14/08/2012

UPDATE:  The report "Impact of carbon pricing on the Victorian health care system" authored by Sinclair Knight Merz was tabled within the timeframe requested by Greg Barber and shows, amongst other things, that the cost burden on hospitals of pricing carbon amounts to roughly 0.1% of the overall cost of health care.  For the full report, scroll down.

From Legislative Council 20 June 2012

Mr BARBER (Northern Metropolitan) -- I move:
  That this house requires the Leader of the Government to table in the Legislative Council by 12 noon on Tuesday, 14 August 2012, a copy of the 'Sinclair Knight Merz' report investigating the effects of carbon pricing on Victoria's hospitals, commissioned by the Department of Health and provided to the Herald Sun.

The Minister for Health has made a number of references to this report in recent days, since he leaked it to the Herald Sun; but he has not wanted to subject himself and that report to the kind of scrutiny that might be available if the report were public in its full format.

I think this pattern of behaviour of the government making a claim or even making a decision and then running away from it is something that is confusing the Victorian public. We saw this in relation to the motion debated a little while ago, where the government seemingly backed both the member for Benambra in the Assembly, Mr Tilley, and the Minister for Police and Emergency Services, Mr Ryan, but now nobody wants to say anything further. We have heard a lot said about irrigation upgrades in northern Victoria, and yet we have now learnt that we will not be receiving the business case. Of course the government decided to continue myki, tipping in even more millions to prop it up and keep it going, yet when we asked for the secret myki report that guided that decision we were told, 'You can't have it'. Now here we go again.

This is an area that deserves some scrutiny. I have found the minister's assertions in this area to be quite odd, because he has claimed there will be significant cost increases in the construction of hospitals.

Yet we know that the carbon pollution price package was pretty well designed to protect the concrete and steel industries, because they are emissions intensive and trade exposed, so you have to wonder how it is that the minister makes and sustains this claim of dramatic rises in construction costs.

Hon. D. M. Davis -- But concrete is not trade exposed -- not the actual transport.

Mr BARBER -- The Minister for Health is interjecting now and saying concrete is not trade exposed. It is; cement is produced in Australia -- --

Hon. D. M. Davis -- The cement is, yes, but the combining and movement of it is not.

Mr BARBER -- Now we are hearing it.

We know the overall cost of the carbon price to the economy in terms of inflation is minimal -- it is less than 1 per cent -- and the impact on wages is not expected to be in any way significant. It is barely significant within the terms of economic modelling, so how is it that Mr Davis, the Minister for Health, has been led down this path? There have been a number of articles in the Australian and the Herald Sun which give quite useful information. For once those two newspapers have come out with some very useful information in relation to these aspects of the carbon package. An article in the Herald Sun of Wednesday, 13 June, entitled 'Carbon cheats investigated -- tax rorters in the gun', says:
  Claims that homebuyers are being ripped off by a builder blaming the carbon tax for a 6 per cent price rise are being investigated.

  Home buyers, renovators and small businesses should not be fooled into accepting massive carbon tax-linked increases in the cost of steel, cement and aluminium, said Australian Competition and Consumer Commission chairman Rod Sims.

I am starting to get a bit worried that maybe the Minister for Health has been sucked in by the same group of what the Herald Sun describes as 'tax rorters'. The article continues:
  Mr Sims said yesterday the 6 per cent price rise for a house was wildly higher than the reality in the building industry, which was price rises of 0.7-1.8 per cent. This was down from earlier estimates of about 2 per cent.

Likewise in the Australian of Wednesday, 13 June -- --

Hon. D. M. Davis -- Who is going to pay? Whatever number you choose, who is going to pay?

Mr BARBER -- I say to Minister Davis that I am quite happy to have a good dialogue about the impact of the carbon price when he releases his report. Apart from the fact that the minister keeps provoking me, I would be perfectly happy to make this a brief motion, for the minister to table the report, we will take note of the report and then we will have the discussion about whether this is significant or not and whether this is realistic or not. My recommended course of action is that we have an informed debate -- informed by the piece of work that the minister himself has commissioned, regularly referred to and leaked to the Herald Sun but simply will not provide to this chamber.

It is another example, as I said, of ring and run.

The government makes claims, sometimes even makes decisions and then runs away from its own choices, and the public does not like it.

In the Australian on the same day we see the headline 'Builders warned over carbon rip-offs as complaints mount'. The article says:
  The consumer watchdog has warned the building industry over carbon tax price rises as it emerged it has received 170 complaints about alleged rip-offs.

I would be really worried if the minister started to flag that there were unnecessary blow-outs in some of the capital programs in his portfolio area.

Unfortunately, from the statements he has made so far, he seems to be anticipating such blow-outs, despite the ACC (Australian Competition and Consumer Commission) and others warning that such blow-outs would be unnecessary because rises in the building price index, even taking into account the price on pollution, should not be large.

The article in the Australian also reports on comments by Mr Sims. It goes on to say:
  His comments came as it emerged that 18 initial investigations have been launched by the ACCC into potential carbon tax price rorts after it has processed about half the 170 complaints received so far. Four investigations have proceeded to 'in-depth' probes.

A responsible course of action for the minister, apart from releasing this document, would not be to go out there talking up huge increases in the building price index but to say what those quite modest increases are expected to be. But that is not possible while the minister holds back this report, like the government is holding back the secret myki report and the business case for irrigation in the northern area. The government is simply afraid of scrutiny of reports that it prepared, possibly for a political purpose, but when they hit the light of day they do not serve the government's purposes. Hence all this obfuscation, running around and wasting the time of the Parliament, as we have seen in relation to other documents requested by this Parliament. I hope to get a positive response from the government to my motion.

 

 

Read the full debate in Hansard - scroll to page 57

UPDATE:  The Sinclair Knight Merz report Impact of Carbon Pricing on the Victorian Health Care System is now publicly available in a series of 5 easy-to-download documents:
 

  1. Introduction and Background
  2. Emission Impacts part 1
  3. Emission Impacts part 2
  4. Emission Impacts part 3
  5. Summary Impacts
AttachmentSize
SKM2012ImpactCarbonPricingVicHealth_1stSection.pdf4.46 MB
SKM2012ImpactCarbonPricingVicHealth_3(1)EmissionImpacts.pdf3.84 MB
SKM2012ImpactCarbonPricingVicHealth_p23.pdf3.2 MB
SKM2012ImpactCarbonPricingVicHealth_p33.pdf1.98 MB
SKM2012ImpactCarbonPricingVicHealth_4SummaryImpacts.pdf3.45 MB