of setting a carbon price. I would have thought that those in the coalition were in a position to do this too, considering their own record of support for a carbon price in the past. It would be terrific if the coalition were prepared to bring their own ideas to the table, because we know that what this country needs is a lasting consensus on climate change, one which will empower us to take action for the sake of our climate and the planet but also, vitally, for the sake of our economy—for, without a price signal on carbon, we will continue to invest in old technologies and carbon-intensive industries that will not adapt to and change with the times. We are currently failing to keep up with moves made by other nations to make their industries climate competitive. If we do not do this, it will result in the loss of thousands of jobs around the nation. Yet again, Mr Tony Abbott wants to play the role of wrecker on this critical issue.

The government have always been clear that we believe climate change is real, we believe in tackling climate change and we believe that the best way of doing that is by putting a price on carbon. The reality is that no party has a majority in their own right on this issue and we are going to have to work together to achieve an outcome in the national interest. That is why we are pursuing this option of a committee. I think it is a significant mechanism to help us deliver a carbon price. We have to have consensus on this issue so that we can make what is a much-needed and sensible economic reform. It is a reform that taxpayers and businesses are demanding from us. This is in stark contrast to the opposition’s position. It is vital that we have people coming together from a broad section of the community to test their ideas so that we can find a way forward. I note that part of one of the committee’s terms of reference is:

… provide advice on, and participate in, building community consensus for action on climate change.

I note also that the question of a citizens assembly on climate change is now a matter for the committee—similarly, the question of a price on carbon in Australia.

The opposition accuses the government of breaking election promises. It is a ridiculous assertion. As members of this place you all know that our capacity to implement any legislative policy is dependent on the will of the two houses in this parliament. If we are too rigid, if we do not listen to and learn from each other, we will never make progress on these critical issues, because we will be precluded from negotiating and making compromises in the national interest. It is time for all parliamentarians to start looking at these issues afresh and get on with tackling climate change. We the ALP, the Greens and the Independents are willing to undertake this task; but, sadly, the coalition is a no-show. Frankly, the climate change committee represents an opportunity for the coalition to put forward its policies too, but you refuse to engage and play ball.

We know that it is important to engage on the question of a carbon price. We have to create an incentive to reduce pollution, an incentive to drive investment in renewable energy and low-emission technologies, and an incentive for business, government and all citizens to change our behaviour. Importantly, Australia needs to provide certainty for business, to keep our economy competitive and strong. If we fail in this mission, if we fail to put a price on carbon, then the longer we delay the greater the economic cost. The government knows it and the business community knows it, but it is something that the coalition flat out fails to acknowledge.

The Climate Institute found that uncertainty caused by delay could cost the economy about $2 billion—$2 billion a year, in fact—or around $600 a household by 2020. In Western Australia currently we have many householders feeling significant pain from increased electricity prices, increases that have been necessary because successive governments have withheld investment from the energy sector and infrastructure. We look like we are going to repeat this experience nationwide now because businesses cannot make investment decisions to guarantee the energy supply of this nation in the future. That is because of the uncertainty about a carbon price. So what will happen is that we will have a bottleneck and a massive spike in energy prices for consumers in years to come.

The Barnett government’s decision to raise power prices by 46 per cent is hitting Western Australia’s most vulnerable. WA households are applying for emergency assistance to pay their soaring electricity bills at nearly three times the rate that they were in 2008-09. In contrast, as demonstrated by the relief provided within our previous CPRS, Labor knows that vulnerable consumers must be protected from electricity price rises as we adjust our economy. That is something the coalition fails to acknowledge. Labor will always protect the interests of low-income earners in making these necessary and vital economic reforms. Under our previous scheme, the average weekly impact of the carbon price forecast by Treasury was going to be $12. In turn, we had proposed household assistance packages to address this problem, to fully offset for low-income households the estimated impact of these increases. If you have the Barnett government, a Liberal government, in Western Australia behaving in this way, who do you trust to take care of consumers who are most vulnerable to these increases?

The coalition has no policy to compensate or help low- and middle-income earners with rising costs caused by their inaction on this issue. Just like the Barnett government, what the opposition intends is a big price shock when, after many years of coalition delay, we will suddenly find ourselves playing carbon catch-up—hitting consumers hard. This will compound the pain of Western Australian families if we do not provide an efficient incentive for investing in low-emissions electricity generation. The coalition are being economically and socially irresponsible. They are being socially irresponsible for failing to accept mainstream economic thinking and failing to take action on climate change.

To compound this irresponsibility, Australians will have to pay more tax for the coalition’s so-called direct action plan. The coalition have proven just how bad and just how inefficient their direct action policies can be. They proved this when they were in government, when they promised over $400 million over four years for 11 million tonnes of abatement. Instead, they spent only $132 million and achieved an abatement of just four million tonnes.

In contrast, we know a carbon price is a major economic reform that will create an incentive to reduce pollution. It is about driving investment in renewable energy and low-emission technologies. Business leaders in Australia understand that this is an important economic reform that we must make. We must make it so that we can be internationally competitive over the long term. Our industries must become less carbon intensive, and the best way of doing this is by establishing a carbon price in the economy.

Businesses need certainty. They need certainty so they can plan ahead with confidence. Delay is currently costing Australian industry. They need to know the form of a carbon price. Currently, businesses in Australia are calculating a great deal more risk into their investment decisions. What does risk equal? It means Australia is more expensive than it needs to be; it means less investment and it means fewer jobs. We know the longer that we delay the greater the adjustment cost, which is why business leaders around Australia are calling for action. That is why we can no longer delay. The Australian people know this, the Labor government knows this, and Australian and international business know this. Just ask BHP Billiton’s CEO. He said:

To remain competitive in a future carbon-constrained world, Australia will need to turn into a lower carbon economy.

Business Council of Australia President Graham Bradley said there ‘will inevitably be the need for a market based mechanism that will give us the lowest cost approach to reducing the carbon intensity of our industries’.

I ask: why would those opposite want to wreck the government’s plan to take steps to move us closer to a lower carbon economy when we know that the Labor government are taking a responsible course of action by looking at getting a carbon price into our economy? The government are not approaching this issue with a closed mind but with openness, ready to engage with our colleagues, ready to engage with the people of Australia and with a willingness to approach this issue to create a consensus. The other members of the committee are willing to do this too. Mr Abbott and his team, by not being part of this, are seeking to wreck the process and they are being economically irresponsible because what we need now is a way forward together, a way forward for our environment, for our community and for our economy. I call on those opposite not to knock it but to join us.