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Wednesday, 30 May 2012
Page: 6330

Mr VAN MANEN (Forde) (17:14): I rise this afternoon to speak on the bills related to the Clean Energy Finance Corporation—another wonderful boondoggle from this government which will see $10 billion of Australian taxpayers' funds put at risk. I would like to refer to a book titled The False Promise of Green Energy and to paraphrase a little bit from it. The authors make the point that the proponents of green energy would have us believe that if we spend enough money to build windmills, add solar panels to the desert and stuff insulation into buildings there will be myriad benefits for very little risk. The end result is that billions of dollars are borrowed or, in this case, appropriated via the world's most expensive carbon tax from ordinary Australians. They have this confidence that the savings in energy, the environment and health costs will actually be achieved, but given this government's track record I have very serious concerns as to whether that will be the case.

According to the Clean Energy Finance Corporation's website, the objective of the CEFC is 'to overcome capital market barriers that hinder the financing, commercialisation and deployment of renewable energy, energy efficiency or low emissions technologies'. This is not the job of government. The job of government is to get out of the marketplace and let the marketplace sort the wheat from the chaff. This set of bills gives the CEFC the power to invest in financial assets for the development of Australian based, renewable energy technologies. These are projects that by their very nature, and according to what the CEFC website says, are uncommercial in nature. Why would we be putting at risk the hard-earned money of Australian taxpayers—mums and dads, small businesses, corporates—by putting it into projects that have a high or very high risk of failure? The risk is high enough such that our commercial lenders and funders and even private equity investors do not want to touch it.

As the member for Wright pointed out in his contribution to this debate, we should be looking instead to provide support to the people that are already there, that have a proven commercial project and are going to add value to that project and to our economy. Part of the Clean Energy Finance Corporation Bill sets out the parameters for the CEFC special account, which will receive $2 billion per annum in funds for the next five years, with the first instalment due to be paid on 1 July 2013. It has the purpose of receiving the payments that will ultimately be invested into these projects.

I think it is worthwhile to have a look at those who have a track record in this area, and that was the previous coalition government, which committed approximately $20 billion to a comprehensive range of measures to restore and protect our natural environment and invested $3.5 billion in policy actions to address climate change. Those actions included: the implementation of the world's first mandatory renewable energy target, which has stimulated $3.5 billion worth of investment in renewable energy technologies since 2001; the establishment of a $4,000 rebate to help families install solar panels in their homes and then the doubling of that rebate to $8,000, before it was scrapped by the Labor government; the provision of $126 million to establish a national climate change adaptation centre; and the provision of $10 billion for the National Plan for Water Security. We place a great deal of emphasis on a strong and effective policy in dealing with environmental degradation and carbon emissions.

The coalition are committed to a climate change strategy based on our direct action plan to reduce emissions and to improve the environment. The direct action plan would cost an average of $800 million a year for the first four years. This compares with more than $1 billion a year that was set aside for the pink batts program over the two years of that failed program, so direct action will actually cost less than the pink batts scheme. To facilitate direct action, an emissions reduction fund would be established to support emissions reduction activities by business and industry, with a goal of 140 million tonnes of abatement each year by 2020, equating to the five per cent target which is shared by all in this House.

It is interesting to note that under the government's proposed carbon tax, emissions are still going to increase and that in order to offset that increase we have to purchase carbon permits from offshore. As a country that is already a net importer of capital, why would we be looking to purchase carbon permits offshore which rob our future generations of wealth? We would be receiving income from export revenues and then sending money offshore again to buy carbon credits. It makes absolutely no economic sense whatsoever.

The coalition's proposed emissions reduction fund will ensure that every dollar of expenditure goes towards actually reducing CO2 emissions. Direct action will not add any additional costs to households. There will be no new taxes. There will be no pressure on—

Ms Owens: Is that a magic pudding over there?

Mr VAN MANEN: Yours is the magic pudding. As I said, there will be no new taxes as a consequence of the direct action policy. However, under this Labor government we face a new tax, effectively the world's biggest carbon tax and the most expensive one. Taxpayers will also end up paying for a suite of new bureaucracies, one of which is the Clean Energy Finance Corporation. This is because for every dollar of carbon tax revenue collected, only 55c is being returned in compensation. The $10 billion Clean Energy Finance Corporation has been exposed as 'inherently wasteful', achieving 'precisely zero' in terms of real CO2 savings under a carbon tax. This conclusion has come from Centre for Independent Research Studies Research Fellow Dr Oliver Marc Hartwich, who released the report, A waste of energy: why the Clean Energy Finance Corporation is redundant.Dr Hartwich said:

The physical effect of energy subsidies is precisely zero in an environment where the total emissions are pre-determined by a trading scheme. Not a single gram of carbon dioxide is saved by pumping money into renewables.

