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CPRS debate - on issue of financing for developing nations

CPRS debate on financing for developing nations

Wednesday 25 November
Senator MILNE (Tasmania) (10:41 PM) -I will follow on from Senator Boswell on exactly the same issue. I can probably elicit a little more of the framework that Senator Boswell is asking about. He and I come at this from different points of view, but we agree-
Senator Wong -You vote with him though.
Senator MILNE-Quite right. The Greens do not support the government's scheme because it is not environmentally or economically efficient. I agree with Senator Boswell that the Australian people need to know what Australia's approach is to the issue of equity as part of a global agreement. There are two aspects to what is being negotiated. One is the target that we put on the table in Copenhagen. The other is the finance mechanism: how much Australia is prepared to contribute to the global financing. As you would be aware, Madam Chair, I have an amendment to put into the legislation to ensure we do put in financial support for developing countries. Either way, it is going to be required.
As has just been said, the European Union have said that they think €100 billion out to 2020 is probably what is required. They have said recently that €5 billion to €7 billion will be needed per year over the three years from 2010 to 2012 as fast-start finance. I understand that there was a pre-COP ministerial meeting last week. As the minister, you obviously either were there or had your officials there. I note that Japan announced at that fast-start finance meeting a figure of $9.2 billion to 2012. So Japan has put that on the table as its fast-start finance. The European Union have said they think €5 billion to €7 billion would be their fair share in that three-year period. What did Australia put on the table as fast-start finance between 2010 and 2012 at that ministerial meeting?
In the broader context, what does Australia regard as the parameters for judging what our fair share of burden-sharing should be? Are we looking at capacity to pay, a formula for who took early action, a formula on the historic legacy or a formula on population growth? What are the parameters that we are going to be negotiating on to say what our fair share ought to be? I have a very strong view that, if we are not going to cut the mustard in our effort on the target, we will end up quite rightly having to contribute more in terms of the global financing figure. It would be unjust to opt out on both. Senator Boswell is right: people who are following these negotiations want to know what Australia's position is in putting money on the table for the financing mechanism so that there will be a global deal. Without a fair financing mechanism there will be no global deal.
Senator WONG (South Australia) (Minister for Climate Change and Water) (10:45 PM) -Senator Milne suggested that I must have been there. I do not know if she noticed, but we were sitting last week and I was here. So, no, I was not at the pre-COP ministerial meeting because we sat last week. Australia has not made any formal offer in relation to financing. I have made that clear. When the terms of the international agreement are clear, obviously, any announcement of any funding by Australia would clearly be made public. Senator Boswell, I agree with you-we do not agree on this bill and we do not agree on a lot of things-but, yes, if Australia does make these sorts of policy decisions, the Australian government should explain it, absolutely. But there has been no announcement and no pledge of funding at this stage.
We do know that financing arrangements are the subject of negotiations. Some countries have made offers, many have not and there is a lot of discussion about the mechanisms and frameworks for that. As I said to you, Senator Boswell, and you have asked me the question in the chamber before, there is also a very live discussion about what proportion of that is public finance and what proportion is private finance and there are different views about that. These continue to be issues that Australia and others will negotiate and consider and it is the case that climate finance is something that needs to be looked at-and why is it? It is because we do need to try and encourage developing nations to take a lower pollution development path. It is actually in our national interest to do that because if you believe, as the government does, that climate change has an effect on this country then we do have an interest in trying to support reductions in emissions elsewhere and/or adaptation.
We do have an election commitment which is being delivered to an International Climate Change Adaptation Initiative of $150 million. That money is being expended by AusAID and other mechanisms and that is primarily focused on Australia's region, so from memory, the Pacific, PNG and East Timor-I might be wrong on that, but that is my recollection. We also have consistent in fact with Mr Turnbull's own initiative prior to the last election a $200 million International Forest Carbon Initiative which assists developing countries in reducing emissions from deforestation, which can account for around 18 per cent of global emissions-that is, deforestation and forest degradation. Through that program, Senator Boswell, we are working in Indonesia; we have demonstration activities there. We are working with the Indonesians on how we can help to support them in reducing emissions from deforestation given that is a significant source of emissions. These are partnership arrangements. The sorts of figures that are being discussed are global figures at 2020 and there is no agreement as yet about the proportion of public and private finance or the mechanism.
That is the status of the negotiations. I think the merit of some of the assistance to date is that there have been some very good projects in the Pacific, for example, and also in Indonesia arising out of Australian assistance just as-as Senator Boswell will know-under both governments Australia provided aid and continues to provide development aid to many developing nations.
Senator NASH (New South Wales) (10:49 PM) -I am a little perplexed about the lack of clarity that surrounds all of this. If we take the assumption-and there has been much discussion this evening around assumptions and how they relate to this whole process-that at some point this assistance will go forward perhaps the minister might like to inform the chamber, given the current level of Commonwealth debt which is around $115 billion would the minister envisage that we may well potentially in the future be in a situation where we are borrowing money from China to give back to China to enable them to go down this lower pollution development path?
Senator WONG (South Australia) (Minister for Climate Change and Water) (10:50 PM) -I have to say I find a little bit disturbing the way in which both the Greens and the National Party keep talking in these terms about China.
Senator Milne -I have not mentioned China.
Senator WONG -You did, Senator.
Senator Milne-Madam Temporary Chairman, I rise on a point of order. I have not mentioned China at all or by interjection; it was others, but I wish to make a very strong point of order and ask the minister to withdraw. I have not mentioned China at all in any context in this whole evening.
Senator WONG-On the point of order, Senator, if I misheard you then I apologise and I withdraw, but I thought you interjected in relation to China when Senator Boswell was on his feet. If you did not, absolutely, I withdraw. In relation to Senator Nash, there are already developed countries, including Australian firms, investing in China under the CDM. Do you really have a problem with that? Do you really have a problem with an Australian firm investing in a renewable energy project in China in a way that displaces emissions which would otherwise be emitted from a coal fired power station-is that such a bad public policy position?
Senator NASH (New South Wales) (10:52 PM) -I think that perhaps the minister has overreacted to that somewhat. I merely posed the question: given the debt level the country has, is there the potential that we will need to borrow money to be able to assist the developing nations and might China be in the future a country that we would look to borrow money from? That was not a disparaging remark about any country whatsoever; it was merely a straightforward question. Whether the minister says yes or no or has a particularly different answer, it was simply a question: is that a possible course of action?

Senator WONG (South Australia) (Minister for Climate Change and Water) (10:52 PM) -Senator, I think most people would know what sort of scaremongering lies behind your question. I think most people would know that. Frankly, Senator Nash, I would have thought better-
Senator Nash-Madam Temporary Chair, on a point of order: I ask the minister to withdraw that. The minister is off on a frolic of her own. I asked a very straightforward question. There was nothing disparaging or scaremongering about it.

