Wednesday, 14 September 2016
Budget Savings (Omnibus) Bill 2016; Consideration in Detail
I move the amendment circulated in my name:
(1) Schedule 5, page 18 (lines 1 to 7), omit the Schedule.
The amendment does a very simple thing. It removes from this bill the cuts to ARENA, full stop. As we know, there are over a billion dollars of cuts to ARENA proposed in this bill. We anticipate that there are going to be some subsequent amendments moved to confirm that there will be over half a billion dollars in cuts to ARENA in this bill. If we are talking about half a billion dollars then the question is: can this chamber and this parliament find a better place to raise half a billion dollars than by cutting renewable energy?
We know that the Australian Renewable Energy Agency has the support of the renewable energy industry, but even more importantly it has the support of companies that run coal-fired power stations, like AGL, and it has the support of multinational companies like GE. They have all said and pleaded with this government and with the Labor Party, 'Please don't kill ARENA.' We now have the opportunity to say, 'Let's work together to find a better place to raise half a billion dollars.'
I think it is not beyond the wit of Labor, Liberal and the Greens to find, for example, a way of winding back superannuation tax concessions to raise half a billion dollars. All sides of this parliament have said that superannuation tax concessions are too generous and need to be wound back. We know that it costs around $30 billion a year—this is what Treasury tells us—to prop up the super system. Everyone has said there is a need for some reform. Okay. So let's give ARENA a stay of execution and instead work together to find half a billion dollars from superannuation. I bet we could do it.
There are plenty of other places that we could find half a billion dollars from as well. We could wind back some of the tax breaks that we give to large mining companies. We could wind back some of the tax breaks that we give to the banks. These measures might have the agreement across the parliament; they might not. But there has to be—I am convinced of it—a better way of finding half a billion dollars than by taking it from the Australian Renewable Energy Agency.
We heard some statements during the second reading debate that ARENA had been saved. Well, now is the chance to do it. No-one is holding a gun to Labor's head and saying they have to cut ARENA's funding by half a billion dollars. No-one is holding a gun to Labor's head and saying they have to cut clean energy to help balance the budget. No-one is forcing them to do this. I say to the opposition: please support us on this amendment and we can find other ways when it gets to the Senate of making up the difference. Please support us on this amendment because this is a chance to save the Renewable Energy Agency.
I say to the opposition: you found other areas on which you were prepared to stand up to the government and say, 'No go.' And I am glad that you did that, because some of those areas were things that we had previously worked on together, like dental—although, as the member for Denison says, we still do not know what is going to come out of that; it might still be on the chopping block if this deal is any indication of what is in store for us. But if you could say no on some things then say no on this. Say 'No', Labor, to cutting half a billion dollars out of renewable energy. Find that spine that you found on the other measures for renewable energy, because this is critically important.
I say to Labor: please support us on this amendment. And I say to the government: please support this amendment and give ARENA its full funding back and let's work together to find other ways to raise that half a billion dollars, because in the context of the overall budget that is a very doable ask. If Labor and Liberal are really saying that the only way we can repair the budget is by taking money out of renewable energy then they are not looking hard enough, because we can point to billions and billions of dollars in tax concessions going to the top end of town. It would be much better to take the money off those who can afford it rather than taking it out of renewable energy. I commend this amendment to the House.
I present a supplementary explanatory memorandum to the bill. I ask leave of the House to move government amendments (1) to (19), as circulated, together.
I move government amendments (1) to (19):
(1) Clause 2, page 2 (table item 11), omit the table item.
(2) Clause 2, page 4 (table item 22), omit the table item.
(3) Clause 2, page 4 (after table item 24), insert:
(4) Schedule 5, item 1, page 18 (lines 5 to 7), omit the item, substitute:
1 Subsection 64(1) (table items 5 to 9)
Repeal the items, substitute:
(5) Schedule 9, page 46 (line 1) to page 56 (line 2), omit the Schedule.
