Tuesday, 10 December 2013
Clean Energy Finance Corporation (Abolition) Bill 2013; Second Reading
I am very pleased to have this opportunity to speak before the Senate today on the Clean Energy Finance Corporation (Abolition) Bill 2013. It is a bill which the government tried to hide within a big package of bills—in a way, to veil the broad ideological attack in unpicking some very sensible, economically rational steps that the Labor government took to enhance our capacity to produce clean energy in Australia.
Senator Abetz has tried to suggest that there is a mandate for this legislation. I do not believe there is a mandate for this legislation. The carbon tax, for which the government are claiming a mandate, can be repealed without abandoning the Clean Energy Finance Corporation. We do not agree with that either, but the fact is that trying to hide this in a suite of bills has certainly failed for them, and that gives us the opportunity to talk specifically about the Clean Energy Finance Corporation and the fine work that it does within Australia at the moment and has done since its inception.
I guess we are not surprised as an opposition and as a former Labor government that the coalition has taken its attack to the Clean Energy Finance Corporation. We know that this government has chosen to proceed down a path on climate change that is driven by a very stunted and blind ideology. Consistently we see the government squirming around the facts of the matter, both on the science of climate change and now in defence of a very flawed Direct Action package that it claims is going to service the needs of reducing our carbon emissions into the future. Of course it will not, and we have heard already from many speakers in the chamber debating this particular bill about the pure folly of the Direct Action approach and about how in fact the government's abandonment of—its walking away from and now complete rejection of—an emissions trading scheme really underscores the failing and flaws within its Direct Action Plan.
The coalition do not appreciate that meeting an emissions reduction target needs investment in clean and renewable energy technologies. It is one thing to lay claim to an ideological package like Direct Action. It is another thing to prevent or disable Australian industry's capacity to develop its clean energy technology industry, and that is exactly what this bill seeks to do. The coalition government are choosing their narrow-minded ideology over the effectiveness of the Clean Energy Finance Corporation to enhance Australia's capacity for clean energy production into the future.
I would just like to focus for a moment on what the Clean Energy Finance Corporation actually does. The corporation facilitates comprehensive commercial loans for both renewable and cleaner energy technology investments. This corporation, like around 14 others across the world, acts as a catalyst for investment in renewable energy, adding a great deal of value to the efforts of tackling climate change in Australia and around the world by reducing carbon pollution. The CEFC is a key part of Labor's suite of clean energy strategies, which were geared towards having a comprehensive approach and leveraging all of the economic tools that we have at our disposal to do that. One of them, of course, is making sure that our capacity continues to grow.
This is not just for our own needs. Our own needs are incredibly important, as we have our targets to reach and our vision for a cleaner future to pursue, and Labor remains committed to that. But it is also about our place in the world and what we have to offer our neighbours and other trading countries. We know that around the world other countries are gearing up their renewable energy capacity for their own needs as well as the export potential. As we move through a period of transition in our economy more broadly, our ability as a nation to export renewable energy technologies is critically important. So the Clean Energy Finance Corporation, while serving the needs of the challenge we confront as a nation in reducing our carbon pollution, also serves to help build that foundation of what our future exports look like for Australia. Those capabilities have been strong in the past.
I remember—because I am that old—coming into this place in 1996 when the Howard government was newly elected and having a huge debate about the disinvestment that occurred at that time in a whole range of research and development projects. I know that Senator Cameron would have been watching that closely from his position in the union movement and looking at addressing the needs of manufacturing workers. What was happening at that time was that the reduction in R&D expenditure under the newly elected Howard government started to undermine and disable what had been a growing capability, for example, in photovoltaics. During that early period of the Howard government, Australia went from a leading position in the world on photovoltaic technology to one that was less so. We saw over quite a number of years in those early budgets disinvestment in Australia's research and development capability. That saw us lose our edge in a range of critical technology areas—technologies that are now exploding in export terms, technologies that are now in huge demand while we are playing catch-up as we try to restore, as we did in government, the gaps left by the early Howard government's disinvestment in research and development.
Many of the Labor government's investments in research and development on coming to government in 2007 were about rebuilding our capacity in this area. They were about putting in place the foundation for a strong future economy. You only need to look at Senator Carr's record in his stewardship of the industry and innovation portfolio, including science, research and development, to see just how strong Labor's record is in this regard.