The TEMPORARY CHAIRMAN (Senator Troeth)-Senator Nash, there is no point of order. Do you wish to ask a further question?
Senator NASH (New South Wales) (10:53 PM) -Yes, I do. On another matter-
Senator Milne -Could I follow up on this?
Senator NASH -Yes.
Senator MILNE (Tasmania) (10:53 PM) -Thank you. Following up on the question that I asked before in relation to the financing mechanism, I asked what negotiating parameters Australia was taking to the negotiation in relation to framing what would be a fair burden share. I am aware that capacity to pay, early action, historical legacy and population are four of the parameters some countries are using, and others are using a variety of those and others. I am just asking: in terms of what we are taking to Copenhagen, what are the parameters around which we are going to be negotiating our burden share in relation to a finance mechanism?

Senator WONG (South Australia) (Minister for Climate Change and Water) (10:54 PM) -First, these are obviously the subject of discussion in the negotiation. The OECD has put forward a range of parameters and ideas, from recollection. I know the European Union, in their proposal, also spoke of categories-I think those that you identified. These are matters still under discussion, and I do not think it would be correct to say that Australia has a rigid view about these issues. We think that ultimately this comes down to getting agreement around what people think is a reasonable way to approach this. I keep emphasising this: we have made no announcement, nor have we put forward any pledges to finance, and we have also said that we need to consider the very important role of private finance. One of the live issues in these discussions, as I have said in response to a question from Senator Boswell, is the mix of private and public funding. I would have to say that that is still a matter under discussion.

Senator NASH (New South Wales) (10:55 PM) -The minister may well be aware that certainly the Nationals are receiving thousands and thousands of emails at the moment begging us to say no to this ETS, so I think it might be worthwhile to ask the minister to clarify, taking on board her earlier comments that some countries are already doing a certain amount towards the reduction of the carbon pollution. Can the minister explain very clearly for the Senate and those people listening at the moment what the global situation will be as a result of those who are undertaking some kind of carbon pollution reduction scheme if no other countries come on board when Australia does?. I just want to be very clear that I am talking not about any countries coming on board in future but about the existing ones. When this scheme does come in, if it gets through the chamber in the manner that is being put forward to the Australian people at the moment, exactly how much will the world's emissions reduce by? I ask this question because it is one of the key questions that are being asked via my National Party colleagues consistently: exactly how much will the reductions be when Australia goes down this CPRS road without any other countries doing it at the same time?
Senator WONG (South Australia) (Minister for Climate Change and Water) (10:57 PM) -Again, it is regrettable that the National Party choose to put things on the record which are simply not true. You again asserted, Senator Nash, that-
Senator Joyce -We want an answer.
Senator WONG -I am happy to answer, Senator Joyce, and I have never run away from a debate with you.
Senator Nash interjecting-
Senator WONG -If I can answer, Senator Nash-
Senator NASH (New South Wales) (10:57 PM) -I would just like a clarification. I ask the minister to clarify what it was that we placed on record. I simply asked a question about what the reduction would be-
Senator Joyce -From the Australian scheme.
Senator NASH -from the Australian scheme. I do not see that I placed anything on record.
Senator WONG (South Australia) (Minister for Climate Change and Water) (10:57 PM) -I thought you referred, Senator Nash, to a scheme where no other countries were acting.
Senator Joyce -It doesn't really matter. What's the effect of the-
Senator WONG -I will take that interjection. He says it does not really matter. The point is that it does. I think it does matter in this debate to try and at least have a discussion that is factually based. The fact is-
Senator Ian Macdonald -Just answer the question.
Senator WONG -Oh, you are here? Are you on that side at the moment, Senator Macdonald?

The TEMPORARY CHAIRMAN (Senator Troeth)-Senator Macdonald, the minister is on her feet.

Senator WONG -It is wrong to keep asserting that no other country is acting.
Senator Joyce -How much will the Australian scheme reduce carbon emissions by?
Senator Ian Macdonald -A very simple question.
Senator WONG -We know-
Senator Joyce -We don't, actually.
Senator WONG-I would like to answer the question, but Senator Macdonald and Senator Joyce might like to have a discussion among themselves. I suppose that would be an option.
Senator Ian Macdonald -Can't you answer the question?

The TEMPORARY CHAIRMAN -Order! Senator Wong is attempting to answer the question and I would appreciate some order while she does that.

Senator WONG-Thank you, Chair. First, the extent to which Australia's national emissions are reduced will depend on what the government sets the Australian targets and caps at. We put on the table a range depending on how much the rest of the world is doing. That range is between five and 15 per cent off 2000 levels, or 25 per cent off 2000 levels if the world is doing an ambitious agreement. The extent to which the world acts will be a question of what targets and reductions all nations of the world are prepared to put on the table. That is self evident. So the extent to which a global agreement can achieve a particular environmental outcome will be a question of how much all of us are prepared to put on the table. Unlike the National Party, the government does not believe that simply because Australia produces about 1.5 per cent of global emissions we should just say, ‘It's not our problem.' If everybody sits back and says, ‘We've got to wait for everyone else to act, not just some,' we will all still be waiting. That is the reality. It is just simple logic. If we all sit there and say, ‘I'm going to wait till they do it and they do it and they do it,' everyone will still be waiting. So we take the view that if you believe climate change is real and is bad for Australia then we have to do our part and try to help build a global agreement.
Progress reported.

