Senator SCULLION (Northern Territory—Deputy Leader of The Nationals) (17:05): I rise to support the motion and I obviously have some views that are quite contrary to the contribution from the previous speaker, Senator Faulkner. In some of his closing remarks, Senator Faulkner said that we need to focus
on why this is being done. I think that is a fundamental question, not necessarily for the chamber to consider, but certainly for those opposite. Senator Faulkner is, in my considered opinion, a great orator. He has made some wonderful contributions to this place, but sometimes it is about how he says it, rather than the substance of what he says. Senator Faulkner put his hand on his heart and said, ‘The reason we are doing this is that we need to show the globe leadership.’ He said that we need to ensure that because we are the driest continent on the earth, we talk about droughts and flooding rains. He basically went on to make the case that the Labor Party are motivated in this matter by a whole range of good things. The party to his right, the Greens—Senator Di Natale, my old mate Senator Ludlam and Senator Whish-Wilson, who I have just met and who I am sure is a very fine stamp of a man; I am looking forward to getting to know you better, mate —have at least always had a consistent position on this, about going to an election and saying, ‘We are going to have a carbon tax.’ Yes, it was slightly different and a little bit more aggressive than the position of those on the other side. But, Senator Faulkner, I would remind you of the reason we are here debating this. Sadly, it is not because Julia Gillard put her hand on her chest and said, ‘We need to show the globe leadership.’ It is because we have a hung parliament. It is because she had to do a deal.
Senator Ludlam: Just as well, because you guys would have done nothing.
Senator SCULLION: Senator Ludlam, I usually take your interventions, but the point I am making is that
those opposite are singly motivated because they had to do a deal with the Greens. It was not a long-term plan to go and deal with the environment and it was not a long-term plan to introduce a carbon tax. The now well worn phrase, ‘There will be no carbon tax under the government I lead,’ said a few days before the election pays credit to that. So I do not think anyone on the other side can have any credibility at all in saying: ‘This was a fantastic idea. We went to an election with this and we have always believed in it.’ I would probably take Senator Faulkner on his word personally that it may have been one of his values, but it certainly was not that of the leader or of the majority of those on the other side.
As many of us who represent constituencies in regional and remote Australia know, the cost of doing business and the cost-of-living pressures are even more intense; we may love to live in regional and remote Australia but of course it is a more expensive process. This carbon tax is a tax on remoteness. It is going to hurt the Territory in far greater ways than it will hurt capital cities. And I have not noticed anything in this legislation that somehow pulls Darwin or Katherine or Alice Springs closer to Sydney—horror the thought.
As I have indicated, we had this spectacle of the current Prime Minister, Julia Gillard, just days out from the election, assuring everybody that this was a tax that we were not going to have. In Lingiari just before the election I was doing the standard ‘fear and loathing’, as one does in a campaign, telling people, ‘They have been talking about this carbon tax; it is going to be horrible.’ In the last few days of the campaign there was some relief. People were saying: ‘Look, Nige, she has been absolutely clear: there is not going to be a carbon tax. I am sorry, I am not going to be concerned about that anymore. She has absolutely clarified it for me. I am more than likely going to stick with voting Labor because I am a Labor voter, I am a swinging voter.’Many Territorians that I speak to today still rue the day that they accepted that as the truth. One of the most important impacts on the cost of doing business and the cost of living in the Northern Territory is fuel. Wherever you go in Darwin is not dissimilar in distance to a lot of other cities, but certainly the cost of fuel is. I was speaking to a mate of mine, Dave Gray, the other day. He is a mango farmer. He used to farm not far down the road from where I was farming mangoes in a previous life. He told me that he has gone through his books and looked at increases in fuel, electricity, refrigeration and the freight on the box costs. He indicated that he is going to suffer some 25 per cent gross profit loss. A lot of people say, ‘How can that possibly be?’ I would have to acknowledge that he is running at a pretty thin margin, as many people do. It might seem a lot in terms of profit, and it is —it is horrific. But, for people who are running at a pretty slim margin, this is going to have a significant impact on their capacity to do business. He has rated his increase in fuel at around about three per cent and his box costs at about two per cent. He has done calculations of his electricity prices, particularly for the cool rooms, and he knows the increase is going to be significant. He is not actually sure how much it will be. He has calculated that at 16 per cent, but I would say that is pretty conservative given some of the price hikes in other parts of the world.
