Mike Kelly (Eden-Monaro, Australian Labor Party) Share this | Hansard source

I rise to speak on the Social Services Legislation Amendment (Energy Assistance Payment and Pensioner Concession Card) Bill 2017. I would like to reflect on quite an amazing history. We talked the other night about the education policy of the present government and the Orwellian nightmare we have been traversing. The issue of pensions is one that also illustrates that incredible story. Really, I think that nothing illustrates more the government's unfairness in its approach to budget measures than the history we have seen in relation to pensions.

Again, if we hark back to those promises that were made before the 2013 election, they were that there would be no changes to pensions, let alone cuts—no changes whatsoever. Then what we saw in that 2014 budget was an incredibly brutal attack on those pensions. I think the area of those pension cuts that concerned me the most related to, in particular, the attempts to cut veterans' pensions and support for war widows and for war orphans. Of course, this was following the Labor record in government of actually taking pensions to historic levels—historic improvements—and introducing new measures to better reflect the support that pensioners of all kinds needed. In particular, there was the introduction of one new indexation mechanism known as the pensioners and beneficiaries cost of living index. We know that CPI did not necessarily reflect the true costs of living. You cannot eat a plasma television even if the price of those TVs come down. That is not something that is relevant to the day-to-day survival of a pensioner.

And so this PBCLI was a very important mechanism to reflect the true cost of living for a pensioner. What does it cost to actually put food on the table or to use electricity, petrol and other basic services and charges? The stripping away of all those efforts by Labor really set back the cause of providing for citizens in the context of a period of time where we had seen the cost of living become a major problem for low- and middle-income earners and pensioners in Australia. It effectively doubled. We saw articles in the media today reflecting on the doubling of cost-of-living issues and the essential elements for maintaining life.

This 2014 attempt to wind back these pensions, in particular in the veterans' area, caused a storm of protest in the veterans' community, as it rightly should. One article at the time in relation to those cost-cutting exercises was very illustrative of this. It was an article by Heath Aston in April 2015, as the full impact of these cuts were starting to be felt. Of course, the Abbott government was refusing to release documents which fully explained and elucidated on these things, but we knew that those changes were going to affect something like 300,000 military veterans and their spouses.

The decision in the budget papers at that time was forecast to cut $65.1 million from veterans and widows when it was to take effect in 2017, and those effects were to compound year-on-year. The government at that time also announced that it was scrapping the $800-a-year seniors supplement that Labor created and which was accessed by an estimated 29,000 veterans and their families. It was to help pay for energy, telephone and internet bills, council rates and the like.

One particularly bitter veteran, Bob Whinnen, a South Australian truck driver who fought in Vietnam, said that conscripts like him were never able to fulfil their full potential in civilian life. His quote in that article was:

We were conscripted by a Liberal-National Coalition government and they sent us there grossly ill-equipped with World War II arms. The North Vietnamese were cutting the grass with their machine guns. Now another Coalition government does this to us.

So there was a great deal of resentment and disgust at what was happening to our war widows, war orphans and veterans at that time. The Defence Force Welfare Association and the ADSO really importuned the then Prime Minister, Mr Abbott, to have a closer look at what he was doing there and to realise the folly of his ways.

I am proud of the effort that the Labor Party and the crossbenchers put in to defeat the worst aspects of what was being attempted then. Of course, that then folded over into defending Defence Force wages. At the same time as we saw that happen in the 2014 budget, later the Defence Force Remuneration Tribunal effectively attempted to cut Defence Force pay and conditions. That was received with equal horror. Again, that battle was entered into by Labor and crossbenchers and we were able to achieve some relenting of that vicious attack. But we still did not achieve Labor's three per cent wage rises for Defence Force personnel.

That was a shocking situation and now, again, we are now seeing in this attempt to wind back the support for the energy supplement for our seniors a repetition of that, because it will apply across the board to all these pension and support recipients.

What a cynical move it is to say they are going to give them $75 in 'go-away money' in exchange for the $375 a year that they were going to get. What we see in that is a classic illustration of how this government has approached its time—the policy confusion over these last four years. Effectively, they begin by taking four wheels off your car and then give you one back and then ask you to congratulate them and tell them what a great job they have done. We are seeing that in the schools debate—they rip all that money out and then try and put some back in and say it is all good. We have seen that in so many policy areas this government has pursued. Really, the public are not going to cop this kind of con anymore. In this respect, it is an insult to say they will give $75 and that is it. It is a recognition that the cost-of-living pressures are real, that these energy cost increases are real, but at the same time it is saying that is all you get and you will have to make that $75 stretch for the rest of your life.

