Save Search

Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Wednesday, 30 May 2012
Page: 6347


Mr EWEN JONES (Herbert) (18:29): It is always a pleasure to follow the member for North Sydney. His contribution basically wrapped it all up. But I rise today to speak on the Clean Energy Finance Bill 2012 and the suite of bills.

These bills seek to establish the Clean Energy Finance Corporation—the CEFC—giving this corporation the ability to invest in financial assets to develop Australian based renewable energy technologies, low-emission technologies and energy efficient projects, and the power to enter into investment agreements and to make investments through subsidiaries. It has a duty to make sure that half of the funds invested by 1 July 2018 are invested in renewable energy technologies.

These bills will also create the Clean Energy Finance Corporation special account, which will give $10 billion over five years to the CEFC. It is this government's intention that the CEFC will be self-sustaining once it has reached maturity and any returns to the fund would then be reinvested! We laughed and we laughed and we laughed! In reality this bill simply creates a $10 billion slush fund used to bribe the Greens over to the government side. It was the 25 pieces of silver they had to pay.

In stark contrast to the idea of a self-sustaining fund the bill forecasts a financial loss as a result of operating costs and failed investments. Treasury officials will tell you that the loss is around 7½ per cent. What they do not tell you is that that loss of 7½ per cent is $750 million, which they are prepared to walk away from on day one. Add to that the government's borrowing rate of 5.3 per cent on $10 billion and that is $530 million a year. So, straight up, at the beginning of the year, you drop one billion dollars every year. So away you go!

The coalition has long supported the renewable energy industry and the pursuit of making renewable energy an affordable and reliable source of power. The renewable energy target of 20 per cent has bipartisan support in this House, but this bill runs the serious risk of distorting the renewable energy market and spending $10 billion of borrowed money to not produce any results.

We already have our 20 per cent target for renewable energy by 2020. This target is driving investment in renewable energy. Regardless of how much this government spends on a renewable energy slush fund the target will still be 20 per cent. So we will still end up with 20 per cent renewable energy. Any renewable energy investment from this fund will simply replace other private sector investment in renewables. That means $10 billion will be spent on achieving nothing.

I hate to harp on the point, but this government has not had the greatest track record in running anything so far, let alone a $10 billion slush fund. Mind you, no-one gives money away like this government, with no hope of a productive return. This could be the hook on which this government hangs its hat: 'We are the best at giving money away with no consequences. We are No. 1!' Now, that will cause pride when you guys are sitting on the verandas under your blankets in the old pollie home!

These bills also seek to provide for the CEFC to hand-pick investments based on comprehensive criteria. The result is that, contrary to the thinly veiled appearance of independence, the minister and this government has a high degree of control over who does and who does not get money from this fund. Couple that with no economic or financial basis for decision making, what could go wrong?

There is a serious concern that these bills will distort the marketplace for renewable energy. We already have many companies around the country successfully running businesses in the renewable energy sector. They have found their market, created a good business plan, and are turning a profit. Now they have to compete with technologies and ventures that should be less competitive but will be given a hand-up by a selection panel. Instead of the market investing in efficient technology and well-structured businesses, the government will be investing in businesses that could not convince anyone else to spend the money on them. If you force cash into any market you will distort that market. In effect, you will place greater pressure on the existing businesses by doing this. I just do not see why this government cannot see that. You are running a real risk of shutting down an industry.

The CEFC has not been required to consider low-cost technology when hand-picking projects. Not only is this money giving an unfair leg-up to the fortunate few, it will be supporting the projects that the market has deemed too risky to finance itself. Even the explanatory memorandum acknowledges, in identifying the fiscal impact for this bill, that some investments will not be recovered. That is code for taxpayer loss on top of borrowed money. This is destined to be yet another expensive failure where the end result will be that the taxpayer will cop it in the neck to the tune of $10 billion and those businesses which have forged a market and products with hard work, will have to deal with the stink and taint this set of bills will no doubt leave behind. You really are running the risk of destroying an industry.

Time after time we have seen that it does not work when government's try and hand-pick renewable energy projects. We had the Solar Flagships program in Moree and the Queensland Solar Dawn project that the member for North Sydney was speaking about earlier. I remember reading about it in the paper and seeing Peter Beattie on TV telling the member for Groom that he was on drugs if he thought this would fail. Yet, there we were, a little way down the line. Peter Beattie, to this stage, has not rung the member for Groom and apologised. The Queensland Solar Dawn project, struggles to gain industry support despite $700 million from the government. Of course, I am talking about ZeroGen there.

When will we stop pretending that we can force the market? These bills are yet another Labor commitment funded by debt—$10 billion, and then we start to pay the interest. We have seen this Treasurer boasting about a budget that contains a surplus. Meanwhile they are using accounting systems to push through lavish and reckless projects without having to put them on the budget and present them to the Australian people.

