House debates

Wednesday, 21 June 2017

Private Members' Business


4:15 pm

Photo of Ted O'BrienTed O'Brien (Fairfax, Liberal Party) Share this | | Hansard source

I move:

That this House:

(1) recognises that electricity prices affect every Australian, whether it be the price of electricity at home or the cost to businesses that will flow on to threaten jobs and business competitiveness;

(2) acknowledges that since 2009, in Queensland the average price of electricity has risen from $35 MW/H to $95.27 MW/H which is a 180 per cent increase;

(3) further acknowledges that there has been a 59 per cent increase in the last year in electricity prices;

(4) notes that electricity prices have reached record levels in Queensland, including $14,000 MW/H in January 2017;

(5) notes with concern the allegations of Rio Tinto that the Queensland Government is manipulating the electricity grid to keep prices high and increase revenue for its state owned assets; and

(6) calls for a full and transparent inquiry to be conducted into the cost of electricity in Queensland with recommendations for solutions to fix the problem.

The Labor government of Annastacia Palaszczuk in Queensland is the worst manager of an electricity grid in this country, at a huge and rapidly emerging cost to household consumers, to businesses, to the economy and to jobs. Jay Weatherill's management in South Australia is clearly awful, as repeated blackouts there have shown. You cannot have a reliable power system so heavily reliant on wind unless you have a backup, and Jay Weatherill has none, other than an extension cord over the border to a shrinking reserve supply in Victoria. Daniel Andrews's management in Victoria is woeful, as the closure of the Hazelwood power station earlier this year and the moratorium on gas exploration attest. But Ms Palaszczuk's government in Queensland is far and away the worst. Given the vast high-quality energy-producing resources available in my home state, we should have utterly reliable, affordable power in Queensland now and well into the future, but we do not, and the future is increasingly bleak.

Five years ago, the average price of power in my home state reflected the fact that its generators had access to some of the best reserves of coal and gas in the world. Power was just over $29 per megawatt hour, the second cheapest in the National Electricity Market at the time, behind only Victoria, which also has access to vast reserves of gas and to even cheaper brown coal, rather than the high-quality black coal of Queensland. Now, however, in Queensland we have the second most expensive power in the NEM, ahead of only South Australia. The average price in Queensland for 2017 to date is $93.81 per megawatt hour, down very slightly from when I worded the motion that we now address but still far and away the worst in the NEM except for the price in Jay Weatherill's state, where the average currently sits at $108.88 and is no doubt headed further north. Queensland is now also significantly worse off than New South Wales, where the average price is $81.36 for 2017 to date. We are far worse than the $74.75 in Tasmania and way behind Victoria, where the average is $65.71 but where the price will no doubt rocket as the impact of the closure of its largest generator, at Hazelwood, kicks in. It is going to be a long, hot summer in Victoria, and the price there is going to go through the roof.

The problems in South Australia and Victoria are well known, but the issue for resource-rich Queensland has to be: how has it come to this? How has the NEM state with by far the richest energy-producing resources in the market ended up with some of the highest power prices? The answer appears to be incompetence, built on greed. History shows us that standard operating procedure for Labor governments in Queensland is going backwards. Wayne Goss and Kevin Rudd corporatised the Queensland power industry and began a Labor habit of raiding the annual earnings of the industry through dividends, through income tax equivalents and through special dividends, which all ended up hurting consumers. The power system in Queensland has never really been back in equilibrium since.

The government of Annastacia Palaszczuk has continued what Wayne Goss started, which is to annually, habitually, rob the industry, with dividends charged to the generators, charged to the transmission agency, and charged to the distributors and retailers, regularly at and even beyond their annual net profits. You cannot do that to your electricity supply industry and expect it to provide cheap power. By doing that you are obviously driving prices up, and Palaszczuk's behaviour in this space over the past two to three years—the scale of the highway robbery she has been undertaking—has put Goss and subsequent Labor governments in the shade, with consumers the patsies.

In 2014-15 she hit on government owned enterprises in Queensland, including the power sector, for $10 billion. Powerlink, the transmitter of power in Queensland, had a net profit of $218.3 million for that year, and the government seized every single cent. On top of that, the government also demanded from Powerlink—via a ministerial directive, no less—a further $1.2 billion, which was paid to the Queensland Treasury Corporation to help pay down the nearly $80 billion of debt that the Palaszczuk government had racked up because it had been spending like there was no tomorrow, exactly as we have become accustomed to with Labor governments in this place.

In the 2015-16 annual report of Powerlink it was indicated that that special ministerial directive demanding $1.2 billion was a major factor in an extension to $820 million of borrowings by the agency. In other words, the $1.2 billion that the Palaszczuk government ordered Powerlink to part with in 2014-15 was a debt shuffle, for which Queenslanders will pay, one way or another, but certainly through higher transmission charges in their ever-growing power bills. The government paid down some of its debt with that cash and simply shifted the debt back to Powerlink. The end result of that is going to be obvious: even more power price increases in Queensland.

Stanwell Corporation, a big generator with multiple assets, made $161.6 million in after tax profits in 2015-16. Every cent of that went to the government as a dividend, plus a special dividend of $150 million. In the 2017-18 budget, just handed down, there were announcements that Powerlink will be hit up for another $150 million and Stanwell for a further $100 million.

This is serial madness. It is incompetence, it is greed and it is deceit. It condemns Queenslanders to higher power prices for many years to come, especially when it is combined with Labor's ideological commitment to intermittent renewable energy. Off a current base of 4½ per cent renewables, Labor wants to hit 50 per cent in Queensland by 2030, inevitably mostly from wind and solar, which it is determined to continue to heavily subsidise, as the recent budget also makes clear. The scale of that subsidy is itself frightening. The Queensland Productivity Commission estimates that the cost of the extremely generous feed-in-tariffs that the Queensland government is providing to hundreds of thousands of Queensland homes with solar panels on their roofs will cost $4.1 billion to 2028, the year the scheme ends. This explains another aspect of why my state, despite its richness in resources, has such high power prices. That subsidy, which at its peak was 44 cents per kilowatt hour, or 50 cents per kilowatt hour from at least one retailer, Energex, has simply been passed on in higher power prices to all those consumers who do not have panels on their roofs. The proof of the pain this is causing consumers is the government's response in its budget.

