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Tuesday, 29 May 2012
Page: 6051

Mr HUNT (Flinders) (18:55): In addressing the Clean Energy Finance Corporation Bill 2012 and related bills, let me begin with some history about the successes and failures of support for and management of renewable energy in Australia.

It was the coalition which created, developed and implemented the mandatory renewable energy target—successfully. It was the coalition which created, developed and implemented the then equivalent of the solar PV rebate—successfully. It was the coalition which created, developed and implemented the solar hot water rebate—successfully. By comparison, what we have had from this government is the Home Insulation Program, which on any account is arguably Australia's most dramatic policy failure on the domestic front since the Second World War. Two billion dollars were largely wasted, including $500 million simply to fix the roofs—over 70,000 repairs, removals or variations to the work done, and that is still knowing that there are hundreds of thousands of other jobs out there which will never be inspected by this government. There were, of course, 200 house fires, and the link to four of the most terrible tragedies.

But this government also created the Green Start program and the Green Loans program. Green Loans cost over $100 million for barely more than 1,000 loans: $100,000 per loan on average for loans which were literally a few thousand dollars. It was a monumental failure which in any other period of government would be classified as the standout failure of that administration, but it is dwarfed by the failures of the Home Insulation Program.

The Green Start program, which never actually started in any meaningful way, was terminated very shortly after it was announced. The cash-for-clunkers program was announced by this government as their centrepiece of the last election's climate change policy, only to be brought to its knees not that long after the new government was created because it was a policy that was so bad it should never have seen the light of day. The citizens assembly was created to randomly select 150 Australians from the phone book to determine the policy which the government dared not take to the last election.

And now we have potentially the largest waste of money of all, and that is the $10 billion Clean Energy Finance Corporation, the $10 billion clean energy fund which, even if it is successful, creates no net new renewable energy. It beggars belief that this government is proposing to spend $10 billion and there is not one megawatt, not one kilowatt and not one watt more of renewable energy which will be generated by 2020 as a consequence of this $10 billion. Let me look at the deep fundamental and structural flaws at the heart of this bill and explain why, whilst the opposition fully supports the 20 per cent renewable energy target, we believe that this bill is ill conceived, ill constructed and doomed to failure. I will do so in two phases: first by looking at the prospects even if there were the implausible case that all of the investments proposed were successful, and then by looking at the overwhelmingly more likely case of what happens if there are failures. Because, when you look around the world and at the history of investment by this government, this policy is doomed to failure and doomed to waste literally billions of dollars of taxpayers' money. This is money that comes from the work of shop assistants, plumbers, nurses and people who are working each and every day to pay their taxes, and their money will be wasted.

Let us begin with the concept, which is so fundamentally flawed. It would seem that spending $10 billion on renewable energy would get you something. What is proposed here is that the government will spend $10 billion and that therefore that will generate some form of new renewable energy. The problem, however, is that before this bill there was a 20 per cent renewable energy target. After the $10 billion included in this bill is spent, there will still be a 20 per cent renewable energy target. What does this mean? It means that any renewable energy generated as a consequence of the Clean Energy Finance Corporation investments will simply displace other renewable energy which would otherwise have come online between now and 2020. It is unarguable, it is without doubt and it is simply, palpably, absolutely the case that the government will spend $10 billion and, in a best-case, no-failure, no-problem, perfect-delivery scenario, will still produce not one gigawatt, not one megawatt, not one kilowatt and not one watt more actual renewable energy between now and 2020. That is an extraordinary example of conceptual failure.

I wonder if the minister at the table, Minister Shorten, or anybody else around the cabinet table considered the fact that for $10 billion there will not be an additional unit of energy generated at all between now and 2020. It is almost extraordinary that this policy could have been created, delivered and funded. But the answer is very simple. It was, of course, funded as part of the trade-off with the Greens to win their support for the carbon tax. The carbon tax, of course, is an entirely different story. We know that it was conceived in the breach. The Prime Minister famously said the very day before the election, 'I rule out a carbon tax.' On the Monday before the election, the Prime Minister said, now infamously, 'There will be no carbon tax under a government I lead.' So the price of that betrayal and of winning support for it included this $10 billion fund. But, as I have set out, in the best-case scenario, on the basis of perfect delivery, no new renewable energy will result. Our alternative is very simple. We have a renewable energy target. It is set to achieve 20 per cent by 2020. We support that, we helped negotiate it and it will achieve that. That will be the same result with or without this bill. It is unarguable, and anything else from the government would simply be misleading.

However—and this brings me to the second part of what I wish to say this evening—this bill will not be executed perfectly. The Clean Energy Finance Corporation and the clean energy fund will not be delivered as the government intends, and history shows us that on three fronts. Firstly, on the government's own performance in this country, as I mentioned at the outset, we have had pink batts, Green Loans, Green Start, cash-for-clunkers, the citizens assembly, the solar bubble and collapse and the solar hot water deception, where $44.7 million was ripped from the budgets of 2011-12 and 2012-13. This was only revealed in its full deception on budget night, and as a consequence we are seeing job losses at Rheem and Dux now. That is a list of seven failures from this government in this space.

