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Monday, 25 June 2012
Page: 4412


Senator SMITH (Western Australia) (19:54): I rise this evening to make some comments regarding the Clean Energy Finance Corporation Bill 2012. I do so as we count down to the world's biggest carbon tax here in Western Australia. For the untrained eye this might look like legislation to support the government's attempts to improve the environment by reducing carbon emissions. For the more seasoned observer this is a $10 billion payment to the Australian Greens—a payment for keeping the Gillard government in office. It has its origins in the agreement signed by Labor and the Greens as a down payment on installing Labor into government. People may recall it was that agreement, signed in September 2010, that committed the Greens to voting with Labor to ensure supply and opposing any motion of no confidence in the government from any non-Greens member.

I am not sure about global warming, but I am certainly not a sceptic when it comes to acknowledging the political warmth of Labor and the Australian Greens. It is worth just reflecting on page 4, item 6.1(a) of that infamous agreement—it is hardly the Magna Carta, but it has absolutely left an indelible stain on the political landscape of this country. I might just remind people that it was signed by none other than the Prime Minister, the Hon. Julia Gillard; the Hon. Wayne Swan; Senator Bob Brown, when he was in this place; Senator Christine Milne; and Adam Bandt, the member for Melbourne.

Senator Edwards: A motley crew!

Senator SMITH: A motley crew, indeed.

Senator Polley interjecting

Senator SMITH: I am grateful for the attention of the senators opposite. Let me just remind you: 6.1(a):

… Australia must tackle climate change and that reducing carbon pollution by 2020 will require a price on carbon. Therefore the Parties agree to form a well resourced Climate Change Committee which encompasses experts and representative ALP, Greens, independent and Coalition parliamentarians who are committed to tackling climate change and who acknowledge that reducing carbon pollution by 2020 will require a carbon price. The Committee will be resourced like a Cabinet Committee. The Parties will, by the end of September 2010, finalise the structure, membership and work plan of the Committee.

This document goes to all of five pages—a five-page political commitment worth $10 billion. There is a very hefty price and, dare I say it, the Greens should be congratulated on extracting such a handsome deal from a Labor government. As I said, it is not the Magna Carta but it has shamed our political landscape in this country.

If you look closely at the document it is also worth noting that it was not a one-way street when it came to political payments. The agreement also stated that Labor and the Greens are predisposed to a system of full public funding for elections. The September 2010 deal was grubby. I will not meander into my views about electoral funding of political parties, but to give a party like the Australian Greens a continuous and uninterrupted source of public moneys for their campaigns would be reprehensible.

As I said, the September 2010 deal was grubby. It was more about saving the political life of Labor and giving the Greens greater leverage over our policy direction, the direction of the government and now this parliament. So here we are this evening, with a demonstration of the political pulling power that is the Australian Greens over the Australian Labor Party and its position as the government.

The Clean Energy Finance Corporation Bill 2012 realises the government's commitment to establishing the Clean Energy Finance Corporation, a $10 billion fund dedicated to investing in clean energy and mobilising investment in renewable energy, low-emission and energy-efficient technologies, all with the aim of allegedly supporting Australia's transition to a lower carbon economy. According to the Clean Energy Finance Corporation's website, its purpose is to overcome capital market barriers that hinder the financing, commercialisation and deployment of renewable energy, energy efficiency or low emission technologies. In plain English, what that means is that we are establishing a $10 billion corporation to finance projects that even the government concedes are not commercially viable. How on earth does that make sense in the year 2012? What we have, just a few days from the imposition of the carbon tax is a typical Labor-Greens idea, the throwing away of $10 billion worth of taxpayer money to get people to spend money on things that they do not want to buy. That is what this government is doing: spending $10 billion to try and subvert the market. It is utter madness dressed up as an environmental measure.

It is worth reflecting on some facts before I continue. It was revealed during estimates that a loss of 7.5 per cent on this venture has already been factored in by Treasury. That is $750 million ripped from Australia's hardworking taxpayers; just gone; disappeared. Worse still, knowing this government's form when it comes to waste, $750 million is probably a very conservative estimate. And I will come to the very poor tale of success when it comes to this government's renewable energy programs.

The real paradox here, however, is that we have been told for almost 18 months that the reason we need a carbon tax is to make investment in renewable energy more attractive. Yet at the same time we are introducing the world's biggest carbon tax we are also setting up a $10 billion fund to attract new players in renewable energy. If the carbon tax was going to work as the government would have us believe then presumably the market would attract people to renewables as they sought to avoid paying the carbon tax. The creation of a $10 billion fund makes it pretty clear to me at least, and I am sure to others, that this government has no confidence whatsoever that its carbon tax is going to lead to the outcomes it claims. They have to set up a massive slush fund to placate the Greens and try to get the outcome another way.

Senator Sinodinos: Shame!

Senator SMITH: Shame indeed. It is a shameful and lazy policy. As a result, the poor taxpayer cops it in the neck twice, first through having to pay the carbon tax and then again as Labor and the Greens flush $10 billion down the toilet. It is worth reminding this place that the carbon tax impost comes on top of the minerals resource rent tax, another blow to the economic hopes and prosperity of my home state of Western Australia.

The only winners from this will be those who set up fly-by-night green energy companies and grab a slice of the $10 billion pie. Existing and therefore proven players in the renewable energy market cannot access it. Only those judged as unviable by the market are eligible. The explanatory memorandum that accompanies the bill states:

This transformation will require substantial capital which the private sector alone may not be able to provide. Current global financial conditions, the complex nature of Australia's electricity markets, the cost of renewable energy, and the preference of investing institutions for listed assets inhibit the financing of the clean energy sector.

In other words, no private sector possessed of any sanity whatsoever would invest in this ridiculously expensive form of power generation so we are going to make Australian taxpayers assume that risk.

