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Wednesday, 26 May 2010
Page: 4144

Mr HUNT (11:14 AM) —The coalition has been the champion of support for and the advocate of the great renewable technologies which are part of the future for Australia’s clean energy generation—solar and wind, geothermal and tidal. Beyond that, we see the potential of biomass and waste coalmine gas, clean energy sources, renewable energy sources which can help to provide Australia with energy security, energy certainty and clean energy for future generations. In August last year, after an arduous debate through June and July, we prevailed in ensuring that the renewable energy target was not held hostage to the emissions trading scheme, that the renewable energy target of 20 per cent—which was a desirable goal, an objective of itself, an end of value—was not held hostage to another piece of legislation which was in no way directly related. We know this because the Prime Minister has now walked away from those famous words of 6 November 2009 at the Lowy Institute. On that day, in relation to his own emissions trading scheme and the reason it had to be passed before Copenhagen, the Prime Minister said of anybody who could possibly consider delaying or deferring the emissions trading scheme:

What absolute political cowardice.

What an absolute failure of leadership.

What an absolute failure of logic.

The inescapable logic of this approach is that if every nation makes the decision not to act until others have done so, then no nation will ever act.

He stands condemned by his own words of ‘absolute political cowardice’ and ‘absolute failure of leadership’. Fortunately, we have had success on the renewable energy target. We have been successful in detaching the renewable energy target from the emissions trading scheme legislation. As a consequence, Australia now has a 20 per cent renewable energy target. The Renewable Energy (Electricity) Amendment Bill 2010 and cognate bills recognise that the very amendments proposed by the coalition, which were rejected by the government in August last year, are now necessary. Although the form of those amendments has been varied to some extent, the principle that there would need to be a separation of small-scale technologies—which are the subject of phantom renewable energy credits at present under the scheme devised by the then responsible minister, Mr Garrett—from large-scale technologies is the subject of the changes in these three bills.

Not only did the coalition support a 20 per cent renewable energy target but also we recognised that that which was being proposed at the time would carry with it some inevitable problems. We wanted to get the 20 per cent in place in order to protect against what was looming as a collapse in the solar sector, but we recognised that the government’s particular approach would need to be varied and that we should amend it in advance so as not to create problems for the future. The government resisted, the government denied, the government objected, and now they are adopting that which we proposed. It is that which we proposed in principle in August last year and which was rejected, and it is what we proposed again in February in our direct action policy. Although the form of what has been adopted by the government is not as neat or clean as our approach, our intention is to be constructive.

The opposition would like ultimately to see this legislation passed. We will not oppose this legislation in the House and we will reserve our final position subject to completion of the Senate inquiry and completion of satisfactory negotiations with the government and industry. The reason we reserve our final position is that, in looking at the detail, we want to make sure that there are no more pink batt or Home Insulation Program disasters, as those we have seen.

To take the government on faith is not the right thing to do because in something as simple as the Home Insulation Program we have seen catastrophic outcomes—144 house fires to date, 1,500 potentially deadly electrified roofs, 240,000 dangerous or substandard insulation jobs across the country and, most importantly, four tragic outcomes. And of the one million homes we do not know which are the 240,000 with dangerous or substandard insulation. All of this is accompanied by a loss, a waste, a provisioning in the budget of up to $1 billion to fix the problem created by $1½ billion expenditure on faulty insulation. That is why we will reserve our position, but our intention, our objective, is very clear. Our goal is to make sure that we do get the necessary changes. We come to the government in good faith, with an intention to ensure that this program is resolved and with an intention to ensure that the 20 per cent renewable energy target is properly implemented. On the specific changes, we will await the outcome of the Senate inquiry.

I will deal briefly with the coalition’s record as opposed to the government’s record and in particular with steps going forward. When we look at this legislation, we recognise that it offers a variation to the changes made in August last year. It is a variation in line with precisely the warnings we put down and precisely the warnings which were ignored by the government. To those who are not familiar with the content of the 20 per cent renewable energy target, it is important to put this explanation. We are expecting an approximate energy consumption in Australia of 300,000 gigawatt hours by the year 2020. Of that, 60,000 gigawatt hours or 20 per cent will be required to come from renewable energy. Of that, approximately 15,000 gigawatt hours were in place prior to the commencement of any government mandated schemes in Australia. The vast bulk of that was from the Snowy Mountains Hydro-Electric Scheme and from the Tasmanian hydro schemes.