The government now says that it will carry the cost of that subsidy for the next three years, at a cost of around $770 million, which is, of course, another way of saying that the taxpayer will meet it—no doubt out to 2028, beyond 10 years from now, at a cost of billions. It is all about swings and roundabouts; it is smoke and mirrors. Such is the scale of the disaster of power pricing in Queensland that any full and transparent inquiry would no doubt reach the obvious conclusion that the Palaszczuk Labor government is the worst power grid manager in this country. It is worse even than Jay Weatherill in South Australia and Daniel Andrews in Victoria, and that indeed says a lot.

Photo of Craig KellyCraig Kelly (Hughes, Liberal Party) Share this | | Hansard source

That is a big effort.

Photo of Ted O'BrienTed O'Brien (Fairfax, Liberal Party) Share this | | Hansard source

That is a big effort. The problem that we have always seen with Labor governments this country over, but particularly in Queensland, is that their incompetence is at times conscious incompetence. They know they are incompetent and they are happy to price gouge, to rip off consumers and rip off businesses to pay for their spending. It is ridiculous and it has to stop.

Photo of Craig KellyCraig Kelly (Hughes, Liberal Party) Share this | | Hansard source

I second the motion and I reserve my right to speak.

4:26 pm

Photo of Pat ConroyPat Conroy (Shortland, Australian Labor Party) Share this | | Hansard source

Well, what a ridiculous contribution from the member for Fairfax. It takes a special effort to make Clive Palmer look like a good representative for the seat of Fairfax, but he achieved it. It is also a sad indictment on his organisation that he could not even get a Queenslander to second it. I know they are in trouble tonight in the State of Origin, but they are in trouble in the Federation Chamber right now. But I have got good news for the member for Fairfax. I am a bearer of good news for once. What is the action item for this motion? It is calling for a full, independent and transparent inquiry into why the cost of electricity in Queensland has doubled. Well, I have good news for you; it has already occurred. It is called the Finkel review, which looked into why electricity prices in this country have increased so markedly over the last few years, and it has an answer. The answer from the Finkel review is this slide. This slide, that is part of the government briefing pack that went to those on the other side, shows that wholesale electricity costs have more than doubled since 2013. They have more than doubled since 2013. What has caused it?

Government Member:

A government member interjecting

Photo of Pat ConroyPat Conroy (Shortland, Australian Labor Party) Share this | | Hansard source

I have got news for you. That is post the repeal of the carbon tax. It is taking out any impact of the carbon tax. The wholesale energy price on 1 July 2014, when the carbon price was repealed, was $58. It is now $130. The cost of electricity generation in this country has more than doubled under their watch, not just in Queensland but around the country. This goes to the myth behind this whole mess.

Mr Ted O'Brien interjecting

I have got news for you, Sunshine, Queensland is part of the National Electricity Market. So prices across the entire NEM have doubled in the last three years. And why have they doubled? Because of the uncertainty around climate change and energy policy. Do not take my word for it; I am not asking those on the other side to take my word for it. That is from the Australian Energy Council, the peak industry body for energy generators. The electricity generators have said that the cost of energy policy uncertainty in this country under their watch, under their incompetent government, is $50 a megawatt hour because of the uncertainty.

Instead of rational economic policy driving their policy and instead of rational economic theory it has been driven by the member for Hughes, the member for Warringah and all the other dinosaurs in their party room who are writing this policy. This is the nub of this debate.

Photo of Andrew HastieAndrew Hastie (Canning, Liberal Party) Share this | | Hansard source

Order! The member will resume his seat. I know it is a spirited debate, and the member of Shortland is an A-league interjector himself, so I am giving you plenty of rope, but keep it orderly, please.

Photo of Pat ConroyPat Conroy (Shortland, Australian Labor Party) Share this | | Hansard source

Thank you, Mr Deputy Speaker; you are ruling with an even hand there, and I appreciate that. I am happy to take interjections because it shows just how intellectually bankrupt they are. They are intellectually bankrupt. The truth is that wholesale energy prices have doubled under their watch because they cannot arrive at a rational energy and climate change policy—and they have one in front of them right now: a clean energy target. That is not ideal from our point of view; we would prefer an emissions intensity scheme because the cost of abatement under an EIS is lower and, quite frankly, I suspect the impact on electricity prices would be greater under an EIS, but, nevertheless, we are prepared to compromise, in an effort to get a bipartisan settlement and take the politics out of this, and embrace a CET. But the Prime Minister and his minister for energy cannot get it through their party room because the member for Hughes and his allies control the party room. We saw a ridiculous party room meeting last week. With due respect to my colleague the member for Port Adelaide, over there sits the real shadow minister for energy and climate change, the member for Hughes. He led the party revolt last week in a three-hour party room meeting, where 22 speakers spoke in opposition to a clean energy target—because they are economically bankrupt. They have no idea about economic policy. They would rather go back to the glory days of the late 19th century, where we had industrialisation.

The truth is that industry desperately need policy certainty. They are crying out for policy certainty. They need a fair signal to drive investment and they have said, and the modelling confirms, that, if you have certainty, you will drive a wave of investment in the energy sector that will reduce electricity prices against a business-as-usual case. If those on the other side are really interested in getting electricity prices down—and they should be if they want to represent their communities for once—they should be embracing a clean energy target or an EIS to provide certainty to industry and let industry do what they are best at: investing in new generation around this country. But they have walked away from that.