That brings us back to the government's heinous attempt to blame the carbon tax and renewable energy for these cost-of-living increases in the energy sector. You will recall that the so-called carbon tax was the source of all evil for costs on pensioners and low- and middle-income earners. That denied the truth of the situation at the time, which was that, firstly, Labor introduced a support mechanism that completely dealt with any impacts arising out of the introduction of our carbon pricing scheme. The truth of that situation—and it is the truth now—is that the increase in electricity costs is being generated by so many other aspects. In particular, there was a wide-ranging upgrade of the poles and wires in New South Wales. Massive cost increases were introduced into the system through that process.

Privatisation was also a factor in that. Sharon Beder, from the University of Wollongong, in a paper that she wrote in 2013, concluded:

The real cause of electricity price increases in eastern Australia have been: firstly the introduction of a national electricity market and the consequent price manipulation by electricity generators; secondly the shifting of risk arising from market price volatility from electricity retailers to ratepayers; and finally, the introduction of a pricing formula for electricity distribution companies which replaces investment decisions based on need and forward planning with those based on maximising rate of return. Further privatisation or deregulation is therefore a solution likely to exacerbate the problem rather solve it.

These are the sorts of things that my friends in the Electrical Trades Union and others have warned about. There will be issues for national security, the cost of electricity down the track and the reliability of the service provided. And boy, haven't we seen that played out! All of the reports that have been done since the Prime Minister's attempts to blame it on renewable energy or the heat in South Australia have been shown to be complete fallacy. Effectively, if it had not been for the investment that we saw in renewable energy, there would have been much greater impact on consumer prices because of the system capacity that is disappearing as our fossil fuel generated energy sources decline. The simple commercial reality is that no-one is going to invest in new coal-fired power generation. The decision to shut Hazlewood was a commercial decision made by companies in France and Japan based on a simple commercial analysis. If you were going to build new coal-fired power stations now, that would simply add even more to the consumer cost impact of electricity prices.

At the same time, we know that investment in renewables is an investment in long-term cheaper electricity. You can see the logic of that. For coal-fired power, you have to have a huge open-cut or subsurface coalmine and there is the effort to extract the coal, and then it has to be transported to a massive coal-fired power station, the coal has to be burnt to produce steam and then the electricity has to be generated. If you put up a wind turbine, it takes advantage of a free resource—the wind that is blowing—and a solar farm takes advantage of the free resource of the sun. When you achieve the strategic weight of that renewable energy investment, that renewable energy sector, you will see that there will over time be a significant reduction in cost provided it is all put in the context of a well-managed transition plan and a plan to manage the grid.

The most heinous impact of the failure of government policy in this area is that that transition and that management of the grid has just not happened. In the context of what is a national situation and a national energy electricity market, it was the federal government's responsibility to put in place a plan to take charge of the transition and the management of the grid. We have seen nothing happen in four years, and as a consequence the current situation has unfolded and we see impacts on consumer prices as a result. In countries where they have got this right—Denmark, for example—they are already withdrawing subsidies from the renewable energy sector because it is now well and truly standing on its own two feet and undercutting fossil fuel sources.

We have also seen in our country, apart from the gaming of the system by private operators, the impact of gas policy. The government has failed to adopt national interest tests up until now in relation to gas, and that has created a massive problem. Without moving rapidly to even greater sources of renewable energy, energy markets have to fall back on gas as the transition fuel, as the mechanism with which to manage peaks. The situation that has evolved in relation to gas exports has had a massive impact on the domestic price of gas. The interests of ordinary Australians have been sold out by governments that have been prepared in this country at state and federal levels to sacrifice consumers' interests for the export buck when at the same time in those early days we seemed to be getting nothing back from exports because of the concessions that were made to them.

Obviously a number of factors have caused these price increases, but what we know is that they are going to continue in the short term. There have been forecasts of price rises increasing by another 40 per cent or so in time to come. The government have completely disregarded all the best advice that could be offered to them on how to achieve efficiency in the energy market—advice from, initially, Mr Shergold, the Productivity Commission, the OECD and the IMF. They did not follow the example of Conservative colleagues in the UK, Germany and New Zealand, and they were not prepared to get involved in energy markets with China, Japan, South Korea, California, Canada, Europe et cetera. We are going to see price rises because they are ignoring the advice of all of these bodies, including the Young Nationals, the National Farmers Federation, all of business, the energy market operators and even their own Chief Scientist, Dr Finkel—a scientist they appointed, who has said time and time again that an emissions intensity scheme not only is going to be the way to achieve our outcomes here but also will reduce the impact for consumers, and it is the most cost-effective way to do that and to transition effectively to a decarbonised energy generation sector. It is time the government woke up to that and did not make pensioners pay the price for their bad policy

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