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Wednesday, 26 May 2010
Page: 4151


Mr IAN MACFARLANE (11:51 AM) —I thank the member for Braddon for his contribution to this debate on the Renewable Energy (Electricity) Amendment Bill 2010 and cognate bills, which added little in terms of fact and a lot in terms of rhetoric, as we have come to expect from those who sit opposite. It is worth while at this juncture to put on the record that the only reason that we have a renewable energy target in place now is because of the coalition government. The coalition government put in place the MRET, of 9½ thousand gigawatt hours. The coalition government put in place a whole series of renewable energy assistance measures, all of which have contributed to a manyfold expansion in renewable energy in Australia, to the point where Australia has reached its target of 9½ thousand gigawatt hours earlier than expected, against the predictions of the doomsayers who now sit opposite. It is because of the actions of the Howard coalition government that Australia has been able to reduce its greenhouse gas emissions per megawatt hour of electricity generated. No-one is more committed to renewable energy than the coalition, because we do not just talk the talk; we walk the walk. We put in place the programs that built the wind farms that are currently there.

I notice that we are being urged to pass this legislation quickly. We would have liked to have seen this legislation six months ago. We would have liked the opportunity to have debated this legislation in February and March. We have no understanding as to why now, in the middle of the winter session, we are suddenly being rushed to give the certainty to the industry which the industry so desperately need to ensure that they are able to make the investments that need to be made in renewable energy over the next 20 years. We have no idea why we are doing this now. The coalition is supportive of the 45,000-gigawatt target. In fact, we signed off on that in August last year. Those in the House may remember that I was personally responsible for negotiating that outcome with Senator Wong, the Minister for Climate Change, Energy Efficiency and Water. Any time after that it would have been possible to introduce this legislation. We are at a complete loss as to why it has taken this long.

We know that one of the distractions for those who sit opposite is their complete abandonment of any meaningful approach to reducing greenhouse gas emissions through direct action or through an emissions trading scheme. We know that the Prime Minister, when speaking about the need to pass the Carbon Pollution Reduction Scheme, described our side by saying:

What absolute political cowardice. What absolute failure of leadership. What 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.

We all know that the Prime Minister repeatedly described the reduction of greenhouse gas emissions and the addressing of climate change as the greatest moral and economic challenge we will face in the 21st century. They are his words, yet he abandoned them. He abandoned them in a complete act of political cowardice—no explanation to the industry, whose expectations he had built up, and no explanation to anyone who ever believed that he meant what he said. He just walked away. He might bring the emissions trading scheme back in 2013, but he is not sure. He will not give that commitment to anyone. Instead, he continues to exaggerate the truth to the point of not telling the truth when he says that this renewable energy legislation will allow this government to meet its carbon reduction target of five per cent.

I used to be pretty good at maths and I still am. This legislation will only reduce greenhouse gas emissions by 40 million tonnes per annum. The Prime Minister needs to reduce greenhouse gas emissions by three to four times that amount if he is going to reach the target which he has set himself. What sheer hypocrisy. We should be used to that from this government. We should be used to the Prime Minister saying things he does not mean. We should be used to him changing his mind on a whim. We should be used to him not being committed to a reduction in greenhouse gas emissions, because that is his position on everything else. He has no commitment on any issue. He is driven by the polls every weekend. He is driven by the latest public opinion. He is driven by the latest numbers. He does not commit to any issue anymore.

When the government actually proceed with a project, they make a complete mess of it. They overspend not by hundreds of thousands of dollars, not by millions of dollars, but by thousands of millions of dollars. Billions of dollars of taxpayers’ money has gone to waste in a series of programs. Those of us who will come after the government will have to pay that money back, whether it is in the next term of government or whenever. We know the Labor debt is going to be huge. It is already $100 billion.

So we come to the issue of renewable energy and its role in ensuring that greenhouse gas emissions are reduced, and we ask ourselves: where does this fit in the overall plan of the government to reduce greenhouse gas emissions and to reach the target? It is there by itself. It is the only thing that is going to play an active role of any great significance in reducing greenhouse gas emissions. By my arithmetic—and, I am sure, by the arithmetic of the Minister for Climate Change, Energy Efficiency and Water—it is going to fall well short.

We need this legislation, and the coalition supports it in principle. We do reserve the right to move amendments in committee in the Senate once we get the Senate Environment, Communications and the Arts Legislation Committee report back. We have had discussions with Minister Wong’s office and with industry proponents to ensure that the legislation does what it is supposed to do. Its basic format—that is, the establishment through these amendments of the LRET and the SRES—we support. We understand, dare I say better that than those who sit opposite because we have actually done it, the importance of getting a scheme in place where there is certainty, particularly for wind farms. We understand the uncertainty that this government created through its own actions by cutting back the subsidy to photovoltaics and trying to add them to this new scheme with a multiplier factor to try and keep the numbers of photovoltaics up and the level of subsidy up. This is its own mess. It created this. The people who sit opposite these benches—the people in Treasury and Finance who penny pinched, the Treasurer, the Minister for Finance and Deregulation, the Prime Minister, the Deputy Prime Minister and the ones who penny pinched the photovoltaic program—have created this problem which we are now asked today to fix, and we will because we believe in constructive opposition. That again is our record.

We agreed to the splitting off of the 41,000 gigawatt hours of LRET and the creation within that of the new segment that comes on top of the 9,500 gigawatts of MRET. We believe that is the only way you can give certainty to the industry that has come to rely on the predecessor to this legislation and to the legislation that was passed subsequent to the discussions last August.