Instead, we have this proposition that somehow the federal government is going to get into the business of building power stations in this country. That is a very suspect notion. I will be very interested to see what the Australian Energy Market Operator comes forward with at the end of the year. I know the member for Dawson is very keen for a new coal fired power station in Central Queensland or northern Queensland. That will only ever be built with billions of dollars of government subsidies—because that is what they are about over there. They are the party of subsidies. To be frank, that is the only way that a coal fired power station will ever be built in this country again. Bloomberg New Energy Finance, the experts in energy forecasting, have come forward with what industry says it costs to build a new power station in this country. They have gone to the banks and the generators and said, 'What will it cost to build a new power station in this country?' What do the generators say? For coal fired power they think it would be around $130 to $150 a megawatt hour. That is what the generators are saying. What do they say about a new wind power station? It would be $55 to $60 a megawatt hour. That is what is being built right now.

Photo of Craig KellyCraig Kelly (Hughes, Liberal Party) Share this | | Hansard source

And the storage!

Photo of Pat ConroyPat Conroy (Shortland, Australian Labor Party) Share this | | Hansard source

I will get to that in a minute. For large-scale PV farms, it would be about $80. We had testimony from the Australian Renewable Energy Agency, the government body tasked with looking at these issues, before the house energy committee. They said you look at those costs and you add on a price for storage. It is fair enough to add on a cost for storage to compare apples with apples. Guess how much it is? It is $20 a megawatt hour. So, for reliable, dispatchable wind power, with storage, you are looking at $75 to $80 a megawatt hour versus $150 for coal fired power—and that is unsubsidised. That is without a RET and without any government subsidy.

Government members interjecting

That is without a RET. The nub of this debate is that those people on the other side are not worried about the environment—but the environment should not drive this debate; economics should drive this debate, and the economics is very clear. A new coal fired power station will not be built in this country without massive subsidies that taxpayers, working class families and pensioners in my electorate and the electorates of my colleagues over there, will pay for. Quite frankly, that is a disgrace, but it is symbolic—

A government member: And you represent the coalminers!

I proudly represent the coalmining communities. Coal has a good future in this country. Metallurgical coal will have a strong future in export and our existing thermal coal fired power stations will have a life ahead of them. But what is worse than talking about coal power is lying to coal workers and that is what those on the other side are doing. They are lying to coalminers and saying, 'Nothing has to change. We can keep doing what we have done for the last 150 years and nothing has to change.' That is what those on the other side are doing; they are lying to workers. What is worse is those lies will lead to greater costs to households in this country and to taxpayers, greater costs than they have to be and that is the nub of this matter. The truth is the government has abandoned any claim to economic credibility. Policy is being driven by the member for Hughes and the Deputy Prime Minister. It is being driven by the remnants of the old DLP. The Liberal Party no longer believe in markets because if they believed in markets—

Mr Craig Kelly interjecting

Well you are representing their policies right now, member for Hughes, because those policies are a rejection of market economics, a rejection of a free market and are instead embracing a command-and-control policy that would do BA Santamaria proud. That is what they are doing. That is what they tried to do under the former Prime Minister, the member for Warringah, and that is what they are doing right now.

I am prepared to debate energy policy and electricity prices uphill and down dale with these jokers on the other side any day because the facts are on my side, the economics are on my side, the industry is on my side, and—guess what—the workers on my side too.

Photo of Andrew HastieAndrew Hastie (Canning, Liberal Party) Share this | | Hansard source

Before I call the member for O'Connor, the members for Fairfax and Hughes are on the cusp of a warning. I want that noted.

4:36 pm

Photo of Rick WilsonRick Wilson (O'Connor, Liberal Party) Share this | | Hansard source

I rise today to second and support the member for Fairfax's motion. The member is correct. The rising cost of electricity, whether it is the price of electricity at home or the cost to businesses that will flow on and threaten jobs and business competitiveness, will affect every Australian whatever state they happen to be in. One solution to the rising cost of electricity is to focus on a technology-neutral approach to meeting our emissions target and considering the opportunity coal offers to the energy market. Coal has historically been integral to power generation in Western Australia, and the town Collie in my electorate of O'Connor is central to this.

Coal was first discovered in Collie in the 1880s and, over the past 130 years, has provided thousands of people with jobs in the south-west of WA. There are now two coalmines in Collie, the only operating coalmines in WA, producing about seven million tonnes of coal per year. The majority of this coal is used to power Collie's three power stations, which generate around 50 per cent of the state's power—at this point in time this afternoon, it is around 52 per cent—compared to wind, which was two per cent about an hour ago. It was up to about 3.3 per cent today. It was 14 per cent about a week ago. Who knows what it will be tomorrow?

Back in 2008, we bore witness to the problems of relying too heavily on gas to power the state, and gas powers around 42 to 44 per cent of the state's energy needs. We had the Varanus Island explosion, which led to the sudden loss of almost 35 per cent of the state's gas supply. This resulted in Collie's decommissioned Muja A and B coal-fired power stations being returned to service. Coal-fired power has proven to be the cheapest and most reliable form of baseload power.

At peak times, other states pay over $100 per megawatt of power. South Australia in particular has the highest power costs in the country, where the average price for power of price this year has been $108 per megawatt hour up from $61 last year and $39 in 2015. I know the member for Grey was just having a look on the AEMO website a minute ago and WA's cost of wholesale electricity at this point in time is $39 per megawatt hour, much to the envy of the member for Grey, who is looking at South Australia, which is currently at around $109. The cost of energy in South Australia has rapidly increased in correlation with the South Australia's government increased Renewable Energy Target. Around 45 to 50 per cent of South Australia's energy has come from sun and wind based resources.

Last year we saw how unreliable renewable energy sources can be, particularly when you do not have a reliable source of baseload power, as we saw in South Australia. And unlike South Australia, which is interconnected for backup power from other states, Western Australia has no interconnector. So when things go wrong, we cannot ask for help from anyone else—we will be on our own. The closure of Victoria's Hazelwood power station and coalmine resulted in the loss of 750 jobs in the Latrobe Valley. Collie relies heavily on its coalmining and power generation industry, so I do not want to see that happen there because any closures would be catastrophic and would result in the loss of hundreds of jobs which would likely end Collie as we know it.

