Oct 11, 2011

Clean Energy Bill 2011 and Related Bills Second Reading Speech

After decades of debate, the time for talking is over.

The science is in.

It’s now time to get this critical reform in place.

Other nations are already acting.

They know that in a competitive, globalised 21st century world, successful economies will be those that adapt early to a carbon constrained future.

Labor is not prepared to ignore the threat, ignore the science and ignore the economists.

We cannot say it is someone else’s problem.

We all share the one planet.

We are all citizens of the world.

It would simply not be fair to leave it to our children and grandchildren to deal with the consequences of our inaction.

Because if we do nothing, dangerous climate change will impact on this and future generations.



As Minister for Transport, I feel a particular responsibility.

Here in Australia, transport accounts for around 15 per cent of total greenhouse emissions – a little lower than the global average of about 18 per cent.

The vast bulk of this is from road transport and light vehicles, responsible for around 87 per cent of emissions.

That is why the Government is taking action to reduce greenhouse emissions from our vehicles.

But we are doing this in a measured and fair way.


Light Vehicles

Under the Government’s climate change plan businesses which use vehicles of less than 4.5 tonnes such as cars, utes and light commercial vehicles will be permanently excluded from paying the carbon price when they fill up at the bowser.

This means that the carbon price will have no direct impact on the fuel bills of many small and larger businesses – the couriers, taxi drivers, tradesmen, hire car companies and minibus operators.

The Government is also excluding the family car and ute.

Families in the regions don’t have a bus or a train station down the road like families in capital cities do.

Similarly, tradies can’t replace the work ute easily.

So, light vehicles will be permanently excluded from the carbon price.


Rail and Maritime 

Looking at rail and maritime sectors, the carbon price will have only a modest impact.

To offset the effect of any rises, nine out of ten households will receive assistance.

This means more than four million households will receive assistance via tax cuts for any increased prices they may pay.


Heavy Vehicles 

In the case of heavy vehicles, operators will have a two year transitional period to reconfigure their fleets and re-negotiate contracts with customers.

From 1 July 2014, a carbon price will apply to the fuel used by trucks over 4.5 tonnes.

The Government has already stated that the agriculture, forestry and fishery industries will be permanently excluded.

Trucks powered by CNG, LNG, LPG or biofuels will be permanently excluded. Once in place in 2014, the carbon price will have only a marginal impact on fuel bills.

In fact it will tiny, compared with the fluctuations we regularly see at the bowser from variations in world oil prices.

The Bureau of Infrastructure, Transport and Regional Economics has calculated that the extra cost of driving a B-Double from Sydney to Melbourne under the carbon price, at today’s diesel prices, will be about $35 – or 7 cents a litre.



Let’s look now at how a carbon price will affect air travel.

From day one – that is, 1 July next year – an effective carbon price will apply to the fuel used by domestic airlines.

To maintain the competitiveness of Australian carriers, it won’t apply to the fuel they use when flying internationally, at least until there’s a global carbon price.

We are also allowing large liquid fuel users, such as airlines, to voluntarily opt in, in 2013.

This is because a carbon market already operates in the EU and our international carriers may want the ability to trade across markets.

It is worth repeating: a market for the price on carbon already exists and Australian companies competing internationally want the ability to trade across markets.

The carbon price will have only a small impact on domestic airfares – less than many of the extra fees airlines already charge.

For example, it’s expected to add about $2 to the cost of a seat on a flight between Sydney and Melbourne – and around $1 on a flight between Sydney and Armidale.

Qantas and Virgin have put the average fare rise across their entire domestic networks at $3.50 and $3 respectively.

Any increase would occur against a backdrop where flying is today FIVE TIMES more affordable than it was two decades ago as a result of earlier Labor reforms such as the deregulation of domestic aviation market.


Public Transport  

Once fully implemented in 2014, the Carbon Price will have little impact on the cost of the daily commute.

The expected rise is only half of one percent, significantly under the eight percent that was added by John Howard’s GST.


Complementary Measures

But we are doing much more.

