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Wednesday, 18 June 2014
Page: 3198


Senator PRATT (Western Australia) (10:11): I rise today to speak on the Clean Energy Finance Corporation (Abolition) Bill 2013 [No. 2], which has, sadly, again come before this place. We can all look to the fact that Tony Abbott has long been established as being unbelievable, as someone who cannot be believed, on climate change. He has demonstrated time and time again—not only by his words but also, more significantly, by his actions—that he does not believe in the science of climate change. If he did, the government would realise that Australia's emissions reductions target cannot be met without increased investment in clean and renewable technologies. This is what the Clean Energy Finance Corporation's core business is. It delivers and drives that investment in clean and renewable energy. Very sadly, because of the holistic abandonment of the CEFC and ARENA, it is very obvious to this nation that the government has no intention at all of taking advantage of the opportunities that are associated with clean energy technology and fuel energy. This will leave an appalling economic and social legacy for Australia. Not only will we not make our environmental contribution but we will be leaving behind the economy and the jobs of tomorrow.

Just a few weeks ago we had the Treasurer, Joe Hockey, calling wind turbines offensive and saying that they were a blight on the landscape. In fact they have incredibly successful energy generators making a great contribution to renewable energy in this country. We know that the Abbott government has appointed Dick Warburton to chair the review of the renewable energy target. This is a further indication of the government's lack of commitment to a clean energy future for Australia. Mr Warburton, incredibly for someone put in this position, has previously said that he does not accept the science of climate change. He has confirmed his scepticism of the contribution of human activity to climate change. To put someone like Mr Warburton in that position really indicates that those on the other side of this chamber have no understanding of the science of climate change, that they have suspended their scientific endeavour and any sense of logic when it comes to these issues and what is in our national interest. How can Mr Warburton be objective in his analysis of the renewable energy sector if he does not think that climate change has any connection with fossil fuel burning? It is an incredible proposition. He cannot possibly be objective. Sure, if fossil fuels had nothing to do with climate change then perhaps he could, but if you look at the scientific evidence that is simply not the case so it is extraordinary that the government would put him in that position.

Previous reviews of the renewable energy target have clearly shown that the policy is delivering. It is delivering clean energy, such as solar and wind, and it has created thousands of jobs and significant investment around our nation—jobs and investment that will be left behind because this government is refusing to make the transition to a clean energy future. We know that these industries are also making a significant contribution to Australia's emissions reduction target.

Very sadly, in the budget this year we saw ARENA, the Australian Renewable Energy Agency, scrapped. The one million solar roofs program is scrapped, despite the fact that that was a recent election promise. This again demonstrates that the coalition cannot be trusted for anything that it says about climate change. Solar schools and solar communities are scrapped. The only thing left is a lousy $2 million for solar towns and that is a long way off the $600 million that was committed at the last election.

Those opposite like to carry on and say it is all about debt and deficit. This is about a return to our economy. These good solid investments generate jobs, but they do not see it that way because of their ideological blinkers in relation to climate change. This is all proof that as a government they are not serious about climate change and not serious about the renewable energy sector. They are simply treating this sector as a joke.

All around the world you can see bodies like the Clean Energy Finance Corporation providing support and investment to economies. There are roughly 14 organisations around the world that act as catalysts for investment in renewable energy and clean technologies. The CEFC is one of these and it puts us in a strong competitive position to develop our industries here. I really hope that this place will protect and maintain this organisation. It is within the role of the Senate to be able to do that.

We can see the CEFC playing a significantly important role in mobilising capital for investment. It is facilitating comprehensive commercial loans for both renewable and clean energy technology investments and is set to fund emissions reductions at a negative cost to government, as we have long said in this place—that is, it generates a return to the bottom line. When you look at the costs of abatement, that stands in stark contrast to the coalition's emissions reduction fund, which in effect is a big pile of money being handed to polluters.

Since being created by Labor as part of our clean energy future package, the CEFC has committed some $536 million of its own budget and has mobilised a massive $1.5 billion in private capital. When you want to look at efficient investment, you cannot go past the way the CEFC does business. Return on investment is currently about seven per cent, with the potential to return $200 million per year or $1.5 billion out to 2020, as well as doing the job we want it to do, which is significantly reduce our carbon pollution. Surely you cannot look past this. This argument was acknowledged by the Senate last time this legislation was considered here and it was soundly defeated.