With more than 50 years of coal available to be mined in Collie, and given its low cost of production and reliability, coal should remain at the forefront for power generation going forward, with investment into cleaner technology being a priority. WA has long propped up the finances for the other states with GST revenues from our strong resources industry. WA should not be penalised by a clean energy target that puts pressure on WA's main power source and favours renewables. If we proceed with a clean energy target we must introduce legislation to enable the Clean Energy Finance Corporation to invest in carbon capture and storage. This will safeguard the future of the coal industry and ensure that emissions from coal fired power stations are kept out of the atmosphere.

Australia's biggest carbon-capture project is a $2.6 billion venture at the Gorgon LNG project in the north of WA, which is due to start up later this year. It will inject up to four million tonnes of carbon dioxide into the ground every year. This project is backed by $60 million of government funding and is intended to cut greenhouse emissions from the LNG venture by about 40 per cent.

A $1.8 billion coal-to-diesel venture by Collie Synfuels has emerged as the first confirmed contender for government funding for carbon capture and storage. Collie Synfuels wants to build two plants, one in Victoria and one in WA, that would initially produce clean diesel and, later, hydrogen. However, to get government funding a bill to enable the Clean Energy Finance Corporation to invest in carbon capture and storage needs to be passed through the parliament with the support of the Senate. Up until now, the project has been hamstrung in efforts to secure funding from the Clean Energy Finance Corporation, despite its low-emissions technology. This policy is about reducing emissions, and we should have a technology-neutral approach. That means considering the opportunity that coal offers when utilising both high-efficiency, low-emission coal and carbon capture and storage technology.

4:41 pm

Photo of Cathy O'TooleCathy O'Toole (Herbert, Australian Labor Party) Share this | | Hansard source

I rise in this place to stand up for North Queensland and to speak out against ever-increasing electricity prices. I need to do this, because the LNP has completely failed and neglected Queensland—especially the north.

In North Queensland we are experiencing skyrocketing electricity prices, with not a sign of support from the Turnbull government to address this dire issue. The cost of electricity keeps rising, increasing pressure on families and pensioners—also including the fact that the cost of living is growing. Pensioners in my area cannot afford to turn on their air conditioner. This is simply unacceptable in such a hot climate.

In my electorate of Herbert I am constantly speaking with residents and businesses, particularly small businesses, which are struggling to make ends meet due to the high cost of electricity. Once a week I visit a locally owned and operated small business in the community. The main purpose of my visit is to promote the message of buy local and to touch base with the business owners—to listen to their successes but also to talk through their challenges. I am constantly hearing that the major concern for local small business in Herbert is the cost of electricity.

For example, Kellie Herring, the owner of Organic Pantry in Townsville recently phoned my office as she had just received an electricity bill for $8,000. That was a huge rise and one that she could not afford. Kelly employs three local staff, and a bill that high was simply unaffordable and unacceptable for her. I have spoken to a business owner who cannot afford to keep the air conditioning running throughout the day. He and his wife have developed some very creative ways to cool the warehouses and offices without using electricity. But as they both said, this is not acceptable because their business is so large that when they do turn the air conditioning on when people come in there is no time for it to cool down.

Let me say that when you live in the dry tropics of Townsville in North Queensland it is very hard to run a business without air conditioning. This situation is creating huge stress for these business owners. Sun Metals Corporation is one of Queensland's biggest electricity consumers, and a key Townsville employer. In the last two years their electricity bill has increased by over 72 per cent. Their electricity bill has increased from $50 million in 2015 to more than $70 million in 2016. And here is a challenging fact: electricity prices in Queensland have been more expensive than in South Australia in 2015-16, despite Queensland's coal fired power generation. The cost of wholesale electricity prices has doubled under the Abbott and Turnbull governments, and yet this year's Turnbull government budget delivered absolutely nothing for Townsville's water security and energy infrastructure, something that will not be forgotten by residents.

Labor leads in energy solutions, where the Turnbull government has failed Townsville and North Queensland. Bill Shorten met with local Townsville business leaders to discuss these issues and the impact that they are having on the north's economy and the negative impact on our community. Less than one month later, Townsville saw a real commitment from Labor. I was proud to stand with Bill Shorten, who committed $200 million for a hydro power station on the Burdekin Falls Dam and $100 million for water security infrastructure in a Shorten-led federal Labor government.

Townsville has sunshine on 300 days of the year, on average. We have so much sunshine in Townsville, in fact, that we are colloquially known as 'Browns-ville.' Our sunshine has the ability to create thousands of new jobs and bring investment to our region. Since January 2016 North Queensland has seen an unprecedented level of renewable energy investment activity, with over 780 megawatts of large-scale projects either commencing construction or securing financial support. The total of these projects will deliver over $1.6 billion of infrastructure spending to North Queensland and will create over 1,400 jobs during construction. These projects include one of Australia's largest solar farms built in Clare, creating over 200 jobs; the $225 million 148-megawatt Ross River Solar Farm, delivering around 200 jobs during construction; and Sun Metals' 125-megawatt solar farm, making them the largest single-site user of renewable energy, creating 210 jobs during construction. Private industry and companies are recognising and acting on the renewable energy opportunities that Townsville has to offer. If only the Turnbull government would join the party.

Addressing alternative energy sources for the north is critical, because our unemployment rate is at 11.3 per cent and our youth unemployment is 21.7 per cent. Jobs in this new sector would be great. (Time expired)

4:46 pm

Photo of Craig KellyCraig Kelly (Hughes, Liberal Party) Share this | | Hansard source

The member for Charlton talked earlier about a rational energy policy. My question to every Labor member is: do you really believe that a 50 per cent renewable energy target by 2030 is in any way a rational electricity policy for this nation? It is the height of irresponsibility and recklessness to promote a 50 per cent renewable energy target, to rush to renewables, without sorting out the issues of storage and inertia, yet that is exactly what Labor Party members support and that is the policy of the Queensland Labor government. They have decided that they want for that state a 50 per cent renewable energy target. Haven't they seen the absolute, unmitigated disaster that that policy has caused in South Australia? The South Australian experiment, where the South Australian Labor government has turned that state into a guinea pig, has completely and utterly failed, yet we have the state Labor Party in Queensland wanting to copy that exactly. You can only shake your head at such stupidity, such incompetence, such recklessness and such danger to the prosperity of not only all Queenslanders but all Australians.

