Wednesday, 4 December 2013
Clean Energy Finance Corporation (Abolition) Bill 2013; Second Reading
As Labor made it clear well before the election we planned to terminate the carbon tax. But in the Clean Energy Finance Corporation (Abolition) Bill 2013 and the related bills before the Senate what we see is much more than a termination of the carbon tax. In fact, they leave us with nothing—absolutely nothing. One of these bills abolishes the Clean Energy Finance Corporation, and this is one of the reasons why Labor is opposing these bills.
The Clean Energy Finance Corporation is, and should continue to be—despite the wants and desires of the now government—an independent body established to stimulate investment in clean energy projects. The CEFC has a proven track record. It has enabled the development of new business opportunities. Importantly, new business opportunities which play a role in redefining the Australian economy for a cleaner energy future.
The Clean Energy Finance Corporation plays a transformational role. Whatever our future direction in reducing carbon is, carbon reduction policies will never play a role in developing and deploying clean energy with lower costs. The CEFC works with the private sector to support the development and deployment of technology in Australia by mobilising investment in renewable energies, low-emission and energy-efficient projects and technologies.
The Clean Energy Finance Corporation delivers real and tangible change. The CEFC has financed innovative projects across our economy in both cities and regional areas. I would like to take a few minutes to elaborate on a few of these projects. There was $10 million in clean energy finance in Central Park, in Broadway, Sydney, through an environmental upgrade agreement with the City of Sydney and other partners. That $10 million will be used to install a $26.5 million, highly efficient, gas powered, tri-generation plant for the landmark Central Park precinct in Sydney—smack-bang in the middle of Sydney, at Broadway. The environmental upgrade agreement will be repaid by a charge on the land, levied by the Sydney City Council.
The project occupies a 5.8 hectare precinct, and it is under construction right now—you cannot miss it if you go into Sydney. It includes 14 new buildings with 3,000 apartments, 900 student accommodation units, 50,000 square metres of commercial office space and 25,000 square metres of retail space. This two-megawatt, tri-generation plant will be used to provide low-carbon thermal energy heating and cooling for this major new development. The plant will reduce greenhouse gas emissions by 190,000 tonnes over its 25-year design life. That is equivalent to taking 62,500 cars from the road.
In regional New South Wales, Rivalea, a major pork producer owned by Golden North—in fact, Rivalea is Australia's largest pork producer—has, through finance from the Clean Energy Finance Corporation, upgraded its refrigeration in projects designed to improve energy productivity. The upgraded refrigeration has improved Rivalea's production capacity, something I would have thought the government would be quite keen to capitalise on. Not only has it improved its productivity, but this upgrade in refrigeration is now enabling Rivalea to bid to expand its business in South-East Asian markets.
Another example in a regional area is Sundrop Farms, in Port Augusta. The CEFC will co-finance a world-leading innovative project in South Australia—namely, a sustainable greenhouse developed by Sundrop Farms. The sustainable greenhouse is the first of its kind to use solar-thermal technology to provide irrigation from desalinated seawater, and heating and cooling for the greenhouse. Sundrop Farms, which already has a commitment to be a low-energy producer, is building a 20-hectare greenhouse facility. This facility will use a renewable power supply and a sustainable water source to produce over 15,000 tonnes of tomatoes a year for metropolitan markets across Australia.
Not only is the CEFC involved in that, but it is helping catalyse other finance for this innovative application of proven, world-leading green technology. This project will demonstrate the potential to transform the Australian economy and create new industries in regional areas. When fully operational it will create around 200 new jobs. Not only that, this project has flow-on effects because it will demonstrate Australia's leading position in agriculture for semi-arid environments, extending this to sustainable horticultural practices and using clean-energy technology.
It staggers me that the National Party, which purports to represent the bush, has agreed to the abolition of a finance corporation that creates jobs and brings new businesses to regional areas. So where are the National Party voices on this issue?
Senator Ludlam interjecting—
Thank you, Senator Ludlam. Where are they? They are completely silent on this issue. Their voices were heard long and loud on GrainCorp, but now their silence around the CEFC—which is bringing new business and creating jobs in the bush—is deafening. I am sure the likes of Rivalea and Sundrop Farms and other regional and rural businesses who have benefited from the Clean Energy Finance Corporation would be appalled to learn that the party which purports to represent the bush is not supporting them this time. It is not saying a word and is in fact complicit in winding up and abolishing a corporation which is working in the interests of regional Australia. It just goes to show, when it comes to National Party politics, any kind of belief or commitment can be bought off.
Is the abolition of the Clean Energy Finance Corporation another mistake by the coalition government? Has it failed to do its homework on the real value of the CEFC? The Clean Energy Finance Corporation is an opportunity for the coalition to do something about climate change. The CEFC's role is to stimulate the economy in a way that contributes to solving the issues of climate change. Isn't this what the government and indeed all Australians want—a rich economy and one leading the way in climate change solutions? Not only is the CEFC contributing to new business, cleaner technologies, jobs in the bush, new businesses in regional areas—which the National Party are absolutely silent about—and fabulous innovative projects in big capital cities like Sydney; guess what: it makes money. The government, prior to the election, was going on and on about the emergency budget situation. It likes to go on and on about how it has got to cut spending and fix up a mess and carry on about money. Here we have a corporation which is making money, and that still does not motivate the government. The CEFC is currently making about $200 million per year. If we project that through to 2020, we expect it to be around $1.5 billion. For a government that is so concerned about balancing its budget and finding additional cash, the CEFC makes money and reduces carbon pollution—but the government seems to be denying that.
