House debates

Thursday, 28 August 2014


Australian Renewable Energy Agency (Repeal) Bill 2014; Second Reading

12:06 pm

Photo of Natasha GriggsNatasha Griggs (Solomon, Country Liberal Party) Share this | Hansard source

Over the past few years, the coalition has very clearly enunciated its fiscal objectives to the Australian people. We want to restore a measure of sanity to public spending and ease the overall debt burden placed on Australian households and businesses, and scrap the unnecessary taxes lumped on them, by the previous, Labor administration.

The carbon tax has now gone, and there are already benefits flowing through to families in the Northern Territory. It is estimated that, in power costs alone, Territory families will save almost $250 a year and small businesses in excess of $750 a year following the removal of Labor's toxic carbon tax. The City of Darwin has also announced a reduction in rates as a result of the carbon tax being scrapped, and I congratulate them on taking this welcome cost-of-living reduction measure. As power bill cuts take hold, further savings are expected to come online not just in the Northern Territory but right around the country, and I think that has to be welcomed by most Australians. So Australians are already reaping the benefits of the carbon tax being scrapped. Bit by bit, inch by inch, we will continue to work to restore the budget to a sensible state, because without a strong budget it is not possible to have a strong economy.

One such measure that will take us down the path towards achieving this goal is the repeal of the Australian Renewable Energy Agency, a body that was established in 2012 by the Labor government, along with a slew of other quangos—all of which were established without consideration of their impact on the budget bottom line. This is the type of fiscal recklessness that underlined the Rudd-Gillard-Rudd administrations and created the environment where this government has to deliver the tough measures on the nation's behalf. Let nobody be under the delusion that, had the unthinkable happened and had Labor been returned to office last year, they too would have had to make the hard decisions to get the budget back on track. The difference, though, is that the coalition would have supported them, in the national interest. Let nobody be confused here: Labor's opposition to our budget is about political expediency and base populism rather than anything to do with the greater good. Labor has no shame. But I digress.

The Renewable Energy Agency is not without merit. An independent statutory authority, it was set up to improve the competitiveness of renewable energy and technologies and to increase the supply of renewable energies in Australia. It is worth noting that the coalition supported the establishment of the Australian Renewable Energy Agency, or ARENA, as it is better known, as a way to coordinate the multiple overlapping renewable energy programs and policies that had evolved over the years. That said, it is an extremely expensive agency. ARENA is in the process of delivering some extremely positive outcomes but falls very much into the 'are there alternative ways to deliver the projects' basket. The government is already providing $1 billion worth of ARENA funding to contribute to supporting around 200 renewable energy projects right across Australia. The Commonwealth will continue to fund these 200 projects, an investment of over $1 billion, but in future these will come under the oversight of the Department of Industry. The closure of this agency is a tough decision and one that in no way diminishes the very good work that has been done by its executive team and indeed the board. As I have already said, its disbandment is a measure taken by the coalition with some reluctance but with an eye on the budget and with the budget priorities in mind.

I will say, though, to the members opposite in the chamber—both to the Labor member for Parramatta and the Greens member over there, the member for Melbourne—that Australia is not walking away from renewable energy. Rather, we are making common-sense decisions about how to better deliver renewable energy projects and budget prudently at the same time. The government has already saved $435 million in agency funding through scrapping the carbon tax. The passage of the Australian Renewable Energy Repeal Bill is expected to deliver savings of almost $1.3 billion. Commonwealth investment of more than $1 billion in 200 projects, as I have already mentioned, will continue under the new arrangements, and private industry has more than matched that spending with inputs totalling around $1.8 billion. That brings total investment in renewables in this country to around $2.8 billion.

