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Tuesday, 1 November 2011
Page: 12337


Mr IAN MACFARLANE (Groom) (17:23): I rise today to speak on Australian Renewable Energy Agency Bill 2011 and the Australian Renewable Energy Agency (Consequential Amendments and Transitional Provisions) Bill 2011. The Australian Renewable Energy Agency Bill 2011 establishes the Australian Renewable Energy Agency, known as ARENA—I do not know where they got the 'N' from! ARENA is designed to centralise the administration of $3.2 billion in existing federal government support to the renewable energy industry currently managed by the Australian government and by Australian government funded bodies such as the Australian Centre for Renewable Energy, known as ACRE, and the Australian Solar Institute, the ASI.

ARENA will also assume the work of ACRE in establishing and maintaining links with state and territory governments and, with the ASI, in fostering and developing collaborative research partnerships internationally. ARENA will also be responsible for the policy advice to the Minister for Resources and Energy and Minister for Tourism and will take over and expand the activities of ACRE in this regard.

The bill also establishes the members of the ARENA board, its chief executive officer and its chief financial officer, and sets out how ARENA will operate and be funded. Funding to be provided to ARENA each year is prescribed in this bill until 2020 and will be held by the government until required by ARENA. Around $1.7 billion of the funding allocations to be made by ARENA is currently uncommitted and will be available for ARENA to provide financial assistance for the research, development, demonstration and commercialisation of renewable energy and related technologies, the development of skills in the renewable energy industry and the sharing of non-confidential knowledge and information from the projects it funds.

The Energy Agency (Consequential Amendments and Transitional Provisions) Bill 2011 complements the main ARENA bill by providing the transition and consequential activities that—

Dr Emerson interjecting

Dr Leigh interjecting

Mr IAN MACFARLANE: Can you guys knock it off? I am trying to do a speech here! Thanks. It provides the transitional and consequential activities that need to occur in order for ARENA to take over funding and administration from the existing programs and projects transferring from the Department of Resources, Energy and Tourism to ASI and ARENA. The coalition believes these bills create a better vehicle for the delivery of renewable energy technology project funding and support, and the coalition's position with respect to these bills is an entirely separate matter from the position the coalition may adopt on any project ARENA may inherit or later consider or support.

While the coalition does not oppose the establishment of ARENA, as it will allow for streamlining of procedures and for appropriate corporate governance in the sector, this non-opposition should not be taken as carte-blanche approval of some of the programs to be administered by the proposed ARENA. It is a matter of public record that the government has not covered itself in glory when it comes to the implementation and operation of energy projects, including renewable energy projects. There is a long and chequered history of failure, as there is on most things in the performance of the current Gillard and prior Rudd governments on a whole range of programs that they have attempted to administer.

We need look no further than the item that is still before the parliament, the establishment of a carbon tax, to again see a program and a policy that has been all over the place. We now see of course, as a result of a breach of promise, a carbon tax that will be introduced into Australia and will be far deeper, far broader and far more economically damaging than any other tax of its type in the world. It is a tax which will drive up the cost of living, put more pressure on electricity prices and make Australia's energy and resources industries less competitive than their global counterparts.

This is a hallmark of this government, as is the incompetent management of a whole range of programs, including its renewable energy programs, which I will come back to in a moment. There are reams of economic modelling that have shown that the carbon tax will put a significant burden on the Australian energy and resources sector and expose it to disadvantage in terms of competitiveness. Yet the members of the government have shown us, on the passage of that legislation through this House, that they would rather celebrate than think about the damage that it is going to cause to our competitiveness and to this economy.

That carbon tax is designed, they say, to try and lower carbon emissions. In reality, of course, it goes nowhere near driving the sorts of fuel switches and energy efficiencies that we need. At least with the bill we have in front of us there is a structure and a corporate governance and an outcome. You do not see the same thing in the carbon legislation.

We have also seen in recent times this government, through its renewable energy and carbon reduction programs, demonstrate the incompetence that we have grown used to across the board. We saw last week the announcement by ZeroGen that it was in receivership and would soon disappear off the face of the earth, and hundreds of millions of dollars—a good proportion of which have been attributed by this Labor government—will disappear with it for no outcome. I am no fortune teller or visionary with a special gift, but four years ago I warned this House that this project was on the road to self-destruction. In fact, another Labor luminary—none other than Peter Beattie—said publicly and in the newspaper that I was on drugs to suggest that the project was going to fail. I hope, Peter, that whatever you were on then you are not on now, when you see what happened to that project. Another failed federal Labor government-state Labor government program literally evaporates into thin air. With it goes taxpayers' dollars that this government had so unwisely invested in it.

