Thursday, 28 August 2014
Australian Renewable Energy Agency (Repeal) Bill 2014; Second Reading
I thought for a minute during that speech that the parliamentary secretary was not going to come clean on the cuts to the budget for renewables. He spent the first half of his speech making it quite clear that the issue we were debating here today was not the value of ARENA, which he acknowledges is very high, or the value of the work that it does, which he acknowledges is also very high. The quality of the work that ARENA does was acknowledged by the minister in his second reading speech. So the quality of the work and the need for the work are not in dispute here; but according to the parliamentary secretary, in the first three quarters of this speech, the single issue we are considering is whether ARENA is the best mechanism to deliver it. Finally, toward the end of his speech, he came clean on what is clear in the bill and explanatory memorandum: this bill abolishes ARENA. It removes the remainder of its budget from the renewable energy space and transfers it to general revenue where, presumably, it can help fund the $20 billion paid parental leave scheme. They do have a budget hole to fill! They can take it from renewable energy and put it into paid parental leave; I guess to them it seems a reasonable thing.
This is about closing down an agency which has done good work. It is acknowledged as having done good work. It is acknowledged by the government as having done important work. They are removing its budget and transferring its existing contracts to be administered within the department. That is a wind-up. That is the shutdown of an organisation which fills an incredibly important function in terms of our country's future.
Before I talk further about what ARENA actually does and what we are going to lose, I want to point out, because I am fascinated by it, the government's red-tape reduction rhetoric relative to its delivery. The regulation impact statement says that business will save an estimated $1.8 million in costs annually, presumably from not receiving grants. That is really interesting. I assume that current contracts will still be administered as current contracts, as they usually are, so I can only see $1.8 million being saved here because they are not giving out any more. It is a really interesting argument to say to an R&D company, 'We're saving you read-tape dollars by not giving you a grant in the first place.' I am sure they will be delighted by that and will add that to that wonderful red-tape reduction achievement of this government. You do not receive grants; therefore, you do not have the cost of administering them. Fabulous stuff—really smart. It is great spin in what is probably one of the thinnest and least fulsome explanatory memoranda for such an important bill that I have ever seen in my now 10 years in this place.
It would be comedy if it were not serious. The wheels have fallen off the government's budget. The Treasurer cannot find the jack. The Palmer United Party has run off with the steering wheel. The Minister for Education is pumping out the fuel as quickly as possible by cutting education. Now we have the government making sure that we will not have a better car in the future. By cutting R&D, it is making sure that the efficiency and effectiveness of future cars simply will not happen. When this one fails, it is over. It is a government, with its eyes clearly in the rear-vision mirror, that cannot see what is happening in the world and the capacity of Australia to be part of it.
I want to talk about what is happening in the world because what is happening in the rest of the world is incredible. While our government is driving us backwards in the areas of renewable energy and action on climate change, it is really interesting to see what is happening in the rest of the world. And I separate this from the whole issue of whether climate change is real. I will not even go into that; I will just talk about the economics of growth. What is growing in the world in energy? Where is the money? Where is the investment around the world compared to what we are doing here today by pulling money out of future investments in technology that will drive growth in the future?
Solar PV has been expanding at a rapid rate, with growth in the global capacity averaging almost 55 per cent annually over the past five years. I remind the government that, prior to the Howard years, Australia was actually one of the leaders in this technology. In fact, we had 12 per cent of the global market share in solar back in the mid-nineties. We were one of the world leaders in this area. Are we now? No. The rest of the world has been growing, on average, by 55 per cent annually over the last five years, and we have a government that is pulling out the R&D investment in this area—in the bill that we debate today. In 2013, last year, renewables accounted for more than 56 per cent of net additions to global power capacity. It was not coal fired power; it was renewables. More than half of the investment in new power capacity around the world was in renewables. In Australia? No. Are we rushing to catch up? No. We have a government with its eyes in the rear-vision mirror, looking back to the sixties and driving us backwards as quickly as possible. This is a folly.
As the member for Solomon mentioned, sometimes tough decisions involve making sure that you are investing now in the future—that you are making sure that we are stronger in the future because of the decisions we made today. Sometimes tough decisions are those decisions. This is not a case of a tough decision; this is a case of a foolish decision that does not recognise what is happening in the world and does not recognise Australia's capacity to be part of one of the few growing sectors in the world. This is a sector which has grown while other sectors shrank. Through the whole global financial crisis, this is an area that continued to grow.
By the end of 2013, the countries that were at the top in the world for total installed renewable power capacity were China and the United States. In spite of all of the things that we hear about China and the United States not doing anything, China and the United States were Nos 1 and 2, followed by Brazil, Canada and Germany. The top countries for non-hydro were China, the United States and Germany. Among the world's top countries for non-hydro, Denmark had a clear lead per capita, along with Uruguay, Mauritius and Costa Rica—but not Australia. We cannot do as well as those countries, with all of our natural advantages: sun, wind, thermal technology and waves. With our large coastline, we cannot compete with developing countries in investments in renewables. In the rest of the world, more than 50 per cent of investment in new power capacity is in renewables. Not us. With all of our talent, not us. And what is the government doing today? Making sure that we will not be in the top 10; making sure we will not be anywhere near it; making sure we will be at the bottom. It is a folly—it is not a tough decision; it is a very foolish one.
