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Wednesday, 29 May 2002
Page: 2588

Mr KELVIN THOMSON (12:08 PM) —The previous speaker, the honourable member for Barker, said he did not think that the diesel fuel rebate was a subsidy. I fear he is living in a state of false consciousness. The Diesel Fuel Rebate Scheme Amendment Bill 2002 amends the Customs Act and the Excise Act to extend the Diesel Fuel Rebate Scheme to retail and hospitality businesses that generate electricity for their own use, where there is no ready access to a commercial supply of electricity. It gives effect to a government commitment during the 2001 election campaign, and Labor will not be opposing it.

Because the rebate only applies to businesses where there is no ready access to a commercial supply of electricity, it will principally benefit small businesses in remote areas of Australia. Typically, businesses that benefit from the rebate include caravan parks, tourist resorts and roadhouses. To be eligible for a rebate, the fuel must be used at premises where the retail or hospitality business is carried out. The fuel does not need to be used at the premises but it must be used nearby. There is no requirement that the enterprise that generates the electricity has to be the sole user of the electricity; however, the rebate is only payable for the diesel fuel used to generate that portion of electricity that the enterprise itself actually uses. The rate of rebate applicable to diesel fuel for electricity generation for retail and hospitality businesses will be the same as that applying to primary production. The rate is currently equal to the full amount of excise paid on the fuel. For those who receive it, it is quite a substantial matter.

In indicating that we do not oppose this legislation, I want to also indicate my support for the amendment to the motion that the bill be read a second time—moved by my colleague the member for Rankin—which does a couple of things: it seeks to expose the announcement of the fuel taxation inquiry as a cynical and expensive election gimmick, which had no genuine purpose in seeking a review of fuel taxation issues.

Mr KELVIN THOMSON —The parliamentary secretary interjects that this is a bit unfair. Anyone who followed the history of this at all would understand exactly what happened. In the middle of the Aston by-election, the government announced—I was there on the day they announced it—that they would hold an inquiry into fuel taxation. This was in response to great public concern about levels of fuel taxation. The subliminal message out there for voters in Aston and around the country generally was: `We have heard your cries, we hear your pain and we want to do something about fuel taxation.' Then the Trebeck inquiry was publicly released by the Treasurer on budget night, with a myriad of other documents—a truckload of other documents—thus ensuring that that inquiry would receive no public scrutiny and could be quietly buried by the government. It was a cynical and expensive election gimmick, as my colleague the member for Rankin has indicated in the second reading amendment which Labor will be supporting.

The other elements of his second reading amendment, which I also wish to refer to and support, are the government's failure to prioritise support for the accelerated uptake of renewable electricity generation as a viable alternative to diesel, which would lead to long-term greenhouse gas reductions, and the government's failure to deliver on their commitment to develop an Energy Grants (Credits) Scheme to replace both the Diesel and Alternative Fuels Grants Scheme and the Diesel Fuel Rebate Scheme. This is something the government have been promising us for some time, but it remains out there in the never-never and, frankly, it is not good enough.

Electricity generated from renewable sources is often an effective way to reduce reliance on diesel for electricity generation. I believe that establishing renewable sources provides a long-term solution. They continue to provide energy year after year; they would overcome the need to burn, I understand, 52 million litres of diesel fuel each year, year in and year out; and, of course, renewable sources also decrease the emission of greenhouse gases. Their total contribution to greenhouse gases may not be that large, but it does provide an opportunity for the Australian government to demonstrate a genuine commitment to reduce greenhouse gas emissions.

The area of renewable remote power generation is an area where I think the government should stand condemned for having promised much some time ago and yet having delivered so little. If we go back to the time of the Democrats' GST deal, the government committed to spending some $264 million over four years from 2000-01 to 2003-04 to support renewable remote power generation. We did not support the GST, but we did think that that was quite a good thing. In the first two years of the program, instead of spending the $132 million which had been promised, they only managed to spend $16.6 million—a fraction of it. In this year's budget, they have reduced that four-year commitment to $51.2 million over the same time frame, pushing out spending way into the distant future. They now say they will spend $106 million for the first six years of the program—that is to say, $17.7 million per annum compared with the original promise of $66 million per annum. So in terms of commitment, that is a quarter of what they promised the Democrats and the Australian people. On the government's past track record, we can confidently expect that this might be watered down even more come the next budget.