(6) Schedule 20, page 180 (line 1) to page 182 (line 12), omit the Schedule.
(7) Schedule 21, items 26 to 35, page 190 (line 4) to page 195 (line 7), omit the items.
(8) Schedule 21, item 38, page 198 (line 16), omit "item; and", substitute "item.".
(9) Schedule 21, item 38, page 198 (lines 17 to 21), omit paragraph (i).
(10) Schedule 21, items 39 to 85, page 198 (line 22) to page 209 (line 6), omit the items.
(11) Schedule 21, Part 3, page 210 (lines 1 to 15), omit the Part.
(12) Schedule 21, items 90 to 103, page 211 (line 4) to page 213 (line 14), omit the items.
(13) Schedule 21, item 105, page 216 (line 6) to page 217 (line 5), omit the item.
(14) Schedule 21, item 106, page 217 (line 23), omit "or a gold card".
(15) Schedule 21, item 107, page 218 (line 26), omit "item; and", substitute "item.".
(16) Schedule 21, item 107, page 218 (lines 27 to 31), omit paragraph (i).
(17) Schedule 21, items 108 to 118, page 218 (line 32) to page 220 (line 14), omit the items.
(18) Schedule 21, Part 5, page 221 (line 1) to page 222 (line 32), omit the Part.
(19) Page 225 (after line 32), after Schedule 21, insert:
Schedule 21A—Income limit for FTB Part A supplement
A New Tax System (Family Assistance) Act 1999
1 Before subclause 38A(1) of Schedule 1
(1A) Despite any other provision of this clause, the amount of the FTB Part A supplement to be added in working out an individual's maximum rate under clause 3, or an individual's Method 2 base rate under clause 25, is nil if the individual's adjusted taxable income is more than $80,000.
Note: If the individual is a member of a couple, the individual's adjusted taxable income includes the adjusted taxable income of the individual's partner: see clause 3 of Schedule 3.
2 Application provision
The amendment made by this Schedule applies in relation to working out the rate of family tax benefit for days on or after the commencement of this Schedule.
I commend them to the House.
I have a number of questions for the Treasurer. There is confirmation from the shadow Treasurer that this reflects the agreement that was reached. In the explanatory memorandum there is a reference on page 6. I am looking at the point about Australian Renewable Energy Agency's finances where it says the government has agreed to restore funding to the Australian Renewable Energy Agency, ARENA, of $800 million over the five years to 2021-22 and to reduce by a commensurate amount the capital allocated to the Clean Energy Innovation Fund. Earlier today The Guardian reported that the spokesperson for the shadow environment minister said:
The discussion was progressed on the basis that any save that fell short of what we needed would be made up for by some other area, and that’s exactly what happened. So no cut to the Clean Energy Innovation Fund is needed.
I am seeking clarification from the Treasurer, given that we have just heard from the shadow Treasurer that this reflects the agreement that was reached. Labor is saying publicly that the agreement did not include any cut to the Clean Energy Innovation Fund, but the explanatory memorandum says there will be a reduction of $800 million in the capital allocated to the Clean Energy Innovation Fund. Who is right, and what is the agreement?
I was just asked by the Leader of the Opposition how long this will go on for. I say to the House: part of the problem we have got is that Labor and the coalition refused to have an open hearing into this bill. We now have the opportunity here, for the first time, to ask questions about the amendment. My question—and maybe the Treasurer did not hear it correctly—was not about the CEFC. I understand the point that is made in the explanatory memorandum that there is no overall reduction to the Clean Energy Finance Corporation. My question is about the Clean Energy Innovation Fund. Labor says the deal did not include any reduction to the clean energy fund. The explanatory memorandum says there will be a reduction to the clean energy fund by the amount of $800 million that Labor says it saved for ARENA. So I ask again: what is the deal? Can the Treasurer confirm that there will be a reduction to the Clean Energy Innovation Fund, and was that part of the agreement reached with Labor?
