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Wednesday, 30 May 2012
Page: 6341

Mr TEHAN (Wannon) (17:59): I rise to support the previous speaker. This $10 billion bill, the Clean Energy Finance Corporation Bill 2012, is one of the grossest wastes of off-budget taxpayers' money that you could ever see. This is the sort of bill where those opposite, after they have voted for it, will need to go and have a shower, because they know that this bill smells. They know that this bill is dirty. They know that this bill is basically a bribe. It is our great negotiator, the Prime Minister's, way of making sure that by any means she continues to keep that faint grip she has on office. But it really goes to the heart of what is wrong with this government. It is all about staying in power and it is not about the long-term interests of the country.

The previous speaker mentioned that the only person who has really come into this place and, with glee, welcomed this bill is the member for Melbourne. We have not seen those opposite from the Labor Party able in all good conscience to bring themselves to come in here and support this bill wholeheartedly—and there is very good reason for that. It is a shabby, shabby piece of legislation. The speed with which it is being rushed through the House demonstrates the embarrassment with which this government holds this piece of legislation. I was called last Friday to see whether I was able to be a temporary member of the House Standing Committee on Economics to examine this bill, the Clean Energy Finance Corporation Bill 2012. When I asked why the haste, they said, 'There's two hours for the House economics committee set aside on Monday to examine this bill and the committee must report by Wednesday.' We have had to rush the report out today so that the bill could be voted on. Let us just consider that: there were two hours for the economics committee to review this piece of legislation. We spent the first hour, roughly, dealing with $5 billion in the bill and the second hour looking at the other $5 billion in the bill.

It is sort of funny—and you have to step outside this place occasionally because $10 billion can sort of start rolling off the tongue a little—but then you look at the way this government spends money. That $10 billion will be added to our net debt position, which will be $144 billion by the end of the year. Today we saw the government shut down debate on us trying to bring attention in this place to the fact that the government wants to increase its credit card borrowing from $250 billion to $300 billion. While all this is going on, here we are, having a bill rushed through which will, off budget, commit the Australian taxpayer to $10 billion worth of government expenditure.

It is worth looking at the mechanism to delivering this $10 billion. The government has set up an investment arm to do this with, the Clean Energy Finance Corporation. During the hearing that we had on Monday, I asked the Treasury officials whether they remembered an organisation in Victoria called the VEDC, which was an investment arm of the Victorian government that helped send the then Cain-Kirner government broke. Sadly, the Treasury officials could not bring it to mind. They could not come to terms with the fact that there have been previous examples of such investment arms being set up which have lost taxpayers—in this case, Victorian taxpayers—large amounts of money. I remember the VEDC because one of the investment projects that they had was for Lake Eildon. They invested in a catamaran houseboat which was going to do wonders for tourism in the region. That half-built catamaran sat on the shores of Lake Eildon for about five years as a constant reminder of what happens when government starts to take the crazy decision that it will pick industry winners, which is exactly what this bill does.

I suppose if we are to say anything good about this bill it is that there is a tiny bit of honesty in it. It recognises that 7½ per cent, to start with, of the money invested will be lost. If there is any honesty in this bill at all, it is that the government has recognised that this Greens inspired piece of legislation will automatically lose 7½ per cent of the $10 billion investment. It might sound crazy, but at least there is a shred of honesty in it.

Mrs Griggs: It's unusual!

Mr TEHAN: It is very unusual. It is interesting to ask, once you delve into these things, how they came about this figure of 7½ per cent. This was a question that was asked during the economics committee hearing. It was asked, 'There must have been some potential investment disasters that government has already been involved in which have made you come up with this figure. What is the basis of your decision that there will automatically be a 7½ per cent loss? Surely, there must be a Solar Flagships program or something else that has led to the 7½ per cent figure.' But they could not come up with anything. So it seems that they have plucked this figure out of thin air, which should be extremely worrying for the Australian taxpayer. They know it is going to make a loss.