Remote renewable power generation is a clear opportunity to replace fossil fuel generation with renewables, invest in our regional infrastructure and provide a more sustainable future for our regions. It will provide them with access to cheaper fuel and electricity costs, yet the government has failed to deliver on its promise of such investment. It shows that Prime Minister Howard and the government's professed greenhouse abatement commitment and their professed commitment to the sustainability of our regions are a farce. As a result, many of our remote retail and hospitality operations remain dependent on diesel power generation and they are the victims of increasing fuel prices.

The Prime Minister could have gone a long way to delivering sustainable outcomes with money that he has already committed. What he needs to do is to deliver on his promise, but he has broken that promise. That is simply another example of this government's failure to deliver on greenhouse gas emissions, its failure to deliver on climate change and its inconsistent approach to policy in this area. The government has consistently failed to engage with the environmental aspects of fuel use and it has failed to tackle the issue of climate change. Unfortunately, the government thinks that it can get away with promising billions in this area and then failing to deliver on that promise. In terms of the government's commitment in this area of greenhouse issues generally, the Governor-General's speech stated:

The government's ongoing funding package of $1 billion over five years for greenhouse gas abatement is among the largest by any government in the world. These funds are assisting to develop strong ... government-community partnerships that are beginning to reduce the rate of greenhouse gas emissions.

No, they are not. The Australian Greenhouse Office's draft third report shows a massive blow-out in emission projections—I will come back to that—and the budget revealed that $1 billion funding package disappearing over the horizon and into the sunset. In its 2000-01 budget the government promised $245.8 million of greenhouse expenditure but a year later only $119.2 million—less than half—was spent, and that included a $104 million underspend by the Australian Greenhouse Office. I think that the Australian Greenhouse Office is experiencing serious problems. The government is not giving it any sense of direction. Its chief executive officer and its second in charge have resigned in recent times. I feel that the Australian people are not getting value from the Greenhouse Office and that it is completely rudderless at present.

The budget further showed that greenhouse expenditure over the coming three years is to be cut by $162.3 million. It has become blindingly obvious that the government has broken its promises under the Measures for a Better Environment package—the Democrat GST deal—and that the original allocation of $796 million to the Australian Greenhouse Office has been slashed to only $254 million. Included in the Measures for a Better Environment package are things such as the Greenhouse Gas Abatement Program, the Renewable Remote Power Generation Program, CNG and LPG vehicle conversion and the development and commercialisation of renewable energy, and they call into question the government's bona fides into the world's most urgent environment issue: climate change.

It was not just this budget which cut the Measures for a Better Environment package and saw this problem of underspending going on. There are a whole range of programs: the Diesel National Environment Protection Measure, oil recycling, the Greenhouse Gas Abatement Program, the Renewable Remote Power Generation Program and the Renewable Energy Commercialisation Program. Each of those programs in 2000-01 was systematically underspent. For the Diesel National Environment Protection Measure, the government promised $700,000; it spent $266,000. For oil recycling it promised $2.8 million; it spent $1.3 million. For the Greenhouse Gas Abatement Program, it promised $6.8 million; it spent $6.2 million. For the Renewable Remote Power Generation Program, it promised $5.8 million; it spent $3.79 million—an underspend of $2 million. In each of those areas during 2000-01 there was systematic underspending. Much of that money is rolled over or rebadged into other programs and reannounced as more good news.

Mr Adams —The greenest budget!

Mr KELVIN THOMSON —This time we had the environment minister standing up and saying that we have the greenest budget ever, courtesy of money which had not been spent in previous years and reannounced as more good news. In relation to the last budget, $243 million was counted as environmental expenditure by the government but in fact it is being spent by Customs on border surveillance activities, which sounds suspiciously to the opposition like Pacific solution money being dressed up as environment expenditure.

Dr Martin —The coastguard!

Mr KELVIN THOMSON —Coastguard it may be, but if you want to take that approach to it you might as well roll up the whole Defence budget and call it environment expenditure on the basis that—

The DEPUTY SPEAKER (Hon. B.C. Scott)—Order! I bring the member back to the legislation before the House.