The investment is part of the whole Labor government's smoke-and-mirrors approach to clean energy, where it promises the world but delivers absolutely nothing. Given that ZeroGen is now in receivership and $40 million of federal taxpayers' money—and a substantial amount, perhaps double that, of state Queensland government taxpayers' money—has disappeared and gone down the drain we need to ensure, as much as is possible when you have a Labor government in power, that those sorts of things do not happen again.

That is why the coalition is not opposing this legislation. We hold out some hope, through the structure of ARENA, that they will not appoint their mates to the board of ARENA but will get the expertise they need to ensure that the make-up of the board is men and women who understand the importance of renewable energy projects and understand how to invest money. On the second count, there is no-one on that side who has the faintest idea.

ARENA will be made up of six appointed members plus the secretary of the board and there will be at least one person from the field of renewable energy technology, another from commercialisation, another from business investment and another from corporate governance. There may be, unfortunately, a cross-membership with the $10 billion Greens slush fund that the Labor Party has set up—let us see how this all works, but it is hard to imagine it is going to work well—so the person who runs this country, Senator Bob Brown, can get what he wants out of the project. It is money poured into projects that will probably end up in the same spot as ZeroGen.

We do not oppose this legislation. We understand the reasons for setting up ARENA and will watch very closely as it is done. Whilst it is reassuring that renewable energy issues—and energy in general—are going to be oversighted by this body, it is somewhat disappointing that we have still not seen the framework for Australia's energy in the form of a white paper. We are of the view that it is very difficult to invest in any form of energy, particularly renewable energy, in the complete absence of a policy or structural framework on energy policy going forward. The last energy white paper was delivered by me, as the Minister for Industry, Tourism and Resources, in 2004.

Mr Ewen Jones: Seven years ago!

Mr IAN MACFARLANE: Seven years ago—thank you for doing the maths—the member for Herbert has just reminded me. And in that time, the world has changed dramatically. In that time we have seen the growth of China and the expansion in emissions that that has caused. We have seen a huge shift in energy demand as countries develop their economies. We have seen in Australia not only a huge focus on only supplying that demand through coal or liquefied natural gas but also an energy shift that has seen an expansion of the wind-energy industry. Without an energy white paper it does not matter how good ARENA is, the energy sector will still be staring in the dark as to which direction it should take.

For that reason, the government has left the industry guessing. Whilst the government has not addressed this issue in any shape or form, I use today and this bill as another opportunity to ask my colleague the Minister for Resources and Energy and Minister for Tourism to do something about his recalcitrant colleagues—to stop them viewing the resources and energy sector as just another milking cow for their wasteful spending—and to do something about putting in place a framework that will ensure that not just renewable energy but all energy investments in Australia have some direction and framework.

Once ARENA has been established, the proof will be in how the funds are administered by government. This is the same government, as I said, that has set up a $10 billion Greens-dictated slush fund as part of its new carbon tax. The cross-representation between the ARENA board and that capital fund will make for some interesting watching and reading. I suspect that if the government establishes the ARENA board properly with people who have expertise there is going to be some real tension between the way ARENA operates and the way the board of the slush fund operates.

This government has put $10 billion out there for these projects without even identifying a specific need. It already has some $3.193 billion allocated to the renewable energy and low emissions technology funds to do work on renewable energy, yet it says it needs these extra funds. The Australian people are not prepared to just take the word of this government on the Clean Energy Finance Corporation, or whatever you want to call it, and they are not convinced that it will be successfully administered—and the record shows that their concern is well placed. The people of Australia have seen how this government has wasted their money on a whole range of renewable energy and emission reduction programs.

Let us not forget where we started with this—the pink batts program and billions and billions of dollars. A constituent rang my office in Toowoomba this week and said that the people had arrived to take out her insulation. She has had that insulation in her roof and she has been living in fear that her house will become electrically live or that it may catch fire. At last, they have come to take it out. Are they going to replace it? Of course not; they are just going to take it down to the dump and bury it, along with billions and billions of Australia dollars. On top of that we have had the Green Loans program. Again, there was another great public announcement, another flash of public relations and another promise from this government in relation to renewable energy and lowering emissions. And what happened? It collapsed.

