Thursday, 28 August 2014
Australian Renewable Energy Agency (Repeal) Bill 2014; Second Reading
I am delighted to support the Australian Renewable Energy Agency (Repeal) Bill 2014 and, of course, the end of the work of ARENA. The previous speaker, in putting forward the opposition's position, falls for that sequential failure that Labor thinks the more authorities they can create the better the world will be. We tend to forget that this is not really about how many bureaucrats we can employ in an authority to do the job that the department should be doing; this is genuinely about what Australia is doing to contribute towards more cost-effective renewable energy and more availability of renewable energy. That is what it is all about.
For those who are watching in the gallery, what they are witnessing of course is an opposition utterly focused on inputs. How big is the authority? How many water bubblers, cubicles and lumbar supports are there, and how much money is being spent? And you have a government over this side utterly focused on outcomes. And that is exactly what we owe the Australian people. In the end what we want are successful and well-managed projects.
And many of those were being managed very well by ARENA. But the test is not whether or not we like ARENA, if we like the acronym or how many authorities we managed to set up back when we were in government. The true test of all this is what the most effective way to bring on new technology is. I would argue that you do not need just another authority to do it.
At some point we just had to stop the party. The current government appreciated that what we have inherited is an economic mess, where a former Labor government had no idea where the money was coming from and they had already given the money away. That is what has been inherited—not an easy position to take over. But, of course, we are used to it, because we did the same thing in 1996 and we are up to the task.
In my seat in Queensland there are some wonderful renewable energy projects. I want to devote a little bit of time to those. And those continue to be managed; they continue to be supported. But let us not forget that we are part of a global renewable energy push and while there might be a unified public good in progressing with renewable energy, Australia is just a very small but significant part of it. In the end we have to make sure that we are looking after our national interest and that the projects we are doing are utterly irrelevant to Australia. Many that were being managed by ARENA were.
But I thought that the previous speaker, who represents the view of the Labor Party in all these matters, made a very interesting comment when he said that this government had provided no evidence that the role of ARENA could be 'better done and better performed by the department'. Do you notice that subtle switch? This is a former Labor government that created authorities like mushrooms and then insists upon us that we have to prove that the department is better at doing it.
Let's just come back a couple of steps: isn't that the job of a department? To carry out the instructions of the government of the day in a strong, fearless and independent manner? Back in the old days, departments used to do that! Remember? But no, not any more. No: we still have growing and overgrown departments and then we create authorities over and above.
Did you hear the Labor speaker saying what was so good about ARENA was that, unlike the department, 'they were strong and fearless and independent'? Weren't they the three adjectives that public servants across this nation raised their hands and swore to when they joined? To give strong, fearless and independent advice to the government of the day. But suddenly Labor has reinvented all this and only authorities can do that. These are separate agencies because the department could not do it. If you keep taking that direction then you simply end up with 23, 24 and 25 per cent of this great nation's GDP just being consumed in bureaucrats and public servants who are working in authorities rather than departments. It becomes preposterous.
At some point, when you are leaking hundreds and billions of dollars in deficits every year and a surplus or balanced budget is nowhere in sight, you just have to pull on the handbrake. You just have to slow thing downs and revisit. At this point there are a billion dollars of excellent projects that are currently being managed and will continue to be managed. But this Labor Party patronising view is that the department is not good enough to do it. The department is not up to it because we need someone truly fearless and independent. What are we left with and where do we go if we have this view that these large federal departments that neither treat a patient nor educate a child need to remain with thousands of employees? And then we are going to set up even more authorities on the side.
I never saw a Labor minister who did not dream of setting up an authority. I never saw a Labor minister who did not know how to spend a dollar. But I never saw a Labor minister who knew where the dollar was coming from.
Mr Hutchinson interjecting—
That is right—we just racked up the debt because it was in the national interest. What is fascinating is that we went into debt, and then suddenly economies were on the move and interest rates started to rise, and the Labor Party forgot that we actually have to pay that interest back, in 70 per cent of cases, to foreign interests. That is where we borrowed the money from: we borrowed the money for all of this dream from the Middle East and from China. They are the people we are now paying back—their sovereign wealth funds and their superannuation funds. That is where Australia's hard-earned taxpayer dollars are going. All they way from the seat of Solomon down to the wonderful state of Tasmania.
The billion dollars a month that we pay because of Labor excesses and their dreams that were unfunded are a billion dollars that I cannot spent on that young child who needs laser treatment for their retinopathy of prematurity. That is a billion dollars a month that I cannot spend in fine schools or early intervention for the children who need it, who come from vulnerable families. These people, who live in remote and Indigenous Australia, must remain right at the centre of our focus. We must never lose sight of the billion dollars that is never spent on these fine Australians because of Labor's decision instead to pay interest on debt.
We are not talking about this momentary GFC global financial collapse, where everyone had had to engage in some fiscal stimulus and, obviously, increasing liquidity. What we are talking about is that long after the GFC had passed, long after economies all around the world had realised that this was going to be a couple of years and not a decade of recession, we saw, as the evidence came in that Australia was not going to have a single quarter of recession, that we still had the pedal to the metal. They were spending money as fast as they could. They were writing cheques for foreigners and for dead people and transferring money as quickly as they could. It was mostly spent on flat-screens and imports. It helped South Korea to avoid a recession; it did nothing to help Australia. These massive cash transfers that were utterly unfunded—Labor had no idea where the money was coming from—is emblematic of their attitude here, which is just that we set up another authority to do the job that we do not want to do and that we cannot trust the department to do.