We know that the CEFC has the capacity to make investments that would account for 50 per cent of Australia's current five per cent emissions reduction target—and that is not at a cost to the taxpayer, but at a profit to the taxpayer of $2.40 a tonne. Yet, despite all of this success, the government still seeks to abolish this organisation which returns significant benefit to our budget. You want to replace it with an alternative plan that will actually consume billions of dollars of taxpayers' money. What a waste.

The coalition have been unable to see past their free-market blinkers and appreciate the role that this organisation plays in facilitating renewable energy that would otherwise be missed by normal commercial banks. I know that you want to be able to say that you can just leave this stuff to the private sector and you can just get out of the way. But this organisation has been incredibly successful. It has been duplicated, with organisations like it doing similar work all around the world, for good reason. It does have the capacity to add that extra value and drive the extra investment. Why would you need your Emissions Reduction Fund at all if you could just leave it to the free market to drive these things?

The CEFC does not engage in risky loans. It is helping to develop a relatively clean energy investment sector. For example, in March this year it provided an innovative $20 million loan facility to Carnegie Wave for an incredibly groundbreaking wave energy installation in Fremantle. That technology truly has the capacity to generate significant renewable energy and jobs for the future of this country. The CEFC provided a $100 million debt facility to the Balmain Corporation for retrofitting ageing building stock, again making a difference not just with investment in renewable technology but in efficient buildings and efficient energy consumption. There was $50 million in debt finance for waste-to-gas facilities in Western Australia, again a project that is using cutting-edge Australian designed technology. Also, the Warrnambool City Council is set to become the first council in Australia to change its street lights to high-efficiency LED lighting. These are all projects that would have been on the margins of banking investment but can attract the extra leverage through the Clean Energy Finance Corporation.

Instead of accepting the success of the CEFC and acknowledging these projects, the government just wants to scrap it completely as part of its agenda to replace anything that was in the whole Clean Energy Future package for this nation with a thing called Direct Action. Let's have a look at direct action. The Senate Environment and Communications References Committee inquiry, which I was part of, got considerable evidence that demonstrated that the CEFC should not be abolished due to its positive investment in renewable and clean energy technology and its return to government. I will highlight some of that evidence.

AUSTELA declared that the CEFC 'has performed its intended and mandated functions effectively and is needed to address key market failures and barriers to investment'. You can still get that return on investment and you can still use a market mechanism, but you cannot just rely on the market to pick those winners for you. Mr Buckley from the Institute of Energy Economics and Financial Analysis told the committee that the function the CEFC performs in the market is unique and necessary for Australia to reduce its carbon emissions. He said:

… the CEFC is meant to lead the way, to pave for new technologies for deployment in the Australian market to show they are financially viable. In a regulatory framework that works, that makes entire sense. The domestic institutions will learn by that process and then follow. They will probably invest in deal 3, 4, 5 or 6 and then fund 100 per cent thereafter. You need the CEFC to pave the way to show that this can be done economically and viably with the right policy.

The Conservation Council of Western Australia suggested that the CEFC performs a unique function that does not duplicate other funding bodies as it is specifically focused on the low-emissions sector. The Council therefore rationalised that any decision to abandon the CEFC:

… could only be based on ideological grounds rather than consideration of the financial and investment merits of the fund.

That is the place we have arrived at today. Doctors for the Environment remarked that, even without accounting for health externalities:

The CEFC has proven economically successful and pays dividends to the government.

Another tick. 350 Australia similarly questioned the rationale for abolishing the CEFC while it makes a return on investment and contributes to emissions reduction:

… the Clean Energy Finance Corporation must remain as an essential and commercially viable part of moving Australia to a low carbon and ultimately zero emission economy. The CEFC is already growing long term business investment and jobs in clean, low carbon technologies.

Again, another tick.

The abolition bills in front of us today are nothing more than the misguided ideological position of a misguided government. The CEFC has been, and should continue to be, a clear success in driving investment in this country, reducing carbon pollution and boosting the government's bottom line. Instead the government is leaving us with a climate policy that has no intrinsic logic. It has no cap on emissions and no capacity to drive investment in renewables—only a plan for more pollution where the Australian economy, and the jobs of the future, are completely left behind.