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Monday, 7 November 2011
Page: 8278

Senator BIRMINGHAM (South Australia) (11:11): I thank Senator Xenophon for raising these issues, which are certainly issues the opposition would like to explore as well. I would like to follow on from some of the points that Senator Xenophon has raised. Perhaps, just for the benefit of the base principles of dealing with this issue of the forward-selling of permits, and whether or not the funds from the forward-selling of those permits to electricity generators are collected at the point of sale or indeed in the vintage year at which they become available for use, could the minister explain as clearly as possible to the Senate what the policy rationale was behind the government changing its approach on the payment times for these permits from the CPRS model, which did defer the payment—and therefore did of course defer the risks and the need for this type of hedging, at least in terms of the costs of those payments—compared with this model, which ESAA claims will cause detriment because there is this requirement for this upfront payment? So, before we go too much further into some of the other more specific questions, can I just get from the minister what the policy rationale was for changing from the CPRS approach that ensured this particular problem was not a factor, to this approach that does bring this particular problem into at least debate and discussion.