Senator CORMANN (Western Australia) (15:45): I move: That the Senate condemns the Labor Government for imposing the world's biggest carbon tax on the Australian economy at the worst possible time, when the Prime Minister (Ms Gillard) promised before the 2010 election that there would be no carbon tax under a government she leads and when it will: (a) push up the cost of living; (b) push up the cost of doing business; (c) make Australia less competitive internationally; (d) cost jobs; (e) result in lower real wages and cause a cumulative reduction in Australia's gross domestic product in the order of $1 trillion between now and 2050, according to the Government's own Treasury modelling; and (f) shift economic activity and emissions overseas, therefore doing nothing to help reduce global emissions. Senator CORMANN: In about 10 days from now, the people of Australia will be hit with the world's biggest carbon tax. It is a carbon tax that, before the last election, our Prime Minister, Ms Gillard, promised the people of Australia in the most emphatic way they would not get. No Australian should forget that time when the Prime Minister looked down the barrel of a camera and said, 'There will be no carbon tax under the government I lead.' We need to remember that the Prime Minister made that most emphatic pre-election commitment, in the shadow of an election that was going to be difficult for her to win, because she knew that unless she provided that absolute, emphatic guarantee the chances were that she would lose the support of the Australian people and be unable to form a government. We have to remind ourselves that Kevin Rudd went to the 2007 election promising that he would sign Kyoto and that he would introduce an emissions trading scheme. Over a three-year period we had a pretty intense and robust debate about whether or not imposing a carbon pollution reduction scheme—imposing a price on carbon—would be an effective way of helping to reduce global greenhouse gas emissions. The conclusion at the end of that robust debate, the conclusion after a number of parliamentary inquiries, including some very good inquiries conducted by the Senate, was that, no, putting a price on carbon when our trade competitors were not likely to go down the same path, now or in the foreseeable future, would not be a sensible way for Australia to go. It is not only people on this side of the chamber who came to that conclusion. Ms Gillard and Mr Swan, our current Prime Minister and Treasurer, walked up to then Prime Minister Rudd, to the great disappointment of Senator Wong, who is in the chamber, and said to him, 'Don't go ahead with this. It is not a good idea for you to press ahead with this carbon pollution reduction scheme when there are significant economic clouds on the global horizon. This is the worst time to introduce this sort of scheme. Don't do it; scrap the thing.' Of course, Mr Rudd had been on Q&A, telling all the world about the engagement that he had with his then Deputy Prime Minister and the Treasurer. People across Australia as they went to the ballot box at the last election knew that Ms Gillard had said to Mr Rudd: 'Don't proceed with this carbon pollution reduction scheme; scrap this price on carbon.' They knew that Ms Gillard had given a most emphatic pre-election commitment that there would be no carbon tax under the government she led, only to find after the election that they were going to have a carbon tax from 1 July 2012. The people of Australia are entitled to feel absolutely deceived and lied to by this government. They are entitled to punish this bad government at the next election because of that deception. The Prime Minister's promise that there would be no carbon tax is not the only lie at the centre of this tax. The Prime Minister wants the Australian people to believe that, somehow, a carbon tax will help to reduce global greenhouse gas emissions. Imposing this tax will push up the cost of electricity, the cost of gas, the cost of living and the cost of doing business in Australia. It will make us less competitive internationally and will shift economic activity and jobs overseas into countries where, for the same amount of economic output, emissions will be higher than if that economic activity had occurred in Australia. The people of Australia know that this tax will impose economic sacrifices in Australia and be bad for household budgets and the federal budget but will not actually do anything to help global greenhouse gas emissions, because it is a tax that will take emissions from Australia and shift them to other parts of the world where those emissions will be higher arguably than if that economic activity had happened in Australia. The verdict was in pretty well immediately. The Australian people were quite insightful post the announcement of a carbon tax by Prime Minister Gillard with the then de facto Deputy Prime Minister, former Senator Bob Brown, who got himself out of this chamber just in time, before the carbon tax hits the Australian people on 1 July 2012. The verdict from the Australian people was as emphatic as the Prime Minister's pre-election promise that there would be no carbon tax. The public verdict was that Australians do not want this tax. Overwhelmingly, people across Australia sent a very strong message to the Prime Minister that they do not want this carbon tax that will push up the cost of living and the cost of doing business, make us less competitive internationally, cost jobs, lead to lower real wages, according to the Treasury's own modelling, and take about $1 trillion in cumulative economic growth out of the economy