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Wednesday, 30 May 2012
Page: 6242

Mr STEPHEN JONES (Throsby) (11:37): It is a pleasure to be speaking on this package of bills. These are bills for all of Australia, not, as many of those on the other side have suggested, bills for the Labor Party or, as the member for Melbourne was just claiming, bills for the Greens. The objective of these bills is to build capacity in clean energy technology, which is critical for our energy security and critical for the future of the nation. It is also critical that this legislation be passed by the House, because what it actually does is address a market failure. The member for Aston just gave a great dissertation on the importance of markets. He obviously did not get that argument up in his own party room when they were addressing their response to climate change and how we implement policy here in Australia, because if ever there were an example of the rejection of a market based and evidence based approach to dealing with reducing carbon emissions and building a clean energy future it is the policy proposals of the member for Aston's party, which presumably he is going to get up at some point in time and defend in this place.

The reason we need this legislation is that essentially we have a market failure. The Clean Energy Finance Corporation will encourage private investment that would not otherwise occur to help overcome financial barriers to commercialising and deploying clean energy technologies. There is a global recognition of the importance of moving to clean energy sources, and due to its endowment in the use of low-cost fossil fuels Australia is a late starter in the transformation to clean energy technology. It does not mean that we have not been great innovators in the research and development of clean energy alternatives. Indeed, we have, and the University of Wollongong in my own electorate has been a leader in the area of developing new cleaner energy technologies. But it is one thing to invest in the research and development; it is another thing entirely to bring that research and development onto a commercial footing and to make it available for large-scale use. It is that purpose that the Clean Energy Finance Corporation is directed to.

Some background to the bills is important because a number of the contributions to this debate have talked about the process, and I will go to that in some detail. But, in essence, on 17 April this year the government released the expert panel's review on a report on the design of the $10 billion Clean Energy Finance Corporation, and the bills before the House accept almost in full the recommendations of that expert panel. I know members of the coalition parties do not like to listen to expert advice in this area. In fact, they reject it at every turn. But the bills before the House today are based on the expert advice commissioned by this government, a detailed consultation process, and a research process and, on the basis of that advice and sound policy making, we have introduced this legislation.

Why have a Clean Energy Finance Corporation? It is a part of a suite of government initiatives designed to transform the Australian economy for a cleaner energy future. The government's $10 billion investment in the Clean Energy Finance Corporation will play a role in unlocking significant new private investment and clean energy projects and the supply chain that feeds into these projects. Australia's clean energy market is at an early stage, categorised by incomplete knowledge and a limited experience of the risks associated with investing in these technologies on a commercial basis. That means that there are barriers inhibiting the efficient and effective allocation of capital. The corporation will leverage private sector financing for renewable energy, low emissions and energy efficiency technologies investments, which are critical to the transformation of the Australian economy.

The CEFC will make investments and encourage private investments in clean energy technologies which build upon the core of our policy—that is, to put a price on carbon, because it is the price on carbon which is key to changing behaviour and to creating a market in this area. There still may be market barriers that prevent these projects from going ahead, such as the incomplete knowledge or the lack of familiarity with investors in these emerging technologies, but the CEFC will have tools at its disposal to tailor investments to address market barriers. Over 50 per cent of the investments of the CEFC will have to be in renewable energy technologies. So it is good legislation and it is directed at that critical purpose of addressing the market failure which exists in ensuring that we are able to move to a clean energy future.

There are alternatives to the proposals in the legislation today. One of those alternatives is for us to do nothing. But daily we see the consequences of what doing nothing means. It means, for example, falling behind China, which is investing more in clean energy technology than any other country on the planet, a country which we are daily competing with in terms of our technology and our exports. I would argue that it is in our national interest to ensure that the government is doing its bit to ensure that we as a nation, with an abundant supply of non-renewable and renewable energy sources, is investing in the research and technology and putting in place mechanisms such as the clean energy fund to ensure we can commercialise that research and development.

The second alternative not mentioned by the member for Mayo, the member for Aston or, in fact, any of the coalition members who have contributed to this debate is that the consequence of doing nothing means, quite literally, we will be paying more for electricity. This is not because of the carbon price but because every single party, and by inference every single member of this parliament, has signed up to the renewable energy targets. We said that it is our commitment to ensure that we increase the amount that renewable energy contributes to our national energy load. Unless we put in place large-scale investments into large-scale renewable energy projects, we will be relying on the sorts of small-scale projects which currently characterise the renewable energy market. The feed-in tariffs from people having solar panels on the roofs of their houses is the best example that comes to mind. Every economic expert that has had a look at this has said this is probably one of the most expensive ways to generate renewable energy. Quite literally, unless we put in place the sorts of mechanisms that are contemplated by this legislation, we will be paying more for our electricity.