The member for Charlton gave a great speech about how renewable energy is actually now cheaper than coal. Let us take him at his word. If he is correct, we simply do not need any renewable energy targets. If he is correct, if renewable energy is cheaper and they can do the storage cheaper, as the member for Charlton eloquently explained, we can wipe out the renewable energy target today. We can cut it today, because renewables will automatically come in because they will be cheaper. Why aren't we doing that? If that is what they really believe, let's go ahead and cut it today. Let's not extend it one further cent, and maybe some of those companies, such as AGL, that are pocketing millions and millions of dollars in subsidies from the RET scheme might want to give some of that money to charity to help some of the old-age pensioners pay for the cost of electricity that they will charge them. That is the test, if they are fair dinkum.

That is why, if we are to solve this problem, we need to provide more dispatchable power into the grid as soon as we possibly can. By 'dispatchable power', I mean that you can simply turn the power on when you need it. You cannot do that with wind and solar unless you have some type of storage capacity. If we have a reverse auction, every type of generating facility, whether it be coal, gas, hydro, solar, wind, tidal or geothermal, can put their best bids into the market. If the member for Shortland is correct, we will simply get more renewables in the market. If he is not correct, we will get more coal, gas or whatever is the cheapest. But that is what will put electricity prices down in this country, and that is what we need to do.

Also, I would again call on all members not to misrepresent the facts in this debate. The facts are that the electricity prices of this nation in the so-called glory years of the Rudd-Gillard-Rudd governments increased 118 per cent. They are the numbers from the Australian Bureau of Statistics: 118 per cent under the Rudd-Gillard-Rudd governments. Now Labor members come in here and say, as the member for Herbert did, how sorry they are for all the constituents in their electorates—all the pensioners that cannot turn their heating on in winter and all the small businesses that are struggling to pay their electric bills. Now they are upset about it. Where were they when, under their rule, we had an increase of 118 per cent in retail electricity prices?

It is true that wholesale electricity prices have increased under the coalition government. That is a fact, but the reason that they have is the insane policies that we have inherited from the Labor government. The policy of the Renewable Energy Target has forced our most efficient coal generators out of the market, and that is what has forced prices up. We need to get this problem fixed. The entire prosperity of our nation depends on us solving this problem without the ideology of the Labor Party and their insane 50 per cent renewable energy target. (Time expired)

4:52 pm

Photo of Graham PerrettGraham Perrett (Moreton, Australian Labor Party) Share this | | Hansard source

I rise to speak on the motion moved by the member for Fairfax about the cost of electricity in Queensland, seconded by an MP from Western Australia. My understanding is that, unless they have snuck in an interconnector recently, Western Australia is not part of the National Electricity Market and is not providing any electricity in Queensland. Then we have just heard from an MP from New South Wales. It is a sad state of affairs when the member for Fairfax cannot find any friends among all those Queensland MPs. It is indicative of them deserting Queensland.

It is a bit rich to have the member for Fairfax criticise the Queensland government about power prices while we have seen power prices double under members in the LNP federal government. I agree with the member for Fairfax that there is a big threat to electricity prices in Australia, but it is the Turnbull government's backbench. In fact, it is sitting right next to him. In fact, he is right between them right now, packing down as hooker between two of the biggest dinosaurs in this parliament. We have had a complete lack of coherent strategy for climate and energy policy under Prime Minister Abbott and then Prime Minister Turnbull, and it will continue whenever Prime Minister Abbott comes back again. They have destroyed certainty in investment; we have seen that. We saw a collapse of over 80 per cent in private equity investment in renewable energy, all leading to a lack of supply and driving up prices under their watch, as they are about to start their fifth year in government.

While the Turnbull government fights among itself and sticks its head in the sand, let's look at what the Queensland government has done. I would point out to the member for Fairfax that we had three years of Campbell Newman and—what is that Treasurer's name?—Tim Nicholls. That is right—Tim Nicholls. We had a whole experiment there for three years. What have the Palaszczuk government done in response? They have done what they can to stimulate alternative generation to increase supply. One gigawatt of renewable projects are in the pipeline, and even more are proposed. An investment of more than $2 billion will put clear downward pressure on wholesale prices and create more than 2,000 jobs in Queensland regions, because the Labor Party still believes in the bush, unlike the Liberal National Party, which has been hijacked by the Liberals. The Nats have forgotten the bush.

When the member for Fairfax talks about electricity prices in his motion, I notice that the prices he quotes are wholesale, not retail. Volatility in wholesale prices can be seen across the NEM, as those who understand electricity know. We heard that from the member for Shortland. However, what those opposite neglect to mention is that Queensland has had the lowest average wholesale price since February. In fact, since the Queensland Labor government announced their Powering Queensland plan, wholesale prices have fallen dramatically in the futures market. I actually printed it out. Looking at the baseload future prices as at Wednesday, 21 June—it is hot off the press, Member for Fairfax—under Queensland we see that this is what people have factored into the market, and that will be 30 per cent of the average that households will actually pay. That is important. We see that for Queensland they are projecting that in 2018 it will go down by 14.2 per cent, in 2019 it will go down by 10.5 per cent and in 2020 it will go down by 8.1 per cent. This is not a Labor policy; this is actually what the financiers are locking in right now. When the member for Fairfax talks about electricity prices, he needs to not focus only on spot prices but to look at how the NEM—the National Electricity Market—is designed, to factor in a lot of things.