between now and 2050. We do not want it, particularly because it will not do anything for the environment. Faced with an overwhelming backlash against this fundamental breach of faith, what did the Prime Minister say? The Prime Minister said to her backbench and to the Australian people: 'Don't you worry—as soon as we have explained the compensation, as soon as we have explained the transitional detail, people will like this tax. People will understand it's not that bad. People will understand that this is actually a good thing. Even though I promised people before the election that there would be no carbon tax under the government I lead, people will see the light and they will say a carbon tax was what they always wanted. People will come back in their droves and support the Labor Party that has been complicit in this fundamental breach of faith with the Australian people.' When that did not happen, the Prime Minister said: 'Don't you worry. What I'll do after the parliament rises in July 2011 is I will wear out my shoe leather. I will go up and down every single main street. I will go up and down every single shopping centre. I will explain to the Australian people what a wonderful tax this carbon tax is.' Guess what? People still did not like it. In fact, the more they heard about it the less they liked it. Now the Prime Minister is telling us: 'You know what? On 1 July 2012, when the Australian people realise the sky has not fallen in, people will love the carbon tax.' All of the people on the Labor side have now put their hope into the idea that people across Australia will pass judgment on the success or failure of the carbon tax on 1 July 2012 and forget from 2 July 2012 onwards that this is a tax which will continue to push up the cost of living, which will continue to push up the cost of doing business in Australia, which will continue to make us less competitive internationally as it imposes a cost on business in Australia that is not faced by most of our competitors in other parts of the world. They just hope that, from 2 July 2012 onwards, people will forget all about it because on 1 July 2012 the sky did not fall in. Of course the sky is not going to fall in on 1 July 2012. This is just political trickery by the Labor Party. They are trying to lower expectations such that as long as we are still alive, as long as the sky does not fall in on 1 July 2012, the carbon tax is a great success. 'It's a fantastic success! Isn't it great? The sky has not fallen in.' This is what you call expectations management, I guess, in politics. It is about setting the bar very low. We on this side of the parliament have higher aspirations for Australia and for our economy than to create a situation where at least the sky has not fallen in. We have higher aspirations on this side of the parliament. When I say that people on the Labor side are pinning their hopes that this time around the Prime Minister will actually be right when she has been wrong before, that this time around people across Australia will flock back to the Labor Party because they will see what they did not see before, that this carbon tax is the best thing since sliced bread, that is not entirely true. Increasingly, people in the Labor Party are telling us on and off the record that they think the carbon tax should be watered down, that it should be scrapped, that it should be moved into a floating price more quickly. We have had a plethora of different positions out there from the Labor Party. Kristina Keneally says that it should be scrapped altogether. People who are briefing out of cabinet say that if Mr Rudd came back as Prime Minister they would water it down, they would reduce the price or they would make it a floating price. I assume, Mr Acting Deputy President Cameron, given that you were part of the Rudd team back in February and March 2012, that you are in the school that wants to water the carbon tax down and move it into a floating price more quickly. But you might be able to— The ACTING DEPUTY PRESIDENT ( Senator Cameron ): Senator Cormann, I am not one who usually gets too upset by you attacking me, but you should show some respect for the chair. Thanks very much. Senator CORMANN: Thank you, Mr Acting Deputy President. The point here is that even inside the Labor Party people are increasingly aware that this carbon tax will not all of a sudden become popular come 1 July 2012. People inside the Labor Party now understand that, where all of the hopes that were put into getting the public on side with this broken promise in the past have failed, people after 1 July 2012 will become increasingly aware that this is a bad tax based on a lie which will push up the cost of living, push up the cost of doing business, make us less competitive internationally, cost jobs, result in lower real wages and take significant potential economic growth out of our economy. I refer the Senate to an article in the West Australian today. The headline is 'Carbon tax won't save Labor, say Ruddites'. I quote: Kevin Rudd's supporters— and I would not want to reflect on the chair, but there are people who must be identifying themselves as Kevin Rudd supporters— say the July 1 introduction of the carbon tax will not be the "game-changer" being promised by Julia Gillard and Wayne Swan, increasing the likelihood of the Labor leadership being revisited in spring. And so it goes on. I strongly encourage senators to have a good read of that article by Andrew Probyn in the West Australian. That is the point. Those people who are talking to Andrew Probyn, those people inside the Labor Party who are backgrounding and briefing Andrew