In the European Union, renewables represented the majority of new electric generating capacity for the sixth consecutive year, with a 72 per cent share in 2013, in contrast to a decade earlier, when it was 80 per cent fossil fuel. They went to 72 per cent renewable from 80 per cent fossil fuel in a decade. That is an extraordinary effort by countries that know where the future is and want to make sure they are part of it. China's new renewable power capacity surpassed new fossil fuel and nuclear capacity for the first time. China produced more of its power capacity with renewables than with fossil fuel for the first time. This country that the government claims is not acting is doing so much better than us. You can bet that today they are not cutting their investment in renewable technology. You can bet today that they are increasing it.
The impact of all of this growth in this area on jobs is extraordinary. More than one million jobs were added to the renewable energy sector around the world in 2013, bringing it up to an estimated 6½ million people worldwide working in this sector. It is no doubt the future of power capacity—and Australia has a talent for it. We are one of the most creative nations in the world. We punch above our weight in science and innovation and have done for decades. We have the capacity in our minds and the natural capacity in our environment to be world leaders in this. Whether you believe in climate change or not—I do, but I know there are many people on the other side who do not—it is foolish to ignore the trends in the world and to ignore where the growth in technology is. To look at where patents are coming from, what fields they are coming from and how much money are other countries investing in order to be in this and not be there as a country is a folly. It is an ideologically driven folly by people whose failure to believe in climate change—to accept the science—has somehow transcended into an absolute ignorance of the economic trends around the world. For economic reasons alone you invest in renewable energy. For economic reasons alone you put a price on carbon to drive every business to find new solutions so that you can be part of the next decade, not part of the last one. This government is taking us back to the last decade, and what is happening today is shameful. There would probably be no other country in the world whose parliament would get together today to actually reduce their investment in the future, and that is what we do today.
I want to have a look at some of the great projects that ARENA has funded. There are 17 completed projects and about 100 or so in the pipeline that will now be transferred to what I assume is the highly qualified management of the department. I am going to read some of them out because I want to point out to those on the other side who claim to represent rural Australia so well that 70 per cent of the projects funded by ARENA are actually in regional areas. You expect that if you think about the nature of the next wave of renewable energy—biodiesel, biofuels, biomass and that range of growth areas. You would expect that a lot of the projects that take place in this country would be about the nature of the fuel itself, the nature of the plant, the nature of the material and the techniques for processing it into a commercial product.
We had the Australian feedstock and refining capacity to produce sustainable aviation fuel, with 12,000 jobs over the next 20 years. There was cane to fuel feasibility of producing biofuel from sugarcane waste, investigating the feasibility of producing biofuel from sugarcane bar gas. There was generating renewable energy from almond waste, production of generation to ethanol from sugarcane waste, production of biofuel from microalgae, sustainable production of transport biofuels from Mallee crops, the Daly River solar research product to demonstrate commercial production of biocrude oil from biomass and fabrication of thermionic device using advanced ceramics—that is the first one that is not regionally based. There was improving accessibility of system adviser model for Australian concentrating solar power users, which was also not a regional one. There was a model for community owned solar, which was in a regional community, new materials and architectures for organic solar cells et cetera. So the vast majority—70 per cent of these—are based in regional areas and are developing technologies that will fuel growth in our regional areas an develop complete new industries in large parts of Australia. They are incredibly important projects.
I also want to talk about the impact of the removal of this kind of funding from business generally. Around Australia in communities like mine all around the country we have seen over the last 10 years a massive change in the range of skills people have in the renewables sector. In the Small-scale Renewable Energy Scheme, for example, in the solar area there are now about 13,000 full-time people and 3,000 to 4,000 small businesses that have come into the sector because of the advances in technology that are making those businesses viable and earning a living. Interestingly again, the biggest uptake in domestic and small-business solar is in regional areas. It is not in the cities, as you might expect. Perhaps it is because of the distances or the need to cut costs, but the majority of areas where the uptake is greater are regional. And we have a government that is not even prepared to stand up and commit to the government support that sustains that sector on its growth trajectory. It leaves a sector of 3,000 to 4,000 small businesses in extraordinary uncertainty, unable to grow, unable to invest, in a holding pattern waiting for a government a year in after it promised in the election to keep these things in place still not providing the certainty that industry needs, still not providing the certainty that business needs to survive, a government that claims to be about small business, a government that claims to be bringing certainty leaving large sectors—the renewable energy sector generally and the small-scale businesses that work in that sector as well—in a state of considerable uncertainty.
This is not a good day for the future of Australia. This is a day where a government is driving us backwards, is ignoring the economic realities of the world and is putting us in a weaker place than we were yesterday.