Senator Alan Eggleston

Speeches

03

Last week was a big week for Australia's two main airlines: Qantas Airways and Virgin Australia. In this country where remoteness and isolation go hand in hand, air travel is rightly viewed by many as less of a luxury and more a necessity of life. As Qantas CEO, Alan Joyce, pointed out in his speech, in the four years to 2012 capacity into Australia by competitors increased by 46 per cent, which in itself was more than twice the global average.

From both Virgin and Qantas there was very little good news last week. For my state of Western Australia, 12 May will see the last regularly scheduled Qantas international service from Perth. In days gone by, Qantas had an extensive international network from the capital of Australia's largest state. But, from 12 May, Qantas will not fly from Perth to anywhere abroad. From that date our national carrier will serve just three of the country's eight capitals with international services.

While the news from Qantas was grim, I was particularly interested to hear Virgin CEO John Borghetti, when he delivered his airline's half yearly results on Friday. One line particularly struck me. Mr Borghetti said:

… the best assistance the government and the Opposition can provide — to our airline industry — is the removal of the carbon tax, which has cost this industry hundreds of millions of dollars …

While the government is eager and willing to please the airline industry and every other industry in the country by abolishing this tax, it seems that the opposition parties—the ALP and the Greens—are not keen to do it. The carbon tax should never have been introduced. It is costing the airline industry and every other industry in this country big dollars. Last year alone, Qantas paid $106 million in carbon tax. To put that into perspective, that is more than 40 per cent of the first half loss that Qantas announced on Thursday. Without the carbon tax, Qantas's figures would be 40 per cent better than we heard last week.

The coalition knew, when in opposition, that a carbon tax would impose an extra cost across the board on Australian industry and consumers. A survey conducted by the Curtin Business School of the Curtin University of Technology and the Chamber of Commerce and Industry, in Western Australia, prior to the introduction of the tax, found that almost 70 per cent of consumers believed they would be worse off under the proposed carbon tax. Yet a majority said
it would not change their behaviour. That was only one example of a multitude of studies, commentaries and surveys that showed that the tax would be bad for Australia, the economy, industry and consumers. In 2011 Reg Howard-Smith, CEO of The Chamber of Minerals & Energy in Perth, said:

The Carbon Tax is … taking over from common sense and … our global competitors are celebrating … as Australia shoots itself in the foot …

The Minerals Council of Australia estimated that the tax would cost some 23,000 jobs, plus additional secondary job losses in local businesses. That is, 23,000 jobs directly in the mining industry.

There are those on the other side who like to argue that the government does not believe in the science of climate change. I come from the south-west of Western Australia. I grew up in Busselton and, as I have said in this chamber previously in debates on climate change and the carbon tax, I can assure you that I believe in climate change because the south-west is a great example of the reality of climate change. In fact, there has been a decline in rainfall in the south-west of Western Australia over the last 20 years of around 25 per cent. But the reality is that climate change has been going on for millions of years and is very much a natural phenomenon of the natural history of the earth.

The ocean has risen and fallen. We all know that there was once a land bridge to Indonesia from the north-west of Western Australia. A couple of years ago, in 2010, I went to Barrow Island, off the northwest Pilbara coast where I was told it was possible to identify, around the island, seven different sea levels over the last few thousand years. I was also told that records show that the island was under the sea for many hundreds of years. So the rise and fall of the ocean has, again, gone on for thousands of millions of years, long before mankind established industries. Again, it must be regarded as part of the natural history of the earth.

Seashells are to be found in the soil at Marble Bar, some 200 kilometres inland from the ocean, in the Pilbara. Greenland is called 'Greenland' because it was once green. I am also informed that the Sahara desert was once fertile and green. In short, the evidence for climate change, having been a natural part of the earth's history, is undeniable.

We also hear much about the UN International Panel on Climate Change from some as being the ultimate authority on man-induced climate change. But, equally, there are those who point out that members of the UN IPCC are mostly fairly junior scientists and are, by no means, at the top of their fields. The IPCC has also been rocked by scandals
of falsification of its results. Given that, I personally believe that the findings and recommendations of the IPCC should be regarded, at the very least, with a healthy degree of scepticism. This does not mean, however, that I do not believe we should clean up pollution. We should make sure that we reduce pollution to an absolute minimum. Nevertheless, I do believe that climate change—which is real, as I have said—is actually part of the natural history of the earth.