Thursday 26 November
Senator MILNE» (Tasmania) (4:04 PM) -I move Australian Greens amendment (1) on sheet 5786:
• (1) Clause 3, page 3 (line 10), at the end of subclause (3), add "including the provision of financial support to developing countries for nationally appropriate mitigation actions and adaptation".
This amendment pertains to financial support for developing countries. This amendment proposes to add to the objects clause the words ‘including the provision of financial support to developing countries for nationally appropriate mitigation actions and adaptation'.
We canvassed the background to this in a fairly peripheral way last night, but the issue here is that everyone recognises that, for a successful global agreement to address global warming, there needs to be a recognition not only that there has to be an adequate target to reduce greenhouse gas emissions but also that equity has to be addressed. It is vital that equity become an instrumental part of any agreement reached in Copenhagen, and it is absolutely certain that there will be no agreement if it is perceived to be unfair.
The inequalities that are already there are clear. Developed countries are already responsible for approximately 76 per cent of the greenhouse gas emissions already released into the atmosphere. Per capita rates of greenhouse gas emissions are significantly higher in developed countries than in developing countries. For example, the average Australian emits nearly five times as much as the average Chinese, and the average Canadian emits 13 times as much as the average person in India. About 100 countries with a total population of nearly one billion people but less than three per cent of the emissions will have to suffer the effects of climate change impacts in the near term. Developed countries have greater economic capability to make the adjustments that are needed to reduce emissions. For example, the US GDP per person is about 10 times that of China and about 19 times that of India.
One of the frustrations in the negotiations to date leading up to Copenhagen is that developed countries have not laid on the table a very clear statement of their level of ambition with regard to a financial mechanism. I think it is important, in the objects clause in Australia, not only that we have a target for greenhouse gas emissions but also that we have a legislated commitment to provide financial support to developing countries for nationally appropriate mitigation actions and adaptation.
Last night we indicated that the European Union has said that, globally, €5 to €7 billion will be needed per year over the three years from 2010 to 2012. Recently, at the pre-COP ministerial meeting, the Japanese announced a fast start-up «finance» figure of $9.2 billion out to 2012. For the United Kingdom, Gordon Brown is already offering a deal on «finance» which includes 800 million over three years for the Climate Investment Fund for 2008 to 2011. I ask the minister about Australia's position on this. It is no use saying that Australia will do its fair share. We know that the negotiations start Saturday week, so it is no use trying to say that we do not have a position. We clearly must have a position if we are going to the negotiations in a week's time. The negotiating team must have its instructions from the government.
I would like to know whether the government is going to support this amendment, which is an in-principle amendment to commit financial support. What is Australia's view about the amount of money that needs to be on the table globally from developed countries for fast start-up «finance» between 2010 and 2012 and, more particularly, what do we think we need overall out to 2020? I know the minister said last night that there are a number of possible criteria that might be used to develop a formula for an appropriate level of financing. They could include capacity to pay, the demonstration of early action, the historical legacy, population growth-a range of things. I would like to know, from the Australian team, what formula we intend to be negotiating around. I might leave it there for the moment in order to get some answers to those questions about what we have on the table and the parameters of the formula that we are pursuing.
Senator IAN MACDONALD (Queensland) (4:10 PM) -I wish to raise with the Minister for Climate Change and Water a matter of some importance to people in North Queensland and, particularly, Townsville. We awoke this morning to find a headline in the local paper ‘Yabulu closure threat'. Yabulu is a major nickel production plant in Townsville that creates a lot of jobs for North Queenslanders. It is particularly important in these times of high unemployment in North Queensland. The chief operating officer of Yabulu nickel refinery, a Mr Neil Meadows, said that the refinery's current assessment of the way it was treated under the Carbon Pollution Reduction Scheme, amounting to a 30 per cent subsidy, ‘meant it could be hit with tens of millions of dollars a year in additional charges'. The Townsville Bulletin reported further on Mr Meadow's comments:
‘‘That could tip it over the edge on what it was a year ago,'' Mr Meadows said.
‘‘On the current nickel prices and foreign exchange rate, it is only breaking even.''
The way Chinese nickel pig iron production was affecting prices, he did not see boom times ahead any time soon.
The nickel and cobalt refinery is lobbying Canberra for status as a stand-alone industry to gain the top subsidy rate of 94.5 per cent for high-emission activities.
Yabulu apparently produces high emissions-1.2 million tonnes of carbon dioxide each year-because it processes a cruder form of laterite ores, whereas rival companies produce less than half the carbon footprint with sulfite ores. Yabulu imports much of its ore from the Philippines where a similar refinery has been mothballed but which could reopen to process the ores should Yabulu close. The Townsville Bulletin reports that Mr Meadows goes on to say:
‘‘This is a classic example of an Australian operation which is at threat of the work going overseas ...
This is an argument that has been regularly made. The Townsville Bulletin reports:
The office of Climate Change Minister Penny Wong did not return the calls from the Townsville Bulletin yesterday ...
So it was unable to get a response from you. I am particularly concerned that here is a direct example of a job-producing activity in North Queensland and that, further north in Queensland, unemployment is something like 17 per cent of adult males. It is a little bit better in Townsville but only because this refinery, the copper refinery and the zinc refinery in Townsville continue to operate. All the way along, I have been vitally concerned that Mr Rudd's CPRS would make those three refineries unprofitable. I have raised the zinc question a number of times and I have been told by members of the government, ‘Oh, that's not right, they're not going overseas,' but here we have a refinery that employs, according to the headline in the Townsville Bulletin, 1,200 people. The headline says ‘PM asked to intervene to save 1200 jobs'. You can imagine what the loss of 1,200 jobs would do to the Townsville economy.
Senator Boswell -What about Bluewater?
Senator IAN MACDONALD -Indeed, Senator Boswell. I know what impact it had on the Cairns economy when the Labor Party refused to give a contract to the Cairns shipbuilding operation. Thereby some 300 jobs were-not put at risk-lost. They should have been given the shipbuilding contract but they were not, as a result of shenanigans between the state Labor government and the federal Labor government.
But that was in Cairns. You can imagine what the loss of 1,200 jobs would do to this community of north Queensland. I know that today, following the presentation of this article in the Townsville Bulletin, there are a great many Townsville working families currently under great stress at the suggestion that the nickel refinery will close because of the government's CPRS. I ask the minister whether she could accede to the request of the refinery for the status of a stand-alone industry to gain the top rate, or whether in other ways the minister can assure not just the owners of this refinery-whilst they are important they are less important in this equation-but also the 1,200 working families in Townsville that their jobs are not at risk of being exported to the Philippines.
I note that the Townsville mayor has said that he will be raising that with Mr Rudd when he visits Townsville next month but that will be too late. I would just like an assurance from the minister that they will take whatever action is necessary to ensure that 1,200 jobs are not lost from this refinery in Townsville.