Before the Clean Energy Finance Corporation was proposed and $10 billion of taxpayer money was spent, the renewable energy target in Australia, supported by both sides of politics, was 20 per cent. The government has not altered this. It is still a 20 per cent target. The government is essentially conceding that there will not actually be a greater level of renewable energy production as a result of spending $10 billion from this fund. If it thought that there would be, presumably it would have increased the renewable energy target.

This government is forever throwing good money after bad, such as on home insulation, school halls, the National Broadband Network or bailing out car manufacturers. The problem is not that there are no worthy objectives; the problem is that this government's inability to plan things properly always leads to perverse outcomes. And so it will be with the Clean Energy Finance Corporation. There will be $10 billion worth of taxpayer money spent, and for what? No reduction in emissions, no increased production of renewable energy and higher prices for consumers as a result of the carbon tax. The Clean Energy Finance Corporation will stand as a monument to this government's folly and its determination to do anything to satisfy the Greens and cling to office.

It is worth reminding people in this place of some of the comments in the other place that are worth replicating here. In opposing this legislation, it is not that some oppose the science of climate change. That is the classic spin that others on the other side would wish to put to the community. Based on the evidence available, climate most definitely is changing and we are all united in our view that we should do our best to reduce carbon emissions. But there is no agreement that this is the mechanism on which we should put valuable taxpayer money.

It is worth using this opportunity also to remind people of what I would like to call a tale of two energy stories. Let me begin with a tale of success. First, it was the coalition that created, developed and implemented the mandatory renewable energy target. It did so successfully. It was the coalition that created, developed and implemented the then equivalent of the solar PV rebate. It did so successfully. It was the coalition that created, developed and implemented the solar hot water rebate. It did so successfully. Now let me share with you a tale of woe and sorrow, this Labor government's home insulation program, a policy failure that dare not speak its name. Need I remind you of the size of that failure: billions of dollars were wasted, including $500 million spent simply to fix roofs, and there were 70,000 repairs, removals or variations to the work done—and still we cannot possibly imagine the scale that the many, many thousands of jobs not yet inspected would amount to. The scheme resulted in 200 house fires and a link to four tragedies—tragedies that could easily have been avoided. This is the government of 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 that were literally a few thousand dollars. The Green Start program was another example—terminated, most thankfully, before it really got started.

The waste I have mentioned pales into significance when we compare it against this latest initiative. For $10 billion, how much clean energy do we get between now and 2020? Let me repeat: for $10 billion, how much clean energy do we get between now and 2020? Deafening silence—that is what it deserves. Not one unit of energy will be generated between now and 2020. This is an idea built on a lie and the outcome of a cosy political deal between Labor and the Greens. It is worth reminding people that on the Monday before the election the Prime Minister said, now infamously, 'There will be no carbon tax under a government I lead.' The price of that betrayal and of winning support now includes this $10 billion fund.

I just want to make some comments about the events of the last few days, not here in Australia but abroad. Much is said about the task of international treaty making. Much is said about sending prime ministers and leaders to global events in search of international harmony and consent. But I think many Australians will find the results of the last few days of the Rio 2012 conference compelling. Only three paragraphs of the 49 pages of the communique referenced action to address climate change. Not only did the final declaration from Rio barely mention climate policy but no country jumped to adopt anything remotely close to Australia's carbon tax. It is clear that, despite every opportunity from the international world to take up Australia's policy, the carbon tax remained desperate and dateless at Rio—I am sure there is a song in that! I think it is worth reminding people that it was this Prime Minister, the week before the election, who said, 'There will be no carbon under a government I lead.' The price of her betrayal to the Australian people is, at a minimum, $10 billion.

As we count down to 1 July, I think it is worth making a number of brief remarks about what the coalition would do in contrast to what the government would do. Much is said about the negativity of the coalition, but I think it is worth putting on record in this place exactly what an alternative government, under the strong leadership of Tony Abbott, would deliver for Australian people. It is worth stating that the coalition's policy would be based on incentives, in contrast to Labor's policy, which is based on an electricity tax. It is worth reminding people that the coalition's policy would be focused on reducing Australia's emissions and improving our local environment and worth reminding people that it would not include a carbon tax. Money would be spent at home on Australian green projects and not abroad on foreign carbon credits. Under a coalition, higher emitters would have an incentive to take action to reduce their emissions rather than pay a tax that is simply passed through to customers. It is also worth reminding everyone that the coalition supports local action through protecting urban green corridors and planting almost 20 million more trees. That would involve a green army that would improve our local environments and support community projects. Most importantly, particularly for the many families in my home state of Western Australia, the coalition's plan would take pressure off the cost of living and protect Australian jobs by keeping businesses internationally competitive.

There is much to be said for the performance of the government. There is much to be said for reducing carbon emissions in our country. But certainly we on this side of the house are in vigorous agreement that the government's $10 billion plan is far from the most reasonable solution, and I think we can expect very little, if any, success.

In making these final comments on this bill, I think it is important to reinforce my view that the Clean Energy Finance Corporation is a slush fund destined to fail. Even if it does succeed, we will see not one watt of additional renewable energy between now and 2020. With its design, its concept and its structure, even in the best case scenario this government is asking this parliament to spend $10 billion and get not one additional watt of renewable energy between now and 2020. It would be a very, very sad con on the Australian people if the government, in unison with the Greens, were allowed to get away with it. In conclusion, might I just remind us where we all started. We started on 1 September 2010 with a political deal between the Australian Greens and the Labor government, and now Australian taxpayers are paying a very, very hefty price indeed for that sort of cosy political arrangement.

The DEPUTY PRESIDENT: Senator Sinodinos, I remind you that you have just over five minutes before the debate is terminated.