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Monday, 1 September 2014
Page: 9168


Mr CRAIG KELLY (Hughes) (15:19): It is a great pleasure to continue my remarks on the Australian Renewable Energy Agency (Repeal) Bill, especially on Wattle Day, the first day of Spring, and especially after such a long and cold winter.

Last week in my remarks on this bill, I was making the point that it provides savings of $1.3 billion to the budget; and how completely out of touch members are on the opposition side. They still believe we can just spend, spend and spend, as though there is some magical money tree out in the Prime Minister's courtyard. If we do not make this saving of $1.3 billion, let's be very clear, that money must be borrowed and it must add to the debt that we already have. And it must correct the prospect that in the future taxes will be higher and government services will be lower because we have to finance the ongoing interest payments on that debt.

The nation currently has to pay $12 billion in interest every single year. If we go back, just six short years, back in 2007, we as the Australian nation were receiving $1 billion a year in interest. The previous Howard and Costello government had paid off Labor's debt; they had put money in the bank; and we were receiving that money.

Now, because of the debt that has been rung up—north of $300 billion—it is now $1 billion a month, or $33 million every single day. In this parliament when a bill comes up, we are given a speaking time of 15 minutes. So, during the 15 minutes that I am speaking on this bill, the interest payments that this country will have to make on the debt that Labor rang up is $347,000. Every 15 minutes of the day, $347,000 is the interest bill that we have to pay on the debt. We know that 70 per cent of that, close to one-quarter of a million dollars, flows out of the country because that money is borrowed from people overseas. That happens every 15 minutes of the day, every day of the week, every week of the month, every month of the year—until we start paying that debt back. But that is not good enough for this Labor Party. They want to continue to borrow the $1.3 billion—that is, the savings that we believe will be achieved by repealing the renewable energy agency.

We have to remember that that money comes at a cost—an opportunity cost—because it has to be taken away from other programs. That $12 billion a year could fully fund the NDIS. When I go around my electorate—and I am sure many other members find this—constituents come up to me and ask: 'What's happening with the NDIS?' We have to be honest. We are working out ways of how to fund it. We could fund it with $12 billion a year, if we hadn't had six years of the Labor government continuing to run deficit after deficit after deficit.

We talk about fairness. It is not fair for governments of today to be borrowing money and running up a deficit, because that means that future generations, our children and our grandchildren, will have the burden of higher taxes and fewer government services. It is also not fair because in Australia we need to recognise that, if we are borrowing money, the costs to service those interest payments are substantially higher than many other countries in the world. That is because the 10-year government bond rate, the rate at which the Australian government borrows money, is substantially higher than for the rest of the world; in fact, we have 40 per cent higher borrowing costs than the UK or the US; 50 per cent higher than Spain; 60 per cent higher than Canada; 160 per cent higher than France of all places; and 250 per cent higher than Germany. That is why we simply cannot go and spend, spend, spend, as this opposition wants us to do.

The other thing that the opposition does not seem to get at all is that government investments have a long history of failure after failure. I have recently been reading a book called Uncle Sam Can't Count—a history of failed government investments. It lists investment after investment and how, when governments subsidise industries, there is a long history of failure. It impedes economic growth and hurts the very industries and companies they are trying to help. Sadly, those are the failings of this opposition. They simply think: if we have a bigger bureaucracy, throw around more taxpayer's money or provide greater subsidies, it will somehow cure the problems.

But we know economic history has shown the complete opposite. For example, in the area of renewable energy, just look at the Kyoto Protocol. Several years ago there was all this hullabaloo that the US had not signed the Kyoto Protocol to reduce their CO2, their carbon dioxide emissions, but the EU had and how terrible the US was. And the EU, with all this regulation and signing protocols, would reduce their CO2 emissions. But we know what has happened: since the Kyoto Protocol was signed carbon dioxide emissions have increased in the EU. So the more government regulation and interference in the market, and the greater the subsidies for renewable energy, we have seen the opposite happen in the EU: an increase in carbon dioxide emissions; but, in the US, which never signed the Kyoto Protocol and relied on free market entrepreneurs to develop and innovate without the need or interference of the government, carbon dioxide emissions have come down.

Not only has the EU failed to do what they set out to achieve by reducing CO2 emissions; it has actually smashed their economy. Today in the European Union, 19 million people are unemployed. The average unemployment rate across the entire European Union is more than 12 per cent, so it has been a complete economic failure. It has been a complete failure of what they were trying to do in contrast to the USA, which, without government interference, has achieved those reductions in CO2 emissions.

The opposition have to realise that when they talk about sustainability, nothing is sustainable unless it is economically sustainable. When we are talking about targeting and putting government investment in renewable energy, we need to be careful that we are not targeting the wrong enemy. My concern, especially for constituents in the western part of my electorate in the Liverpool area, is the effect of air pollution—not CO2 pollution but particulate matter. We know that, according to a new State of the Environment report, in 2011, 3,000 Australian—more than twice the national road toll—deaths were attributed to air pollution. In New South Wales alone, we are talking about 1,400 deaths and 200 hospitalisations every year caused by particulate matter air pollution.

Particulate matter is the ultrafine dust, smoke and particles that are released into the atmosphere through fuel, especially diesel engines. Preferably, this is where we should be targeting our resources, rather than reducing carbon dioxide emissions, because we can save lives. We can have greater health outcomes, if that is where we train our guns.

The other issue we need to look at for government investment or some encouragement is the issue of our liquid fuel security. With our refineries closing down and relying on imported oil, we have a significant issue with our fuel security. We only have seven days supply in the supply chain but we have the potential to have coal-to-liquids plants to convert our brown coal into liquid fuel. This is a proven technology called liquefaction.

South Africa already produces 30 per cent of its liquid fuel needs from liquefaction—from turning coal into liquids oil. For all the talk about China, it is advancing very quickly on this. In fact the International Energy Agency has recently said that the only country that has meaningful investments in coal to liquids is China. Yet we have this great coal resource and we not using it.

The other issue, which was raised by members of the opposition in this debate, is the RET. I believe that we should not be giving any special advantages to any particular power companies in the energy industry. But if there is no change to the RET, it is very clear from the recent review, the taxpayer will bill giving a $22-billion subsidy to the wind farm industry. That works out to be a $1,000 subsidy for that industry for every man, woman and child. We hear talk of lowering the wholesale price of electricity; it is a complete and utter furphy. What counts is the cost of production and the retail price. You cannot lower the cost of production and you cannot lower the retail price if you are producing a mandated percentage of production from a higher cost source. With that $22 billion cost, if we are not going to make any changes to the RET then members of parliament on either side need to carefully explain the benefits. What are the benefits to this nation of giving a $22 billion subsidy to wind farms?

We hear that this is taking action on climate change but we must quantify what that action actually is. How will spending $22 billion reduce the carbon dioxide in the atmosphere? How much will investing $22 billion change the temperature? And will that change in temperature be beneficial? Will it equate to $22 billion? It will, more or less. This is the debate that we must have because we are investing taxpayers' money. We are getting in the way and we are interfering in the market. Therefore, I commend this bill to the House. The savings of $1.3 billion are most important for this budget.