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
Thursday, 18 June 2009
Page: 3677

Senator BOB BROWN (Leader of the Australian Greens) (11:05 AM) —As Senator Coonan has just outlined, the Guarantee of State and Territory Borrowing Appropriation Bill 2009 has the purpose of enabling the Treasurer to provide a guarantee to the states upon request for bonds or debt and if there is a need for it to borrow money for that purpose. The bill is about guaranteeing funding to the states for infrastructure spending. Bond markets have experienced liquidity problems in the last year or two but data from the Reserve Bank indicates that this is slowly recovering. As with the so-called Ruddbank legislation, we are being asked here to support another major spending program—and this could potentially be a huge spending program—by the Commonwealth on issues where the urgency of the matter seems to have retreated somewhat.

An example of my concerns is over the infrastructure spending by the New South Wales, Queensland and Victorian governments that indicates, in the case of the first two, they may be accessing the loan guarantee scheme. That could lead to Commonwealth guarantees of quite massive loans for such things as coal transport and port infrastructure for increasing export of coal to the rest of the world. Australia is already far and away the world’s biggest coal exporter in an age of dangerous climate change. The latest UN reports say that 300,000 people died in the last year as a result of climate change. So here we have the federal government using taxpayers’ money to support old, polluting industries but passing up this great opportunity to ensure that there are green bonds that will be supported through this loan mechanism and a green new deal for the economy.

It is notable that the need for this guarantee arises from the guarantee provided to the private sector banks, because the imposition of the bank guarantee certainly made it harder for state governments to obtain debt funding. I foreshadow an amendment from the Greens in the committee stage. I will be asking the government about what guarantees it can give to the Senate and whether indeed there is any limit whatever on the Commonwealth guarantee being offered through this legislation to the states. The government has stated that this bill will create an unquantifiable liability on the budget, on the basis that it is unlikely that a state government will default on its outstanding loans. One could wonder immediately whether we ought not to be ready to deal with such an exigency when it occurs rather than in the general way in which this legislation offers to back up state governments before any such event of default or potential default has even come into focus.

If called into use, this guarantee could lead to billions of dollars more debt for the Commonwealth. The coalition has been consistently critical of that potential growing government indebtedness yet is apparently going to support the legislation. In that circumstance, the Greens amendment becomes very important. We will be seeking to ensure that any guarantee provided to a state government is supporting projects for infrastructure which is responsible and socially valuable. By ‘responsible’ I mean environmentally responsible. Our proposed amendment follows on from the concerns I mentioned earlier that the money could be used to fund coal ports, more tollways or more climate-change-unfriendly projects from state governments, which do not have the national responsibility that we have, as we approach Copenhagen, to ensure that this country is on a green trajectory to reduce greenhouse gas emissions and is not potentially, through the mechanism we have in this bill, putting billions into fostering greenhouse gas emissions in this country when there are better alternatives.

We can only speculate on the projects. Another one that would be of great concern to the Greens would be the seawater reverse osmosis desalination plant proposed for the Bass Coast in Victoria. As you may know, Acting Deputy President, the funding model chosen there is a public-private partnership—it was chosen by the Labor government in Victoria—which is creating a necessity to profit from water. Veolia, which runs Melbourne’s rail network, or another French company, Degremont Suez, will lead a consortium to implement and profit from this plant, I am informed. An internet search reveals that both of these companies have questionable corporate ethical and human rights records—and, indeed, environmental records, although the environmental projection may be something that quite a lot of money has gone into. Internationally, these companies have recently lost sizeable chunks of their business as a result of adverse publicity and boycott campaigns. The Victorian government is about to hand over a third of the water supply in Melbourne to one or the other of those consortia, in effect.

Certainly the Senate and the national parliament ought to be very careful indeed that, if we are going to be offering state governments, including the Brumby government in Victoria, guarantees for potentially billions of dollars for polluting, disruptive, job-losing projects like the desalination project on the Bass Coast—where there are much more prudent and feasible alternatives for the supply of that water through proper use, for example, of the rainfall over the metropolitan area of Melbourne—we should have a debate about that in this parliament. The proposed Greens amendment is aimed at ensuring that there is some environmental record of the projects that the government is proposing to guarantee with billions of dollars of Australian taxpayers’ money. I foreshadow an amendment in the committee stage to page 3 of the bill to add clause 7, a schemes rules requirements clause, which will say:

Scheme Rules must include provisions that limit the Deed of Guarantee so that it cannot be applied to borrowings relating to projects that will have a significant negative environmental impact or result in significant greenhouse gas emissions locally or internationally, and for which there are … prudent or feasible alternatives.