CARBON TAX

Mr HAMILTON-SMITH (Waite) (17:24): My question is to the Premier—

The Hon. J.R. Rau: Keep going.

Mr HAMILTON-SMITH: —or whoever is speaking for the Premier. Does he agree that abolishing the carbon tax will lower the cost of living? Here he is. My question is to the Premier. Does he agree that abolishing the carbon tax will lower the cost of living?

The Hon. J.W. WEATHERILL (Cheltenham—Premier, Treasurer, Minister for State Development, Minister for the Public Sector, Minister for the Arts) (17:24): Can I say that the abolition of the carbon tax is the bipartisan position of both the federal Labor Party and the federal Coalition, and I presume it was advanced for good quality public policy reasons. There is no doubt that it will have a short-term effect in relation to issues such as cost of living—it no doubt will have an effect in that regard.

But can I say that in relation to the question of the carbon tax and, probably more importantly, the question of climate change more generally, this remains the position of the Australian Labor Party: the first thing is that climate change is real; the second proposition is that it is an imperative for any government that has any regard for the future of its citizens to take action on climate change; and the third proposition, which is absolutely crystal clear, is that the most effective and efficient way of taking action in relation to climate change is a market-based mechanism and, once you reach that conclusion, you are in the world of putting a price on carbon because that is how markets work. You put a price on the relevant externality and that allows you to get the efficient allocation of resources.

So that is the position, and there is no serious economist who would argue with that proposition so, what we are talking about is, inevitably, the notion of actually having some market-based mechanism that will lead to putting a price on carbon. The emissions trading scheme is the preferred method. It doesn't happen to be the present policy of the present Liberal government but, ultimately, they will be driven to that conclusion just as John Howard was driven to that conclusion when he promised to do such a thing and, just as Mr Turnbull was driven to that proposition as he was confronted with the reality of grappling with the question of climate change.

So, we will return to this debate at some point. We are going to have a carbon constrained future and the most efficient way of doing that is through putting a price on carbon. Both parties have moved away from a carbon tax but there will ultimately have to be a further market mechanism proposed. Almost everybody seems to take the view—including, it seems, an overwhelming majority of the new Senate, if I read the analysis in the commentary correctly—that direct action is an expensive and wasteful way of grappling with the question of climate change and is destined not to achieve the 5 per cent reduction by 2020 in carbon pollution levels that has been committed to internationally by Australia.

In South Australia we have taken the view that being a first mover is absolutely crucial for us in this state. We have done that. We are a first mover. We have created a reputation for our place as a clean energy state. It is creating jobs. I was just up in Whyalla recently opening up a new wind farm construction plant, so we are actually gaining the benefits of being first movers in a carbon constrained economy. That is the future, and those opposite should not give away this incredibly important advantage that we have established for ourselves by being the first movers in this nation.