Senator COLBECK (Tasmania) (16:14): It is indeed a pleasure to speak to a letter put to the Senate by Senator Fifield. It is true: there is a crisis of confidence throughout the business and consumer sector. I do not think there is any doubt about that. All the indicators demonstrate that there is crisis of confidence throughout the business and consumer sector. There is absolutely no question that the introduction of a carbon tax is a significant element in that crisis of confidence. We have seen in recent weeks the complete crisis that runs through the manufacturing sector at this moment. In fact, Mr Paul Howes, one of the four people responsible for choosing our Prime Minister—or deciding that the last one should be dethroned—said that Australia's manufacturing is in its deepest crisis since the Great Depression. If that is not an issue of crisis of confidence, I do not know what is. The published polls also talk about the crisis of consumer confidence and business confidence. In fact, in my home state of Tasmania confidence is the lowest I have seen it for a long, long time. We see now the spectre of this country, under the governance of the Gillard government, being considered a global sovereign risk. We all know that finance is very mobile. It will pick its best point to go to. I have not heard since the early 1990s, when the Labor-Greens government came into power in Tasmania, the strength and the vehemence of concern being expressed by business and the community around the sovereign risk that relates to government. Not only do we have that crisis of confidence in Tasmania but, unfortunately for Australia, we now have it nationally. We have global financiers looking twice before they invest in this country because they are concerned about this country's sovereign risk. We have seen the issues around this carbon tax that the government proposes to introduce providing considerable confidence concerns to industry. We know that industries overseas are not going to be subjected to the globe's biggest carbon tax. This carbon tax is going to raise something on the order of $9 billion just in its first year. It is going to increase power prices by 10 per cent in the first year, and they will go up by more than that afterwards. It will increase gas prices by nine per cent just in the first year, and it will be more and more every year after that. I do not know what has specifically been happening in other states, but in my home state of Tasmania we have had a 40 per cent increase in energy prices over the last two years. That is projected to increase another 20 per cent in the next 12 months. The government is going to impose a 10 per cent increase in energy prices over and above that. Tell me why there would not be a crisis of confidence. Tell me why there should not be any concern in the local community about the capacity of people to pay their power bills. Why is it that the elderly are staying in bed rather than paying their power bills, so that they can keep warm? Why is it that consumer confidence is so low? Why is it that business confidence is so low? It is because of the performance of this government and governments like this, particularly governments that are dependent upon the Greens to stay in power, such as the government in Tasmania. That is why the economy is so soft. That is why manufacturing and consumers are so concerned that at a time when things are tough, particularly for manufacturing, the Gillard government is giving us an additional cost—a carbon tax that is applied across the economy, that trickles down right through the economy and will cost $9 billion a year. Yet the actual cost of abatement is less than $2 billion. Applying a $9 billion cost to the economy when the real cost of abatement is less than $2 billion does not make sense, and the community understands this. The business community certainly understands it. That is why it is saying it is concerned about investment and about the future of manufacturing. And that is why Mr Paul Howes says that Australian manufacturing is in its deepest crisis since the Great Depression. When manufacturing is in that sort of crisis, why would you add the additional burden of a carbon tax? It just does not make sense, but it reinforces the fact that this government is so far out of touch. I was on King Island for a couple of days last week, talking to the community over there and hearing their scepticism about the promised impact of the carbon tax. The Prime Minister dropped in there on her way to Tasmania a few weeks ago. When confronted in the street she said, 'But the impact is less than one per cent.' She forgets that the impact in a remote regional community like King Island is actually magnified because of the additional costs of living in that community. She forgets that the only way for those communities to get on and off the island is to fly, and 30 per cent of the overhead costs of the airlines that service the island is for fuel. Senator Ryan: They can swim. Senator COLBECK: Perhaps they might like trying to swim, Senator Ryan, but I can assure you they prefer to fly if they can. But 30 per cent of the overhead costs of those airlines is fuel, which will go up by 10 per cent. The Prime Minister says that if a business puts up its prices by more than one per cent she will send the ACCC after them. Why wouldn't a business be concerned about having the ACCC banging on their door because their business costs have necessarily been driven up by more than one per cent? For those airlines with overhead costs of 30 per cent for fuel, a 10 per cent increase in the fuel price will put up their prices by three per cent. It is not difficult to do the mathematics. But Prime Minister Gillard says, 'If they go up by more than one per cent, we'll send the ACCC around to have a look at them to see what the circumstances are.' Another small business that I am aware of in my hometown of Devonport is an aluminium powder-coating business. They have done their numbers and their power price will go up by 10 per cent. They also use gas, which is going up by nine per cent. Their baseline costs will also go up by three per cent, coincidentally. So will that small aluminium powder-coating business have the ACCC coming in to talk to them? What about the vegetable processor at Forth whose power bill is $600,000 a year? This will cost them an extra $60,000. But what will they get for that? What will be the impact on the environment for that $60,000? There is a vegetable processor down the road a little further whose power bill is $1 million a year, so that will be an extra $100,000 on top of their costs, just for the carbon tax. They also have a $1.4 million fertiliser bill but they have not been able to determine what the additional cost for the carbon tax will be because that information is not available to them, yet here we are starting to debate the legislation in the parliament this week. There is another major vegetable processor who is about to spend $17 million, albeit with some assistance from the Commonwealth and state governments. After having spent that $17 million to mitigate it, they will still have an annual bill of $1 million on top of their operational costs. We all know that that will most likely go back to the farmers. They cannot charge the supermarkets because they will not bear the cost. I could give you a number of examples. There are dairy farmers who will pay $10,000, on average, per dairy farm and an additional $8,000 to $10,000 in costs coming back from the processor. There is no doubt that there is a crisis of confidence. All of the economic indicators demonstrate that there is a crisis of confidence, and the carbon tax is playing a significant role in generating that crisis of confidence.