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Wednesday, 9 September 2009
Page: 6144

Senator MINCHIN (3:58 PM) —The opposition does not support this disallowance motion. The regulation that Senator Milne is seeking to disallow, as the senator has explained, extends the expiry date for the exemption of electricity generators, transmitters and distributors from obligations under the Energy Efficiency Opportunities legislation. It does so by extending the expiry date to 30 June 2013 from 30 June this year.

We are familiar with this matter. It was under the coalition government that the Energy Efficiency Opportunities program was introduced as part of the package of measures which our then government announced in 2004 under the energy white paper that we produced. It proposed that from 2006 large energy users—and I emphasise ‘users’; those using more than half a petajoule of energy per annum—would be required to undertake Energy Efficiency Opportunities assessments every five years and to report those publicly and to the government. Obviously, when we were in government we were committed to trying to ensure that we streamlined government reporting under this program and made the program cost effective and with the least possible impact on industry.

When it was passed under our government in 2006, as Senator Milne has appropriately noted, generators were exempted from its provisions. As I understand it the logic was, and remains, that generators already have a very natural incentive to reduce their energy costs. It is logical because this whole program is aimed at energy users—the big factories of Australia that use a lot of energy. It is about ensuring that energy users are motivated to look for efficiencies in the way that they use energy. Here we are talking about the generators of the energy that is supplied on a daily basis to millions of Australians and hundreds of thousands of big energy users. Logically, it makes sense that in a program like this the generators of the energy are treated differently, because this is a program aimed at users. I accept that.

The logic of Senator Milne’s position is that generators are also energy users. Yes, but their prime purpose and function—and it is a noble one; it does distress me to continue to hear Senator Milne talk about the workers of Australia, who keep the lights on and the power going, as just polluters—is to generate. That is what they do for Australia. When you introduce programs like this, if you apply them to generators it will inevitably add to their costs, and those costs will obviously flow through to all Australians who use that energy, including low-income Australians who rely on that energy to keep their power going—their lights, their air conditioning and their heating going. And to the extent that you increase costs for energy generators, that will flow through to energy users. So there is some logic to treating generators differently. If what you are talking about is trying to improve energy efficiency and cost-effectiveness in the use of energy by large energy users then it makes little sense to be adding to the costs of the generators, which are going to flow through to the users.

Senator Milne goes on and asks the government: ‘What are your policy levers to require energy efficiency of generators?’—taking that typical big-government, bureaucracy-knows-best approach. Frankly, the motivation—the lever—for energy efficiency by the generators is competition and the marketplace. Energy generators have a natural incentive to be as energy efficient as they possibly can. They make their money from the cost-effective generation of energy. They have a natural incentive to reduce their own input costs when it comes to energy so that they are producing energy as cheaply as they possibly can. That is the point of the marketplace and competition, which of course the Greens do not believe in.

In relation to the extension, the exemption was originally granted to 30 June 2009. There is a review of the regulations governing this matter, and that review is due in 2012. The amendments which the government has tabled take the exemption out to 2013—the logic of that being that the exemption extends to just beyond the deadline for the review. That makes eminent sense and we welcome this extension. I do not think the government is talking about a permanent exemption; it is a matter that should be kept under review, but we believe that extending this current exemption out beyond the current review timeline makes eminent sense and we oppose this disallowance.