House of Representatives Speech- Carbon Pricing 2012

What we have here today is a scramble to salvage some credibility on the issue of climate change. It is a desperate attempt to maintain the relentless negativity, the schoolyard bully behaviour and the deceit which has been a motivating ideology for those on the other side. It is a pathetic move to prop up the sagging credibility of the Leader of the Opposition on this subject. It seems to me a particularly sad attempt by the member for Flinders to convince himself that he did not sell his soul when he joined the attempt to frighten the Australian people and mislead them about the effects of the carbon price. The member for Flinders seems to have entirely forgotten his previous decade's long commitment to pricing carbon, the purpose of which, as the member for Flinders well knows is to reduce carbon pollution. It is not an electricity tax; it is a price on carbon.

What we have here today is a scramble to salvage some credibility on the issue of climate change. It is a desperate attempt to maintain the relentless negativity, the schoolyard bully behaviour and the deceit which has been a motivating ideology for those on the other side. It is a pathetic move to prop up the sagging credibility of the Leader of the Opposition on this subject. It seems to me a particularly sad attempt by the member for Flinders to convince himself that he did not sell his soul when he joined the attempt to frighten the Australian people and mislead them about the effects of the carbon price. The member for Flinders seems to have entirely forgotten his previous decade's long commitment to pricing carbon, the purpose of which, as the member for Flinders well knows is to reduce carbon pollution. It is not an electricity tax; it is a price on carbon.

And the member for Flinders and those opposite know that the only reason why they like to use this phrase is because they are engaged in a scare campaign. They are engaged in a campaign of denying the way in which pricing carbon works. They do not want to read what the OECD says about this. They do not want to read what the IMF says about this. They do not want to accept what economists around the world say about this, which is that pricing carbon is the least-cost, most efficient way of reducing carbon pollution and, when put together with a comprehensive package of complementary measures, as our government has done, that is the way in which we should be going about reducing carbon pollution.

We have an opposition here that has spent years chipping away at the confidence of Australians—making them fear for their jobs; seeking to make Australians feel economically insecure; making knowingly false claims about the impact of the carbon price on jobs and on prices. And they should be ashamed of themselves. We should be hearing an apology from the Liberal Party, not this continued bluster and deceit about the carbon price.

Their scare campaign has, of course, had some impact on some people's confidence about the future. It has an impact on how comfortable Australians feel about their place in the world, and that is, of course, what the Liberal Party intends. But this scare campaign is based on untruths. It is a scare campaign that has no basis, and it is a scare campaign that has now been exposed.

We have had a carbon price in force in Australia since 1 July this year. It is now some four months since that happened. It has been long enough for the first quarter of results from the consumer price index and the Australian Bureau of Statistics to come through, and we can now see that this scare campaign is without basis. If the Liberal Party were a business, the ACCC would have hauled them off to court long since for false and misleading conduct.

But of course the Leader of the Opposition has a completely cavalier attitude to just about everything. He has certainly got a cavalier attitude to the truth, as have his colleagues. He has certainly got a cavalier attitude to economics. And we know, from what the member for New England has told us in this House, that the Leader of the Opposition, when he begged—begged!—for the vote of the member for New England, said he would do anything to become Prime Minister, and we can only assume from this that he will always put himself before the interests of working people, and always put himself before the interests of Australians, no matter what.

We have this opposition making more false claims about the impact of the carbon price on prices and jobs, but the only risk to the jobs of ordinary Australians are the Liberal Party, the opposition leader, the member for North Sydney, Senator Bernardi—the whole ratbag crew of them. Just ask Queenslanders about Campbell Newman—another part of the Liberal Party—and what he has done to jobs and services in that state, or the callous way in which he has gutted the Public Service, destroyed key services, and thrown people on the scrap heap. Or ask Victorians about the supposedly enlightened Liberal moderate Ted Baillieu and his gutting of the TAFE sector, costing jobs and robbing young people of a secure future.

It is extraordinary to see this opposition bring on a debate on the impact of the carbon price on electricity prices today, because only yesterday we had the welcome news, in the latest ABS bulletin, about the actual increase in prices across the board—and I include in that electricity prices—for the year to date. The year-to-date rise in prices for working families across Australia was just one per cent, and that is according to the selected living cost indexes. The most recent CPI figure that we have had was 1.4 per cent in the September quarter and two per cent over the year to September. Those opposite do not like to hear those figures, because they have been running this false campaign that said that prices were going to go up and up and up and up because of the carbon price coming in on 1 July. Well, we have seen that that has not happened.

As to the particular matters that have been raised by the member for Flinders today about electricity prices: of course, it is true, as predicted by the Treasury modelling, that there has been an increase in electricity prices, and that is included in those most recent figures. That is the most recent CPI figure of a 1.4 per cent rise in the September quarter. But when you get to unpick it, you see that higher electricity prices contributed 0.3 percentage points of that 1.4 per cent CPI increase—less than a quarter of the CPI rise. It is wrong—but we should not be surprised, given their conduct over the last couple of years—that the coalition attributes the entire electricity price impact reported in the September quarter CPI to the carbon price.