The Clean Energy Innovation Fund provides debt and equity, not grants, to target clean energy technologies and businesses that have passed beyond the R&D stage but are not yet commercially ready to attract private sector capital. This type of government financial support will continue to support clean energy, but, unlike grants, will provide a return to the taxpayer. I think that covers the member's question.
I will give the Treasurer one last opportunity to advise the House whether or not part of the agreement with Labor included a reduction of $800 million for the Clean Energy Innovation Fund. The explanatory memorandum says it did. And so unless the Treasurer disavows the explanatory memorandum, it appears to be that the government is saying to the House, in writing, part of the deal was $800 million coming out of the Clean Energy Innovation Fund. That has been contradicted publicly by Labor this morning, and I am seeking clarification about who is right.
We are being asked to vote on this right now, when there has been no public hearing into the effects of these cuts and we have been given an explanatory memorandum and all of five minutes to examine this deal that has been done. It seems I cannot get a straight answer from the government about what is included in the deal, because the Treasurer seems to be unwilling to confirm what is in the explanatory memorandum or tell us whether what is being said publicly about it is right or wrong. So maybe it is the case that the opposition has been played off a break on this: they think they agreed to something, but in fact they have agreed to something else—in which case the government has got one over on the opposition. Or maybe it is the case that what is in the explanatory memorandum is right, that it is part of an agreement—the word 'agreement' is there—and that the Labor Party agreed to take $800 million from the Clean Energy Innovation Fund, in which case it is Labor who is saying one thing in parliament and saying another thing to the public and the media.
This is crucially important because we are being asked to vote on this right now, with all of 10 or 20 minutes to examine this so-called deal that has been done, and there is an absolute lack of clarity about where the money is going to come from to supposedly save ARENA. I ask again: can the Treasurer confirm that what was in the explanatory memorandum is right? If so, how does that square with public statements being made that there was no agreement to cut the Clean Energy Innovation Fund?
Once again I point out to the member, and I refer him to the new explanatory memorandum that I tabled a few minutes ago, that I refer to the fact that there is the difference between debt and equity. This is debt and grants, and that is an on- and off-balance sheet issue. I commend the explanatory memorandum to the member.
I would seek clarification from the Labor Party. Have they got an agreement that there are going to be no cutbacks, or haven't they? We want to know what the agreements are. It is quite a reasonable question asked by the honourable member for Melbourne.
While I am on my feet and while the ALP decide how they are going to answer the question, which will be rather curious for we crossbenchers, could I add this: I do not feel particularly comfortable in acting like, 'No, we don't agree to any cutbacks in anything.' What people like myself are saying is: for heaven's sake, everyone else on earth has a charge on goods coming into their country. Whether you call it an excise duty or a customs duty or whatever the hell you want to call it—a 'primage charge', as Billy Wentworth used to advocate in this place—even five per cent will bring in $16 billion a year. Surely some benefit for the Australian community would follow if, in fact, we put that charge on. Our manufacturing industries are collapsing because of overseas competition. All of our competitors have protective mechanisms—tariffs and various other mechanisms—that protect them. We cannot send our sugar into Europe; we cannot send our sugar into the United States. All of these other countries have protective mechanisms; we have no protective mechanisms whatsoever. Surely a five per cent or a 10 per cent charge for people who want to buy an item from overseas, instead of buying an Australian made item, is not an unreasonable proposition. In my opinion, that is one of the places where the money should come from—not cutting back on areas that are extremely important.
For the areas I represent in North Queensland, we are at the end of a 2,000-kilometre electricity line. The line losses of 20 per cent and 25 per cent and the cost of servicing the debt on those transmission lines is horrific; it is costing the Queensland government something like $500 million a year. So these ARENA projects are extremely important to us. Right at the end of the line is Karumba, and they are now getting into solar, which is absolutely ridiculous in any normal situation. But when you are trying to carry electricity nearly 3,000 kilometres, then it is very, very intelligent to have solar panels in. We commend Doug Scouller and the people doing it at that end. But they are doing this on ARENA grants. Let us be intelligent about this.
