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Wednesday, 16 June 2004
Page: 23913

Senator MACKAY (2:39 PM) —My question is to Senator Ian Macdonald, the Minister representing the Minister for Environment and Heritage. Has the minister seen reports that, following the government's energy statement yesterday, wind power companies are already abandoning future projects? Is the minister aware that one company alone, Pacific Hydro, says it will now abandon $1.5 billion in likely projects and will focus on growing its overseas business and that the Australian Wind Energy Association has claimed that this figure across the industry is more like $5 billion? Is the minister aware that the Howard government statement has cast doubt on a blade manufacturing factory in north-west Tasmania by the Danish company Vestas, putting 280 jobs in jeopardy? In light of how swiftly the Howard government's new policy has turned off a burgeoning, greenhouse-friendly technology, what action will the government belatedly take to actively support the new industries as the future of Australian energy?

Senator IAN MACDONALD (Minister for Fisheries, Forestry and Conservation) —Again, the answer is no, as it is to most of Senator Mackay's questions. I am not aware of most of those things but I am sure Dr Kemp would be aware of them if they have been in the media. The energy statement was a complete package looking at all aspects of fuel and energy in Australia, the alternative energy industry and how Australia can promote some of the initiatives in areas in which we have become justifiably renowned as being at the leading edge. In relation to wind energy, there has been a lot of development in recent times. Under the MRET proposals, the targets that have been put in place still provide good opportunities for the alternative energy industry.

You will recall, Mr President, that the MRET of 9,500 gigawatt hours was set in 1999. That target was based on projections of electricity demand growth at the time. The MRET represents a 60 per cent increase in renewables over the period from 2000 to 2010, and over $2 billion in renewable energy investment. MRET is expected to provide more than four per cent of the 2010 electricity demand. It is important for the Senate to understand that this level of output is equivalent to two Snowy Mountain hydro schemes. As we would all recall, that was one of the largest engineering projects ever undertaken.

Since 1997, projections for electricity demand in 2010 have increased, reflecting faster economic growth and increased electricity penetration. The new renewables output will be a smaller percentage of the electricity than was originally anticipated but the renewables share is now expected to be 11.1 per cent in 2010. That is somewhat of an increase. Across the board there are opportunities for the alternative energy industries. They are industries that have been very strongly promoted by the Howard government over the years and they are industries that we will continue to promote in the future.

Senator MACKAY —Mr President, I ask a supplementary question. Can the minister apprise himself of the situation, ask Dr Kemp and get back to the Senate with respect to the two projects that I mentioned? Further, can the minister confirm the basis of a multitude of well-informed leaks that the Minister for the Environment and Heritage argued, as the Labor Party has done, for the benefits of a substantial increase in the MRET to five per cent? Isn't it the case that Minister Kemp was defeated in cabinet by the Minister for Industry, Tourism and Resources, together with former holders of that ministerial post?

Senator IAN MACDONALD (Minister for Fisheries, Forestry and Conservation) —I am quite sure that Senator Mackay would not tell me what happened in the Labor shadow cabinet meeting if I were to ask her, and I think she is wasting her time in this chamber if she should presume to ask me what might have happened in the cabinet meeting. I will say this, however: Dr Kemp is a very committed Minister for the Environment and Heritage and a very committed member of the government. He understands that for Australia to move forward we have to concentrate on our environmental credentials but we also have to concentrate on the economy of the country. You cannot have good environmental outcomes and you cannot spend the money that the environment needs if you have an economy that is going backwards. Regrettably this is something the Labor Party and certainly their mates in the Greens can never understand. You have to have a progressing economy to do good things for the environment. (Time expired)