Ms Owens: So it's not a tax, then—it's a trading scheme now?

Mr VAN MANEN: No, you are introducing a carbon tax. What we are saying is this $10 billion that you are putting in is going to have no benefit. That is what we are saying. I appreciate the interjections from those opposite, but, as usual, they do not contribute much to the debate.

As we have seen from this government's track record, we do not expect that the $10 billion will be successfully invested and, even if it was, which as I said is highly unlikely, there would be no new renewable energy generated as the target will still be 20 per cent.

In total, through Senate estimates and the government's own documents, we know the Clean Energy Regulator will cost $256 million over the four-year forward estimates, with around 330 staff expected to be appointed. That is on top of the staff and costs associated with the $10 billion Clean Energy Finance Corporation, the $3.2 billion Australian Renewable Energy Agency and the $25 million Climate Change Authority.

The CEFC is also not charged with investing in the lowest cost technologies to produce the cheapest emissions reduction. Its responsibility is to find the technologies which the market considers to be unproven, too speculative or too risky for commercial financing. This will mean that not all investments will produce a commercial return; the CEFC sets itself up for failure before it even begins.

It will not be the first time we have witnessed failures of this nature. For example, the government's $700 million Solar Flagships Program in Moree and the Queensland Solar Dawn projects struggled to gain industry support. The Bligh government presided over more than $100 million of losses in the ZeroGen project, despite clear warnings from both the opposition and experts. Former Queensland Premier Beattie even said that the shadow minister for energy and resources was 'on drugs' for his warning that ZeroGen would fail. But as we all know, the shadow minister was in fact correct. The CEFC also has many of the hallmarks of the Victorian Economic Development Corporation, which left Victoria in a disastrous state only two decades ago.

Programs like these tell a similar story in the United States. The failures of the $700 million Solyndra project, as well as those of Beacon Power and Ener1, occurred under a similar program to the CEFC. These companies were recently joined by the collapse of Solar Trust of America, which had a $2.1 billion loan guarantee from the US energy department. I recently read that President Obama spent $90 billion of his stimulus package on green energy projects, yet at the end of the day only some 16,100 people landed jobs in the so-called new green industry. That is a cost of some $5.6 million a job.

Direct action is what is needed in my electorate of Forde. A carbon tax and a Clean Energy Finance Corporation will do nothing to resolve local issues with respect to the water quality in the Logan and Albert rivers and other environmental issues. I grew up near the Logan River at Waterford and we spent plenty of time swimming and fishing in the river. These are not activities that I would undertake or recommend today, given the recent water quality reports. There is only one way to solve the issues with the water quality in our rivers and waterways and that is by protecting vital areas of biodiversity for future generations. This is a practical, sustainable, long-term measure that can be implemented from the ground up. That is what our Direct Action Plan is designed to do. There is not a single dollar of carbon tax money allocated to practical, on-the-ground environmental projects.

Ms Owens interjecting

Mr VAN MANEN: I know the member for Parramatta finds this funny. That is a sad indictment on where this government is at. Under a coalition government we have demonstrated that we can deliver practical, on-the-ground solutions for environmental projects. One of those was our successful Green Army scheme. We will look to reintroduce the Green Army to tackle environmental issues, such as the Logan and Albert rivers in addition to planting trees around the nation to improve local environments.

I mentioned during the debate on the clean energy bills that it is the height of ignorance to believe that we as a society can control global climate change via a tax on carbon dioxide emissions. It is just as ignorant to believe that the CEFC will produce one watt more of renewable energy by 2020 as a consequence of this $10 billion being spent. The CEFC also says it will not provide grants. It is intended to be commercially oriented and to make a positive return on its investments. Given we are investing $10 billion of Australian taxpayers' money, I would certainly hope that it is focused on achieving positive returns on its investments and that they are significant, given the uncommercial nature of those supposed investments.

As this bill presents itself as an extension of the carbon tax, we will oppose its implementation. An economy-wide, wealth-destroying carbon tax, along with its suite of bureaucracies that provides no practical, on-the-ground environmental outcomes, is not the solution for the future of this nation.