In November 2011 I sat in this chamber and listened to the ALP senators crowing about the benefits this carbon tax would produce for Australia—a carbon tax they were about to legislate for. Since that time I have heard those opposite spruik the well-worn line that Australia has one of the highest rates of carbon emission per capita of any country in the
world. Well, of course we do. While Australia has a small population, we are one of the most highly industrialised countries in the world, with a rich mining and resources sector, which, coupled with a comparatively small population, means Australian emissions levels, averaged out, will appear to be high when in reality they are probably just typical of a Western industrialised country.

I believe the ALP was so blinded by their euphoria about the carbon tax that they gave no serious consideration to the facts that were raised by the coalition senators about the consequences of this tax. Back then I and my coalition colleagues warned that there was no doubt at all that a carbon tax would impose an extra cost across the board on the Australian economy and on consumers. In fact, it is undisputed that, unless this tax is abolished, Australians are set to pay some $9 billion in carbon tax each year and will see electricity prices go up. And because electricity is
so central to the production of many goods, the cost of consumer goods will inevitably rise as a direct result of the carbon tax, just as we have seen airlines struggling to survive under the burden of the carbon tax they have to pay.

In August 2012 the Water Corporation of Western Australia levied an additional $21.3 million on around 1,010,000 residential and non-residential customers as a direct result of the carbon tax—a lot of money. Back then I stood in this chamber and joined my coalition colleagues in arguing that a carbon tax would impose an extra burden on Australian industry—a burden like that explained by John Borghetti last weekend. I would like to say that it was very prophetic of me, but the simple truth is that the then Labor-Greens government was warned repeatedly that the carbon tax they were so adamant about introducing would not deliver what they so blindly told themselves it would. They simply ignored the evidence before them.

Our competitors around the world do not have to pay carbon taxes, because none of our major trading competitors, with the exception of the European Union, have been so short-sighted as to implement carbon taxes or a carbon emissions scheme. That of course leads to the question of Australia having an emissions trading scheme, for which the introduction date was brought forward by the ALP-Greens government last year. But surely, given what we now  know, one must ask: why do we need an emissions trading scheme, and what for? Emissions trading schemes, in my view, are totally fraudulent, because they do not reduce emissions at all. Emissions trading schemes do not lead to a reduction in emissions because industries still produce the same emissions, which are traded against the purchase of a carbon sink, such as an Indonesian rainforest or something similar—all at great cost, which is of course passed on to the consumers in the form of higher electricity charges as well as charges for consumer goods. In other words, an ETS is a kind of card trick whereby a company buys, for example, an Indonesian rainforest for a huge amount of money and tell themselves what good chaps they are, but then back in Australia they still produce the same level of
emissions but charge the customers much higher prices for the same electricity. The losers are the consumers—
Mr and Mrs Average Australia—and the only winners are the stockbrokers who stand to make millions and millions of dollars from their trading or brokerage fees on carbon emissions.

As I said in a speech last year, the notoriously longest established emissions trading scheme in the world is the European scheme, which has cost billions of dollars but has not reduced carbon emissions at all in Europe. I think that speaks for itself. Surely we cannot be so naive as to not learn the lesson from the European experience. As far as the mining and gas industries go, we are already seeing investment drift off to other parts of the world because Australian costs are so high, and part of the reason for that is the carbon tax. Chinese and Australian industry is developing new mines in West Africa and other parts of the world where it is cheaper for them to operate than it has become in Australia. Relieving the Australian mining industry of the cost of the carbon tax, and not introducing the proposed
emissions trading scheme, will preserve our existing mining and gas industries and the jobs and incomes of many Australians. I think we should relieve the Australian people of the burden of the carbon tax.

One of the more naive aspects of the previous government's approach was that they did not seem to understand that the mining industry is an international industry and that the miners and the mining companies will go to the places where the costs are lowest— and, naturally, they look to their bottom line. I am told this is happening very much already in the gas industry, where Australian costs are the highest in the world and, I am told, there will be no more LNG projects developed in Australia—when, for example, in a country like Canada it is 12 per cent cheaper than
Australia to establish these industries. When you are talking about $45 billion projects, 12 per cent is a lot of money. I am told that in the United States the costs are even lower.

So I believe that it is in Australia's interests that we abolish the carbon tax and not proceed with the crazy nonsense of the ALP-Greens emissions trading scheme and that the sooner we do these things the better it will be for the ordinary people of Australia, who cannot afford the higher prices and lower standard of living these two monstrosities are bringing us.

Posted in: Speeches
Actions: E-mail | Permalink |

Contact Dr Alan Eggleston

Email me

Working for Western Australia
© Senator Alan Eggleston 2012 | Authorised by Senator Alan Eggleston, 26 Charles Street, South Perth WA 6151 | Datasearch website design | Login