If we do not act on Carbon our children will pay the price (14/09/2011)

09 January 2013

Maiden-Speech.jpgModern Australia was built on the efforts on men and women who were willing to make an investment in the future of this great country, men and women who had a vision beyond the present and men and women who thought about the future of this country and what it might look like for their children and beyond.

They were led by governments who in the main believed in building a country which was the envy of the world and a place to build our hopes and dreams. The question for this generation of leaders, the people who occupy this place, is whether we have the right to claim the title of heirs to this legacy, whether we have the courage to build and to introduce policies which are in the future national interest and look beyond short-term political opportunism, because this generation does indeed have a challenge.

We know that greenhouse gases are one-third higher than before the Industrial Revolution. We know that global temperatures have risen by 0.7 degrees Celsius over the past century. We know that unabated they will continue to rise. We know that the last decade was the world's hottest on record and we know that globally 2010 was the equal warmest year on record. We know 2010 was the 34th consecutive year with global temperatures above the 20th century average and we know that climate change and global warming are real. We know the consequences are real and we know that we have to change the way that we do things in Australia and around the world if we are to avoid catastrophic changes. We know that if we do not act our children will pay the price.

This government has a realistic plan on how it will respond to this generational challenge. We have a target, which is shared by those on the other side of the chamber, though they sometimes deny that climate change is real. Nonetheless, we have a target which is shared by all in this place of reducing our carbon emissions by five per cent over 2020 levels. On this side of the House, we have a plan to tackle this in the most efficient and effective way. Our plan will put a price on carbon, because we believe this is the most effective way to ensure that we change gradually and do not need to put in place dramatic efforts to reduce our carbon emissions if we leave the situation to continue unabated. We will do this in a way that brings households along with us and looks after those who are in need of assistance. Under our plan nine out of 10 households will receive assistance through either tax cuts or payment increases. Almost six million households will get tax cuts or increases in payments that cover the entire average price of the introduction of carbon pricing. Over four million Australian households will get an additional buffer with the assistance that covers 120 per cent of the average price impact of the carbon price. The net effect of this is that they will have the capacity to adjust the way that they live and the way they use energy and, if they do, they will be able to pocket the difference. If they are unable to make these changes, then they will be no worse off.

This presents us with an enormous opportunity to put in place some significant tax reform. As a result of our increase in the tax threshold, shifting the tax threshold from $6,000 to $18,000, over one million Australians will no longer need to lodge a tax return. On average our package will cost households around $9.90 a week, but they will get $10.10 assistance in return. This assistance will be permanent, and the government will review the adequacy of assistance each year and increase it further as necessary.

It is no secret in this place and elsewhere that I have had a lot to say about the manufacturing industry and in particular the steel industry, as it is so important to my electorate of Throsby, which takes in Port Kembla and the BlueScope steelworks and many other manufacturing businesses. I am very pleased to see that, as a result of advocacy of many members on this side of the House, including me and my colleague from the Illawarra, the member for Cunningham, Sharon Bird, we have been able to see some significant assistance for manufacturing and the steel industry make the necessary transitions. I point to the Jobs and Competiveness program, which is an important part of this package of legislation. It will provide assistance to emissions-intensive and trade-exposed industries with the aim of supporting jobs and businesses make the transition. The way this assistance is provided maintains the incentive for companies to reduce their carbon pollution partly because they will compete with each other and other companies to look for cost-cutting ways to ensure that they do not lose a market edge. The initial rate of assistance will be 94.5 per cent for the most emissions-intensive and trade-exposed industries and 66 per cent for moderate emissions-intensive industries. This will provide significant shielding for many, many industries in my electorate of Throsby.

In addition to providing the free permits and the free assistance for those emissions-intensive industries, two separate funds have been set up to assist businesses in the manufacturing of food and foundries and related industries to make the necessary adjustments to transform their businesses and to implement energy-saving and energy-efficiency measures, technologies and processes. I point to the $200 million Food and Foundries Investment Program, which will provide grants for manufacturers in the food-processing and metal-forging and foundry sectors to invest in energy-efficiency projects and low-emission technologies, processes and products. In addition, an $800 million clean technology investment program will provide grants for those manufacturers in a sector not eligible for other forms of assistance to invest in energy-efficiency projects and low-emissions technologies, processes and products.