Let's wind it all back. These are brilliant projects. They do not require much more than sophisticated assessment to make sure that they are good value for money, and then careful contract management. We do not need a high-rise building full of publicly funded officials to do much more. These things are running with the private sector putting a dollar in, putting a shoulder to the wheel, and knowing exactly what they are trying to do.
Let's go up to Doomadgee, where they are assessing the technical viability and the systematic reliability of a hybrid energy system. It is only small—it is 1.2 megawatts—but the PV generation bolts onto their diesel that runs the community. What a great idea! We do not need a high-rise building full of people micro-managing that project. It was assessed. It cleared the bar. This is basic business of the Public Service 101; it is not for ARENA.
I recognise that good people like Greg Bourne devoted the last two years to seeing ARENA doing great work, but that time has closed. The money has been disbursed. The projects are up and running. Now let them just go, without the added interference of a free-standing authority.
The Collinsville Power Station is currently generating 180 megawatts of power. They are completely reconfiguring that power station to a 30 megawatt hybrid solar-thermal-gas power station. That is very important work. It was assessed as being worthy and able to demonstrate benefits. We do not need an authority to manage all of that. This is just old Labor thinking. And, too often, jobs were given to Labor mates to run these authorities at hopelessly over-bloated public salaries. I would like to know some of the salaries that are paid in these authorities.
Algal bio-fuels are creating great excitement around the world. The US Navy is now committed to running some of their own vessels purely on algal bio-fuels. This sort of micro-algal biomass is very exciting. It is actually consuming the CO2 that we have nowhere to put. It is creating, as a waste product, algal bio-fuel and a fertiliser. In a world that is short on phosphate fertiliser this is producing a nitrate fertiliser that can be used in our farming sector. It is exciting stuff. You do not need to have an authority to manage stuff. Historically, this was all done—and done elegantly—by a department.
The Kogan Creek Solar Boost Project is much larger. It is a 44 megawatt-addition of renewable energy to a 750 megawatt coal fired power station. It will be largest of its kind in the world. It is well worth funding. It is still being funded; please do not panic. We can take away an authority but still have the money invested, where it counts, on the front line, with the smartest people working on the break-throughs that ensure that we have more renewable energy.
Re-deployable hybrid power is a uniquely Australian solution. Remote projects consume large amounts of energy for things like drilling and prospecting. Why not have a fully 'put-up, pack down system'—or whatever the term is—to lower costs and to be able to provide power in these camps that can then move on to a different site? This reduces the need for expensive trucked-in diesel. It is a great idea. To be honest, when it comes to contract management, after you have approved it, it is not that complex a job. Re-deployable hybrid power with a portable hybrid solar-diesel plant is very exciting, promising work.
Working on reflective coatings to make solar panels more efficient is something that we are doing for the whole world. We are leading that with mineral technology to make sure that solar panels are as efficient as they can be, particularly in the household situation, where they are popped on a roof and rarely maintained.
In Weipa, not far away from Doomadgee, there is enormously energy-hungry activity in the bauxite operation run by Rio Tinto. There they already have a solar farm, and they are operating a 6.7 megawatt solar farm, which has been added onto a solar village which is already operating under a power purchase agreement. So these are remote parts of the world where a significant amount of the expense is due to the provision of power.
The speaker for the opposition immediately prior to me did refer to Labor's views about the RET, and where things are heading. Obviously, we are looking forward to seeing announcements about the government's review, which are due very soon. But do not mistake the fact that renewable energies offer us a cheaper alternative when the fact is that the RET expanding from 20 per cent compels energy users to pay relatively high marginal amounts for power. That is the truth behind elevated short-to-medium-term power prices.
But, yes, there is the potential to bring prices down over the long term. Over the long term it will be cheaper, but in the short term it is not. The problem with that is that we are seeing a reduction in the consumption of power in Australia, anyway. That is partly because of changed domestic practices, but mostly because, like most wealthy economies, we are expropriating a lot of our high-energy-intensive activity to China. We are closing our smelters, and that is having an enormous effect and leading to an oversupply of power in this country.
So, any modelling that assumes that conventional power providers are simply going to keep churning that power out is hopelessly erroneous. They are going to respond to the market. My view is that we can get to a sensible middle ground. We will have a renewable target and a very important role for renewables. I am sure that will continue. There is an enormous number of us on this side who are going to fight to make sure that it does, and we will not be made to look like villains by the other side.
In conclusion, what we saw from the previous speaker from the Labor Party—despite his relatively short but glorious career as a minister in this portfolio—were his halcyon recollections of running around with his business card in the few weeks that he had in the portfolio. That is probably not the best example of where we are heading. In reality we can lead the world, still, in many of these areas, but we do not have to have to be replete with authorities. It is only appropriate that we achieve the outcomes, that we invest the money on the front line. That is consistent with the coalition's approach. Ultimately, you can only have so many non-service-providing public servants in the system before it becomes unwieldy, expensive and it bogs down. I am delighted to see that ARENA is being repealed. The projects will go on. They will continue to be managed. That is the kind of nation that Australians are looking for.