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Tuesday, 10 December 2013
Page: 1250

Senator CORMANN (Western AustraliaMinister for Finance) (13:46): I thank all of those senators who have contributed to this debate. Abolishing the Clean Energy Finance Corporation is a priority for this government—indeed, it was a firm commitment that we took to the Australian people at the last election. We know that Labor senators in particular are suffering from government change denial, but not even the Labor Party could credibly suggest that we were not entirely transparent about our plans to scrap the carbon tax and to abolish the Clean Energy Finance Corporation. We know that there were Labor senators in Western Australia—the shadow parliamentary secretary for climate change, in particular—who went across Western Australia distributing pamphlets promising that Labor would terminate the carbon tax. Despite all of the backtracking since the election, there was no mention in the fine print of the pamphlets of any plans to replace a fixed price carbon tax with a floating price carbon tax, an emissions trading scheme or whatever the Labor Party wants to call it. The senator was making a very firm commitment that Labor would terminate the carbon tax.

Unlike Labor, coalition senators—this government—are delivering on the commitments that we made before the election, which is why we introduced this legislation in the first sitting fortnight of the new parliament. That is exactly what we said we would do. We made all of that very clear to the Australian people and we received the support of the Australian people, as shown by our strong election result. Labor takes at its peril the position that it has flagged again in this chamber today. It ignores at its peril the wishes of the Australian people as expressed at the last election. It is really quite arrogant to persist with something that has been rejected so overwhelmingly by the Australian people.

Claims that the Clean Energy Finance Corporation does not cost the budget—repeated again by Senator Lundy just now—are just another case of magic pudding economics. Claims that the Clean Energy Finance Corporation somehow would have a positive impact on the budget are a case of voodoo economics, because they do not take into account the public debt interest cost of the corporation. When public debt interest is taken into account the Clean Energy Finance Corporation clearly costs the budget bottom line over the forward estimates.

The Labor Party inherited a position of no government net debt and strong surplus budgets and in six years turned that into a situation of $250 billion of accumulated deficits, gross debt heading for $400 billion and beyond, and a budget situation that will be very difficult to turn around from where Labor left it. It is no wonder that the Labor Party left the budget in such a mess if it cannot understand such basic premises as: if you borrow money in order to spend money there is actually a cost attached to the borrowing. That is something that Senator Lundy ignored again in her presentation today—as have her colleagues. She is not Robinson Crusoe in relation to this, to be fair to Senator Lundy. All of the senators on the Labor side have faithfully delivered the Labor Party talking points during this debate, in order to keep the debate going, and have made the same erroneous assertion.

Let me be very clear and explicit in relation to this: abolishing the Clean Energy Finance Corporation will improve the budget position over that period, because the government will not be paying interest on the debt that it borrows to fund the Clean Energy Finance Corporation. By opposing our delivery of our commitment, made during the election, to abolish the Clean Energy Finance Corporation, those opposite drive the budget further into deficit than it needs to be.

But that of course is the history of the Labor Party. The Labor Party in government was pretty reckless when it came to financial management; but it is even worse now in opposition under the leadership of Mr Shorten, because Mr Shorten is essentially too weak to stand up to the different vested interests across the Labor Party. If there is somebody in the Labor Party who wants an emissions trading scheme, even though everybody knows that Bill Shorten personally wants to scrap it—everybody knows that; he has confided that to so many people that he could not credibly deny it—he is too weak to stand up to the vested interests in the Labor Party. So instead of picking a fight in the national interest, instead of picking a fight that will help deliver cost-of-living relief and help us to strengthen the economy, Bill Shorten goes the easy way and allows Labor Party people to get away with—

Senator Cameron: Madam Acting Deputy President, I rise on a point of order. I let the first issue go past, but the senator should refer to Mr Shorten either by his title or as Mr Shorten.

The ACTING DEPUTY PRESIDENT ( Senator Ruston ): Senator Cormann, continue.

Senator CORMANN: The Clean Energy Finance Corporation would have you believe that it is delivering projects achieving a total abatement of 3.88 million tonnes per annum and that it was doing so at a negative cost of $2.40 per tonne of abatement. These claims by the CEFC, which have been parroted by Labor and Greens senators in this chamber, are not supported by the facts. The CEFC is spending borrowed taxpayer money to invest in wind farms, many of which are already built and supported by private sector finance. About two-thirds of the CEFC's annual abatement claims rely on just three wind farms, Taralga, Portland and Macarthur.

What the CEFC and the Labor and Greens senators are not telling the Australian people is that these projects are already supported by the government's 20 per cent renewable energy target. With the CEFC gone, the renewable energy target will still be delivering these investments and emissions reductions at no cost to Australian taxpayers. It is ridiculous that the CEFC should take credit for emissions reductions that are happening anyway and that will happen without it. In one example, the CEFC helped to refinance a wind farm that was 50 per cent owned by Meridian Energy and, in the process, helped the New Zealand government get a better price when it sold the company in October—all paid for by the Australian taxpayer. How does that make sense?

The government's position is that the CEFC should not be using $10 billion of borrowed money underwritten by Australian taxpayers to invest in wind farms. Australian taxpayers do not want their government to act as a bank. This is the role of the private sector, not the Australian government. There used to be a time when the Australian Labor Party believed that banks should be private. In fact, it was the Australian Labor Party that privatised the Commonwealth Bank of Australia, but here they are going down this bad old path again.

This bill abolishes the Clean Energy Finance Corporation by repealing the Clean Energy Finance Corporation Act 2012. This bill also transfers the CEFC's existing assets and liabilities, including the CEFC's investments, to the Commonwealth. These assets and liabilities will be managed by the Treasury. Funding to manage the CEFC's existing assets and liabilities and meet contractually committed payments on investments will be met from the CEFC's existing funding, which will be transferred to a new CEFC transitional special account.

Future moneys that were due to be appropriated to the CEFC annually until 2017 will be returned to consolidated revenue. The bill also provides for excess funding to be returned to consolidated revenue at any stage if it is no longer needed for managing the CEFC's assets and liabilities. I commend this bill to the Senate.

The ACTING DEPUTY PRESIDENT ( Senator Ruston ): The question is that the amendment moved by Senator Pratt be agreed to.

Question agreed to.