Ms KING (10:06 AM) —I rise to speak on the Energy Grants (Credits) Scheme Bill 2003 and the Energy Grants (Credits) Scheme (Consequential Amendments) Bill 2003 which seek to bring the existing Diesel and Alternative Fuel Grants Scheme and the Diesel Fuel Rebate Scheme into one bill. The bills seek to streamline the two pieces of legislation in order to be more workable for industry. As such, the major changes in the bills are largely about the administration of the scheme and not about the substance of the scheme. We have heard, during the now ditched fuel inquiry, of the problems that industry experienced with the compliance requirements of the two schemes and the costs of compliance. I am led to believe that the trucking industry, at least, is now somewhat happier with the new arrangements although, as yet, none of us have seen the regulations that are supposed to support these bills.

The problem that I have with the Energy Grants (Credits) Scheme Bill is that it fails to fulfil the promise this government made to introduce incentives for clean fuel. The freight industry is a significant one in my electorate and one that relies heavily on diesel grant rebates, as does the farming sector. My issue with this bill is not the fact that it provides a boost to these sectors but that it fails to assist the industry to develop new technologies and to provide incentives to take up technologies that are healthier for rural people and healthier for the environment in which we live.

This bill represents a broken promise by the government. It has had three years to develop a system of energy credits that promotes the use of clean fuels. It gave itself an extension of 12 months in the lead-up to the last election, but it has failed to deliver on its promise. The credit scheme is important for the trucking and farming industries. But even these sectors acknowledge that, in a world where we are much more aware of the damage that fuels such as diesel can do to public health and the environment, there needs to be a system that encourages the development of and the use of cleaner fuels and the technology to use them.

In 1999 when the then Democrats leader, Senator Lees, sat down with the Prime Minister to do their deal on a new tax system, she and the Prime Minister said that it would be the greatest thing for Australians and Australia. I am sure that I am not the only person to inform Senator Lees that she was dudded. In those heady days of negotiating, the Prime Minister informed Senator Lees that, in return for her support of the GST, the Diesel and Alternative Fuels Grants Scheme and the Diesel Fuel Rebate Scheme would be drawn into one bill under the heading of the Energy Grants (Credits) Scheme and, as a consequence, would deliver measures to promote cleaner fuels. As far back as 1999, the Democrats public statement was that the Energy Grants (Credits) Scheme would be a totally new scheme with a new focus on cleaner fuels—another promise by this government that it has failed to deliver on.

This was a promise by this government that would have helped reduce greenhouse gas emissions and promote the use of cleaner fuels. They have done nothing about it. It joins a long list of environmental inaction, including failure to ratify the Kyoto protocol, no funding certainty beyond the budget for the solar rebate scheme and the demise of the CRC for renewable energies. Today I see that the minister has now placed former Liberal Senator Grant Tambling in charge of the supposedly independent inquiry on renewable energy targets. The Energy Grants (Credits) Scheme represents a missed opportunity.

The ANTS package back in 1999 contained two commitments about petroleum products: the first was an explicit one in terms of the ultralow sulfur diesel incentive, which now seems to have been endlessly delayed, and the second was a commitment under the Energy Grants (Credits) Scheme to do something about clean fuels. The bill fails to live up to these commitments. I note that BP Petroleum, in its evidence to the Senate Economics Legislation Committee on 18 March this year, was extremely concerned about this issue. Here is one of the major producers of petroleum products critical of the government's failure to include incentives for clean fuels in this bill.

Whilst the transport industry representatives are keen for this bill to go through, I also note that their concern is more about ensuring that there is no erosion of the benefits that their industry currently receives. They appear to have some faith in the fact that the government will look after environmental concerns separately, and that the development of technology overseas will drive clean fuel uptake. I must admit that I do not share that faith. BP proposed quite a contrary view to the trucking industry, arguing that without incentives the investment in technology will not occur and the subsequent reduction of greenhouse gases from the transport sector will also not occur. BP argued that the advances in technology and the uptake that has occurred so far have been in anticipation of the changes that were supposed to be in this bill and that the government has now effectively removed the main driver for clean fuel uptake by its failure to deliver on its promise.

This government have an abysmal record in providing the conditions in which innovation develops in this country. They have an abysmal record in relation to promoting and driving research and development—one that we will pay for in years to come. This bill is another example of the government's lack of foresight. Why is it important that incentives for clean fuel be included in this bill—something which the government promised to do and have not done? There are several reasons. The first reason for providing incentives for cleaner fuel is an environmental one. Cleaner fuel can make a huge impact on the reduction of greenhouse gas emissions. The second reason for providing incentives for cleaner fuel is that they are important for health outcomes. With a major national highway and the main artery for the transport of goods from Melbourne to Adelaide crossing through the heart of my electorate, the impact of emissions on public health of the people who live and work along that highway is something that we think about in rural and regional Australia. The third reason for providing incentives for cleaner fuels is that they provide encouragement to build better engines that have greater fuel efficiency, which is good for both the environment and consumers.

BP specifically argued at the Senate Economics Legislation Committee hearings that it is time to look beyond 2006 and that the omission by the government of initiatives to do this is a wasted opportunity. BP stated in their submission:

The Australian Conservation Foundation also gave evidence at the committee. They stated:

They further stated:

The investment that the sector has undertaken in relation to cleaner fuel technology has occurred in a context where the industry was anticipating changes and was preparing itself for them. Now the government has moved the goalposts. I do not have confidence that the new Energy Task Force the government has set up, which has terms of reference that appear to be a mystery to everyone else and whose program of work and discussions have had limited input from the energy or environment sectors, is going to do anything to provide a solution.

The Australian Conservation Foundation said in their submission:

These bills represent a significant opportunity missed by the government. In 1999 the City of Ballarat undertook the Ballarat Region Conservation Strategy, looking forward to 2004. In this strategy the council stated a number of ways in which the federal government could take action. It included the hope that the federal government would continue to promote alternatives to current inappropriate practices and would actively encourage the reduction of the total automotive emission levels. Why is it that Ballarat City Council has committed itself to this progressive and straightforward agenda in the reduction of greenhouse gas emission levels from transport, while the federal government continues to duck and weave on the issue? It is now time that the federal government sought to take an active step in promoting the reduction of transport emissions. With this legislation, it has missed the opportunity to do so.

In March 2001 the Prime Minister announced the fuel taxation inquiry at a time when the government knew that a federal election was on its way. It was given a hefty budget to investigate `the total existing structure of Commonwealth and state taxation of petroleum products ... particularly for transport and off-road use'. The inquiry was to be a basis for the legislation that we have before the House today. Industry, environment organisations and transport lobby groups contributed to the inquiry. On the day the report was released, however, the government rejected all the recommendations out of hand. It is pretty unusual for that to happen; we generally wait a few months before we hear a response to the recommendations of an inquiry, but they were rejected quickly.

The government has now established the Energy Task Force, about which there is limited information and for which there are no public terms of reference and no department ready to claim responsibility. Senate estimates questions about it go unanswered, but the environmental movement, who do not even have a seat at the table, are told by the government, `Trust us; the task force is here to help you.' The government have consistently backed away from their commitments in the Measures for a Better Environment package. These bills are yet another example of such broken promises. This legislation is a missed opportunity; it is a broken promise and one that the Democrats would do well to remember as they desperately strive for some relevance and negotiate with the government on other bills, such as the Australians Working Together bill.