The legislation put in place by the previous coalition government established a 9,500 gigawatt hour mandatory renewable energy target. With our urging, with our leadership, with our push prior to August of last year, that was expanded by an additional 35,000 gigawatt hours to bring up a total mandatory renewable energy component of a renewable energy target of 45,000 gigawatt hours. It is that component of the 45,000 gigawatt hours which is now being varied as a result of these three acts. In essence, what is occurring is that of that 45,000 gigawatt hours, 41,000 gigawatt hours will be reserved for large-scale renewable energy technologies. These large-scale renewable energy technologies of solar and wind, of geothermal and tidal, the great new energy sources of the future, did not have certainty—as we predicted—under the government scheme. The government has now come back, having recognised its errors, and is seeking to amend its original error.

We want to be constructive. We proposed, we urged, we advocated change in precisely this space. We now see that there will be a large-scale renewable energy technology component, or LRET, of 41,000 gigawatt hours and a small-scale component of approximately 4,000 gigawatt hours but uncapped. So that figure will rise and we will be seeking advice on that. The financial impact, on the advice we have had in the last 24 hours on this legislation, is that the renewable target on household electricity prices has been approximately 4.2 per cent. It is approximately a 4.2 per cent increment on household energy prices. The best advice we have—and we will test this through the Senate process—of the incremental changes contained within this legislation is 0.22 per cent on household electricity prices. So we have been vigilant, we have been cautious and we have been concerned about changes, but those changes are, on the face of it, something which we will test but which, if they are proved to be correct, would appear to be acceptable. It compares with the 20 per cent increase in electricity prices that we would see over three years from the emissions trading scheme alone. That is over three years, with a price rise continuing significantly and greatly over the coming decade and beyond. That is why we take very different approaches.

Every change in this legislation produces clean energy. Not one element of the change under the emissions trading scheme—which would produce a 20 per cent impact on household electricity prices under the New South Wales IPART estimates—would result in any decrease in emissions. That is the essence of why we believe that that indirect approach is ineffective, whereas this form of direct action is, as a general rule, far more effective and a far lower cost.

Having recognised those elements, I want to mention that the coalition’s history is very strong. It was the coalition which put in place the mandatory renewable energy target of 9½ thousand gigawatt hours. It was the coalition which advocated the 20 per cent figure be decoupled from the emissions trading scheme so that there would be no delay and there would be no uncertainty for the providers and generators and those who would put in place solar, wind, geothermal and tidal energy—these great new energy sources of the future. It was the coalition that also put in place the $8,000 solar rebate at a time when solar panels were far more expensive. This $8,000 solar rebate, which was committed to by the now Labor government when they were in opposition, had a profound impact. It brought solar panels within the reach of ordinary Australian mums and dads, of farmers and of people throughout the country who wanted to make their own contribution.

We see, in comparison to the coalition’s approach, three fundamental things from the government. Firstly, on budget night in 2008, with no warning, the government abolished the $8,000 solar rebate for thousands and thousands of Australian families by imposing a means test which had not been considered, discussed or otherwise raised in public. It was a breach of an election promise—clear and absolute—and it had the immediate impact of sending the industry into chaos. Compared with what we did, the government also completely abolished the $8,000 solar rebate on 9 June last year, again with no warning. It was immediate, it was catastrophic and it sent the industry into a decline. That was unacceptable, it was unprepared, it was unprofessional and it was another example of the way in which decisions made with no understanding of real world consequences are being replicated today through the impact of the mining tax on investment and superannuation in Australia.