Probyn about their concerns about the Labor-Greens carbon tax, are 100 per cent right. They are right because 1 July is not going to be the key date. What is going to happen as of 1 July, progressively moving forward, is that Australia will be heading in the wrong direction. Australia will be heading in a direction where the government is imposing sacrifice on the Australian people that will not make a difference. We are heading in a direction where the Australian government is going to impose cost increases on the Australian people that will not actually lead to reductions in greenhouse gas emissions. All you have to do is look at the government's own Treasury modelling. The government's own Treasury modelling shows in black and white that emissions, even in Australia, will continue to rise under the carbon tax. The Treasury modelling shows that under the carbon tax the cost of living will continue to go up and up. The Treasury modelling shows that under the carbon tax real wages will be lower than they otherwise would be while prices and the cost of living will continue to go up. That is a very toxic combination—lower real wages than there otherwise would be and higher prices than there otherwise would be. The carbon tax, in those circumstances, at the worst possible time, will of course have significant consequences for people's quality of life. If it was a sacrifice imposed on the Australian people that would actually make a difference, we would be having a very different conversation. But to actually ask the Australian people to make a sacrifice for something that is not going to make a difference is cruel. It is outright cruelty. People should look at the Treasury modelling to get a sense of some of the implications of the government's carbon tax in that regard. One of the things that really shocked me in the government's own Treasury modelling was when I looked at 2050. As a result of the carbon tax, our GDP in 2050 is expected to be $100 billion lower than it otherwise would be. We have to bear in mind here that this Treasury modelling is based on some very generous assumptions that are designed to minimise the perceived economic impact that the carbon tax will have. For example, there are assumptions that the US, China and others will have equivalent carbon pricing arrangements in place by 2016, which of course will not be the case. We have to remind ourselves that in the context of the CPRS Treasury modelling the government assumed that the US would have an emissions trading scheme equivalent to our emissions trading scheme in place by 2010. It did not happen then and it will not happen now. Despite all of these errors and heroic and unrealistic assumptions that are designed to minimise the perceived economic impact of the carbon tax in Australia, let us just take the modelling figures as they are. Even the government's own Treasury modelling shows that by 2050 our GDP will be $100 billion lower than it otherwise would be. 2050 is the out year. Some people might say, 'That is a long time away. Who cares what happens in 2050?' None of us is going to be around. Senator Carr ain't going to be around. I am not going to be around. So who cares about what is going to happen in 2050? We should care because it is not what happens on 1 July 2012 that matters; what matters is what happens between now and 2050. What is important is what happens over the 38 years or so between now and 2050, which is the period that the Treasury modelling looks at. If you look at the cumulative impact year after year after year then you will see that in today's dollars the impact on our economy from the carbon tax, according to the Treasury's own modelling, is a loss of economic growth, a loss of GDP, of $1 trillion. That is a staggering amount to take out of the economy as a result of the carbon tax between now and 2050. $1 trillion in today's dollars is effectively the whole GDP for the whole of Australia for a whole year. It means that as a result of Labor's carbon tax, the carbon tax that we were promised we would not get, every single person across Australia who works will be expected to work for nothing for a whole year in order to pay for the impact of the carbon tax between now and 2050. Some people might say, 'So what? People across Australia should be expected to work for nothing for a whole year between now and 2050 to pay for the impact of Labor's carbon tax because it is such a great thing.' If that were the case surely you would want to know that, if you were going to work for nothing for a whole year—every working Australian will have to work for nothing, effectively, for a whole year—that sacrifice was actually going to make a difference. But, no. If you look at the Treasury modelling again you will see that emissions will continue to grow. They will continue to go up. The government would say, 'But they will grow by less than they otherwise would have.' That is true. According to the Treasury modelling, emissions will grow less than they otherwise would have. But what happens to the emissions that otherwise would have happened? They will just be transferred to other parts of the world. Those emissions will go to China, the US and even Europe, because the carbon tax even in Europe is much lower than the world's biggest carbon tax here in Australia. This is a bad tax. It is a tax that is based on a lie. The Australian people will judge this government very harshly for the very bad impacts that will flow from this carbon tax over many years to come until such time as the coalition—hopefully after the next election—can rescind this carbon tax once and for all. (Time expired)