The TEMPORARY CHAIRMAN (Senator Troeth)-Senator Macdonald, I would point out that we are discussing the Greens amendment which deals with financial support to developing countries. I realise that your query has a tangential connection to that but it is very slight. I will leave it to the minister to describe but you may need to ask that at another time. I will leave it to the minister.
Senator WONG (South Australia) (Minister for Climate Change and Water) (4:17 PM) -I did not want to take a point of order in the interests of trying to proceed through these matters. If Senator Milne can give me a minute or two, I will respond to Senator Macdonald and then I will come to her amendment.
In relation to Yabulu I am advised that representatives of Queensland Nickel are meeting with my department in a couple of weeks time-or some time thereabouts-to discuss this issue: that is, the activity definition for nickel production. So I am certain my department will consider very closely what is being put by that company. I would make the point that the government-supported by the majority of the opposition-has agreed on a very significant amount of transitional assistance to our emissions-intensive industries. Those thresholds have been public and the subject of consultation with industry for some time. They enable, as assistance, a starting rate for the most emissions-intensive industries of 94.5 per cent of free permits, and some 66 per cent for the moderately intensive industries.
I am certainly happy for my department to work with this company through the issues raised. The government has put a lot of focus on ensuring that this is a scheme that enables our economy to continue to grow, in terms of both the size of the economy and jobs. That is certainly what the Treasury modelling shows us. So, on that issue I indicate that the department will be meeting with that company.
In relation to the amendment which is before the chair, I say to Senator Milne firstly that she is asking what the government's negotiating position is but that that is not something that has yet been announced, and I do not propose to announce it now. Secondly, we have put on the record-I did last night-that Australia is prepared to pay its fair share in an agreed global climate finance package. However, it is the case that those matters are still under consideration and for negotiation. We have said quite clearly that we recognise the significant and urgent need for international financing. We recognise that these are matters which need to be dealt with both in Copenhagen and beyond, but the government is not minded to accept this amendment. We think this is legislation which is about reducing Australia's carbon pollution. It is not necessary to include this provision in domestic legislation. We will continue to engage, through the UNFCCC, to deal with financing issues.
Senator MILNE (Tasmania) (4:21 PM) -It seems that the European Union has no problem identifying the amount of money they think needs to be on the table as start-up finance. Japan has no problem. The UK has no problem. One of the big problems, though, is that the developing countries are beginning to think that Australia is not negotiating in good faith, because you are not acknowledging the quantum that needs to be on the table globally, let alone talking about the appropriate burden share. I note that you are rejecting the notion of even putting final support to developing countries into the object clause of the legislation. So, firstly, my question is: is the money that is provided for developing countries going to come out of public funding and not be related to receipts from the scheme in any way? Are you saying that it will be publicly funded? Are receipts from the scheme in any way directed to overseas funding?
Secondly, I would like to know from the minister whether Australia is supporting a tax on aviation or bunker fuel in order to be part of a private sector contribution to a fund that might be able to be directed in the way that I am suggesting. Can the minister at least confirm that there will be no global treaty unless there is a fair allocation of funding to developing countries to allow them to adapt and to mitigate as much as possible? Can she be clear about where the money will come from, if it is not going to be in any way connected to the Carbon Pollution Reduction Scheme?
Senator WONG (South Australia) (Minister for Climate Change and Water) (4:23 PM) -First, in relation to the bunker fuel, the government has not determined its negotiation position on that issue. I think that is the best way to explain it. Second, in terms of the revenue sources, I explained to, I think, Senator Joyce last night that this income is not hypothecated. We have provided publicly an indication of the impact of government policy measures on the fiscal balance, but that is as an indication of how the revenues are being spent as opposed to that revenue being hypothecated to any particular outcome.
Obviously, when the CPRS returns to a budget-positive position the government will be very mindful of the importance of the allocation of those revenues to environmental programs. But the reality is the current package is not revenue positive out to 2020. In terms of the third question, we have already stated publicly that we understand that climate finance to support developing country action on climate change will be an important part of a global deal. The Prime Minister said words to that effect and I have said that.
Senator MILNE (Tasmania) (4:25 PM) -I thank the minister for her answer because it is clear looking at this that the Carbon Pollution Reduction Scheme will not have a positive budgetary impact out to 2020, so any money that is paid into a global fund must come out of the budget somewhere. That is why it is important that Australians have a commitment that the money will be paid and that Australia is not going to go to Copenhagen with a miserly position, having allocated so much compensation to the coal-fired generators-with no justification whatsoever-and argue that there is no money, because the scheme does not generate any additional funds, to put an appropriate share into an international fund for the adaptation, mitigation and assistance that is required.
So I think it is important that we at least we get from you, Minister, a commitment to the kind of quantum. As you are aware, Oxfam, Friends of the Earth and others have put on the table their view. Looking at the formula that I have referred to previously, they think that Australia's fair share ought to be in the vicinity of $4 billion per annum. I think there has to be some awareness of what it means when you design a scheme that is so economically inefficient that there is no money left over from it to meet your quite right, just and fair international obligations to shoulder your fair share. If the rest of the world determines that the adequacy of the target on offer has a direct relationship to what our fair share is-so, the lower the target, the higher the financial contribution-we need to know what Australia's position is. There is real concern that the failure of developed countries to put an adequate amount of money on the table will be a deal breaker in Copenhagen.
I would just like to know from the minister whether she thinks the quantum that has been put on the table by the EU, Britain and Japan for fast start-up is in the ballpark. Does Australia think that is the kind of quantum we need on the table for the fast start-up? And what is the ballpark quantum for us out to 2020? I also want a commitment that the government is going to meet it, because I know what could happen here. It could become crunch time because of the global financial crisis and the amount of money that has to be found because of what we expended in the short-term. With this scheme having been so generous to the polluters, it could well end up that there is no money on the table for developing countries.
I want to know how Australia is going to finance it and, secondly, that it is going to finance it. If it is not then we will not have a global treaty. That is why it is critical that we get this amendment up-so that in the objects clause there is a clear understanding that, when you have a carbon pollution reduction scheme to reduce emissions, it ought to be efficiently designed in order to generate sufficient funds to invest in such a scheme. If it is going to be publicly funded outside the scheme, we need a commitment to that and to the order of magnitude. Otherwise, I am fearful Australia will not front up with its appropriate level of burden share.
Senator WONG (South Australia) (Minister for Climate Change and Water) (4:29 PM) -Senator, I am not sure I can add anything further. The government have not indicated a view as to quantum. The government have said that we will continue to work through the negotiations on the whole gamut of issues that are on the negotiating table, including international finance. The government have said that we understand that climate finance to support developing country action on climate change will be an important part of a global deal. I am not sure I can add anything further. You are seeking announcements in this chamber that the government has not yet made, and no amount of questioning me is going to alter that. In terms of your comments about an economically inefficient scheme, I simply make the point that obviously that is a subjective view. That is your view; that is not the government's view.

Senator IAN MACDONALD (Queensland) (4:30 PM) -I am concerned with the figure Senator Milne raised. I ask the minister: do you accept that people are saying that at Copenhagen Australia's share would be $4 billion? I am not asking you to say whether you are committing it, Minister, but do you agree with Senator Milne that that is the amount being sought from Australia?

Senator WONG (South Australia) (Minister for Climate Change and Water) (4:30 PM) -I have to be honest and say that it is not a figure I recall reading about in the press. What I have said in response to Senator Milne's question stands.
Senator BOSWELL (Queensland) (4:31 PM) -I want to ask some questions about the financing of underdeveloped countries. But before I go there I want to talk about the nickel plant in Townsville. We have not even started this CPRS-or ETS-and we are finding that already there are 1,200 jobs on the line-

The TEMPORARY CHAIRMAN (Senator Troeth)-Senator Boswell, I draw your attention to the content of the amendment.

Senator BOSWELL-Madam Chair, maybe I can form my comments to meet with the amendments. Here we are debating how we are going to look after the underdeveloped countries. As we quite often find ourselves in parliament now, we are in a situation where Senator Milne wants to go too far and we want to find out just how far we have got to go. I raise this in the context of 1,200 people losing their jobs. We pay for other people to put an ETS in their countries. What is the point of this? There are 1,200 jobs going to go on the burner-the company is on the line. It was bought out by Clive Palmer about 12 months ago and it was losing money then. He took over, guaranteed the jobs and now we are penalising him so we can provide compensation for foreign countries. Senator Macdonald has a unit in Townsville. There is a series of suburbs along the northern beaches of Townsville. People from the whole of that area work in the nickel refinery, and we are going to close down the whole of North Townsville so Australia can provide finance to underdeveloped countries.
We are getting into the farcical stage. We are closing our industries down because we are penalising them so much. We then have to go and put in $4 million or $8 billion-depending on who you talk to-and you come in here, Minister, and say, ‘Well, I haven't got a figure.' Well, you had better get one because in three weeks time you are going to Copenhagen. I find it very difficult to believe that a government with all the public servants at their disposal-and there must be 200 to 300 in that department-are asking us to believe that you are going to Copenhagen without knowing what you are going to put on the table. That defies logic.
I have very rarely agreed with anything you have said. I know you are an intelligent woman and I know you would not go to Copenhagen unprepared. You would have all your i's dotted and your t's crossed before you went over there. You are not going over there and pulling out a figure from the back of an envelope. Do not ask us to believe what is impossible to believe. You are a skilled performer but do not try to spin it so much that you do not know what you are doing. You do know what you are doing; you have had a grip on this ETS for 12 or 18 months and you know exactly what is going to happen. I am not going to say you are misleading the Senate, but I believe you know what you are going to put on the table. It is going to be frightening. You are trying to avoid getting it out while the parliament is sitting and before we vote on the ETS.
People are terrified of this and what this is going to do to the economy. You are asking them to finance another country while jobs at Yabulu nickel refinery are going. And that is not the first lot. The first lot was the Rockhampton cement mill. They could have kept going; it would have been hard because they would have had to revamp their machinery. But they would have kept going if there was no ETS. But while there was an ETS there they said, ‘It is not worth doing it.' That was not a lot of jobs-68-but as I said at the time, it was a canary in the coalmine. Now we are having massive losses.
Townsville cannot afford this and neither can Australia. If you want to push this through-all the Nationals and many of the Liberals do not want it to go through-then be honest with us; do not try and dodge it. Tell the people what they have got to know. You might not carry the people, but do not dodge it. That is what a parliament is for-to expose these issues and to find out what the figures are, and you know it. You know you have got them there, I know you have got them there and everyone in this parliament knows you have got them there.
Senator WONG (South Australia) (Minister for Climate Change and Water) (4:37 PM) -Senator Boswell has just engaged in the same sort of scaremongering that those on that side of the chamber who have lost the vote in their party room have engaged in, because they will do and say anything-

