darren.chester.mp@aph.gov.au 1300 131 785
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April 30, 2009

An independent report into the Rudd Government’s proposed Emissions Trading Scheme (ETS) confirms that the scheme is rushed, ill-considered and a massive risk to the economy over the next 20 years.

The report was conducted by the Centre for International Economics and found the ETS would cost tens of thousands of jobs without doing anything significant about CO2 emissions.

The Nationals Member for Gippsland Darren Chester said the findings were no surprise and further justified his calls for the Government to abandon the proposed ETS because of concerns it will cost jobs in regional areas like Gippsland and the Latrobe Valley.

“The report confirms that the Government is rushing ahead with a scheme that will tax some of Australia’s largest exporters and employers, damaging their competitiveness and putting jobs at risk,” Mr Chester said.

“This is highly reckless, with the Government flying blind on both the risk to jobs and the prospect of achieving anything meaningful on global emissions reductions.”

Frontier Economics recently completed separate economic modelling which found that the impacts of an ETS would be much more severe in states and regions where emissions-intensive industries were the backbone of the economy, such as the Latrobe Valley.

Mr Chester said the Frontier Economics report forecast devastating cuts to the Gippsland economy of more than one fifth.

“In the middle of a global recession, the last thing we should be doing is creating uncertainty and undermining business and industry confidence,” Mr Chester said.

“The proposed ETS has enormous social and economic risks and the potential for little environmental gain.

“Given that our nation’s contribution to emissions is less than two percent of the global total, anything we do in Australia needs to be put in a global context.

“There is a real concern that all this new tax will achieve is to force jobs offshore, where there are less rigorous environmental standards.”

Over recent months company after company has publicly indicated the cost of this scheme in terms of lost jobs:

• Bluescope and OneSteel say “hundreds of jobs would be lost” across the country and the 12,000 jobs that the Port Kembla steel works supports “would be under threat.”
• The Queensland Resources Council predicts up to 8,000 jobs could go.
• Rio Tinto has stated that “put simply, the CPRS as proposed will cost jobs – now and in the future”.
• Xstrata predicts that between 5,000 to 10,000 jobs nationally may be lost.
• Alcoa has raised concerns about 1,800 jobs at risk in Geelong and Portland.
• Exxon predicts that 350 jobs could be lost at their Altona refinery.
• Norsk Hydro and Hydro Alumina Kurri Kurri see the ETS “jeopardising the future of the Australian aluminium smelting industry” and that cancelling their expansion plans under an ETS “means a loss of 3,000 permanent jobs and 15,000 construction jobs”.
• Clean energy projects such as ZeroGen and Envirogen say that up to 1,000 jobs will go begging if future investment is cancelled because of the ETS.
• Ford Australia believes the ETS will drive jobs overseas.
• And research commissioned by the NSW Government into the regional impacts of the Government’s scheme found that regional centres across Australia, such as Gippsland, ,would shrink by over 20 per cent under the Government’s scheme.

As well, Professor Ross Garnaut, the Australian Conservation Foundation, Greenpeace, Tim Costello and many others have publicly asserted that the scheme is not going to provide certainty for business nor will it do anything of any consequence for the environment.

The ETS legislation is due to come before the Senate in June and is currently the subject of two Senate inquiries.  The Federal Opposition has called on the Government to model the short-term and regional effects of its proposal before the Senate votes on the issue.

The Opposition’s spokesperson on Emissions Trading Design, Andrew Robb, said the Coalition would finalise its policy response once it reviewed the current Senate inquiries and following analysis of this new report.

“However, it is clear that the Government’s current plans will cost tens of thousands of jobs, kill investment and achieve little, if any, reduction in CO2 emissions,” he said.

“The Government must propose a viable alternative.”

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