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Monday, 7 November 2011
Page: 8287


Senator CORMANN (Western Australia) (11:53): Reading between the lines, I take it that what the minister is saying is that, if you are a coal fired power station that is less polluting—has less emissions—and has a lower emissions intensity, then you are going to be worse off under this package than if you are a higher-polluting coal fired power station. If you are a lower emissions inten­sive coal fired power station, you will cop the whole cost. That is $540 million in additional tax for Macquarie Generation, which happens to be responsible for 40 per cent of the power generation in New South Wales, or about 13 per cent of the power generation across the whole eastern seaboa­rd. So they get nothing—they get zero; that is what I am reading between your lines—and the reason they get nothing is that they just happen to be a too-environmentally-friendly coal fired electricity generator.

Of course, the higher polluters need more assistance, and I hear what you are saying there, Minister Wong. But let me just make this point: you talked about how they would get no assistance under our policy; of course they will not get any assistance—because they will not be whacked with a $540 million tax bill either! There will not be a $540 million tax on Macquarie Generation under our policy, Minister. And, if you are not going to get whacked with a $540 million tax, you will not need to access transitional assistance. But your government is going to whack Macquarie Generation, which just happens to be responsible for 40 per cent of the electricity generation in New South Wales, with a $540 million tax. Why aren't you giving them any transitional assistance? Because they are too environmentally efficient; their emissions intensity is too low. That is what you are saying. It is the same with Verve Energy or Griffin Energy in Western Australia. They are not polluting enough. If their emissions intensity was above 1, rather than below 1, they would get transitional assistance.

The minister can stand there with her back to the chamber and try and ignore us as much as she likes, but that is the effect of the government's policy. The government, very disingenuously, refers to the 500 biggest polluters without telling people that those 500 biggest emitters are either the energy suppliers that are helping Australia keep the lights on or some of Australia's major employers, all of whom have made significant efforts to reduce their emissions intensity, to reduce their emissions and to improve their energy efficiency over the last 10 to 20 years, without a carbon tax.

The evidence that we have had at the Joint Select Committee on Australia's Clean Energy Future Legislation from organisati­ons like Macquarie Generation, and Verve Energy in Western Australia, is that they will be asked to take 100 per cent of the tax without any transitional assistance whatso­ever because they are too environmentally efficient and their emissions intensity is not high enough. In the case of Verve Energy, they are saying this is going to be a net cost to their bottom line. They will have to pass it on, either through increased electricity prices or through the states' taxpayers. Will there be any effect on emissions as a result? No. In the case of Western Australia, WA is not part of the National Electricity Market. Western Australia is an energy island, Minister. You may not have realised that when you put your policy together. Minister Wong is now, finally, turning around; we have managed to get her to turn around and focus on what is happening in the chamber rather than keeping her back to us. But, Minister, Western Australia is an energy island—there she goes again; she is obviously not interested in what is being talked about in the chamber. Western Australia, for energy security reasons, needs to have a diversity of energy sources. We will continue to have to rely on a combination of coal, gas and various renewables—but coal and gas to a significant degree.

During the Senate committee inquiry, we asked witnesses what the effects would be in terms of the use of coal as part of power generation in Western Australia. Well, Verve Energy has to pay $200 million in additional tax, and the effect is going to be zero. Verve Energy will not be able to close down one single coal fired power station. In fact, the evidence we got is that it is most likely that, even with a carbon tax, the next new power station in Western Australia will be a coal fired power station, and that is for energy supply reasons. So this is just a net cost that is going to be imposed on the people of Western Australia, in the context of Verve Energy, through increased electricity prices, through increased taxes or through reduced services at a state level. There is zero, zilch, transitional assistance from this government in order to do it. The minister then says, 'There won't be any transitional assistance under your package.' No, there will not be. But there will not be a $540 million tax on Macquarie Generation, there will not be a $200 million tax on Verve Energy, there will not be a $180 million tax on Alinta Energy and there will not be a $161 million tax on Victoria Electricity. These are taxes that you are imposing, Minister, and in this chamber you cannot even bring yourself to say the words: 'Yes, you're right, Senator Cormann. Macquarie Generation is not going to get any transitional assistance under this package. Verve Energy is not getting any transitional assistance under this package. And the reason they are not getting any transitional assistance under this package is that their emissions intensity is too low. They are too environmentally efficient. They have done too good a job in keeping their emissions intensity as low as it can be.' That is why they have to cop the whole force of the carbon tax. That is why they have to pay 100 per cent of the carbon tax. If only they had not done what they could to keep their emissions intensity as low as possible, if only they had kept their emissions intensity above the factor of one, then your govern­ment would rush out and give them billions of dollars in transitional assistance. That is one of the many ludicrous parts of this package that your government, Minister, has put forward—a carbon tax that of course the Australian people were promised we would never get. And here today you cannot even fess up and say the words: 'You're right. There is no transitional assistance whatso­ever—not one dime, not one cent; nothing, zilch—for companies like Macquarie Gener­ation or Verve Energy because they are too environmentally efficient', in your judgment, 'to warrant getting any assistance.' That is completely inappropriate.

Minister, you confected outrage when I made the observation that I did not believe that when the government put this package together they understood that Western Australia was an energy island. My question to you is: what are the features in this carbon tax package that give effect to a recognition that Western Australia is actually an energy island which has to be energy self-sufficient and which of course is going to be impacted very differently, and in an even worse fashion, by this carbon tax package as a result of the way you have structured it? When it comes to transitional assistance to energy suppliers under your package, what are the features in which you recognise that Western Australia is not part of the National Electricity Market but is in fact an energy island?