Greg Hunt (Flinders, Liberal Party, Shadow Minister for Climate Action, Environment and Heritage) Share this | Hansard source

May I say the previous member for La Trobe was strong, elegant and clear on his support for renewable energy. Let me begin by addressing the current member for La Trobe's motion this evening and let me begin by setting out three propositions. We agree on the science of climate as a coalition and as a government. We agree on the targets in our bipartisan approach. However, we disagree on the fundamental mechanism, which is the carbon tax. We disagree clearly, absolutely.

I want to deal with three parts in this particular motion. The first point of disagreement is on the carbon tax and the reason why that is a failed mechanism and actually fails to increase or decrease renewable energy—it has no effective impact on that whatsoever; it is just an electricity tax. The second point is to look at the incredible failure in the renewable space of the Clean Energy Finance Corporation, which, as we speak, is preparing to give $100 million to a New Zealand-based company for a wind farm that has already been built, and which the private sector was also willing to finance. It sort of makes you wonder what is the point because when you spend $10 billion you would hope you get some additional renewable energy, but this Clean Energy Finance Corporation will not deliver one additional watt of renewable energy over and above what was already under the Renewable Energy Target. And in the third point I want to deal with the target itself. We support the target, we created the Mandatory Renewable Energy Target, which became the Renewable Energy Target. We gave bipartisan support to its creation, but we did clearly oppose the phantom credit scheme and the state Labor bonus tariff schemes, which created a spike in price and which distorted what would otherwise have been a good scheme. So those flaws were warned of, were identified; we endeavoured to stop them, but the two levels of Labor government proceeded nevertheless and with very damaging results.

Against that background, I also acknowledge that there are genuine and legitimate concerns in communities, and some of the members this evening will rightly express the concerns of their communities. Sometimes these communities have differing views within them on the impacts of wind on both human health and property values. I do not know the answer. I do think it is right and proper for the parliament of Australia to sponsor a full National Health and Medical Research Council independent science-based study using primary sources of actual testing to determine those. Nobody should have anything to fear because if there is a problem, we have a fundamental duty to find out. And if it is not a problem, then nobody need fear anything. It is our duty and our task to make sure that we are prudent wherever we are, firstly, spending public money and, secondly, and much more importantly, wherever there are claims of risks to public health. Some on the Labor side, including the previous speaker, the member for La Trobe, just dismissed the concerns of the community. I think this notion of dividing communities rather than recognising that both sides have a right to be heard is contemptuous in the extreme, and it is not the way we will proceed and it is not the way, if we are given the chance, we propose to govern.

So to the carbon tax. Let me be brief on this. The case is well known against it. Firstly, it was based on a false promise and pledge to the Australian people that there would not be a carbon tax under any government led by the current Prime Minister. Secondly, beyond the betrayal, the sad and tragic thing is that it does not even do the job. The thing that most amazes Australians is that we go through a $9 billion a year tax and our emissions go up, not down. Not our figures, not something that we have created, but the government's own tracking to Kyoto figures, submitted internationally, were that Australia's emissions during the period from 2010 to 2020 go from 560 to 637 million tonnes. Go figure that, for all of this pain, our emissions go up, not down.

And that comes to the fundamental flaw: it is an electricity tax, it is a gas tax, it is a refrigeration tax and, as a consequence, it is focusing on essential services. The iron law of economics is that, when you tax essential services, the primary effect is that it causes people to substitute out of other discretionary items rather than out of the essential service. So the consequence of the carbon tax is that it simply has an impact on people's cost of living and quality of life but, as is shown by the government's own projections—not ours—emissions go up, not down, because taxing an essential service in economic terms is taxing a largely inelastic good. In other words, if you drive up the price, you will have minimal impact on consumption. This is again demonstrated by the work of IPART in Australia and New South Wales and studies around the world that show that electricity is pretty close to the most inelastic of all the major consumer items. In other words, it is a bad idea to tax electricity because it hurts but does not do the job, according to the government's own figures.

There are many other reasons why we would not want to support the carbon tax, including the fact that on the latest projections, in this year's budget, only a month ago, we will still be spending $3.8 billion on foreign carbon credits in addition to the carbon tax to make up the difference because it does not do the job here in Australia. So you have a $9 billion tax and then on top of that you have to spend another $3.8 billion a year from 2020 onwards in perpetuity, rising to $57 billion by 2050, on foreign carbon credits. It is amazing.

This brings me to the Clean Energy Finance Corporation. Our dispute here, by the way, is with the government. We respect the board and we respect the executive. The fundamental flaw in this green hedge fund is it is a $10 billion fund using borrowed funds from the taxpayers—and that will have to be paid back at some stage—to invest in projects that are not producing any new renewable energy. The first cab off the rank is reportedly a $100 million payment for a wind farm in Victoria that has already been built and that could have gotten finance from the private sector, just not on such concessional terms. So there is no new renewable energy. Before the Clean Energy Finance Corporation there was a 20 per cent renewable energy target. After $10 billion of Clean Energy Finance Corporation funding there is still a renewable energy target of 20 per cent. In other words, we spend $10 billion on projects using borrowed money and we get no additional renewable energy. The best-case scenario is that you go from low-cost renewables to high-cost renewables. It does not make sense.

This brings me to the renewable energy target itself. The facts of the renewable energy target are these. According to the New South Wales IPART, in the year just past we had an 18 per cent price rise in New South Wales electricity, of which nine per cent was the carbon tax—10 per cent on average around the country—and 0.3 per cent came from the renewable energy target: one-thirtieth of the carbon tax and one-sixtieth of the RET. Those are the IPART figures that were published in the last year. Even when you build in the total cost, because that is a legitimate question, the work of the AEMC is that the RET has contributed 1c a kilowatt hour or three per cent to the total cost. It is not a trivial sum and I do not want to dismiss it—we need to be honest about the cost—nor is it the figure claimed by some. Those two independent bodies—IPART and the AEMC—have set the facts straight. The figure is neither trivial nor the figure represented by some.

Communities have a right to have a full investigation. As I said at the outset, I do not know what the impact of wind is on health. I do know that it is our duty as policymakers and legislators to allow a full National Health and Medical Research Council independent survey based on fresh testing to be conducted. Communities have a right to know. None of us should be dismissive, none of us should be contemptuous and none of us should ignore those community needs. So we support the RET and we also support the community's right to know. (Time expired)

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