I hear the Prime Minister and the government constantly saying that this is only on the 400 big polluters. Poor old Dave Gray, with the arse out of his pants, is saying, ‘I am not really sure that I consider myself a big polluter, Nigel.’ I say, ‘Well, mate, apparently you are on that list now.’ How many businesses like this mango grower are going to invest in an industry with reasonably slim margins, as has always been the case, with potentially a 25 per cent reduction in profitability? When the markets are remote, we are not going to know the transportation costs. Senator Faulkner and others say, ‘Look, the sky is not going to fall in on 1 July.’ It probably will not, but there will be a bit of squealing and creaking about eight weeks after that as soon as this impacts. Part of the concern of my constituents is that this is simply unknown. They are scribbling down sums, they are trying to work out what to do, they are trying to run a budget. They are invariably small business, family businesses, and they are finding it very difficult. About 1,500 Northern Territory businesses are going to face quite considerable increases in their fuel costs under the carbon tax when there is a reduction in the diesel fuel rebate. I have been speaking to the Chamber of Commerce and they are having some difficulty in providing information to all those in business who are trying to work out exactly what some of these cost implications are going to be. Australian Taxation Office data has also shown that Territory businesses are going to be hit five times as hard by the tax as average businesses in other states. I think about 60 per cent of that is due to remoteness and transport costs, but there
are some other complexities. That may be just about the Northern Territory, but it is certainly significant. In addition to the obvious impact on mining operations, there will be an impact on Northern Territory construction, manufacturing, retail, wholesale and particularly tourism operators. By tourism I do not mean grand hotels and magnificent big schemes— invariably, they will get through. The problem is with the small operator, whose costs are fixed. Many of them have a fishing tour operator with a car, a wish and a dinghy that goes and they might own a small lodge somewhere on the Mary River. If tourists decide not to travel because it is now too expensive, many of those small operators will go out of business, as happened I recall in some of the downturns in the past. According to the tax office data, Northern Territory businesses claim an average of $55,000 under the Fuel Tax Credits Scheme. The reduction in the credit as a result of the carbon tax will mean that NT businesses will face an additional cost of $9,200 a year, on average. Yes, that is an average and it is obviously raised by some of the larger businesses, but some operators would find it very difficult to amortise even 25 per cent of that. The number of businesses affected is going to increase to more than 100,000 on 1 July 2014, which is when the road freight sector, on which all of us in the Territory depend for our groceries, including tens of thousands of owner drivers, is going to become liable for the carbon tax on fuel. We know that fuel prices are always increasing. In
Darwin, last week, the average petrol price across jurisdictions was $1.40.6; for the rest of the Northern Territory the average price was $1.58—that is a clear 18c a litre above everywhere else. In any event, we are starting behind the eight ball. Perhaps that is why the profitability of some of these small businesses is so marginal. An increase of some 6.5 cents a litre in the price of petrol, which has been indicated, is going to put even further pressure on small and marginal businesses. The Chamber of Commerce NT did a study using a carbon price of $25 a tonne, before the $23 a tonne price was announced. Given that the price is going to $29 a tonne in 2015-16, its figure could be used as a conservative measure. The study has indicated that the cost of carbon to the Territory economy is going to be around $147 million in the first year, which equates to $642 for every man, woman and child, regardless of where they live. Again, if the government is saying that only the big polluters will pay it is simply not being honest. Everybody is going to pay, particularly those people who are in the business of creating or making something. As you look around, you will see that the new tax collector will be the electricity outlet, the three-slotted maw in the wall. I suppose that the whole notion behind the carbon tax is: be careful when you turn something on; do not use as much electricity. If you are a wasteful person, that would make you think, but most of us use as little fuel as we can. We are as efficient as the technology will allow us to be, we use the minimum amount of electricity and hot water and we whinge at the kids even more to do the same. That is the environment we are in. I appreciate the motivation behind having a tax to change behaviour; I am just very cynical about what it can achieve if people do not have the choice to change their behaviour. Families and businesses—very small and medium businesses—in the Northern Territory are going to be hurt, but they are the ones who can least afford it. There has been a lot of discussion about pensioners. The Northern Territory pensioners I have spoken to are already concerned about the high cost of living. Remember, people’s pensions are not indexed just because they live in the Northern Territory and have a much higher cost of living than anywhere else. They have made a choice to live there, but they know that people with a fixed income are going to be hurt by the increase in the carbon tax. The government has said that it will give them a one-off settlement for that. I know that that is welcome to some degree, but it is being sold as: ‘By the way, I’m just putting your pension up. I am a nice bloke, because I do not like to talk about it in the context of a tax.’ Of course, the carbon tax will go up and up; one adjustment will not assist these people. We have already said that, if elected, the very first thing the coalition will do is repeal the legislation. That will be our first order of business. We have also gone on to say, ‘If those opposite attempt to block the scrapping of the carbon tax we will go to a double dissolution election.’ We have made that very clear, and that is exactly what we will do.