And it was also refreshing—and here is another concession—to hear, in the speech of the member for Flinders that we have just heard, that network costs are in fact responsible for a large part of electricity prices, and not just over the 2½ year period that the member for Flinders was talking about. Over the last five years it has been the network costs: what the Prime Minister has described as gold plating—these excessive rises in electricity costs, all of them predating the introduction of the carbon price on 1 July. I am talking about the more than 50 per cent rises over the last five years in electricity costs. None of them could possibly have had anything to do with the carbon price, because it only came in on 1 July. This attempt by the opposition to roll into the carbon price an impression of rising prices in electricity needs to be unpicked and needs to be laid bare. Those price rises over the last five years have got nothing to do with the carbon price; they have everything to do with gold plating of our electricity networks by the states and expenditure on poles and wires, on network infrastructure.

The Prime Minister has remarked on electricity prices that have risen dramatically over the last years prior to the introduction of the carbon price. The Prime Minister said this:

At the heart of all this is a simple market design problem: a clear regulatory incentive to overinvest in infrastructure and pass on costs to consumers.

This is not the view just of the Prime Minister. It is not the view just of the government alone. Just last month, on 18 October, the Productivity Commission stated in its draft report on electricity regulatory frameworks:

Spiralling network costs are the main contributor to these increases, partly driven by inefficiencies in the industry and flaws in the regulatory environment.

The Chairman of the ACCC, Rod Sims, has made very similar remarks, and of course he has the experience and expertise to know, because he came into this job having been the chair of IPART, the New South Wales price regulator.

It is also worth noting—and I welcome them—the public statements made today in an opinion piece in the Daily Telegraph by the New South Wales Minister for Resources and Energy, Chris Hartcher, who clearly has not read the script the federal Liberal Party is working to. He wrote an opinion piece about electricity price rises. I read this and read it again and I have carefully checked it. Not once does he mention the carbon price in his article. Instead he talks about network costs, gold-plating and investment in poles and wires. He said:

With the cost of poles and wires making up a significant component of power bills, my aim is for power price rises to be limited at, or below, cost of living.

It is refreshing to hear a member of the Liberal Party talk about what the real pressures on electricity prices are rather than the imaginary carbon price scare campaign we have had now for years and years in this place. I will say again: Mr Hartcher, a Liberal who is actually prepared to engage in a real debate about why electricity prices might have risen, said this in his opinion piece today in the Daily Telegraph:

Everyone agrees that something has to be done about electricity prices and energy reform is something all levels of government must work together to deliver.

Hear, hear! It is a pity Mr Hartcher is not part of the party sitting opposite here, because then we might hope to have some real debate about why and how electricity prices have risen in the way that they have and how we can get to a situation where, in the interests of Australian consumers, those prices might at least be paused or reduced.

Surprisingly, there are some other Liberals who do not seem to be using the script provided by the Leader of the Opposition and to which the member for Flinders spoke here. In response to the Senate inquiry into electricity prices, released today, coalition senators have been very measured. The report focuses on the real drivers of and the solutions to electricity price rises. It runs for about 200 pages. The coalition senators have supported this analysis. They have not dissented from the view that electricity price increases are due to factors that include:

… electricity markets and market power, business and investment issues, technical and reliability requirements, and policy and regulatory settings.

One never hears of this from the Leader of the Opposition or from the member for Flinders, but the difference between the modest rises in prices from the carbon price, which of course are compensated for through our household assistance package, and the unsustainable and dramatic rises that have been caused by regulatory failure is absolutely clear. The difference is not only that we have provided household assistance to nine in 10 Australian households; it is that we need the carbon price to reduce our emissions. Before the member for Flinders signed up to the Leader of the Opposition's scare campaign, he too knew that and was prepared to say so.

A carbon price is the most efficient way to cut carbon pollution and it contrasts very dramatically with the fig leaf of a policy of the opposition that was advanced in the first week of February 2010 and has been rolled out intermittently and tokenistically since then. It is called 'direct action', I believe. Not one word of it has been changed since February 2010—not in response to any circumstances that have changed in the world and not in response to anything that might have happened in Australia. It is a plan that will cost households $1,300 per year. It gives taxpayers' money to the largest polluters in the hope—not with any compulsion, but just in the hope—that they might perhaps reduce emissions. I say again: the carbon price is the most effective way to reduce emissions and it is the least costly. It is far more effective than the direct subsidy policies we see from the opposition.

What the opposition needs to realise is that this is the future. This is the way in which the world is headed. By next year, 850 million will be living in a country, state or city with an emissions trading scheme. It includes countries like the United Kingdom, Germany, France, Sweden, Norway, New Zealand, Switzerland, the United States, where it is operating at a subnational level, Canada and Brazil.

We hear this nonsensical distinction being made by those opposite about 'economy wide'. California is the eighth biggest economy in the world. Those opposite do not want to acknowledge that. It has an emissions trading scheme that is going to commence on 1 January next year. It is an emissions trading scheme that is remarkably similar to the scheme that we are introducing here in Australia, complete with a carbon farming initiative offset scheme that is very like ours. Korea's will also commence in 2015, and the details of the Korean scheme are going to be published on the 15th of this month. Countries like Turkey, South Africa, Thailand and Chile are working on developing carbon pricing schemes.