Senator Boswell -Are you including Senator Milne in that? She is on this side of the chamber.

The TEMPORARY CHAIRMAN (Senator Troeth)-Order! Senator Wong has the call.

Senator WONG-There is scaremongering by National and Liberal Party members who have never wanted action on climate change and will do and say anything, regardless or how erroneous, wrong and incorrect it is, in order to avoid action. That is what is happening. The fact is that you have form on this. You are the rump of the Liberal Party and the National Party who refuse to believe the science, who refuse to listen to the Australian people about their desire for action on climate change and who refuse to back the election commitment you made under John Howard to introduce a scheme like this. It is irresponsible in the extreme for senators to come into this place seeking to deny the science and fight this policy, not on the basis of fact but on the basis of fear. Senator Boswell knows well that this scheme has not yet commenced; in fact that is what he is trying to stop. That is what he is opposing. He wants to ensure that the scheme never commences.
Second, he makes this claim that we are closing down industries to send money overseas. What an appalling piece of scaremongering here in this chamber. He knows that every cent of this scheme out to 2020, and more, is being used to assist Australian households and Australian businesses to adjust to the impact of a carbon price. That was our commitment and that commitment remains. He also seeks to avoid recognising the impacts of climate change. Senator Boswell, I know that you do not agree with the science. But we are doing this because we think it is the right thing for the country. We believe that the science is right, that this is an enormous economic and environmental risk to Australia and that the world is moving. We know, for example, that the US has just announced a provisional target to take to Copenhagen.
Senator Joyce -Is it legislated?
Senator WONG -I will take that interjection. Senator Joyce asked if it was legislated. If he does not want to take the word of the President of the United States, that is a matter for him.
Senator Joyce -Unless it has been to Congress, I will not.

The TEMPORARY CHAIRMAN -Order! I remind senators the minister has the floor.

Senator WONG-In relation to nickel, I think it is always very useful to get facts on the table about movements in price, because there are some in this place who seek to suggest that the world will come to an end if we start to recognise the costs of climate change through our economy. And I believe I had interchanges with Senator Macdonald and Senator Boswell about cement previously. I will just make an observation about the movement in the world nickel price over the last couple of years. My advice is that that has varied between in excess of $55,000 and $18,000 over two years. So there has been a 70 per cent fluctuation in the price of nickel, and that is not unusual in the sense that there is variation on world markets. But those are the sort of market fluctuations that industry deals with. The sort of impact on revenue, before assistance, that we anticipate for this industry-and this is a rough estimation-is about three per cent. So the proposition is that somehow that is-what was it that Senator Boswell said?-'closing down industries.' Three per cent of revenue. The reality of the scaremongering campaign is that any price impost is described as ‘closing down industry' by those who want to stop action on climate change. We have worked enormously hard in this government, including with sensible members of the opposition, to provide reasonable transitional assistance to Australian business.
I want to make another economic point; it is this: if you believe that the world is eventually moving to a global carbon constraint, and the evidence is that it is moving, then Australia needs to be able to compete in that world. So the rationale for this reform is not only that we have to be part of action on climate change but it is also that we have to reform so that we can produce the goods and services that, increasingly, will be demanded by world markets.
Senator XENOPHON (South Australia) (4:43 PM) -I had a discussion with the minister's office earlier today and I thought that the most time effective way of dealing with things that I need to seek your leave on-whilst this does not relate to the amendment at hand-is to actually set out a list of question so that, effectively, the minister can take those questions on notice and respond. I am not sure if that is an adequate way of proceeding with that.

