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Wednesday, 13 November 2013
Page: 85

Mr HOCKEY (North SydneyThe Treasurer) (10:58): I move:

That this bill be now read a second time.

This bill, repealing the Clean Energy Finance Corporation Act 2012, delivers on our election commitment to abolish the $10 billion Clean Energy Finance Corporation, which was funded by borrowing money.

The CEFC was established on 3 August 2012 and was given a wide remit to lend taxpayers' borrowed money.

The CEFC extended the reach of the carbon tax by creating a $10 billion fund to invest in renewable energy technologies and energy efficiency projects.

The CEFC used a full range of financial instruments to co-finance and invest directly and indirectly in these projects and technologies.

From the outset, the concept of the CEFC overlapped with the 20 per cent renewable energy target.

By itself, this target encourages investment in renewable energy. The target does not need to be accompanied by $10 billion of borrowed taxpayers' money going into the CEFC to encourage the investment that may be required.

Setting up a government bank with $10 billion of borrowed money, underwritten by taxpayers, to invest in high-risk ventures should be a thing of the past century. You would have thought that the Labor Party would have learned its lessons when it comes to government banks.

This bill also transfers the CEFC's existing assets and liabilities to the Treasury.

The Commonwealth will ensure both an orderly transition of the CEFC's investments to the Commonwealth and minimal disruption to the clean energy market so business can continue as usual.

We will of course honour all payments that are necessary as part of meeting our contractual obligations to committed investments.

These obligations will be met from the CEFC's existing funding, which will be transferred to a new CEFC transitional special account.

This account will also cover the Treasury's management costs in administering the CEFC's investments. Any other liabilities relating to the CEFC will also be covered by funds from the special account.

Future monies that were due to be appropriated to the CEFC annually until 2017 will no longer need to be borrowed and will have a positive impact on the gross debt on issue.

This bill also provides for excess funding to be returned to consolidated revenue at any stage if it is no longer needed for managing the CEFC's assets and liabilities.

With this bill the government is delivering on its commitment to abolish the CEFC.

It is also the case that with this bill we reduce the amount of money the federal government has to borrow. If the Labor Party and the Greens are so concerned about the debt limit that has been their legacy, then they should immediately pass this bill.

Debate adjourned.