We need to ensure that we are not paying more than we need to pay for the renewable energy proportion—that members on that side of the House and members of this side of the House have all signed up to—by investing more in commercialising and bringing into the market large-scale alternative renewable energy or we will be paying more for electricity. That is a fact that those on the other side do not wish to mention. The simple fact of the matter is unless we put in place mechanisms like this, which enable us to commercialise large-scale renewable, alternative and clean energy technologies, we will be paying more for electricity. That is the nub of the policy of those on the other side of the House.

Of course, there are other alternatives that have been floated. We had an excellent dissertation from the member for Aston earlier—and repeated by the various contributions from the member for Mayo. I love being in the House when the member for Mayo is speaking. With the amount of energy that he emits, I always feel like bringing in a bag of washing and some soap and throwing it in his direction because, with all the sound and fury and activity, we could get a fair bit of recycling of energy going on—more noise than light. One of the interesting things in his earlier contribution was his astounding statement that he abhors the proposition the government should pick winners, that it is not the role of the government to enter into an area of activity that should be filled by the market and we should not be throwing billions of dollars into this area by essentially picking winners. Obviously, he lost that argument in his own party room because, if you have a look at the coalition's own policy—and this is one of the alternatives to that which we see before the House this morning—you see that their alternative is simply to set up a billion-dollar fund without the rigorous commercial guidelines that are included in the clean energy fund. They would set up a billion-dollar fund which would provide grants, presumably to those people who can convince coalition ministers that their proposals are worthy of support. Well, if ever there was an example of a government an alternative government attempting to enter the market and pick winners, it exists in the coalition's policy.

Absent in their policy is the proposition that you would put in place commercial principles or that you would require an interest return on the investments made. The same sort of rigour that a bank or a venture capitalist would apply when investing in a new project would be applied in their grants based scheme. I really found it quite amusing when I heard those on the other side, those from the coalition parties, attacking this proposal because it was an example of the government intervening in the market and picking winners. You would hope we would pick winners, because winners are the things that are going to ensure that we do have a clean energy future.

I will spend a bit of time addressing some of the other criticisms that have been made by coalition members. In particular, the member for Higgins made the astounding observation:

It is important to note that the consultation on this bill has been negligible. The consultation process has been virtually zip.

I have done some work on this and I can inform the House that since 1992 there have been around 36 parliamentary inquiries into climate change and the appropriate government response to it. I have about six pages here which list, line by line, those inquiries from 1992 through till today. I would be happy to table those pages if other members of the House do not believe me. There have been over 36 inquiries since 1992 looking into this area.

The legislation, as I already said, follows the report of the expert committee. This expert committee was chaired by Ms Jillian Broadbent, an eminent Australian who has a 30-year career in banking. I know her because she happens to be the vice-chancellor of the University of Wollongong as well. Her career in the finance and business sector, I would say, is entirely remarkable. She is a board member of Woolworths and Coca-Cola. She is known to all members in this place. She is a Reserve Bank board member and she has served on the boards of Woodside and Qantas. If you were thinking about anyone who could bring to this area a more commercial focus, you would think it would be the chair, Jillian Broadbent, together with other eminent members of the expert committee.

The expert committee received 151 public submissions to the inquiry. On the basis of those public submissions and their own research, they said to the government that they see the establishment of a clean energy finance corporation playing an important part in addressing the government's vision for a clean energy future, tackling climate change, lowering carbon emissions and transforming Australia's energy sector. In attacking the consultation process which has led to the introduction of these bills, the coalition are attacking the process that has been set up by the eminent people on the expert committee and the recommendations that were made. The expert committee was not the first time we dipped our toe in this water in this particular parliament. It follows the Joint Select Committee on Australia's Clean Energy Future Legislation's inquiry in October 2011, an inquiry that received several hundred submissions and held numerous public hearings.

I have also had a look at the number of questions that we have had in this House on the particular matter. Over 300 questions have been asked and in excess of 20 matters of public importance debates have been had on this in the last 12 months alone. In my estimation, on the parliamentary debates— (Time expired)