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Tuesday, 1 November 2011
Page: 12371


Mr VAN MANEN (Forde) (20:02): It was with much interest that I listened to the contribution to this debate by the member for Robertson. I am sure she has a deep and abiding love for her electorate but I am afraid to say that her contribution was full of misguided utopian statements that say green energy will create this new wonderful world where nothing will bother us and we will all live happily ever after. I am sad to say that the realities of the world are much different from that.

I rise to speak on the Australian Renewable Energy Agency Bill 2011 and the Australian Renewable Energy Agency (Consequential Amendments and Transitional Provisions) Bill 2011. As has been said by previous speakers in this debate, we in the opposition will not oppose these bills. We are prepared to support the government's objective to introduce a new independent statutory authority to manage more than $3 billion worth of renewable energy projects. This is to some degree founded on common sense and good governance which, based on the government's track record over the past 4½ years, is somewhat surprising. ARENA will be responsible for policy advice to the Minister of Resources and Energy and will take over and expand on the activities of the Australian Centre for Renewable Energy, ACRE.

The purpose of ARENA is to manage renewable programs as well as research and development of projects in solar, geothermal and bio-fuel energy. It is hoped that investment into alternative energy resources overseen by ARENA will help transition Australia's renewable energy strategy in a competitive way. Further, we hope that this new agency will take solar from being a mismanaged and misunderstood technology in this country to a more organised one.

The agency, we are told, will be managed by an independent board of investment, business and energy experts appointed by the government. It is hoped this move to an independent board will lead to more action, less red tape, more practical on-the-ground outcomes and a better spend of the money involved. While the coalition may agree in principle to the creation of these agencies, it does not in any way imply that all programs that are to be administered by the proposed ARENA will receive automatic assent.

The government's track record on the administration of energy projects is far from satisfactory. It has not yet informed Australian families about the true cost of its poorly planned renewable energy policies. Like so many of Labor's poorly planned projects I have no doubt that they cost too much and deliver very little.

As an example, the Queensland Labor government's plan to become a world leader in clean coal saw the government invest $47.5 million towards a pre-feasibility study of a now aborted plan. A damning assessment report by the Auditor-General indicated that ZeroGen was unviable, which resulted in a massive waste of taxpayers' money—in excess of $112 million.

In addition, taxpayers are about to become co-owners of green power and clean energy technology as the government injects more than $10 billion over the next five years as part of its carbon pricing policy. The new measures will include the Clean Energy Finance Corporation that will be responsible for investing these funds in businesses seeking to get innovative clean energy proposals up and running.

The member for Robertson mentioned the Solar Flagships program and the Kogan Creek solar farm in her speech. We had a recent example in the United States with Solyndra, a huge solar project of some $550 million, which has gone into administration. This idea of picking winners has not been at all successful where it involves bureaucrats picking supposed winners that the market has already decided are losers.

The Clean Energy Finance Corporation will also invest in the transformation of existing manufacturers to help them meet the demands of the new clean energy sector for goods like wind turbine blades and solar panels—both of which are largely manufactured in China and imported. The aim of these initiatives, supposedly, is to provide taxpayer funded capital investments designed to help transform the renewable energy sector of our economy.

Previously, most government funding for renewable energy has been targeted at early-stage research and development. This is a critical area for government support but it has left a gap in funding for demonstration and deployment stages of renewable projects on a large scale. The proponents of these schemes state that the expected national benefits from these renewable energy investments will be: creating jobs in new and traditional sectors; generating export opportunities; reducing dependence on oil, coal and gas, and exposure to their volatile prices; supposedly, cutting carbon pollution; and driving cost reductions in renewable energy by delivering large-scale projects in new technologies and thereby allowing the industry to learn by doing. However, the stark reality is that we are borrowing billions of dollars and introducing new and punitive taxes to achieve these outcomes, putting our future generations into debt and robbing them of future economic prosperity on the off-chance that the imagined savings in energy, environmental and health costs are actually achievable.

All this begs the question: what are the benefits and how will they be calculated and measured and, given the governments track record, how can we be certain that the choices being made are the right ones for the future? Green energy proponents would have us believe that if we build windmills, add solar panels to the desert, fill our buildings with insulation, run our cars on biofuel, build more light rail and travel by train more often, eat locally grown food and buy more foods produced at home rather than overseas, the 'green fairy' will magically wave its wand and all will be right with the world—the money expended to support these fanciful ideas will quickly be recouped and we will all be healthier and there will be less environmental damage. I think we all know that this is not the reality.