Senator WONG (South Australia) (Minister for Climate Change and Water) (4:44 PM) -I will make a suggestion to the chamber for the consideration of senators. We have before us an amendment from Senator Milne. I wonder whether, when senators have sufficiently put their views on that, we could put that amendment. I am very happy then to take questions from Xenophon-that will give me time to come back. I say to senators Joyce and Milne that I have some responses on a number of issues raised last night. I also have an official here in relation to the Kyoto accounting rule issue that was discussed last night. I wonder if it would be possible for us to deal with that set of questions rather than asking the official to remain here until 11pm. If that is not convenient for the Senate we will obviously facilitate that but, if it is, that would be appreciated.
Senator MILNE (Tasmania) (4:45 PM) -I support the proposition that we finish considering this amendment, vote on it and then go to the bushfire questions, Senator Xenophon's questions and so on. But, first, I return to the issue of what we are going to put on the table in terms of our obligations under a financing mechanism.
I note that Minister Wong said that she had not seen the figure of $4.4 billion in the press. I draw her attention to Oxfam Australia's report, which it sent to all senators, entitled Hang together or separately? How global co-operation is key to a fair and adequate climate deal at Copenhagen. James Ensor, the Director of Public Policy and Outreach at Oxfam Australia, said in a letter he sent to all senators:
A new global mitigation finance mechanism managed by the United Nations should be established to direct money from the sale of carbon permits allocated under the UNFCCC to assist poor countries in their efforts to reduce emissions and adapt to the unavoidable impacts of climate change. At least $187 billion globally is needed each year, and Australia's fair share of this amount is approximately $4.3 billion annually.
So that figure of $4 billion came from a report by Oxfam, based on the kinds of discussions and parameters that I mentioned previously. The minister said that she did not think it was appropriate to put a provision for financial support to developing countries into this legislation, but I draw a minister's attention to the objects clause where:
The first object is ... to give effect to Australia's obligations under:
(a) the Climate Change Convention; and
(b) the Kyoto Protocol.
The second object is:
... to support the development of an effective global response to climate change
I would have thought that including the provision of financial support to developing countries for nationally-appropriate mitigation actions and adaptation would be part of an effective global response to climate change. It does not specify figures; it is a principle in the clause. I am concerned that no public financing facility is being foreshadowed by the government on where our fair share is going to come from. There is no private fund from aviation or bunker fuel. I accept that that has not been agreed and that it is on the table for negotiation, which will, hopefully, lead to some private sector financing for such a fund.
Can the minister guarantee that Australia's overseas aid budget will not just be rolled into part of Australia's effort and that Australia's contribution to this fund will be over and above both our existing obligations under the Millennium Development Goals and our existing aid budget? Can the minister guarantee that our aid budget is not going to be merely a part of this contribution but actually additional to it, since it will come out of the public purse?
Senator IAN MACDONALD (Queensland) (4:48 PM) -On the same issue and in relation to this amendment, I have a question for Minister Wong. Senator Milne had to say this, but she makes a very good point: you are going to Copenhagen in three weeks time and you are going to be asked there-even if you do not want to be, though I am sure you do want to be and I am sure it is in your mind-what Australia can contribute to underdeveloped countries along the lines of calls that have been made by the Secretary-General of the UN and many other people.
Again, Minister Wong, I can appreciate why you do not want to tell the Australian public or the Australian parliament or the people who approve your appropriations. I can understand why you do not want to do that now. There is a lot of spin in this, so that will make for a good announcement at the right time. I understand that, but can you at least tell the Senate what your parameters are? Are you prepared to agree to anything? If you are, are you prepared to agree to a little bit, a big bit or a medium bit? Are you likely to agree to something that is for this year, for next year, for the next decade or for the next 100 years?
Can you just give us some details without mentioning the figure of $4 billion or anything else specifically? Or do you think you are not going to be asked? Do you think that after you and Mr Rudd have been to Copenhagen, you will come away from there without making any comment whatsoever on what Australia might be able to contribute to underdeveloped countries?
Senator WONG (South Australia) (Minister for Climate Change and Water) (4:50 PM) -I reiterate that the government has made no announcement as to quantum.
Senator Ian Macdonald -I know that. I acknowledge that.
Senator WONG -I know, Senator Macdonald, that you want to try to use this issue to bolster your campaign against this bill. I know that. Senator Boswell has made that quite clear.
Senator Ian Macdonald -You are casting aspersions, which is contrary to standing orders.
Senator WONG -No, not at all. I am not casting aspersions; I am telling the truth. You are trying to use this issue-
Senator Ian Macdonald -You are imputing improper motives.
Senator WONG-Senator Macdonald suggests that I am imputing an improper motive. I do not know that I would call it ‘improper'; it is quite patent. Senator Macdonald has crossed the floor against his own party.
I am not going to add anything further to what I have said. I have answered Senator Milne's questions and Senator Boswell's questions. I have also made the point that every cent of the revenue from the bills before the chamber is accounted for. The government has gone to unprecedented lengths to do a 10-year forecast, which is most unusual. We did so because we wanted to be transparent about the revenues and the expenditure associated with the scheme, so we have gone beyond the forward estimates period, which is an unusual thing to do. But, given the importance of this legislation, we thought that was appropriate.
Senator JOYCE (Queensland) (Leader of the Nationals in the Senate) (4:52 PM) -I have a question for the minister: is China a developing country?

Senator WONG (South Australia) (Minister for Climate Change and Water) (4:52 PM) -China is regarded as a developing country under the UNFCCC.

Senator JOYCE (Queensland) (Leader of the Nationals in the Senate) (4:52 PM) -So we will be borrowing money from China to pay back to China to develop?

Senator WONG (South Australia) (Minister for Climate Change and Water) (4:52 PM) -It is most regrettable that that same question has been asked again. Senator Nash asked it last night. I made the comment that it is regrettable that we want to play politics in terms of our relationship with China. I make this point: China already receives funds from Australian companies under the current mechanisms of the Kyoto protocol, known as the clean development mechanism, whereby Australian companies can, for example, invest in renewable projects in China. What I would say to you, Senator, is that that is a good thing. If we have a situation where we can give an incentive to Australian companies to invest in clean energy in China, displacing more emissions-intensive forms of energy such as coal, that is good for the planet-and, providing you get the mechanism right, it is good for that Australian business. There are Australian businesses already doing that.

Senator JOYCE (Queensland) (Leader of the Nationals in the Senate) (4:53 PM) -Minister, this is not about businesses; this is about you going to Copenhagen and putting on the table money to be appropriated towards developing countries, which would include China. We currently have in excess-I imagine; I will have to find out-of $115 billion of debt. The states have in excess of $170 billion in debt. The major financier of that debt is the People's Republic of China. So, quite evidently, we will be borrowing further money, and putting ourselves further into debt, to take the money across to Australia, pay for the administration charges, and then send it back to China. Then we will have to repay the debt for the stimulation of the Chinese economy from the Australian economy back to China, for the money we borrowed from China to pay to China to develop Chinese industry.

Senator IAN MACDONALD (Queensland) (4:54 PM) -Senator Joyce makes a very good point. But can I just respond to the minister's answer to my question-which she chose not to answer but simply used to abuse me and others who have the temerity to question our government on what funds they are putting aside for this. I acknowledged to her that I did not expect a dollar figure. I asked her to tell us what the parameters might be. I asked her to tell us whether she expected to come away from Copenhagen without having mentioned funds to developing countries but that, if she was intending to say something, could she indicate to us just what the parameters are and how it is going to be assessed?
I say to the minister that, if she is simply going to get up in response to questions and abuse the questioner, then we are going to be here until Christmas. This is the greatest piece of economic rearrangement of Australia in a lifetime. We understand the government has a position, wants to get this through and claims a mandate-and all of that may be true-but at least this Senate should be able to question the minister on just what this might cost and how it is going to operate. If the minister, in answer to those questions, simply abuses the questioner, we are going to be here for a very long time. I suggest the minister might need to find a fill-in for Copenhagen, because if that is the way she is going to keep answering our questions, we will keep asking the questions-and we can do that until we get an answer.
Senator MILNE (Tasmania) (4:56 PM) -The Australian Greens' perspective is very clear: developed countries have caused the problems we now face with climate change and we have a responsibility, because of the historical legacy, to assist developing companies to mitigate and adapt into the future. There is no doubt that, if we do not contribute our fair share, there will be no global agreement and we will be going beyond the tipping point and the whole planet will suffer. This is a matter of justice. It has to be built into any negotiation.
I want to come back to this issue of Australia's fair share, justice and the need for this principle to be here. In the negotiations with the coalition it is clear that billions more were found for the coal-fired generators but there is no income stream identified in the Carbon Pollution Reduction Scheme to provide this finance. I have heard the minister say that Australia has said it will pay its fair share, but I have not heard any undertaking from her as to what the government has thought the parameters or the formula for a fair share should be-or, indeed, how Australia is going to find the money for that fair share. I believe it will be, and should be, in the quantum of the figures that I have discussed earlier-that the European Union, that Britain and that Japan have put on the table, for early and fast financing out to 2020.
I asked the minister a minute ago to give us an unequivocal undertaking that this will not be to displace Australian overseas aid, that it will be additional to that. I think there is some obligation for the minister to explain to the parliament, given that billions could be found for the polluters, how billions are going to be found for those who deserve the billions. They are the people who are suffering around the world now, as the minister well acknowledges and that is clear to everyone who follows this debate. Millions are suffering already. A billion people live in the four big river valleys of Asia. If you have the glaciers in the Himalayas retreat and disappear, they will have no fresh water for six months of the year. This is a humanitarian crisis, quite apart from an ecological crisis.
In moving this amendment, the Greens are trying to secure a real commitment and an identification of where the income stream is going to come from to pay our fair share. If this is public financing coming out of budgetary lines for which the government of the future will say ‘there is no money to pay' then we have no hope of getting a global agreement that is just and fair, and therefore we will not get a global agreement, because I am sure that developing countries will not sign on unless they have a high degree of confidence that each of the developed countries is signing on for something real in terms of a figure. I have heard the minister say that she is not going to say anything more on this issue. I think that is unfortunate, because other developed countries have felt they are able to say something on this issue. At least please assure this Senate that this will not be a substitute in part for overseas aid but that it will be additional to our Millennium Development Goals obligations and our current overseas aid obligations.
Senator XENOPHON (South Australia) (5:01 PM) -I indicate my support for this amendment. I have had a number of discussions with Tim Costello, from World Vision, in relation to this as recently as last night and today. Reverend Costello indicates that the Global Humanitarian Forum-that is the group that Kofi Annan is involved with-has indicated that 330,000 people died in the developing world last year due to climate change related health issues. The World Health Organisation has given a lower figure and has said that 154,000 people died last year due to climate change related health problems-for example, malaria in areas which previously did not have malaria, because of temperature rises.
The point made by Reverend Costello on behalf of World Vision is that there is a very real concern about the whole issue of adaptation as well as funding for mitigation. World Vision's view, as I understand it, is that our share of the health commitment to the region, which is $600 million by 2012, should be $1,200 million by 2012. Senator Milne is right: if there are additional health pressures as a result of climate change then we should increase our budget. I think that this object clause is laudable. It does not constrain the government in a budgetary sense, but it does set as a clear objective that we provide appropriate financial support for mitigation actions and adaptation. Therefore I support it.
Senator BOSWELL (Queensland) (5:02 PM) -What are you supporting? You support an increase, but how much? I am sure you want to know-