Separate from the CEF package of bills, but being debated at the same time, is the Steel Transformation Bill 2011. The steel industry is facing considerable pressure in Australia and right around the world at the moment. Many say it has not yet recovered from the global financial crisis. In Australia we are facing additional pressures due to the high Australian dollar and the high input costs of iron ore and coal. The Steel Transformation Bill provides the legislative framework for the establishment of a steel transformation plan, which provides a $300 million special appropriation to assist the two main steel producers, BlueScope and OneSteel, to introduce mechanisms, innovations and investments to ensure that they reduce their carbon intensity and assist them make the structural transformation necessary to ensure that they still have a viable future in this country. Indeed, the bringing forward of $100 million in this special appropriation was instrumental in assisting BlueScope, which has recently announced a significant restructuring of its operationsincluding those in Port Kembla in my electorate. This will have a significant impact on the local economy, and I fear that without the bringing forward of that $100 million in assistance the future for BlueScope in Port Kembla would have been very dire indeedmuch worse, in fact, than the current situation.

The plan for the fund contains two elements. The first will provide for a competitiveness assistance advance payment, which I have just referred to, to the value of $164 million in 2011-12. The second element will be the balance, which will be made up to $300 million over five years from 2012-13. The net effect of the free permits provided under the Jobs and Competitiveness Program and the additional $300 million in assistance under the Steel Transformation Plan mean that, effectively, the steel industry is completely shielded from the impact of the carbon price and is provided with the necessary assistance to enable it to try to restructure itself and trade its way out of a very difficult global and domestic environment for steel. This government is committed to ensuring that there is a bright future for steel in the Illawarra and throughout the country. As a local member, I will be working with other members representing manufacturing electorates to make sure that our government does everything within its power to assist steel manufacturing through this difficult environment.

The countries of the world are changing. They are, in effect, in a race to transform their economies. We are not the only country which is acting to transform itself to make sure that we have the capacity to reduce our carbon emissions and to transform our industries and to ensure that, as they grow, they do so in a way which is environmentally sustainable and preserves the planet for the future of our children. If we know that we are in a race to transform our economy, it beggars belief that in this country we would want to implement policies which would hamstring our country in the racethat we would say that we know that the world is in a global race to transform itself but that we should have a handicap and not start making the transformation as soon as possible.

I am pleased to say that this package of legislation has the balance right. It has the balance right between providing assistance to households and ensuring that, on the one hand, our emissions-intensive trade-exposed industries have the right degree of shielding to be able to trade and be competitive in a difficult environment and that, on the other hand, they have the incentives to reduce their carbon emissions. It has the balance right in that it will provide significant funds to assist manufacturing, food and foundry industries to transform themselves with assistance from government through co-investment schemes. It has the balance right by ensuring that households and businesses are assisted through the process of transformation. We are doing the right thing by putting a price on carbon and, instead of having a centralised, government-controlled mechanism where government makes the decisions and attempts to pick winners, we will enable individual businesses and individual households to make the millions of decisions on an hourly and daily basis that are necessary for them to be able to transform their work and consumption practices and their household arrangements and so reduce their energy use and carbon emissions.

In this debate there has been some criticism of our intention to ensure that, as we move to an emissions trading scheme, we will enable ourselves to integrate with other economies around the world which also have emissions trading schemes in place. In fact, the attacks I have just heard from those opposite include an attack on the international trade and emissions permits. This attack falls awkwardly from the mouths of those who deny the fact that there is international action on climate change. On the one hand, they argue that we are so far out in front that we are acting in a way that is completely incompatible with every other economy in the world; on the other hand, they criticise us for attempting to put in place a mechanism which will enable our emissions trading scheme to be integrated with similar emissions trading schemes in Europe and other places around the world. However, what lies at the heart of these criticisms is not a serious policy confrontation but an attempt to whip up the fear that there is some conspiracy behind these arrangements. These criticisms have very little policy credibility.

I commend the package of legislation to the House. This is without doubt a difficult debate, but I return to the theme that I started with: the prosperity that we now enjoy in this great country of ours was the result of the efforts of men and women who were willing to put aside their immediate interests and invest in the future. They had the courage to put the national interest and the future interests of this country ahead of immediate short-term political opportunism, and I encourage all men and women in this place who are of good will to act in that tradition, which is in the best traditions of this country and this parliament, by voting in favour of these bills.

Speech to Federal Parliament on the Clean Energy Future legislation.