I have an idea. Why don't we take the defence spend off budget? That way you would have a $25 billion surplus! It would be easy! We could just take it all off budget and increase the debt. We could raise the debt level to $3 trillion and be done with it; run it all off budget. We could bring forward money out of the debt level to create that surplus so that everyone can feel warm and fuzzy. But it does not produce the right picture.

You guys—this government—are leaving it up to the next generation to pay for a policy that is designed to fail, knowing full well that it will be spent on projects that nobody in the private sector trusted and on many that are bound to fail. Just like the NBN, this is a huge expense that this government do not want to be held accountable for at budget time. There are huge salaries at the NBN, and in this organisation, being paid out to people and we have no control over who they are.

If this government genuinely had a commitment to renewable energy it had many chances to get on board, even in North Queensland. The CopperString project was aimed at bringing Mount Isa onto the National Grid. They were seeking $300 million in federal government funds to build the line to Mount Isa. If this was done, the impact on renewable energy would be huge. The North West Queensland Mineral Province is also home to one of the world's most exciting renewable energy corridors, with projects such as the Kennedy Wind Farm, with 700 turbines producing electricity at a projected $48 per kilowatt hour. The Kaiwedera Solar Project is another project which was to produce quality renewable energy.

One thing you have to remember is that, as the member for Dawson so succinctly put it, renewable energy is not clean—you still must invest in all sorts of stuff to create the equipment that makes it. A huge amount of pollution goes into making the mirrors, the turbines and the fans, and transporting them. As the member for Mitchell said, every human endeavour affects the environment.

The fact that the Kaiwedera Solar Project, which currently operate along the corridor and burn diesel for power generation, should have had this government and the Greens running to their aid. I do not blame Mount Isa and Xstrata for going on their own and building their own new power station. The messages they were receiving from both the federal and the state government were too weak and mixed for them to wait any longer. In short, the government talks a good game but it never, ever delivers. It could it be that they could not commit to infrastructure in North Queensland if it was to appear on budget. Maybe it was just not sexy enough for the Greens. Maybe it was not in the right part of the world. Maybe if it was in inner-city Melbourne and it was about turning mung beans into cafe lattes, we would be throwing some money at it.

Why doesn't this government support the MBD algae project more? Here we have a science based, high-skill project ready for commercial application which is being starved of funds by this government. It will take pollution out of any system to which it is applied and turn it into a protein source, a biodiesel, and sequester carbon. Tests at Tarong Power Station in the South Burnett have been very positive, with massive reductions in pollution—up to 40 per cent. If we integrated the MBD algae project into the design of a coal or gas fired power station, we would have cheap baseload power with zero emissions. Why isn't this government all over this project like it was 102 degrees in the shade and they were prickly heat? It beggars belief. Again, are they only interested in projects where the Greens decide what we will do? Are they only against it because it would have to be on budget? I am not a huge believer in conspiracy theories, but the more I watch this Labor-Greens government, the more I am convinced that there is another completely separate agenda here.

This legislation is not about supporting renewable energy; it is about supporting the Greens. The fact that they can on one hand claim a budget surplus and then on the other try and slip through a $10 billion off-budget slush fund, and that they can claim to be in favour of renewable energy and then sit back as the CopperString project stalls, shows the hypocrisy of this government. We all want to see a strong renewable energy future; that is what we have the renewable energy target for. But splashing around $10 billion on projects that the market has rejected is an insult to taxpayers. This legislation is about a select group of latte-drinking, Vespa-riding, black-skivvy-wearing people picking winners at our expense. It is easy to punt big if you do not have to cop the losses. I suggest we send this mob to Randwick on the weekend with their own money and see how they go. Let's see how good they are on the punt—because that is what they are doing. But they should do it with their own money.

This legislation is irresponsible, it is destined to fail and I do not support it. What this country needs is a government which will, in the first instance, do no harm. Secondly, we need a government that will get out of the way of the private sector and keep their hands out of the pockets of the people who are making a difference. We need a government which offers hope, reward, and opportunity for all, not just a select few. Think of the interest alone on this thing, the money that you are prepared to lose on this, that you are prepared to throw away. In the meantime you have 21-year-old soldiers stationed in Darwin that you are pulling a return airfare off once a year.

The government shows its hypocrisy on these issues. The fact that you are prepared to make the average person pay and you are prepared to let the Greens run this show is horrendous. This is my first term, as it is the first term of the member for Wannon, who spoke before. We all come in here thinking of Mr Smith Goes to Washington, thinking we can change the course of the debate. But when nobody is listening on the other side, when you are in the back room and you have to cut the deal, you will do whatever it takes. That is what is wrong with this place and that is what is wrong with this government. They are not prepared to make the hard decisions. They are not prepared to stop these people from doing this.

This is $10 billion. I scratched $1,000 once and thought all my luck had come at once—I never won another single cent. This is bad legislation. It should be shown up for what it is. I will fight against it all the way through. When we are in government, we will repeal the carbon tax fully, we will get rid of this slush fund and everything that goes with it, and we will find out why the advice was what it was.