Senator Chris Evans: Never happen.
Senator SCULLION: Senator Evans, I am sure that you will not remember my betting you a beer on that, mate, but I am sure we will have a beer on the result, in any event. We are already facing substantial cost of living pressures. The carbon tax will only increase these pressures, particularly in those regions that can least afford it. Figures already show that the carbon tax is going to go up and up. This tax is going to increase. It is a new, $9 billion a year tax that will cause a 10 per cent hike in electricity bills in the first year alone. I am being conservative—very realistic—about the figures; I know that there are other figures quoting between 18 per cent and 20 per cent for some of the other jurisdictions. There will be a $3.4 billion hit on the budget bottom line and a nine per cent hike in gas bills in the first year alone. Our forgotten families are already struggling; a carbon tax is going to make a bad situation worse. Households around the country will be paying $515 on average, against $642 that we Territorians will pay because of our remoteness. It will be a trillion-dollar cost to the economy over coming decades that will send hundreds of billions of dollars of Australian business overseas. There will be $3.5 billion spent each year on foreign carbon credits by 2020, which will rise to $57 billion by 2050. Senator Faulkner and some on this side have talked about 50 years being a long way off. These sorts of figures, where we will be making a contribution for foreign carbon credits to the tune of $57 billion, to anybody with any sense seem almost sublime. Perhaps 2050 is not really in our context, but $3.5 billion each year on credits by 2020 is in our context and is a considerable amount of funds. A lot of Australians are having great difficulty nderstanding why that is an investment, not a cost. On those sorts of figures, we will see every Australian slugged about $40,000 over the coming decades. To many people that is the equivalent of a year’s work for Labor’s broken promises.
The 2012-13 budget confirmed the government is forecasting the carbon tax to rise from $23 a tonne to $29 a tonne by 2015. A lot of people would really like to understand what the impact of that will be. Sadly, the government is running an advertising campaign that does not appear to be informing people. Many people are disturbed about what the full impact will be on them personally. There is $36 million for an advertising campaign that will start in 2012-13. They are spending a total of $70 million of taxpayers’ money on carbon tax advertising, and that includes last year’s campaign. So when the Prime Minister tells the ACTU conference, ‘Nobody has anything to fear from carbon pricing,’ I think we all find it difficult to understand why she does not appear to have the courage to include the term ‘carbon price’ in the advertisements.
Quite clearly the circumstances of people who are just trying to eke a living in regional and rural Australia are difficult enough, but this is a toxic tax on remoteness. Certainly all of the constituents that I speak to are sick and tired of being told by this government that this is all about leadership: ‘We’re here to change the climate. We’re here to change the environment.’ They made a rock solid promise. I do not believe that the Prime Minister, Julia Gillard, was lying at the time. That is my personal view. But circumstances that arose later meant that she had to do a deal. She went and did that deal, which made it a lie. I think people are sick and tired of being told that this is a good idea. Labor are out there beating their chests saying the world is going to be a better place because of the introduction of this tax. If the polls are not telling those opposite, they should listen to their constituents. I speak to quite a wide diaspora of individuals and I certainly do not have many who would tell me that this is a good idea today, for the future, for those people living in the cities, for the global environment or, most importantly, for our national interest.