We also support in principle the establishment of the Small-scale Renewable Energy Scheme, but we do have concerns that, on initial modelling, that scheme is going to blow out significantly. It could perhaps blow out twofold to threefold on the 4,000-megawatt allocation which is uncapped but which it is intimated the small-scale renewable energy target is set at. We are going to have some further discussions on that. One of the things we want to see, if this part of the scheme is able to be crystallised, is some of the abuses that are taking place in that solar heat and solar energy sector, which will be supported by the SRES, stop.

I have evidence of a motel in South Australia where heat pumps were fitted in place of gas hot water systems for which the government subsidy was greater than the capital cost of the pumps. The government are giving them away and they wonder why their modelling shows that this part of the scheme is going to blow out. That has to stop. The minister has assured me it is going to stop. It has to stop now because we need to make sure that the consumers of renewable energy are not paying for rorts, and that is a rort. The solar pump industry know it is a rort. They have admitted in my office it is a rort and it will stop.

We will support the SRET component. We will support the photovoltaic component of that. We will support the solar hot water system component. I am a great supporter of solar hot water. I know from time to time conservation groups want to attack its contribution, but the most energy efficient, lowest emission way to produce hot water is on a gas boosted, solar hot water system.

At my own expense—no subsidies from government, of course—I recently installed a gas booster to my solar hot water system. That solar hot water system has been in place for probably 15 years. Each night it heated water with electricity from a coal fired power station and I wanted to stop that. I know from personal experience that I now have the lowest emission system that you can buy in Australia. But we need to ensure that they are the systems that are being fitted and we need to ensure that when people put in solar hot water systems they put in a gas booster, because that lowers the emission footprint even further. Not all hot water is heated by the sun. A proportion in those systems is heated by fossil fuels. We need to ensure that that part of the scheme is promoted. We need to ensure that, where electric hot water systems have to be replaced and where there is no access to mains gas, the next best lowest emission option is put in place, and that is solar heat pumps. I have no problem with solar heat pumps. They have a role to play. They reduce emissions, they provide efficient heating of water, but they are not the best option. The best option is gas boosted solar electricity. We need to ensure that there is room left in the SRES for them.

We need to ensure that in the photovoltaic area people are able to make a reasonable investment in photovoltaics and get a reasonable return. There is an argument on the other side in relation to reasonable rates of return. They say that, for the mining industry, a reasonable rate of return is six per cent. No-one will invest in photovoltaics at six per cent unless they are a zealot like me. If we are going to have widespread installation of photovoltaics, we need to ensure that part of the SRES works. We need to ensure there is consistency in the message we send out there.

We need to also ensure we do whatever we can to encourage new technologies into the LRET space and that wind does not crowd out the emerging technologies, particularly geothermal, which I think has the greatest potential in Australia to provide 24/7 baseload renewable energy into our grid. We need to ensure that biomass gets an opportunity and, where possible, small-scale hydro gets an opportunity. Hydro is generated at peak times through pumping water back into the reservoir during off-peak times. Those sorts of schemes have to be given the opportunity to take their part in the RET.

As we go forward on this issue, I give my commitment to this parliament that I will negotiate with the minister, Senator Wong, in good faith to ensure that this legislation is passed, but my grave concern is that this government have left this for so long that they will attempt to play politics with it. They will attempt to dare us and try to put in front of us obstacles that we cannot climb over. They will attempt to do what they can to score political points out of that. Why do I say that? Because that is what they have done for six months. This legislation should have been introduced in February, but we saw a Prime Minister more interested in trying to get the political wedge in on climate change than in getting this legislation through. And then, when he turned around and ran and showed political cowardice—his words, not mine—he had to try and get us to rush this legislation through without due consideration. We will consider it, but in the meantime let me assure the Australian people that the coalition will continue to do what we can to lower Australia’s greenhouse gas emissions.

Along with supporting this legislation and the reductions that it will produce, we will continue to work to ensure that one of the key elements that this government has not addressed—a lot of talk, no action—which is energy efficiency, is also promoted, and we will look at options to make sure that people understand energy efficiency. In my time as energy minister I was a strong proponent, and I still am, of ensuring that people understand the true cost of electricity, the true cost of what they are consuming, so that they have in their kitchen a device which tells them when they are using high-cost electricity. It is called a smart meter. Surprisingly, I have got one of those as well and I have had one for six years. Until we explain to people the cost of electricity, they will not move to energy efficiencies, and we need to get them to do that.

The third cornerstone of the coalition’s commitment to reducing greenhouse gas emissions is our direct action plan. Contained in that is the Emissions Reduction Fund, which will urge and assist businesses to reduce their emissions below the baseline of ‘business as usual’ activity. We also have a very significant commitment to soil carbon—the use of the soil to sequester carbon in such a way that that carbon is then tied up. That can be through a range of biochars, through a change in agricultural practices and through the growing of trees that are going to be long-term carbon sinks, but we need to do more in that area, and the coalition, our party, are committed to that.

We are also committed to ensuring that we do what we can to boost the commercial development of solar energy, both photovoltaic and thermal, as well as the small-scale use of solar energy. The coalition will commit $100 million to our Solar Towns and Solar Schools Initiative to ensure that grants are provided to towns, non-capital cities and schools to access direct solar energy for onsite use and for return to the power grid.

The coalition are a party committed to reducing greenhouse gas emissions. We are a coalition that has a track record in this area. We are a coalition that paved the way and led the world in the introduction of a mandatory renewable energy target. We are a coalition that remains committed to direct action—to actually getting outcomes, not just talking the talk but walking the walk.