The TEMPORARY CHAIRMAN (Senator Mark Bishop)-Senator Boswell, you might care to direct your comments through the chair.

Senator BOSWELL -Certainly. Senator Xenophon has just given a contribution in which he says he supports an increase. That is his prerogative. I am sure that Senator Xenophon would want to know how much money he is supporting, because I certainly want to know.
The European Community are a bit more generous to us than Oxfam. They say we should pay only $3.8 billion. Oxfam says we should pay $4 billion. I want to know a couple of things. I want to know how much it is and how we are going to pay for it. Is it going to be paid for by increased taxes or a levy on aviation fuel and bunker fuel for the ships, or are we just going to take it out of the budget? I have asked these questions; they are reasonably sensible questions, and all I get from you, Senator Wong, is abuse. You are better than that. You really do not have to do that. You might have your faults but you are not a redneck.
Senator Joyce interjecting-
Senator BOSWELL -Senator Joyce, she is a capable woman. You are not telling us what we have got to know. It does not matter what Senator Joyce wants-or Senator Nash or Senator Milne. It is irrelevant. But you have to tell us what you are going to spend and how you are going to raise the money-whether it is going to be by a tax, a levy or any other means. If you do not, you are deceiving the Senate, and when you deceive the Senate you are deceiving the Australian people. This is a parliament and we are all gathered here because we have been elected to represent our constituents. Whether they are to the far left or the right or the middle, they all have to vote, and they all want to know how much this is going to cost and how we are going to finance it.
If it is a levy on aviation fuel and bunker fuel, that is going to impact on Australia more than any other country in the world, because we are a trading nation. As I said in my speech on the second reading, we have been a trading nation since Macarthur sent the first bale of wool overseas. And we are a long way away from anywhere. We are down at the bottom end of the world, so our transport costs are going to be more than others. We will be impacted on more by levies and taxes. If you want to get this through, that is okay; I do not know whether you have the numbers. But surely there is nothing wrong with telling us that. Are you ashamed? Are you frightened? Are you observing the polls, as I am, and finding that the ETS is going down like a brick and you do not want to frighten the horses? Your polling must be the same as ours, and ours is saying it is going down in front of your eyes. That is a fact of life. You cannot escape it. People have a view and they express that view in the polls. But it is wrong for you to stand here and abuse Senator Macdonald, Senator Milne and Senator Joyce. Senator Joyce is pretty thick-skinned and he can cop it, but Senator Milne does not like it, and I do not think you should abuse her. Chivalry is not dead in the National Party, and we respect women.
We can be flippant about this, but I do not think you can escape it: you cannot deny telling us how you are going to raise the money, what the money is, what taxes are going to be paid, what is going to be on revenue and how you are going to raise the money. The figure is going to be around $3.8 billion, I suspect. You can deny that, but that is what Oxfam have said. I do not know what they have got to do with the price of fish. They are a charity organisation and they probably do a pretty good job as a charity organisation, but when they stray from their knitting I do not think they have any expertise to make these claims. Then you have got the EU, which has put us down for $3.8 billion. So we can assume that we are in the ballpark, give or take a billion, but we would actually like to know the figure and how you are going to raise the figure, whether it is going to be by taxes, levies or raiding the budget. They are not unreasonable questions, I would have thought. So can you please give us some answers or, as Senator Macdonald said, we will be here until Christmas. We are prepared to stay here as long as you like. Do not try and obfuscate, because you can only obfuscate for so long. In the end, the truth will come out. You will have to give us the truth and you are trying to avoid that at the moment. The questions I ask you are: how much is it, and how are you going to raise the money-are you going to invoke a levy on fuel or is it going to be through taxation or a raid on the budget or something else?
Senator WONG (South Australia) (Minister for Climate Change and Water) (5:09 PM) -I am not sure if I should take some of that contribution as a compliment or not, but I think I will take it in the spirit in which it was said.
Senator Joyce -Sir Galahad and Sir Lancelot over here.
Senator WONG-I think a lot of things about Senator Boswell, but Galahad and Lancelot are not amongst them I have to say. Not pretty but pretty effective was one of his slogans, wasn't it? I am not sure what you think was abusive about what I said, Senator Boswell. I have found in this debate that the very harsh language has not been from those who want action on climate change; it has been from those who oppose it. There have been people in this chamber who have accused me of wanting to burn people at the stake. Those are not words I would use. I think I have referred to the comments about China as regrettable. I do not think it is abusive to name what is happening, and I do think this is scaremongering.
A number of figures have been raised and put into the public arena by NGOs and other governments. Those are not Australian government figures. If and when the Australian government chooses to put a figure out, we will be held accountable to it. But that is not something we have done. A number of the issues raised are issues which are live in the negotiations, so I am being asked to respond to something which is currently the subject of negotiations and will continue to be the subject of negotiations.
In terms of the bills before the chamber, there is a lot of discussion about international finance. I do not agree with Senator Milne's position, but it is a legitimate amendment for her to put which is consistent with her party's position. Some of the contributions that are being made are seeking to conflate an issue which is not before the chamber. There is no revenue out to 2020 which the government is asking the chamber to allocate towards international finance. Every cent is going towards Australian business and Australian households. That is the issue that Senator Milne has. I respect that and I have given my answer to that, but Senator Boswell's contribution seems to suggest we are putting something before the chamber that allocates revenue to developing countries when we are not. In fact, that is Senator Milne's very point.
Can I make a suggestion? I know there are people in this chamber who really do not want to vote on this bill. Throughout all of last night and up to now we have only dealt with one amendment.
Senator Boswell -Because you have never told us what we have been asking for.
Senator WONG -Senator Boswell, you are asking me to make announcements that the government has not made. You can ask all night long and my answer will be the same. I suggest to the chamber that we have been sent here to consider this bill. People are entitled to move amendments and to speak to them but, if they are simply trying to avoid this bill being resolved, I think that will become increasingly clear to anybody who is watching as the hours go on.
Senator MILNE (Tasmania) (5:12 PM) -I have asked twice; I will ask for a third time and then I will assume that the minister is not going to answer and therefore the answer is that there is every likelihood the aid budget will be rolled into this. I just wanted the minister to give an undertaking that this money will be over and above the existing aid budget and existing commitments under the Millennium Development Goals and will not be money that is substituted for those amounts. That is the commitment I want from the government. It is not about the quantum that Australia is prepared to pledge; it is whether the money will be over and above the existing amounts. I also put it clearly on the record that the decision to give billions of dollars to the coal-fired sector when it is completely unjustified in this scheme is no excuse for future budgets not to allocate what is Australia's fair share, because it is a choice of the government and the coalition not to provide an income stream under the CPRS for the social justice commitment that Australia should rightly be making.