The third example of how the government undid previous coalition policies is that it abolished and suspended the Remote Renewable Power Generation Program as of 22 June 2009, again sending a segment of the industry into chaos. Lack of certainty has been the hallmark of the government’s approach to renewable energy in its term. This government has not been a friend of renewable energy. It has been a destroyer of renewable energy, with the solar rebate means tested, the solar rebate abolished and the remote renewable power generation or regional solar program ended. There has been chaos. All of these things have had real world impacts because the government has not understood how markets operate and how its decisions can affect investment and how its decisions can have catastrophic results for ordinary Australians, wherever they are.

This brings me to the fact that when we negotiated the legislation last time we were successful in five of our six asks—in decoupling this legislation from the CPRS or the emissions trading scheme, in ensuring that there was a reservation for waste coal mine gas on top of the legislation, in ensuring that there was a recognition of the hardships the energy intensive sectors would face, in looking to make sure that the different forms of solar hot water were appropriately and adequately treated and in looking to make sure that food processing was considered. The one area where we were not successful, where the government resisted, was in provisioning for the problem created by the establishment of phantom renewable energy credits. That problem which we identified is the very subject of this entire legislative process which is having to be redone. We warned, we identified and we provided alternatives, we provided solutions, and we did it again in the direct action program. The grand irony of this legislation is that the government is seeking to adopt our direct action program.

At present—here is something extraordinarily important—there is only one approach to reducing emissions in Australia. Only one of the major parties has a climate change policy. The coalition has a direct action policy; the government has no immediate approach to climate change. They are varying the renewable energy target, which we advocated and proposed, and for which we established the preceding legislation, but they are not proposing their own system for the forthcoming election.

The government have an approach to an emissions trading scheme which is not dead, only sleeping—but when it will awake we do not know. We do know that they have the emissions trading scheme out there but they do not have the courage to take it to a double dissolution. There is no barrier to the Prime Minister commencing it immediately. Again, for the record, I quote his words, to the Lowy Institute on 6 November 2009, on why his emissions trading scheme had to be passed that very moment. He said that to fail to pass it immediately would be ‘absolute political cowardice’, an ‘absolute failure of leadership’ and an ‘absolute failure of logic’. Those are the Prime Minister’s words about his own program, which he has now postponed indefinitely. It is not dead; it is only sleeping, but those were the Prime Minister’s words. With those words we get an insight into his character and leadership and his genuine approach, under pressure. By comparison, this legislation builds on what we have done.

We have reservations which we want to raise through the Senate inquiry. Those issues which we will explore include: firstly, any attack on the waste coal mine gas sector; secondly, the ability to increase waste coal mine gas; thirdly, the question of ensuring that high-electricity and high-intensity energy users are not subject to a major windfall impact upon them; fourthly, a proposal which has been championed by two of my coalition colleagues, Bronwyn Bishop and Wilson Tuckey, to establish an emerging technologies band, preserving 25 per cent of the LRET for emerging technologies other than wind. We were looking there at a figure of approximately 7,500 gigawatt hours. We include in that issue the question of whether or not HVDC powerlines could reduce emissions and therefore could be considered as a component of the large-scale renewable energy target.

However, those are questions for consideration during the Senate inquiry. We will consider them and, if we are satisfied with the answers, we will proceed; if we are not satisfied we will propose amendments. This legislation ultimately is in the vicinity of what we want to achieve. We will not give a blank cheque, because we have witnessed the tragedy of the home insulation program and the government’s ability to mismanage the simplest of legislative changes. We witnessed the capacity of the government’s mismanagement to do damage to this very legislative piece, in the face of warnings from the opposition. So there is no blank cheque. There is good faith; there is goodwill, and we want to see legislation proceed, generally. In consideration, we will put forward amendments during discussions with the government in good faith. Those talks have already begun.

At this moment we will reserve our position, but we note that we are the champions, the supporters of a 20 per cent renewable energy target. That target is in place, and we are the champions and supporters of solar, wind, geothermal and tidal energy. The government stood in their way and the government made the mistakes which have necessitated these acts of legislation. I would hope that at some stage the government will apologise to the renewable energy sector for ignoring the warning signs and necessitating these changes.