An opposition member: 750 million bucks!

Mr TEHAN: Yes, $750 million straight up, it is pointed out to me. And yet, when they were asked how they came to this figure, they did not know. There was no evidence based approach to coming up with this figure for the loss. One might think that this would worry this government. I got the feeling it did embarrass the Treasury officials who were there trying desperately to give some sort of credence to what was going on. You would think that the government would be embarrassed by this, but I must admit that those members of the government who sat on the House economics committee blindly sat there, shrugged their shoulders and went, 'Well, if $750 million is the price we have to pay, that's what we have to pay.' It is a real shame.

Not only that, there was a follow-up question to this which asked, 'Given that there is no substance to this 7½ per cent figure, what happens if it loses more money than that?' Everyone just shrugged their shoulders. No-one knew. As a matter of fact, it seems to be wholly reliant on the board to make sure it does not. The information on how the board and its staff is going to be governed was very interesting as well. The board's salaries are going to be along the lines of those paid to members of the Future Fund board—we are talking of a chair on maybe a $2 million salary. Who will decide the salary of the staff? Will it be the Remuneration Tribunal? No. The board is going to decide what the staff salaries will be.

An opposition member: Like the NBN.

Mr TEHAN: Yes. In this situation is the board really going to care what rigour is put into this? I do not think so. Seven and a half per cent, 9½ per cent, 15 per cent—if those are the losses, I think the board is just going to be sitting there saying, 'Oh well, it's all right—we're not losing from this.' It is the taxpayer who is ultimately losing.

This committee hearing was a real eye-opener and it was even more of an eye-opener when the representatives from the Department of Climate Change and Energy Efficiency were asked: 'But isn't the 20 per cent of renewable energy required by 2020 already delivering investment into renewable energy anyway? Isn't this bipartisan commitment actually delivering this? Do we need the additional $10 billion if our Renewable Energy Target, and the renewable energy credits which are delivering that target, are already doing this job?' There was no answer to that—no answer to the effect that this $10 billion is not needed because we already have a bipartisan mechanism to deliver this anyway.

What we have is $10 billion being spent as a bribe to keep the Greens happy. I would have thought there were better ways to keep the Greens happy than giving them $10 billion, but it seems that is what this government is prepared to do to cling to power. It is an unnecessary $10 billion because, as we heard in the evidence, the Renewable Energy Target—20 per cent of our energy from renewable sources by 2020—is going to deliver this anyway. That is very important because it also means that those companies which have already invested privately in renewable energy technology—in wind, solar and wave—will now see their competitors come in, using this $10 billion fund as a leg-up, and gain a commercial advantage over those players who are already in the marketplace.

I must ask the government, how can this be fair? How can it be fair that existing players in the renewable energy space will now face competition from late entrants who can use this $10 billion fund? What the government is doing is saying to those companies who have made investment decisions based on private enterprise with a little bit of assistance under the Renewable Energy Target: 'We don't care about those investment decisions you have made. We are going to support new entrants into the market which could potentially blow the investment decisions you have taken out of the water.' This bill hammers home another example of sovereign risk and shows that this government does not care. We see time after time that the government does not understand this.

I am in my first term in this place—

Mr Hockey: And you're doing a great job!

Mr TEHAN: Thank you, Member for North Sydney. I have seen some incredibly interesting things in my time—it has only been a brief 18 or 19 months—but I must say sitting in that House economics committee for two hours on Monday was the most disturbing thing I have seen yet. It is alarming that this government is prepared to give away $10 billion, off-budget, of taxpayers' money without any consideration of the opportunities on which it could be spent. I hope all the members opposite know, as they vote for this piece of legislation, that it is the silver offered to the Greens to make sure they continue to support this government. I hope they go and have a long hot bath or a shower because they will need to; this bill smells. It smells to the Australian taxpayer and it smells of what it is about—keeping this Prime Minister in power.