Senator WONG (South Australia) (Minister for Climate Change and Water) (5:14 PM) -The issue of what proportion is ODA or not ODA is obviously one of the issues that has been the subject of negotiation, but again, given that the Australian government has not announced its position, I cannot give you an indication on that. I just refer you again to my statements and the Prime Minister's statements about Australia paying its fair share in an agreed global climate finance package.
Senator McGAURAN (Victoria) (5:14 PM) -Following my colleagues Senators Boswell and Macdonald, who raised the issue of job losses in the north of Queensland, I want to raise the same issue of job losses in my state of Victoria. It is relevant at this point because of the high-handedness of the minister when she-
Senator Wong-Mr Temporary Chair, I rise on a point of order. It goes to relevance. I have no difficulty in Senator McGauran making a contribution on this issue-and there are amendments subsequently which deal with this-but we are dealing with an amendment on international financing and putting it into the objects of the act. I fail to see how a contribution about Victorian industry is relevant to an international financing amendment.

The TEMPORARY CHAIRMAN (Senator Mark Bishop)-The minister has on a number of occasions suggested a particular course of action as to how this debate be conducted. We are dealing with an Australian Greens amendment about financial support to developing countries. It would be useful in the discussion if the comments made are directly relevant to the amendment we are dealing with.

Senator McGAURAN-I can make my comments relevant. I could raise my particular issue in relation to the Victorian aluminium industry at any point, but the minister has provoked me to get up at this particular point because she was very high-handed towards a question asked by Senator Joyce about whether China is a developed or a developing country. It is classified as a developing country-a very developing country, I should add. The minister put that information out with a certain undertone in her comments.
Senator Joyce asked how many billions we are going to give to China. We have a right to ask what the effect of this scheme will be on Australian jobs and industry. There is such a thing as carbon leakage. The minister would know all about that. If this scheme is badly designed, these industries will head off to China while we are paying China whatever is agreed-and we have no idea what that might be from the upcoming Copenhagen agreement-to lower its emissions. For example, if not the case in point, the aluminium industry in Victoria will go to China to set up under the existing structure.
Two Senate reports have touched on the question of carbon leakage to developing countries. The interim report of the Senate Select Committee on Fuel and Energy-a government majority report, I should add-raises deep concern about carbon leakage. This is where the developing country aspect is important. In evidence to that committee, the Australian Aluminium Council outlined its view of the impact of the CPRS on the aluminium industry. It said:
The CPRS will impose an extra cost on alumina refining and aluminium smelting industries-thus helping to move our very competitive operations up the cost curve, whilst competitors in non carbon constrained economies remain unaffected ... Capital will instead be most likely directed to operations in countries such as China ...
That industry is Victoria's biggest export industry, the greatest revenue earner for Victoria. Under the framework of this scheme, Alcoa in Portland and Geelong will pack up and possibly go to the developing country that we will be supporting. That is the relevance of all this. That is why Senator Macdonald raised the question of Australian jobs because that will be the effect.
All the industries that Senator Macdonald, Senator Boswell and I have been talking about involve rural and regional jobs. And there will be a double effect. They are part of the community, the essence of the economy. Those industries are the foundation of those rural economies. In the city, they would be missed, of course, but when they pack up and leave a country town the effect is devastating on families and jobs. Where are the unions in speaking out for the aluminium industry or the nickel industry?
The minister knows that the aluminium industry, which I will raise later in more specifics, has a real problem in Victoria, and at the moment it is unsolved. Under the structure of this scheme, the effect on their bottom line in Victoria alone will be $40 million. They cannot sustain that. China will look like a very attractive proposition. They will certainly look at China if the scheme goes through as it is. The minister knows the aluminium industry has a problem, but does she know the real effect on rural and regional economies? Does she know that of all the industries this is one that can pack up pretty quickly? The aluminium industry around the world have proven how quickly they can pack up and move to the most cost-effective country. China looks very cost effective at the moment under this scheme.
It is not a matter of us trying to stop it. Of course we are trying to stop it. That is well known. We may yet stop it, by the way, Minister. Wouldn't that be a turn-up? We may yet stop this. In fact, I am a little bit confident about that. I know something you do not know. It ought to be stopped because under the existing structure it will be devastating on industry. We are unaware of how many billions are going to go over to developing countries. My question is this: will you factor in carbon leakage if the aluminium industry leaves Victoria in the next five years and goes to China? Will you factor that in to how much you will be handing over to China? Why should Australia give up its economic security? Why should Victoria give up its biggest export industry when there is little likelihood that any of those countries are going to reduce their emissions, and certainly not have an ETS like Australia?
Question put:
That the amendment (Senator Milne's) be agreed to.
Brown, B.J. Hanson-Young, S.C.
Ludlam, S. Milne, C.
Siewert, R. * Xenophon, N.

NOES 37 (31 majority)

Adams, J. * Arbib, M.V.
Back, C.J. Bilyk, C.L.
Bishop, T.M. Boyce, S.
Brown, C.L. Cameron, D.N.
Colbeck, R. Collins, J.
Conroy, S.M. Farrell, D.E.
Feeney, D. Fielding, S.
Fierravanti-Wells, C. Forshaw, M.G.
Furner, M.L. Hogg, J.J.
Hurley, A. Hutchins, S.P.
Joyce, B. Ludwig, J.W.
Lundy, K.A. Macdonald, I.
Marshall, G. McEwen, A.
McLucas, J.E. Moore, C.
Nash, F. O'Brien, K.W.K.
Parry, S. Polley, H.
Pratt, L.C. Stephens, U.
Sterle, G. Wong, P.


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