Spot prices have behaved similarly almost every year since its creation; I understand that. Of course, any of these peak prices are all investigated by the Australian Energy Regulator. They have looked at a report into spot market prices on 13 and 14 January, and if the member for Fairfax was in Queensland on those days then he might remember that we had the fifth and sixth days of a heatwave. Heatwaves highlight the growing bite of climate change on our atmosphere and our electricity prices. Those opposite would have you believe that renewables and real action on climate change are part of the problem, but Finkel and sensible, rational people know that we need to work on a lasting solution.

The problem with the member for Fairfax using wholesale prices, as his motion refers to, is that they only tell half of the story. In three disastrous years under the Newman-Nicholls government—those horror years—the retail electricity prices in Queensland skyrocketed by 43 per cent on the Liberal-National Party's watch. There is no mention of that in his speech. However, since the Palaszczuk government came to power, retail prices have only risen by 1.9 per cent.

4:57 pm

Photo of George ChristensenGeorge Christensen (Dawson, National Party) Share this | | Hansard source

I do thank the member for Fairfax for moving this important motion. A survey was published in The Australian yesterday showing that 70 per cent of those who were surveyed ranked power prices and reliability as the highest priority, while only 24 per cent ranked meeting emissions targets as the priority. Many in that 24 per cent will, no doubt, be those who can afford massive power prices and those who believe the world will end by Christmas if we do not make sacrifices to the climate gods.

Yesterday in an opinion piece to my local newspaper in Mackay, the Daily Mercury, the Queensland minister for energy and gullibility, Mark Bailey, described renewables as 'the cheapest form of power'. He said that near Townsville in my electorate:

SunMetals is constructing Queensland's largest industrial solar project with 1.3 million solar panels providing the zinc refinery with a third of their baseload needs. That's right—baseload solar.

But, no, it is hardly baseload if it only generates one-third of the needs of a single business. And if it takes 1.3 million solar panels to do that, the 50 per cent renewables target is going to turn Queensland from the Sunshine State into the 'Shady State'. In criticising my commitment to affordable and reliable electricity through clean coal generation, the minister asserted:

Stagecoaches served their purpose till motor cars and Henry Ford came along.

What the minister fails to recognise is that people did not start using cars because the government taxed horses or subsidised cars or poured taxpayer money into car production or banned the construction of stagecoaches. For the past decade we have seen government interference in the energy market on a grand scale, with them trying to force renewables on people and using the people's money to do it.

Where has that got us in Queensland? According to the Queensland Productivity Commission's report on energy pricing, which was released last year, electricity prices in Brisbane increased 87 per cent in the past decade, but in the previous 26 years electricity prices had not increased at all. Why is that? In the 26 years from 1980-81 to 2006-07 the cost of electricity did not rise, but in the nine years from 2007 to 2016 the cost of electricity increased 87 per cent. If you go back over the past decade you will find that Labor governments—and, regrettably, but to a lesser extent, coalition governments—have been spruiking renewables at any cost.

And it has come at a cost: billions of dollars in costly regulations; a billion dollars of free money through the Australian Renewable Energy Agency; large-scale and small-scale renewable energy targets; solar panel rebates; $1.6 billion in the Solar Flagships program; the solar cities program; feed-in tariffs in Queensland of 44c per kilowatt hour, more than double the domestic-use tariff of 21.3c per kilowatt hour; the clean energy initiative; the Clean Energy Trade and Investment Strategy; the Solar Homes and Communities Plan; the Green Loans program; Minister Bailey, himself, spruiked this week about spending $386 million in clean energy; and of course we had Labor's carbon tax.

With all that free money, subsidies, mandated usage and the carbon tax, what actually happened? Electricity prices went up 87 per cent. Now Labor and the Greens and the climate gullibles all say that we can lower prices by spending more on renewables and shutting down more coal-fired power. I am reminded of a very popular definition of stupidity: to keep doing the same thing and expecting a different outcome.

According to the Climate Council, the biggest user of wind power is Denmark and the biggest user of solar power is Germany. Is it somewhat of a coincidence that those two countries—Denmark and Germany—have far and away the most expensive electricity in the OECD? It is double the average. If we want a different result we need a different strategy.

What Australia has not done in past decade is build high-efficiency, low-emission coal-fired power generators that can provide power for $60 to $70 per megawatt hour, including building and operating costs. That is cheaper than wind, half the cost of solar and a quarter of the cost of solar thermal with storage. Around the world there are more than a thousand of these supercritical and ultra supercritical units, with another 1,231 planned or already under construction. Over the next five years, 88 per cent of new coal-fired power will be in Asia, and it will be mostly supercritical and ultra supercritical. China has 579 of these units and is building another 575. India, another 395; Japan, 52; South Korea, 18; another 90 in Vietnam, Indonesia and the Philippines. Australia plans zero. It is time we delivered on what people want and people need: power they can afford, power they can rely on, with new clean coal generators, especially one in North Queensland.

5:02 pm

Photo of Susan LambSusan Lamb (Longman, Australian Labor Party) Share this | | Hansard source

I thank the member for Fairfax for highlighting the really important issue of Queensland's rising electricity prices, because it really is an issue in Queensland. It is an issue because his government refuses to take meaningful action, instead of cutting federal support, that would ease the pressure that energy bills are placing on some of our society's most vulnerable people. They would not be the first LNP government to do this, either. In fact, it happened pretty recently—I am sure he will remember—at the state level in Queensland, the very region that he comes from and that he is taking issue with.

If it had been left to Campbell Newman and his rash and imprudent LNP government, the people of Queensland would no longer own their power sector companies. Despite his pre-election commitments, as Premier Mr Newman sought to sell off Queensland's assets. The public of Queensland know what happens when assets are privatised. They knew that it would jack up their energy bills and they did not want it. So guess what they did? It was up to Labor, under Annastacia Palaszczuk, to keep the assets in public hands. They succeeded, and thanks to them private companies have not been able to raise prices even further.

Queensland's state Labor government committed to delivering stable electricity prices, and they have. Prices have only increased by a minimal 1.9 per cent per year on average in this term. When you compare that to the 43 per cent increase that the Newman-Nicholls government burdened Queenslanders with, it is obvious that the downward pressure the Palaszczuk government had placed on wholesale prices is paying off for Queenslanders.