Persons like me would normally be anti the Greens agenda, but in this case we are not—because we are at the end of the line and we need these alternative energy sources, which are highly suitable and cheaper when you are dealing with the end of the line. I speak as a one-time minister for electricity in Queensland. But we would like an answer from the ALP. I do not think it is unreasonable for the honourable member to ask for clarification on this matter.
The government and the opposition reached agreement that ARENA would receive funding of $800 million over the next five years. That is what is necessary and agreed for ARENA to continue to operate. The government has separate arrangements off-budget, but the government has reassured us and reassured the public that the Clean Energy Finance Corporation is unaffected, with capital of $10 billion. That is a result; that is the case. The government has also agreed to a process for the shadow minister for climate change to work with the Minister for the Environment and Energy on the funding profile for ARENA. That is what we intend to ensure occurs, and I am sure it will occur.
Neither of them has answered the question, and it is clear why: they have been caught out. What the shadow Treasurer just spoke about was the Clean Energy Finance Corporation. That is not what my question was about. What I asked about was in the supplementary explanatory memorandum about the Clean Energy Innovation Fund. If there is confusion about this, let me clarify it. Speaking about the Clean Energy Innovation Fund—and I am reading from a transcript—the Prime Minister, on 23 March 2016, said:
… we are establishing a new $1 billion Clean Energy Innovation Fund and what that is going to do is every year invest $100 million in the smartest, most cutting edge Australian clean-energy technologies and businesses to ensure that we not only drive jobs and innovation in Australia but also play our part in cracking the very hard problems, the challenging technical difficulties that we face in terms of reducing emissions.
So it was a key announcement that there was going to be $1 billion for this.
As we know, the outcome of the negotiations that took place about ARENA is that half a billion dollars is coming out but $800 million is staying. The question is: where is that $800 million coming from? No sooner was the ink dry on that deal than the finance minister and the minister for energy went out and said the $800 million is going to come from elsewhere in the clean energy bucket. Labor then went out and said: 'No, that's not our understanding of the negotiations.' Again, so that there can be no confusion, let's be clear what Labor is saying. In The Guardian today, Labor is reported as saying: 'The government's Clean Energy Innovation Fund was never the subject of negotiations. The discussion was progressed on the basis that any save that fell short of what we needed would be made up by some other area'—not clean energy, some other area—'and that is exactly what happened.'
So no cut to the Clean Energy Innovation Fund is needed—that is what Labor is saying. So Labor and the government have been caught out, because there will be a cut to the Clean Energy Innovation Fund to make up for the so-called saving of ARENA. The money that is being left in the ARENA bucket is, according to the government's explanatory memorandum, coming from somewhere else. The government said in the explanatory memorandum: 'The government has agreed to restore funding to the Australian Renewable Energy Agency, ARENA, of $800 million over the five years to 2021-22 and reduce by a commensurate amount the capital allocated to the Clean Energy Innovation Fund.'
I am seeking clarification. This is the government's bill and the government's amendments.
Government members interjecting—
If we have misunderstood it then it can be clarified. Where is the $800 million coming from? It can be very, very easily clarified. So there is a lack of clarity on that.
Government members interjecting—
There has been absolutely no clarification. I want to move to another series of questions about the funding scheduled that was referred to in the amendments. I refer to item 4 of the amendments to schedule 5 which sets out a new funding schedule. Can the Treasurer confirm the total amount of the reduction in funding to ARENA under that funding schedule and which years it will be coming out of? I am interested in the profile between years 5, 6, 7, 8 and 9. What cuts are being made in which particular years? Can the Treasurer enlighten the House?
We have been given a schedule that sets out numbers next to a number of years, and those are the budget allocations for those particular years. Those numbers are obviously less than what ARENA currently gets. I am seeking clarification about where the cuts fall. The cuts are in the order of half a billion dollars, and I am seeking clarification as to which years they fall in. On my quick reading of it—given that we have not had a lot of time to pursue this—$241 million will come out in 2017-18 and $213 million comes out in 2019-20. The overwhelming bulk of the cuts—more than $514 million of the $517 million-odd in cuts—will come out in the first three years. Is that how we should understand the amendments we are being asked to vote on?