More recently, we have had the collapse—again in my electorate but right across eastern Australian—of photovoltaic installers' businesses, where those businesses have installed photovoltaic cells for customers and they then in good faith acquired the credits and sold them to a company which has just disappeared, along with the money of course. Husband and wife businesses—mum and dad businesses, as they are called—small businesses and people my age and younger who have basically mortgaged their houses and gone into business to install these photovoltaic renewable energy cells on the roofs of houses on the say-so of the government, in a program administered by the government, not only have lost their money but also, unfortunately, in a couple of instances, I suspect they are going to lose their houses. Such is the record of this government when it comes to administering renewable energy projects. It is just one disaster after another—constant mismanagement, constant hyperbole, constant spin, constant smoke and mirrors, no outcomes, lives destroyed and jobs lost—because they cannot administer anything.

This week, in the oil and gas energy space, we are going to see the introduction of another new tax. Because we have a tax-and-spend government, we are going to see the introduction of the minerals resource tax. And what a disaster that has been! Can anyone remember what RSPT stands for? It stands for resources super profits tax. The reality is that that tax was so badly put together that they had to retreat to the MRRT—and now we hear that even the MRRT is not ready for introduction. But, because this government are so desperate for money—because they can never get it right no matter how long they take—we expect that tax to be introduced into this House before it is in a proper state to be administered.

This is just another example of how, when it comes to the energy space—whether it is renewable energy, fossil fuel energy, energy for export or energy for domestic use—this government cannot get their policies right, and, when they put policies in place, the administration of those policies is a total and complete disaster. I could go on for some time. There is a long and appalling list of failures in the resources, energy, renewable energy and carbon reduction area. In fact, this whole area of energy and carbon reduction is just a political game for those who sit opposite. It is an area that they continually play in and continually mess up.

It is long overdue that the Gillard government take the energy and resources industry seriously, instead of flippantly assuming it will just continue to underpin our economy—regardless of what atrocious policies this government inflict on it and regardless of the failed programs, particularly in the renewable energy area, this government put in place only to watch them crumble and fall to pieces. We believe that there needs to be a far sharper focus by the government and some economic competence to actually manage these programs. That is why we will not be opposing the ARENA bills.

We do support renewable energy. We do not support some of the programs that the government have in place—and at an appropriate time we will go into that in detail. The renewable energy industry was started by the coalition. I know that those who sit opposite like to take full credit for everything, but let us get a few facts on the table. The mandatory renewable energy target, the MRET, was introduced by a coalition government. It was put in place and was up and running. It was the first in the world. It was a coalition government that established the photovoltaic industries in Australia. It was a coalition government that funded the first wind projects in Australia. It was the coalition government that funded the first photovoltaic large-scale generation programs. It was the coalition government that put money—and I was the minister partly responsible—into the first solar thermal projects. It was the coalition government that continued to ensure that we had projects that worked.

So we in the coalition do have a strong basis on which to support renewable energy and we do have a very strong interest in making sure that we put in place a structure that will be able to administer the programs that the government put in place to bring about an outcome that actually produces lower emission energy and is renewable. The problem that we have is that this government continually come up with bright ideas and then comprehensively bungle them through bad administration and failure to oversight policy development properly. The coalition will make sure that the onus is put on the government, by the establishment of ARENA, to be effective and efficient in their management of policies and projects as this money is rolled out. Who knows when the election will be? But between now and then there is going to be a sizeable amount of money put into this sector and if it is managed properly it will have a positive outcome. It may not create headlines and it may not give photo opportunities, but the goal is to make sure the money that is spent is spent well. When we have a government that cannot deliver the most fundamental things such as energy white papers or even put insulation bats in ceilings, we do hope that with this legislation and with ARENA we can get a policy and a structure which actually works.

I hope that this government uses the establishment of ARENA as another chance and a turning point in its poor planning and policy implementation, but I have to be a little bit pessimistic about whether the government will do that. I doubt that it will—though we live in hope—because this government has not heeded any of the wide-reaching warnings from the industry or from the coalition to date. The coalition will not object to the introduction of appropriate policies that can assist and not impede the energy resources sector, including the renewable energy sector. But examples of success have been few and far between in the life of this government. We will not stand in the way of a government that pushes ahead with good policy, but we will stand in the way of policies which are destructive or based on a poor agenda.

The coalition will not oppose this bill. We would in our time, had we had the opportunity—or when we do get the opportunity—have established a structure perhaps even similar to this one. But the crux of this bill is that it is a second chance for the government. It will be another chance for the government to demonstrate not only to the energy industry but also to the people of Australia that it actually can manage money. To date we have not seen that. ARENA will not only have to administer the renewable energy sector; it will also have to be a miracle worker to give the government a lead and show it how it should manage money and not waste billions and billions of dollars, almost on a monthly basis.