That is not all that Queensland is doing, either. Let us talk about that. On 5 June this year, they released the Powering Queensland Plan. I am sure you have heard about it, Member for Fairfax, who is walking out the door. That plan in part backs the gas generator that had been mothballed by the LNP. That will reduce the household bill increase in regional Queensland from 7.1 per cent to 3.3 per cent. So if the Queensland Labor government had such a positive effect on its state's electricity prices, why are prices skyrocketing federally?

There is the key word: federally. This federal government, the federal coalition government, has done nothing but worsen Australia's energy market. This government has caused prices to shoot upwards. It has done nothing about it, and it continues to damage our environment. If only there were some recently released report that could help prevent energy prices from continuing to rise and help our government. If only there were something—something like this! Guess what?

Something needs to be done about Australia's energy crisis. Something needs to be done that reduces damage done to our environment and stops the rises in energy prices. This report, the Finkel review, does both. Accepting the guidance of our nation's Chief Scientist would help bring Australia's energy industry into the future, yet Prime Minister Turnbull is too cowardly to stand up to his own party and just accept it. He is too cowardly to stand up to the arrogant science deniers of his party, members of the far right like the member for Warringah, Tony Abbott. Yes, despite the numerous messages from Australia's business leaders, leaders like the Business Council of Australia, who are quoted as saying that doing nothing means 'we will continue to pay higher prices and have less secure electricity supply'—that is what they said; I quoted that—the Prime Minister is still refusing to stand with Labor and do the right thing.

To the member for Fairfax—and it is a bit of a shame that he has left; he put forward this really important motion and could not be bothered to stay and listen to members of the opposition and what we have to say; it was so important—I agree. Do you know what? I agree with him. Something has to be done about Queensland's energy prices, but not by the state government, because the Queensland state government has been doing an exceptional job at keeping prices down. There is evidence of that. But what has to be done has to be done by their government, because their government—Malcolm Turnbull and the member for Fairfax's government—needs to accept the Finkel review and bring Australia back into the future.

5:06 pm

Photo of Rowan RamseyRowan Ramsey (Grey, Liberal Party) Share this | | Hansard source

Might I say from the outset to the member for Longman that the member for Fairfax had a speaking engagement in the other chamber, and I think that type of aspersion on his motives is a little low. I thank the member for Fairfax for bringing this to the attention of the Chamber and giving us an opportunity to debate it. I have said on a number of occasions that unfortunately exhibit A in this debate on electricity prices is my home state of South Australia, very sadly. Last year in South Australia, 47 per cent of our electricity came from renewable sources, mainly from wind. More than 50 per cent of the wind towers, Australia's wind towers, the nation's wind towers, are in South Australia. About 60 per cent of those are in my electorate of Grey.

It is interesting that wind is supplying around 5.3 per cent of the national electricity needs, and yet in South Australia it is providing over 40 per cent. There seems to be something of a link here between the fact that we have the most expensive prices in Australia and the least reliable electricity grid. In 2012, in fact, I met with AEMO because I was alarmed that Alinta might cease operation of the Northern Power Station prematurely. I was assured by the commissioner at the time: 'Mr Ramsey, you shouldn't worry about this. We're upgrading the interconnector to Victoria, and even if Port Augusta goes off-line it'll all be fine.' Well, goodness me. What a terrible error of judgement that was, because it has not been fine.

What has happened with the proliferation of the wind towers is that, each time another wind tower block or even solar cell comes on line, it diversifies the electricity content. In an overall sense, that is a good thing. It means there are fewer times that you are deficient in electricity. The wind might not be blowing in one spot, but it is blowing in another. But unfortunately there comes a time when it does not blow anywhere. And every time there is new wind generation capacity brought on it erodes the business case of the base-load generators. So it happened with Alinta's Northern Power Station, and our gas power stations are under great pressure at the moment.

It is worth looking at a few figures. In fact, in 2016 South Australia's wholesale price of electricity was double Victoria's. For the five years to 2015, South Australia's wholesale price was 46 bucks. It went up to $61 in 2016, which was the year that, in May, the Northern Power Station came off-line, and it has gone to $108 this year. Victoria, by comparison, was $38 for the five years to 2015. It went to $46 for 2016, and in 2017 it went to $65. The effect of the closure of Hazelwood is starting to bite very deeply in the Victorian economy.

This motion is about Queensland electricity, so it is worth taking some notes there. In Queensland, for the five years to 2015, it was $47 a megawatt hour. In 2016 it went to $60, and in 2017 it went to $93 a megawatt hour. I turn to the words of the motion where it calls for:

… a full and transparent inquiry to be conducted into the cost of electricity in Queensland …

And refers to:

… the allegations of Rio Tinto that the Queensland Government is manipulating the electricity grid …

Let us go through those figures again: five years to 2015, it was $47; in 2016 it was $60 average for wholesale electricity in Queensland; and in 2017 it was $93.

In fact, in Queensland, because only four per cent of their electricity comes from renewable sources, their generation sources have not changed. The price of coal at the moment is only US$74 a tonne, and yet the price of electricity has doubled in two years. There is something funny in the walls of Denmark, or should I say in the walls of Brisbane? There is something going on here, and it looks like gaming of the system. We know who games the system: it is the people who own the power stations. I say to the people of this place and the members of this place, I say to the government of Queensland: 'Don't make the same mistake South Australia has made. You'll regret it.' I said on a number of occasions that in fact we are quite lucky. South Australia has shown the rest of Australia what not to do. If the disaster that has occurred in South Australia happened in New South Wales, it would drag the whole Australian economy under. Do not make the same mistakes.

5:12 pm

Photo of Milton DickMilton Dick (Oxley, Australian Labor Party) Share this | | Hansard source

I concur with the member for Grey. Queensland will not make the same mistake as South Australia, because under his party and under his government they sold the assets in South Australia. They did. We will not make that mistake, and the people of Queensland have made that clear.

