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Monday, 17 August 2009
Page: 8056

Mr COMBET (Minister for Defence Personnel, Materiel and Science and Minister Assisting the Minister for Climate Change) (8:47 PM) —I respect that the shadow minister has some further submissions to make in relation to the amendments which he has moved and will respect that in the forthcoming five-minute contributions. I speak to a number of the issues that the shadow minister has raised in support of the amendments that the opposition has moved. Firstly, there is the relationship between the renewable energy target and the Carbon Pollution Reduction Scheme and the so-called issue of decoupling the two pieces of legislation. Yesterday, as I remarked before, the Minister for Climate Change and Water announced interim arrangements that will set aside the link between the renewable energy target and the Carbon Pollution Reduction Scheme legislation until such time as the CPRS passes the Senate. The government decided and the Coalition of Australian Governments agreed on 30 April this year to provide assistance under the renewable energy target to activities that are emissions-intensive and trade-exposed under the CPRS legislation.

That was a position that was consistent with the arguments of the industries that are emissions-intensive and trade-exposed, because they wished to see consistent application of the regime between both pieces of legislation. The government respected that. COAG respected it and also recognised the cumulative cost impact of the renewable energy target and the carbon price to be delivered by the CPRS. However, the Coalition of Australian Governments agreement was made in the context of the CPRS legislation coming into force. As I remarked earlier, the cost impact of the renewable energy target alone is certainly small for most industries. In the absence of legislation implementing the CPRS—at this point in time, at least—the scope and basis for assistance under the renewable energy target has had to be reconsidered by the government because of our commitment to the passage of the renewable energy legislation. It is fundamentally important to ensure that it pass in order to unlock the significant investment that will be made in renewable energy sources. The government does not support the amendment that has been moved by the opposition in relation to this decoupling, as it provides assistance to all emissions-intensive trade-exposed industries, not just those that are electricity-intensive.

As the shadow minister has indicated, the government has had good-faith discussions with the opposition in relation to this issue, but at this point in time I think it is also evident that the government is unmoved by the submissions that have been made to it by the opposition. Discussions will continue in this respect; however, the renewable energy target assistance, in the absence of the CPRS, should, in the government’s view, be targeted to highly electricity-intensive emissions-intensive trade-exposed activities in the period before the CPRS legislation is in force. The government remains committed to providing assistance to all of the so-called EITE industries to help manage the cumulative costs of the CPRS and the renewable energy target once both pieces of legislation are in force.

The shadow minister has also moved an amendment concerning the aluminium industry. As I foreshadowed in my second reading summation, the government does not support this amendment. The opposition amendment would give the aluminium sector more assistance by providing a 90 per cent exemption for both the existing mandatory renewable energy target—the 9,500 gigawatt hour MRET that is to operate in 2010—and the new renewable energy target obligations. The government, on this point, has been clear from the outset that its intention is not to provide exemptions from the existing mandatory renewable energy target scheme, which has, after all, been in place since 2001 and under which all aluminium entities, like other sectors, have been bearing their share of the mandatory renewable energy target liability. As assistance under the renewable energy target only applies to the expanded portion of the target, all industries will make a contribution to supporting the deployment of renewable energy. I will address the remaining opposition amendments as time permits.