I will just make this final comment. I would just note how outrageous it is that we are being asked to sign off on a half a billion dollar cut and the Treasurer will not even do us the dignity of explaining where the cuts fall. The Treasurer is asking us to accept amendments to cut a government agency. He is giving us the schedule that lists what the funding for the agency is going to be. When he is asked the reasonable question, 'In what years are those cuts going to fall, given that you have given us a schedule?' he will not answer. I cannot recall any other instance in which a Treasurer has come into this House and said, 'I want you to pass a budget cut but I won't tell you when the cuts fall. Just accept the numbers I put in front of you.' This is treating this House with contempt—an unwillingness to simply say when these cuts are going to fall. 'I want you to vote on it right now, but I won't tell you when the cuts are going to fall.' I cannot recall a single instance in which this House has been treated with such contempt.
When the more questions you ask the less information you are given, it is crystal clear that there is something wrong with this dodgy deal. When our Treasurer, who is in charge of the finances of the nation, cannot even tell you when the cuts are going to fall, something is wrong. That is why his bill should be opposed.
Deputy Speaker Broadbent, I defer to your wisdom about the functioning of this place. But before we go to the third reading and possibly a division, I think we need to just clear this up. I am not doubting the Treasurer that there is a more recent explanatory memorandum but—despite my best efforts just then—I was not able to get a copy to see the latest version. The version I have says quite clearly:
The government has agreed to restore funding to the Australian Renewable Energy Agency (ARENA) of $800 million over five years to 2021-22, and reduce by a commensurate amount the capital allocated to the Clean Energy Innovation Fund …
And it goes on. I understand from talking to the Treasurer just then that there is a more recent version of this explanatory memorandum which—I understand from the Treasurer—does not include that statement. I think it is very important that before we finalise this matter we at least get to see the latest paperwork on what is a very, very important piece of parliamentary business. At the moment, despite our very best efforts, this is what we understand to be the facts of the matter, because we have not got a more up-to-date explanatory memorandum—I see the Clerk racing in and hopefully this will clear the matter up.
Through you, Deputy Speaker, I would ask the Treasurer: if the latest version of the explanatory memorandum does not have that paragraph, that would make almost make me even more nervous—because then it will be completely unknown where that $800 million is coming from. I suppose it would probably be a reasonable assumption by honourable members, including by the member for Melbourne and me, that it is still going to come from the Clean Energy Innovation Fund; it is just that the government does not want to broadcast it in the explanatory memorandum. I will keep talking while—hopefully—the latest version makes its way to the crossbench. If that cannot happen quickly enough, Treasurer, I would ask you to explain whether or not that paragraph has indeed been removed from the latest version of the explanatory memorandum and, if indeed it has been removed, what the source of that $800 million funding to ARENA will be. Will it indeed be by commensurate reduction in the Clean Energy Innovation Fund.
Thank you, Mr Pyne—I see here in this version that we have basically just removed the reference to the Clean Energy Innovation Fund. So, after that very longwinded preamble—and I am very grateful for your patience, Deputy Speaker—my question for the Treasurer is: where will that $800 million come from? It is very simple: will it be from the Clean Energy Innovation Fund? A simple yes or no would do the job.
As both the shadow Treasurer and I have made clear, the CSC's total balance of funds of $10 billion is unchanged by these measures. This is a package of measures which includes $6.3 billion of savings in some 25 different measures. So this bill pays for itself in the entirety of the savings that have been pursued through these measures.
Perhaps I can assist the House. Earlier this morning we asked the Treasurer's office for a copy of the supplementary explanatory memorandum. The document that we got from the Treasurer's office had at the end of the sentence: 'and reduce by a commensurate amount the capital allocated to the Clean Energy Innovation Fund'. And that is what the finance minister said yesterday. And that is what the energy minister said yesterday as well. That is the document that we got.