Energy dominates everything that we do. Solar and wind energy is significantly more expensive than coal, natural gas or hydro. Additionally, solar and wind energy production differs from coal, natural gas and hydro because the latter will work continuously regardless of whether there is sun or wind. This adds a new complexity to managing power supply. Wind farms and solar facilities are more often than not generated some distance from the existing grid that distributes the power around the state. This would mean that there would be a need to invest in a new infrastructure that will accommodate the new technology.

The infrastructure that currently is in place is unable to maximise the benefits of renewable resources. As an earlier speaker on our side pointed out, the power station in South Australia in times of peak load already needs to dump coal generated power. Wind and solar resources are connected to the grid as one-off solutions that are generally not integrated with other generation nor optimised as a reliable baseload energy source. Traditionally, electricity has flowed one way: from a power station to a customer. But, as more energy is generated by alternative sources, power will be entering the network from multiple locations, and most current grids are not equipped for multi-directional power flow. The installation of the equipment required for two-way power to flow is sophisticated and requires grid automation technologies to move it around and send it where it is needed.

To transfer our modern society into a green society requires an effort of staggering complexity and scale. And to do so on borrowed money on a combination of wishful thinking and bad economics is the height of economic irresponsibility. There will be ample opportunity in the future for the development of new, green initiatives that will help resolve the need to balance the environment and societal needs.

I have recently met with a number of small to medium businesses in my electorate of Forde. During discussions they have advised that they been progressively implementing green strategies for their businesses over the last number of years, as they recognise the value and the importance of wise environmental stewardship—not a government directive or piece of legislation in sight and with all their own capital. While the ARENA and CEFC initiatives are not direct consumer initiatives and given that the government's record in the area of providing assistance in energy projects, anything that improves governance standards is welcome.

I would like to provide you with a couple of examples of the misuse of taxpayers' money in trying to implement renewable energy projects. We need only look at the bungled home insulation scheme that cost in excess of $2.45 million dollars.

Mr Lyons: Why don't you name the tradies? They are the ones who messed it up.

Mr VAN MANEN: You guys administered it, so you are responsible for it. Cash for clunkers did not fare any better and was scrapped by the government with the intention of resurrecting it, but it was again put on the backburner because of problems experienced due to inadequate preparation. Then there is the mother of all taxes—the carbon tax. The government's carbon tax is a bad tax based on a lie to the Australian people, and Australians will pay not just in this generation but also for generations to come.

Mr Lyons: No climate change?

Mr VAN MANEN: Well, let us look at the practical environmental—

The DEPUTY SPEAKER ( Mr Murphy ): Order! The member for Bass will cease interjecting and the member for Forde will not respond to the interjections. The member for Forde has the call and will be heard in silence.

Mr VAN MANEN: Thank you, Mr Deputy Speaker. The government does not have a mandate to implement this tax and we certainly want to ensure that this situation does not occur again. We now face the prospect of a minerals resource rent tax, a complex tax requiring multilayered calculations and valuations and limited to only certain resource products. As with the carbon tax, it will succeed in reducing the competitiveness of Australian and global resource companies as their cost base increases further.

The member for Robertson talked in her contribution to this debate about the long-term benefits to Australia. There are also long-term consequences which are not being discussed, such as what the negative effect will be on the share prices of and company growth prospects for those Australian companies and what the flow-on cost will be to the retirement savings of Australians through their superannuation funds. What will be the effect on future federal government budgets of increased age pension liabilities due to lower retirement savings of Australians caused by the unknown or unforeseen consequences of the carbon tax and the MRRT? In my opinion, these are important unanswered questions that go to the heart of the question about the future prosperity of this great nation.

The coalition will not oppose the passage of this legislation, but with a disclaimer duly attached. We want to ensure that the government provides suitable evidence that the administration of the spending of the funds can withstand public scrutiny. I do not believe that the Australian general public are prepared to just take the government's word anymore that it will spent the funds appropriately. The general public are still dealing with the cost of the government's previous frivolous, gimmicky, money-wasting projects.

Debate adjourned.