ARENA has involvement in three different projects in the Northern Territory with a total value of $36 million. One of those, the Daly River Solar Research Project, was completed at the end of last year and its findings were released this year. That particular project's focus was on the integration of solar energy into diesel minigrids, which will have a particular application in remote Territory communities. The key question for the Territory's Power and Water Corporation when looking at this innovation was how to maximise solar energy penetration in minigrids to achieve the highest possible diesel fuel savings while also maintaining an efficient power system and a reliable energy supply for Territorians. The key outcomes of that project were the Solar/Diesel Mini-Grid Handbook and a minigrid power system modelling tool. ARENA and the Power and Water Corporation also undertook a report on the impacts on the Alice Springs township power grid of increased solar energy penetration. This is a bit of a new area of electricity generation and, with Alice Springs being a sun city and with the increased emphasis on solar energy generation in recent years, this report aimed to better understand the technical, economic and regulatory requirements needed to achieve high levels of PV penetration of electricity grids.

These and the other projects undertaken by the agency will have short-, medium- and long-term benefits, and the coalition government is still eager to see the completion of the rest of the Renewable Energy Agency projects that are currently underway. That is why we are transferring supervision of these projects to the minister's office and indeed the department. This way we will ensure that the existing projects are well managed and still meeting key indicators along the way. We will ensure that what we learn from these projects is shared to allow the renewable energy industry to continue to grow and prosper.

Darwin and Palmerston residents are innovators at heart. They have welcomed renewable energy with open arms, and many homeowners now have an impressive collection of solar panels and other alternative energy sources in their homes. Instead of the pernicious slug of a carbon tax on all Australians, the coalition is going down the same path as the rest of the world through policies that provide direct incentives to adopt new technologies that reduce emissions will improve energy efficiency. These policies can be pursued with or without agencies such as ARENA. Our emissions reduction fund offers a carrot approach, not a stick approach, to the reduction of emissions to achieve our goal of a five per cent reduction by 2020.

It should never be forgotten just how 'successful' the carbon tax was at achieving its stated goal of reducing emissions: domestic emissions, under the carbon tax, actually continued to rise. The previous government's own modelling, which it submitted to the United Nations Framework Convention on Climate Change, shows that, under the carbon tax, Australia's emission would have increased from around 560 million tonnes in 2010 to 637 million tonnes by 2020. So the carbon tax was estimated to accrue $16 billion over two years for no change in domestic emissions.

The Emissions Reduction Fund takes a more holistic view of carbon emissions reduction than simply imposing a tax on Australians. We will look at direct abatement purchasing schemes such as Norway's commercial carbon procurement facility, which purchases abatement worth millions of dollars through a competitive tender process. Japan's joint credit mechanism is purchasing abatement and funding low carbon technology diffusion through bilateral agreements with developing countries. As well, the United Nations clean energy development mechanism operates as an abatement procurement scheme. It has registered over 7,000 projects and generated over 1.4 billion tonnes of abatement for market based purchase.

The government supports the science of climate change and is committed to reducing domestic emissions by 2020 without an electricity tax. Preliminary figures from the Department of the Environment indicate that our abatement challenges is now around 440 million tonnes to 2020 rather than the 750 million tonnes assumed in other previous projections. This government will focus on measures that directly address the 440 million tonne abatement challenge to reduce emissions through measures such as reafforestation, cleaning up power stations, claiming up waste landfill and cleaning up waste coalmine gas. We will also foster innovation. This can be done in lockstep with the private sector, which is already committing $1.8 billion to drive development of measures which will go a long way to reducing emissions.

This repeal bill provides for the transfer of all ARENA's existing contracts and commitments to the Commonwealth, with the Department of Industry to assume management on the commencement of this legislation. Yes, this was a tough decision, but it was a common-sense decision when we look at the enormous capacity of our public service and industry to do the right thing by the nation and also at the savings to be made in the context of our budget. Some of the speakers here this morning have suggested that the coalition does not support renewables. Well, nothing could be further from the truth. We also support Australia and Australians, and we are doing everything we possibly can to ensure that we have a prosperous economy and a safe, secure Australia. That means we sometimes have to make tough decisions, but those decisions are always made to ensure that we have a prosperous economy and a safe, secure country.


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