John Murphy (Reid, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Resources and Energy and the Minister for Tourism. Will the minister inform the House about the importance of policy certainty to deliver investment in the energy sector?

Martin Ferguson (Batman, Australian Labor Party, Minister for Resources and Energy) Share this | Link to this | Hansard source

I thank the member for Reid for the question. In answering it, I remind the House that one of the cornerstones of the strength of the Australian economy has been the reliability of our electricity system. It is regarded as one of the most efficient national energy markets in the OECD world. For those reasons, we as a community are going through a series of significant increases in the cost of electricity, largely born out of decisions at a state and territory level. These decisions, as recognised by the Premier of Western Australia, are absolutely required to maintain reliability for the strength of the Australian economy. Currently in the pipeline are investments of about $100 billion over the next 10 years, of which $40 billion has currently been committed. Those investments are about maintaining the reliability of the system, going to fundamental issues such as network assets—the poles and the wires—and our generation assets.

That is not just the view of the government. I remind the House that this issue was actually recognised by the member for Groom. I refer to his statement of 20 August this year when he said:

If you look at where the investment has to go, there is massive investment to be made out there. You can’t dally around.

No, you cannot dally around on the investments in the current pipeline, and you cannot dally around on the question of our absolute need for new investment in generation capacity. We have a strong economy. Hence, the demand for energy is increasing. Our problem in recent years has been an inadequate amount of investment in new generation capacity in Australia. That is because there is no-one interested at this point in time in investing in new coal fired generation capacity in Australia.

The House supported a renewable energy target. That will see an immediate growth in wind energy in Australia. We would all appreciate that that gives the energy system some challenges as to reliability. What is now required is some fundamental investment in baseload capacity, and the transitional fuel is going to be gas. To bring on these immediate investments in relation to the transition, we require a price on carbon so that the industry has the certainty it needs for the purposes of investing in Australia.

For those reasons, this government is absolutely committed to building consensus on these issues, just as we built consensus in the 1980s and 1990s on fundamental restructuring of the Australian economy. This is equal to the changes we made on issues of globalisation, a reduction in tariffs and changes in the nature of workplace relations in Australia, which well positioned Australia for the 21st century. We now confront the same challenges on the issue of electricity and the reliability of our system, which is the key to our economic future from both an industry and a household point of view.

In conclusion, I simply say that the sooner we resolve the issue of a price on carbon the sooner we can make these baseload decisions which guarantee our economic future, guarantee that when we go to work there are no brownouts and there is no shedding so we can actually put in a hard day’s work for a fair day’s pay and guarantee that when we go home we can turn on the lights and cook a meal without questioning the reliability of the electricity system in Australia. A price on carbon is fundamental to our economic future.