Then we go to the broader question of comparable systems around the world. In the United States, we have seen the $700 million failure of Solyndra under the comparable US system. Beacon Power has collapsed. Ener1 has collapsed. Solar Trust of America was given a $2.1 billion line of credit from the US Department of Energy and has collapsed. It makes you think that perhaps there may be some systemic problems. The comparable program in the United States is the source of enormous division, enormous conflict and an ongoing scandal in relation to its administration, according to the Republicans in the way that they have presented. So, far from being a unifying program in the United States, it is a program which has had significant failures and is a source of deep, clear and ongoing division within the US congress.

What about Australia? Are there any comparable programs? There are. Let me point to two similar examples. The first is the ZeroGen project, which had over $100 million of co-financing from the Queensland government, delivered by Peter Beattie and, from the Australian federal government, by the then Prime Minister, Kevin Rudd. At the time that the ZeroGen project was proposed, Ian Macfarlane, who was the relevant spokesperson for the coalition, said that it would fail. He was clear on this front. The then Queensland Premier, Peter Beattie, famously said that Ian Macfarlane was on drugs—that, of course, was false. It also turned out that Ian Macfarlane was absolutely right: the ZeroGen project collapsed. It is gone; it is finished. The public money was done. Nothing was built. There is no low-carbon, let alone zero-carbon, ZeroGen project in Queensland. The money is gone. The project is gone. The idea was flawed from the beginning. It was not well executed. Therefore, we were not surprised when that which we had warned of came to pass.

But let me explain that that $100 million was money which came from everyday Australians. It was the taxes of everyday Australians, from all walks of life. It could be from members of the Health Services Union who are cleaning hospital wards and emptying bedpans. Their taxes go directly towards a project such as ZeroGen. It collapsed and failed. So all of that work and the payment of those taxes were wasted. So let us never forget that this is nothing hypothetical. When the government wastes somebody's money, it is real, because there is a shop assistant, an orderly or a small business person who has worked to pay that money. We hold their money in trust and we have a sacred responsibility to guard it carefully.

Let us also look at the Solar Flagships program: $700 million was announced over three years ago and yet no project has been successful. We have seen the Central Queensland project effectively collapse. We saw the Moree project collapse. I hope some success comes out of them. But many days, many months and three years have passed since the world's biggest solar array was proudly announced by the once and future Prime Minister. So that is another example.

We see the litany of failures of general environmental programs: pink batts, green loans, Green Star, cash for clunkers, citizens assembly, the solar bubble and the solar hot water bubble. We see the US examples of Solyndra, Beacon Power, Ener1 and Solar Trust of America, and we see the Australian examples of ZeroGen and also Solar Flagships where nothing has come to pass. The lessons must be fairly strong.

Let us, then, come to the costs of this bill. What we have seen is that, even on the government's own modelling, even in the explanatory memorandum, there is an expected loss, out of the first $6 billion, of $1.346 billion, or $1,346.4 million. That extrapolates out, over a five-year period, to more than a $2 billion loss—that is a combination of operating costs, write-downs for commercial failures and interest forgone for the government.

Let us understand that that is a best-case scenario—$2 billion being wasted over five years. That is a profound amount of money. And that is from a government which has not been highly successful in its other predictions in relation to comparable programs or allied environmental programs. Huge amounts of money have been wasted, to no effect. So, on its own best-case scenario, over five years we are looking at $2 billion of public money gone—written off; wasted.

Finally, we come to the fact that there is an impact on existing projects. It changes the financing regimes. It changes the competitive regimes. It changes the merit order. So it has a sovereign risk impact on existing investments in the space because, if they are displaced by subsidised projects, it has an impact on their ability to compete on level terms in the renewable energy space. That is another example of ill-thought-through consequences. I have a respect for the individuals involved who have sought to assist in this. But it is the fundamental design at the heart of government from people who have repeatedly shown an inability to apply government programs to the commercial environment with disastrous consequences.

Against all that background, what we saw yesterday was quite extraordinary: a two-hour hearing for $10 billion—$5 billion an hour—for a parliamentary inquiry. That inquiry was called on Friday. It was delivered on Monday. There was no ability for the public to have input. It was carried out over two days, and my understanding is that it will report tomorrow. What we had was not a parliamentary inquiry but a show trial. So that was an abuse of parliament and an abuse of the confidence of the public, and it is likely to be a fatal abuse of taxpayers' money.

In opposing this bill and the three related bills which extend the scope of the carbon tax to cover LPG, LNG and CNG, let me be clear on behalf of the opposition: the Clean Energy Finance Corporation $10 billion slush fund is destined to fail. Even in the unlikely event that it succeeds, what we will see is not one watt of additional renewable energy between now and 2020. In its design and its concept, this structure, this system will, on a best-case scenario, spend $10 billion and Australia will not have an additional watt of renewable energy between now and 2020. For those reasons, we oppose this bill and these allied bills, and we do so with every ounce of vigour.