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Wednesday, 26 May 2010
Page: 4245

Mr RAMSEY (6:38 PM) —I rise to address the Renewable Energy (Electricity) Amendment Bill 2010 and related bills. I feel a bit like a school student as I stand here and say to the government: ‘We told you so.’ We warned the government at the time the RET legislation was introduced into the House last August that it would lead to emerging and large-scale projects being frozen out. The government is now proposing that we split the RET into two—a large-scale renewable energy target and a small-scale renewable energy target. That will improve the bill but I still have some reservations.

In considering the amendments, I return to my comments in August 2009 when the original legislation was presented. I said:

The legislation will help a number of these industries, but it also has some dangers in that the support may be soaked up fully by mature technologies which can quickly meet the targets when the aim should be to encourage new technologies to be able to come of age and compete in the marketplace. That is why the opposition will move an amendment stipulating that 25 per cent of the renewable energy target should be reserved for new and emerging industries … The renewable energy credits or RECs will be most valuable at the start of the program and will deteriorate in value as 2020 and the 25 per cent target near.

This would protect and foster new industries. It is now some eight months later and we have come back to revise that legislation because the government chose to ignore our advice at the time.

At the time of those comments, I took the opportunity to highlight a number of opportunities in my electorate of Grey that would benefit from the RET. It is worth remembering that the origins of the RET were in the previous government’s MRET scheme, which was responsible for most of the completed wind farms in Grey. Off the top of my head, I think we have seven fully completed wind farms. The scheme will also benefit solar, wave power and hot rocks. I am pleased that in the current budget the government has allocated $60 million to the solar array project in Whyalla. This project enjoyed the support of the coalition government with $10 million in seed funding. I am hopeful it will come to fruition, unlike the $7 million solar power project that the Minister for the Environment, Heritage and the Arts announced some two years ago for Coober Pedy. Despite having questions on notice, I have never received an official answer from the minister that the project has been officially shelved, even though it is already some four months past its switch-on date. Nothing has happened at all.

We are considering the amendments before us because there has been a rush on solar photovoltaic roof installations and hot water systems. With their front-loading of lifetime credits, it was quite predictable to everybody—except the government, it would seem—that this would lead to a distortion in the system. The amendments are an attempt to address that distortion. But, even now, I must admit that I have some doubts about the economic efficiency of a scheme that gives a taxpayer subsidy to install a home generation system and then another very generous taxpayer subsidy—the feed-in tariff. In South Australia, the feed-in tariff is 44c per kilowatt hour, which is typically about double the price for retail electricity. The scheme accesses the taxpayer subsidy on installation and then it accesses the state taxpayer subsidy every time the sun shines. It bears some consideration whether this is really a good use of taxpayers’ money. Renewable, yes; public assistance, yes. But the scheme must be designed in such a way that it encourages the most efficient forms of renewable energy. I am a little worried about the double subsidy.

This legislation also leaves the small renewable energy target uncapped—that is, as many photovoltaic power systems and hot water systems as we can put into houses will subsidised by the government. We must be honest about what we want to do here. If we want to use taxpayers’ funds to engineer a shift in energy production in Australia, which is what this legislation proposes, it will come at a cost. So it is imperative that we get good value for money, the process is transparent and we understand exactly what we are doing.

I have been very encouraged by the wind farm industry. As I said, we have seven operating farms in the electorate of Grey and a number of others on the drawing board at the moment. It is great to see the local employment that they encourage. My reservation about wind farms is that wind is a fully mature technology delivering today. Some of the other possible projects in my electorate, such as hot rocks technology and wave technology, will probably not be mature enough to take advantage of these RETs until the latter years of the scheme. By then, the targets may well have been soaked up by the wind farms. That is something that still causes me concern and I raised it when I spoke on our amendments back in August.

It is worth looking at the amendments proposed by the coalition the government did accept. One was to decouple the legislation from the CPRS. Looking back now, it is just as well because it enabled us to actually do something positive about greenhouse gas emissions reduction in Australia when it would all have failed had it been attached to the ETS. The failure of Copenhagen exposed, in the end, how foolhardy it was to try to introduce legislation that was, in effect, irreversible before the rest of the world had made decisions about how it was going to deal with this problem. Other amendments the government accepted dealt with waste coalmine gas, the exemption of the aluminium sector, heat pumps and concessions to the food processing industry. These were all good things and all things I am very pleased the government accepted.

We also attempted to introduce a banding structure, which would have dealt with the problems I have talked about concerning mature technologies as opposed to emerging technologies. As always with amendments the coalition puts up, the government say they are not needed and we should just get out of their way and let them get on with governing Australia. I would bring their attention to the youth allowance debate, the imported beef debate and the cataract surgery debate. In those cases, despite telling us to pass legislation, in the end they did see the point of view of the coalition. I suspect that even the great big new tax on mining may meet a fate where the government is, in the end, prepared to compromise and come back to reality.

To come back to the amendments: as with all of this government’s measures, everything seems to cost more and this is no different. The sum of $10½ million for the Small-scale Renewable Energy Scheme is not a lot the way governments measure money—and it is certainly not a lot the way this government throws money around—but it is still a lot of money to me and it is another $10½ million out of the budget. I can think of a lot of good things I could do in my electorate with $10½ million.

It does come at a cost, but the coalition is committed to real and direct action on climate change. Unlike the government, we do have a policy in this area. The government have abandoned all pretence of trying to get their ETS legislation through the parliament. We should remember that the Prime Minister described this is the greatest moral, economic and environmental challenge of our generation. Now we watch government members rise, one by one, to speak in this place, mouthing the words that they still want the ETS legislation passed, but they do not believe it and we know they do not believe it.

If they did believe it, they would bring it back into the Senate. There are probably two reasons why they are not keen to bring it back into the Senate. One is that it would trigger their ability to call an election on the matter and I do not think they are at all confident that they have the confidence of the Australian people on this subject. The other reason is that they may well find that, if they reintroduce the legislation into the Senate, the Greens will agree to it. Then they would be stuck with it. I do not think they want that either. As the Prime Minister said, not to implement the ETS would be absolute political cowardice, an absolute failure of leadership and an absolute failure of logic.

It comes as a great disappointment to many Australians that their Prime Minister was not really fair dinkum about the ETS. What he was fair dinkum about was a new tax. He was fair dinkum about a $14 billion a year tax on Australian industries. Not to be deterred because he could not get the $14 billion a year tax on Australian industry, the government has opted for a $9 billion tax on the mining industry. It is quite obvious that the main game in town is the new tax, not what the consequences of the new tax are.

It is a simple fact that, if Australia is to make a real contribution to greenhouse gas emissions reduction, we can only do it by staying roughly in step with the rest of the world, not by proposing irreversible legislation. Looking back, the ETS was very foolhardy and I am glad the government has abandoned the attempt to get it through in this session of parliament. I wonder what they will say to the Australian electorate when we come to the election. However, the absence of agreement does mean we need a direct action agenda, as the coalition has proposed. This RET, and the amendments to the RET, is a direct action agenda and, broadly, I support it as I have done before. As I said, I still have some reservations about its implementation and that is why the coalition will be referring this legislation to the Senate committee.