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Monday, 7 November 2011
Page: 8277


Senator WONG (South AustraliaMinister for Finance and Deregulation) (11:10): With respect to Senator Xenophon, I think it is actually the same set of questions. What I would say, again, is this: this is about how you manage that uncertainty. What you are flagging, as opposed to 'advocating'—I accept I verballed you—is a policy proposition that says: let's fiddle with the auction process within government to manage this risk. We say: no, we believe financial markets will, as they do now, provide the ability for firms to hedge risks. Let's remember, firms hedge risk all the time; not just on a carbon price but on a whole range of issues: exchange rates, whatever the commodity price is and so forth; this is not a new concept. If we are wrong in that then the government has the capacity to provide financing through the mechanisms I have outlined.