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Tuesday, 8 November 2011
Page: 8472


Senator XENOPHON (South Australia) (10:20): by leave—I move amendments (5), (18) to (27) and (31) to (36) standing in my name on sheet 7165:

(5) Clause 5, page 14 (lines 1 to 3), omit the definition of emissions intensity.

(18) Clause 161, page 214 (line 8) to page 216 (line 6), omit subclauses (2) to (4), substitute:

Issue of free units

(2) On each of the following days:

   (a) 1 September in the eligible financial year beginning on 1 July 2013;

   (c) 1 September in the eligible financial year beginning on 1 July 2014;

   (d) 1 September in the eligible financial year beginning on 1 July 2015;

   (e) 1 September in the eligible financial year beginning on 1 July 2016;

the Regulator must issue a number of free carbon units equal to the number of units specified in the certificate as the annual assistance number.

Note:   For annual assistance number, see section 167.

(19) Clause 161, page 216 (line 12), omit "or (3)".

(20) Clause 161, page 217 (line 24), omit "or (3)".

(21) Clause 161, page 217 (line 30), omit "or (3)".

(22) Clause 161, page 218 (line 3), omit "or (3)".

(23) Clause 165, page 221 (lines 12 to 15), omit subclause (3), substitute:

(3) A certificate of eligibility for coal-fired generation assistance must state that a specified number is the annual assistance number in respect of the generation complex.

Note: The annual assistance number is worked out under section 167.

(24) Clause 166, page 222 (lines 27 and 28), omit paragraph (2)(c), substitute:

   (c) the emissions intensity of the generation complex is above a threshold of:

      (i) 1,000 tonnes of carbon dioxide equivalent per $1,000,000 of revenue; or

      (ii) 3,000 tonnes of carbon dioxide equivalent per $1,000,000 of value added.

(25) Clause 166, page 222 (line 29), omit the note.

(26) Clause 166, page 223 (lines 3 to 5), omit subclause (4).

(27) Clause 167, page 223 (lines 6 to 30), omit the clause, substitute:

167 Annual assistance number

(1) The annual assistance number to be specified in a certificate of eligibility for coal-fired generation assistance in respect of a generation complex is a number equal to 100% of the units above the emissions intensive baseline for the generation complex.

(2) For the purposes of subsection (1), the emissions intensive baseline for a generation complex is calculated in accordance with the method set out in the electricity generation benchmark scheme.

Note: For the electricity generation benchmark scheme, see Part 8A.

(31) Clause 281, page 330 (table item 32, 2nd column), omit "factor", substitute "number".

(32) Clause 303B, page 355 (lines 6 and 7), omit paragraph (4)(b), substitute:

   (b) the emissions intensity of the complex is above a threshold of:

      (i) 1,000 tonnes of carbon dioxide equivalent per $1,000,000 of revenue; or

      (ii) 3,000 tonnes of carbon dioxide equivalent per $1,000,000 of value added.

(33) Clause 303B, page 355 (line 8), omit the note.

(34) Clause 303B, page 355 (line 19), omit "or 168".

(35) Clause 303B, page 355 (line 22), omit "sections 5 and 168", "substitute "section 5".

(36) Clause 303B, page 355 (line 23), omit "sections 5 and 168", "substitute "section 5".

This group of amendments provides for 100 per cent assistance to be given to emissions-intensive trade-exposed businesses. Under the current legislation, there is a very complicated formula to establish how much assistance these businesses should receive based on historical energy multiplied by emissions intensity minus 0.68 and so on. Under these amendments, all emissions-intensive trade-exposed businesses that are eligible for a certificate of coal fired generation assistance will receive 100 per cent assistance in respect of the units above the determined benchmark. This is not about giving business a blank cheque. It is about providing these emissions-intensive trade-exposed businesses with the support they need during a transition to lower carbon emissions. And whilst I will not be moving them at this stage because of time constra­ints, I should foreshadow that I have other amendments that introduce increased requirements for generators to receive assistance. It is about the blank-cheque approach: the amendments require greater compliance from generators if they are to receive assistance. The government already has conditions on generators receiving assistance, including a requirement for a clean energy investment plan to be provided to the regulator. But this group of amendments insert a requirement for the clean energy investment plan to include a commitment in terms of jobs that is more rigorous, if you like, so it is not a blank cheque. This series of amendments should be read in conjunction with that. Again, it is modelled on the basis of the work of Frontier Economics, using the same modellers and the same model that Treasury has used. I note that the government rejects the modelling undertaken by Frontier. Well, guess what? It is the same model—the same modellers, in fact—as used by Treasury.

I commend these amendments to my colleagues. They are about ensuring we have a smarter, greener and cheaper scheme in place. The revenue churn you will get with the government's scheme will be enormous, and we must do something to protect trade exposed industries. I note that Senator Ryan, in question time yesterday, expressed concerns about a local business in Victoria and the job impacts the scheme will have there. I am concerned about jobs in South Australia as well. It is about how you manage the transition to reduce carbon emissions.