Earlier in the week the government was trying to gag debate on the Clean Energy Finance Corporation and it tried to roll debate on this bill into the broader debate on its repeal package—because this government just wants to talk about the carbon tax. Despite the fact that Labor said before the election that we would repeal it, the government just wants to bang on about the carbon tax, at any cost. It leads me to conclude that this was nothing but a shameless attempt by the government to hide the fact that the Clean Energy Finance Corporation makes money. It wants to hide that from Australian voters, because Australian voters would never understand—I certainly do not understand—why a government would shut down a corporation which is doing amazing work, which is doing world-leading work in regional parts of the country and which is making money. Why would you shut it down?
I can only conclude that the government is playing politics here because it does not want to have anything to do with any success that the Labor government might have introduced. 'We have to shut it down and pretend that it was costing money, when the facts are far from that.' But perhaps Senator Abetz is just trying to hide yet another embarrassing mistake. Perhaps it is another government blunder, and he is trying to hide that from the Australian voters. Well, voters in Port Augusta and Sydney will know, when the money stops flowing to those projects, exactly what the government has done. Senator Abetz said the government's reasons for abolishing the Clean Energy Finance Corporation are there for all to see. What is there for all to see is that it is a profit-making, carbon-reducing, innovative clean energy corporation. That is what is there to see. He went on to say:
… setting up a government bank with $10 billion … of borrowed money … to invest in high-risk ventures should be a thing of the past in this country.
What is high risk about supporting an already viable pork producer? What is high risk in that? What is high risk in enabling that pork producer to improve its productivity so it can bid for markets offshore? Where is the high risk in that? I would have thought it is something that this government, which apparently is open for business, would be willing to do. I have heard the Prime Minister go on and on: 'We're open for business.' Well, tell that to Rivalea, because with regard to Rivalea actually we are shut for business. Particularly if it is about clean energy, we are definitely shut. We do not want to know anything about that. So it is completely the opposite to what Senator Abetz says. These are not high-risk investments but ordinary businesses that the Liberal Party government and its National Party partner go on and on about wanting to support: 'We're here for business.' Well, they are not. These are businesses making smart decisions around clean energy and clean technology but, for whatever reason, that is not good enough for this government.
I want to put on the public record in Hansard that the Clean Energy Finance Corporation is one of 14 organisations across the world that acts as a catalyst for investment in renewable energy and clean technologies. It fills a groundbreaking role in mobilising capital for clean energy technologies—a groundbreaking role, yet we want to get rid of it. This is a corporation which stands on its own two feet, a corporation that makes an average return of seven per cent per annum, yet the government with its National Party colleagues wants to shut the Clean Energy Finance Corporation down. Never mind that it returns seven per cent per annum. For the ordinary Australian investor that is more money than you would make putting it in the bank. Since created by Labor—I think that is the crux of the issue here, that it was created by Labor so it has to be smashed down regardless of how effective it was—
Senator Ludlam interjecting—
You can say that in your speech. The CEFC has committed $536 million of its own budget whilst mobilising over $1.5 billion in private capital—a success in anyone's terms, except apparently the government with its National Party mates. I only learnt this the other day and I wish I had known about it beforehand because it is something as a West Australian to be really proud of: in Western Australia the Clean Energy Finance Corporation invested in a fantastic project with Richgro. For those of you who come to Western Australia, Richgro is a name you see all over the city. They are a major Australian garden products supplier using waste energy technology which meets all of their power needs. They are doing that by recycling organic waste. That is a brilliant project and it is only made possible by CEFC funding—a project well and truly worthy of investment but one obviously that the coalition government sees absolutely no merit in.
To go further, this government claims it is fiscally responsible, it is open for business, it knows how to manage money; it goes on and on about its economic and financial credentials. Yet this government has done not one scrap of due diligence on the CEFC. It has put no business case as to why it should be closed down. It has undertaken no analysis, it has done no review. It is just acting out an ill thought out, poorly conceived, sloganistic election line. This bill, the Clean Energy Finance Corporation Abolition Bill, winds up the clean energy corporation, which is an institutional investor and underwrites projects. Its assets and liabilities will be presumably transferred to a government bureaucracy and left to wither and die, on the heads of the coalition.
What we have heard from the government is that they had some kind of mandate and that this was a key election issue, that the election was a referendum on the carbon tax. Guess what: that is simply not true. It is only in the minds of coalition senators and MPs that this was a big issue. Despite the continuing rhetoric on the carbon tax, it did not rate as a key issue for voters in the election period; it was not a top five issue. In fact, the only time it rated at all was when Prime Minister Rudd announced that he would terminate and that we would terminate the carbon tax—a fact now conveniently forgotten. So we support the repeal but not to leave us with nothing and not to knock off effective organisations like the Clean Energy Finance Corporation. It is a shameful act and those opposite will rue the day that they did it.