We are also working to reduce the sector’s footprint through smart regulations and by empowering consumers.

Already we are:

  • Introducing the first ever mandatory CO2 emissions standards for all new cars and light commercial vehicles sold in Australia. We are working with local manufacturers to set the emission levels – and these will apply from 2015. This will be a big saving for motorists through better fuel efficiency.
  • We are also requiring all new cars sold in Australia to display fuel consumption labels, spelling out their emissions and fuel consumption in both city and highway conditions. Coupled with our Green Vehicle Guide, consumers will be able to make more informed choices about the environmental performance of the car they buy.
  • We are investing in new technologies to better manage the flow of traffic along some of our busiest roads. By using this so-called Smart Motorways technology we can substantially reduce congestion and carbon emissions, while making our roads safer and smoother for motorists.
  • And we are restoring national leadership when it comes to the growth of our major cities. After all, that is where three in four Australians live. Our recently published national urban policy – Our Cities, Our Future – supports locating new jobs and future employment precincts closer to where people live, thereby minimising the daily commute.



Labor has long recognised the risk of climate change to future generations and to the nation’s economic wellbeing.

Indeed, the first official act of the Rudd Labor Government was to ratify the Kyoto Protocol.

Personally, this was a proud moment.

I had campaigned long and hard for Australia to ratify the Kyoto Protocol.

When I was the Shadow Minister for the Environment and Heritage, I introduced a Private Members Bill in an effort to get the then Prime Minister John Howard to take action.

In 2006, I worked with Kim Beazley on Federal Labor’s policy paper -entitled Protecting Australia from the Threat of Climate Change.

This was Labor’s blueprint for tackling climate change.

It is worth remembering some of the practical measures in that blueprint:

  • a commitment to 60 per cent cuts to Australia’s year 2000 level of greenhouse emissions by 2050;
  • a commitment to ratify the Kyoto Protocol;
  • ensuring Australia realised the economic benefits of sustainable industry, by supporting carbon-friendly technologies and emissions trading;
  • a commitment to sustainability by increasing and extending the Renewable Energy Target to 20 per cent by 2020;
  • the development of commercial solar, wind and geothermal energy technologies by Australian research, including a commitment to “rebuild the CSIRO”, and
  • the establishment of a National Sustainability Council to monitor the performance of the entire country against agreed sustainability targets.

The similarity of the Beazley Blueprint, and what is now contained in the Bills currently before the House, is striking.

Unlike those opposite, Labor has always been committed to practical, real and fair action on climate change.

The Liberal Party once was too.

On 14 February 2005, while introducing my Private Members Bill that would ratify the Kyoto Protocol, I stated:

“We must start working actively on climate change because it is an issue affecting Australia’s future prosperity.”

Six years ago I stood in this Place and argued that we needed a planned approach to shift Australia towards a modern, clean-energy economy.

That the potential for innovation and therefore business investment and growth, would be immense.

In six years nothing has changed, except the urgency of the need to act.

Australian companies and our economy will be disadvantaged if we exclude ourselves from carbon markets and the growing market in renewable energy technology.

Just as science and technology have given us the tools to measure and understand environmental problems, they also help us solve them.

The potential for innovation, scientific discovery and hence business investment growth is immense.

With the right policy framework, the very act of addressing our challenges can unleash new commercial forces and unimagined opportunities.

New jobs, new technologies, new markets.

Think of the potential economic benefits – and jobs – for this nation.

The global trading market for carbon will be worth billions of dollars.

If we don’t act, our businesses and the national economy will be simply left behind.

It is not just a question of economics.

The Opposition puts at risk more than just our future economic prosperity.

By pretending the world is not taking action, by pretending that climate change is not real, by ignoring the science, the Opposition risks the health and indeed future of Australia.

There is only one planet.

Let’s treat it, and all of us that depend on its health, with respect.

We must not be condemned by history as the generation that knew but did nothing.

The time for words is over.

Now is the time for action and delivery.

That is what the Gillard Government is doing with these Bills.

I commend the Bills to the House.