So the coalition have form. This is another example of a government that are not willing to invest in the future. It is in the context of climate change. It is in the context of disabling and unpicking the former Labor government's clean energy package. A subset of that is unpicking one of the purest market mechanisms to actually achieve things. The Clean Energy Finance Corporation is not, as the coalition have tried to characterise it, some kind of ideological trimming on the clean energy package. It is a very pragmatic response to the demands of the market and industry to come at what is required to stimulate investment in a crucial area. But, nonetheless, the coalition still seek to unpick it.
Since it was established, the Clean Energy Finance Corporation has committed some $536 million of its own budget and managed to mobilise over $1.5 billion in private capital. I know many of my Labor colleagues have been through these figures, but it is success in anybody's terms. When you look at the range of government co-investment programs over many years in the innovation portfolio, this is a very good example of the ability to mobilise private capital investment. It stands up very strongly against a raft of programs of coalition and Labor governments alike over many, many years. The coalition would be very hard pressed to criticise the performance of the CEFC in the context of the performance of other government programs that have sought to stimulate co-investment in an innovative area of industry. I challenge the coalition to explain why they chose to attack this body that is playing such an effective role, has investments in place and is demonstrably delivering on those investments and managing to provide a positive return to government while all the while achieving the stated goal of the clean energy policy, which is to reduce the carbon emissions into our atmosphere.
I believe that the vast majority of Australians are tired of the Liberal government's general rejection of the science of climate change. I think they are highly sceptical of the Direct Action package being put forward. I believe that over time the Australian public in general will view with a great deal of cynicism the ploy and the trick that is being presented to them in the form of that Direct Action policy as it seeks, as we have heard from many of my colleagues in this chamber, to pay polluters. It will have a limited effect on reducing carbon emissions.
The Chair of the Clean Energy Finance Corporation, Jillian Broadbent, has urged the coalition government to spare the CEFC from their unscrupulous and illogical cuts, but it seems they have not listened. Those senators opposite have not listened to the fact that if the Clean Energy Finance Corporation were allowed to continue it would account for some 50 per cent of Australia's 2020 emissions reduction target at no cost to government. That is in contrast to a Direct Action Plan that is going to cost taxpayers an enormous amount of money, and all of that money will be going to the biggest polluters.
The coalition government claim a saving from the abolition of this corporation of some $760 million over four years. But they have forgotten that the Clean Energy Finance Corporation is making money. It is getting a return. The combined blow to the budget from its abolition could be as high as $1.5 billion. I look forward to Senator Cormann explaining exactly how he accounts for not just the saving they are going to claim from the abolition but the cost to government of the revenue forgone that the CEFC would return to the government coffers over the period of its existence.
Many senators have been told through representations to the hearings of the Senate Standing Committee on Environment and Communications that projects the Clean Energy Finance Corporation have invested in so far already account for an annual reduction in carbon emissions of some 3.9 million tonnes. The net benefit to taxpayers is some $2.40 a tonne. That abatement is delivered at a negative cost. That is, if the CEFC were allowed to continue, it would be able to do so while actually making a return and it would contribute significantly to the greenhouse gas reduction target. As Mr Yates, the CEO, told the committee, that is probably the lowest cost action you are going to get. As I said, it is still beyond me that the government would seek to remove this effective tool in the campaign against reducing carbon.
Just before I conclude I want to reflect on the diligence with which the CEFC has reported. There have been quite a few comments by coalition representatives about the CEFC implying that somehow it is a rinky-dink outfit. One look at the CEFC's annual report for 2012-13 will show that it has very meticulously reported on a range of key performance indicators, including setting a portfolio benchmark; its placement of funds; its investment in renewable-energy, low-emissions and energy-efficient technologies; building industry capacity, a key point I made earlier; and dissemination of information to stakeholders about the operation and work of the CEFC. The CEFC is attracting a great deal of international attention. The CEFC is a key part of the suite of clean energy package measures that we put in place and seeks to stimulate the development of Australia's, and industry's, capacity to provide renewable energy solutions for industry.
In conclusion, I acknowledge the members of the board of the CEFC. The board members obviously have found themselves to be in the middle of a political football match. That is in no way a reflection on their professionalism, abilities and leadership or on their contribution to the CEFC. I take this opportunity to acknowledge not just the chair, Ms Broadbent, but all of the board members, who have devoted their expertise to what is quite a noteworthy and extraordinary organisation that formed a key part of our clean energy package.
I too will be opposing this bill, because it seeks to abolish the Clean Energy Finance Corporation. I urge other senators to do the same.