Mr KELVIN THOMSON —Thank you, Mr Deputy Speaker. I am happy to receive your guidance in this matter. I urge the government to look at the issues that we have raised in our amendment. The government needs to prioritise support for the accelerated uptake of renewable electricity generation. The government needs to implement its commitment to develop the Energy Grants (Credits) Scheme. These are things which it said it would do. These are things which, amongst other things, would help to contain greenhouse gas emissions. I want to make that point about greenhouse gas emissions quite forcefully because the draft third report from the Australian Greenhouse Office showed the projected emissions increase— excluding land clearing, for which figures are still unavailable—between 1990 and 2010 as a massive 33 per cent. The draft third report is to be compared with the second report from the Greenhouse Office, which projected that the emissions increase—again excluding land clearing— between 1990 and 2010 would be 18 per cent.

The draft report attributed this blow-out to higher than predicted emissions growth and it states that the impact of government measures announced in 1997 has been less than earlier predicted. Australia's emissions are now projected to grow by 128 million tonnes of greenhouse emissions expressed as units of carbon dioxide to 518 million tonnes of greenhouse emissions between 1990 and 2010.

That leaked draft report suggests that the government's measures to tackle climate change have failed and that a much greater sense of urgency needs to be shown, and that is the point we want to make with regard to their need to accelerate the uptake of renewable energy generation as a viable alternative to diesel. They need to get to work and act on their commitment to develop an Energy Grants (Credits) Scheme. It is hard to believe that this government are giving up on developing renewable remote power generation alternatives such as photovoltaic arrays, wind turbines and hydro units. It is shameful that the government say that they are happy to support the burning of 52 million litres of diesel fuel each year without investigating alternative energy sources.

With regard to the Energy Grants (Credits) Scheme and getting the GST through the Senate, the government introduced the Diesel and Alternative Fuels Grants Scheme and the Diesel Fuel Rebate Scheme back in June 1999. In what I think was an attempt to restore some modicum of credibility after their position and capitulation on the GST, the Democrats pushed the government to include sunset clauses in each of the bills. The sunset date was set at 30 June 2002. At that time, the Deputy Prime Minister said that there would be an alternative to those two schemes in the form of the Energy Grants (Credits) Scheme. The 30th of June is approaching fast and the government has done nothing about developing that alternative to these two schemes. As a result, we have been put in a position where we have to agree to an amendment to the schemes to extend the sunset date to 30 June 2003.

So far, neither the opposition nor anyone else has seen what this Energy Grants (Credits) Scheme is going to look like. We are eagerly awaiting the release of information about that new scheme. Everyone in the transport industry is eagerly awaiting the release of information about that scheme. People in the transport industry are entitled to the release of information about that scheme. At the time of the original legislation, the government said that the new scheme would maintain the equivalent benefits of the old schemes and the Minister for Transport and Regional Services also said that the new scheme would:

... provide active encouragement for the move to the use of cleaner fuels.

The road transport industry is entitled to know the nature of the new energy credits scheme as it is likely to impact directly on operating costs, decisions about capital investment, business expansion and things of that character. I hope that the government will give those interested Australians the opportunity to fully discuss the proposed Energy Grants (Credits) Scheme prior to the sunset of the Diesel and Alternative Fuels Grants Scheme and the Diesel Fuel Rebate Scheme.

In closing, I urge members of the House to support the member for Rankin's amendment and I return to the Trebeck fuel taxation inquiry which was launched with great fanfare and hullabaloo and buried quietly on budget night. The government spent almost $4 million of taxpayers' money on an inquiry which they have completely ignored. They invited Australian organisations, businesses and individuals to prepare detailed and costly submissions to that inquiry and there were 341 submissions, so plenty of Australians took the inquiry seriously. The Treasurer set in train a process that would raise expectations and he then dudded them by burying the inquiry on budget night. The fuel taxation inquiry was called for cynical election purposes with no intention of a genuine review of fuel taxation issues. The government misled the Australian community on that point. Based on that, I urge the House to support Labor's second reading amendment.