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Wednesday, 19 March 2008
Page: 1288


Senator JOHNSTON (3:06 PM) —I move:

That the Senate take note of the answer given by the Minister for Climate Change and Water (Senator Wong) to a question without notice asked by Senator Chapman today relating to electricity prices and the renewable energy target.

In my motion, I could have used the term ‘responses’ because for two weeks now, in these sittings, we have not had one single answer from the government on any question—not one answer. It is patently obvious that they are not across their briefs, are not able to digest the most fundamental of facts associated with their portfolios and come in here with preset speeches to ramble away on the side to look like they are saying something when in fact they cannot answer even one question in two weeks.

That would not be so bad save for the fact that the emissions-trading scheme is bigger and more significant to our economy than the GST. It is going to do absolutely horrendous things to the costs incurred by electricity generators, particularly gas and coal generators. Can I draw the minister’s attention to an article in the Australian today, written by Matthew Warren. He starts his article by saying:

LABOR’S plan to dramatically increase the mandatory levels of renewable energy will cost the economy $1.5 billion and drive up power bills by 6 per cent.

That is just the renewable energy quotient: 20 per cent by 2020. What is going to happen if the minister happens to agree with Mr Garnaut—whom she has said is the touchstone of the Labor Party’s policy on an emissions-trading scheme—and Mr Garnaut says there is to be no compensation for gas or coal electricity generators, particularly on the eastern seaboard? What is going to happen to electricity prices? I can tell you, Mr Deputy President: they will go through the roof. The minister and her party have spent 11 years in opposition. They ran around during the campaign talking about renewable energy targets and all of that, but when they get into power they have absolutely nothing to back it up with. What that means is that mum and dad are going to have to foot the bill for this.

What we are saying is that the government needs to be very, very careful. An emissions-trading scheme is a very, very good thing for this country, but it must be implemented with tremendous care. The minister has given us absolutely no confidence that she understands the commercial risks in this policy. Can I quote the words of John Boshier, the Executive Director of the National Generators Forum. He talks on behalf of 21 major generators, and I want to quote what he has had to say in the Financial Review today:

Coal generators will be faced with the situation where they not only cannot recoup their high carbon costs but also find themselves generating far less electricity in a carbon-constrained nation. This will slash their asset values and render some unviable, leading to premature closure of plant ...

He went on to say:

If we accept what Professor Garnaut is advocating - no adjustment assistance - existing generators will have their asset values significantly reduced. These are the same owners and investors who will be central to introducing the new technologies that will underpin Australia’s transition to a low-carbon economy.

He then went on to say:

If electricity is not there when homes and industry need it, then the costs to the nation are immediate and immense.

These are the things that the minister should be acknowledging and saying that their policy will focus on seeking to avoid—that is, that they will go for the soft landing in implementing this policy and will be absolutely careful and conscious of not damaging the economy, by looking after those big gas and coal fired power stations, so that when the goalposts are moved they are in a position to play ball with the government’s policy and we go forward in a positive way. But the minister does nothing about this. She says nothing about fuel prices. She says nothing about grocery prices. She is going to impose mandatory targets on transport companies. Regional Australia is going to pay through the nose for this unless she gives us some confidence that they are at the forefront of her mind when considering this policy. It is absolutely crucial that she come in here and reassure Australia that she is concerned to look after business when she is instituting her emissions-trading scheme.