Then, during the course of this debate—because we caught them out—they come in here with a revised supplementary explanatory memorandum which takes that sentence out. In the course of the last two hours this morning, because they have been caught out—in that they are robbing Peter to pay Paul: they are taking $800 million from the Clean Energy Innovation Fund—they have taken it out of the explanatory memorandum. This is why this dirty deal must not be rushed through. If we can find that out in the space of a couple of hours—if the Treasurer can go from telling us, 'I am raiding $800 million from this clean energy fund to give it over here,' to 'No, I am not willing to tell the House that'—then what else are we going to find, the more we look into this deal?
This is what happens when you do dirty deals—to cut renewable energy, and to cut support to low-income earners—and then front up to parliament, without a public hearing, and say, 'push them through'. Then, when you ask the simple question, 'Where is the money going to come from?' they will not tell you. And then when you ask another simple question, 'Tell us over what years the money is going to come,' they won't tell you that either. This is a shameful process, and I am astounded that the Labor Party is signing up to it. This Labor Party is prepared to sign up to half a billion dollars of cuts to renewable energy, while the government is out there publicly telling people it is going to come from another renewable energy pot—and the government cannot even tell us over what years the cut is going to come. They are saying, 'Yes; let's push it through without the proper scrutiny that a bill like this deserves'.
The Treasurer treats this place with contempt and will not even get up and say when the cuts are going to fall—a very, very simple question—or where the money is going to come from. The last couple of hours should give everyone in this place and everyone who is watching what is going on here very great cause for concern—because if this is how we are going to work over the next couple of years; if we are going to try and secure this country's revenue base by doing afternoon deals that the parliament does not have an opportunity to scrutinise, where stories change during the course of a morning about where money is going to come from or where the cuts are going to fall, then this country is in a very dire place indeed.
What else is in this bill? What, if we had more than 20 minutes to examine it, would we find? If the last couple of hours tell you anything, it is that this government is intent on trying to balance the budget off the back of renewable energy, and off the back of people who have got fewer means and less money than others. The job of an opposition should be to oppose and scrutinise. It should not be to wave through—in a dodgy process that can be unpicked and unstitched within an hour or two—a bill that cuts half a billion dollars from a signature renewable energy agency, and possibly does a lot more as well. The Treasurer is not even willing to get his story straight. The shadow Treasurer gets up and talks about the CEFC. I am not talking about the CEFC. I am talking about the Prime Minister's signature project, the Clean Energy Innovation Fund. Is it going to be cut by $800 million? The Treasurer told us yes this morning in an explanatory memorandum. They revised it on the run when they were caught out. Who knows what the real story is! What we do know is that dirty deals are being done that will have an impact on clean energy, that will have an impact on people in this country, that will cut money for students and that will cut money for research and development. I, for one, am not willing to wave it through and give it a blank cheque, and I wish the opposition would oppose. You know the clue to your job title is in the word 'oppose'. Scrutinise. Do not let this mob get away with cutting half billion dollars from renewables when you do not know where it is going to come from. Do not let this mob get away with cutting money from research and development. Do not let this mob get away with cutting money from students and aged care. You railed against it for a couple of years when it was done under Tony Abbott. Continue to stand up to it now and we can find a better way to secure the revenue that this country needs. What is happening this morning shames everyone in this place and should shame every Australian who is concerned about good budget management, because good budget management would be done transparently, and you would take the money off those who could afford it instead of taking the axe to clean energy. (Time expired)
I think it is fair to say that the member for Melbourne has made his points forcefully and he has had a fair run talking about these matters. The explanatory memorandum has now clarified the question that he was asking. We do have three hours of maiden speeches today and many people have travelled from interstate to be here for those maiden speeches. Therefore, I move:
That the question be now put.
Question agreed to, Mr Bandt and Mr Wilkie dissenting.