As the member for Grey has indicated, it is a huge, huge mistake. We know that the LNP in Queensland, if they are to return to the Treasury benches, will sell our essential assets. It is in their DNA. The member for Goldstein knows that: that the Liberal Party, as an article of faith, will actually say that they want to sell the assets that the people own. We know that. We hear it time and time again. In fact, the Leader of the Opposition in Queensland last week said—wait for it—'Privatisation is dead,' just like Tony Abbott said Work Choices were 'dead, buried and cremated'. Fancy using the member for Warringah for a truth-in-government test. Hello! 'No cuts to health, no cuts to education, no cuts to the ABC'—remember that one?

Ms Husar interjecting

Yes. We get that. That is right. On the night before the election—Member for Lindsay, I take your interjection. But we hear today the member for Fairfax moving a motion—it is truthful too—from the LNP in Queensland. We had the member for Forde moving anther Queensland government motion. Memo to those opposite: start governing and do not worry about what is happening in Queensland. I know there are a lot of distractions: party room brawls week after week and stand-up fights with everyone hooking into each other instead of governing. We know that those are so divided they are too busy fighting amongst each other.

The only party in Australia that is a shambolic mess when it comes to energy policy are those opposite. We see it leaked out through their party minutes and leaked out through the cabinet, time and time again. It is peculiar that the member for Fairfax is drinking the LNP Kool-Aid to make sure that he can run the lines to prop up a failed leader and a failed Treasurer like Tim Nicholls. But we know that, even a fortnight ago, when the member for Fairfax and his government had the opportunity to work in a bipartisan way in a collaborative fashion, when the Finkel review was handed down into the future security of the National Electricity Market, we saw a complete meltdown inside the LNP. We know that under the LNP government, led by the Prime Minister, power prices have doubled. Their heads are down and they are silent now. That is a statement of fact. They know that. They cannot deny that. Under this government, power prices are up, pollution is up and jobs are down. We know this because that is what we are hearing time and time again.

Let's have a look at some of the facts about the motion that we are dealing with today, dished up by the member for Fairfax. The truth is that electricity prices in Queensland have been historically low since the Palaszczuk government came to power in 2015. In the year to March 2016, electricity prices rose by a meagre 1.43 per cent. In the past year they have grown by 3.18 per cent. Let's just go back to over two years ago, when the LNP were in power for that toxic experiment that was the Newman government, led by Campbell Newman and the then Treasurer, Tim Nicholls. It is a stark contrast. Power prices increased by 43 per cent over their term in office.

Just two weeks ago we saw the Premier announce a new Powering Queensland Plan, which will invest $1.16 billion to ensure Queenslanders continue to enjoy an affordable, secure and sustainable supply of electricity. The member for Fairfax mentioned the issue of state-owned power generators, and I am pleased to inform the House that the state government is leveraging its ownership of these businesses to intervene to reduce wholesale price impacts from the National Electricity Market and to protect jobs in energy-intensive industries. But, of course, that would not be happening if the LNP had been successful at that election and if the member for Fairfax and his supporters had had their way, because these assets would have been sold off, meaning the returns would have gone to interstate and overseas investors instead of being reinvested in the Queensland economy.

It is absolutely clear that all the member for Fairfax and the government need to do is to get on with the job of working in a bipartisan way on a national energy policy. Stop the infighting, stop blaming each other and start delivering for Australia. (Time expired)

5:17 pm

Photo of Bob KatterBob Katter (Kennedy, Independent) Share this | | Hansard source

I have never entered a debate where there has been more prevalent towering ignorance of what is actually going on. It is really very simple. In 1993, householders paid $642.87. In the year 2000, they were paying $642.87. When I was minister, we had the cheapest electricity in the world, and I can prove that, because we got the aluminium industry. There were two huge smelters that were going to Canada, which has very cheap power from hydroelectricity, and they found out we had cheaper power. This is a radical idea these days, but we had a thing called a reserved resource policy: we took one per cent of the coal for free—'Too bad, so sad, Mr Utah and Mr Mitsui; we're taking one per cent of the power, and we're putting it into the biggest power station in the world, Gladstone, owned by the people of Queensland.' There was no privatisation in the Bjelke-Petersen years, I can assure you—just the opposite. There is the proof. I do not deserve any credit; in fact, I came in afterwards. But I was right-hand man to Ron Camm under Bjelke-Petersen in the end.

This is interesting: why does it then leap from $642 in 2001 to $2,010 by 2013? We do not have the figures for 2014 and 2015, unfortunately. Why does it take a 250 per cent leap through the sky in Queensland? These are the graphs for South Australia and for Victoria, and again you can see there is a flat line until we get to the year 2000, and then there is no longer a flat line; it is almost a vertical line.

So what happened? If there is someone in this parliament who is not a free marketeer—outside of me, the Xenophon party, my colleague from Hobart and, I am ashamed to admit, the Greens—I have not run into them. I have never heard a single person get up in this place and say, 'We're going to build a railway line into the Galilee.' They all talk about Adani as if somehow the Galilee Basin is Adani. It is not; it is just one of 20 businesses on the Galilee. You see that all of it is flat line until the year 2000, and then suddenly it is vertical—so what happened in 2001? It was not the greenies because they came in little increments, here, there and everywhere. What happened? It was the year of the introduction of National Competition Policy and the year we abolished a government system, owned by the people and delivering at operating costs. It is no use the ALP saying differently. I have great personal respect for the Labor member of parliament, but he talks like it was the fault of the Liberals. Listen, mate, you were the one who corporatised the electricity system and watched 2,000 ETU members lose their jobs. You are the one who did that—not the LNP. The ALP did that. On the railways, I could not believe Pat Dunne when he said, 'The ALP government will annihilate us.' There were 22,000 members in the railways in 1979 and 22,000 members in the railways in 1989. It was the time of Bjelke-Petersen. Not one single railway job was removed in 10 years. Under the socialists, within 16 years there were only 7,000 railway employees in Queensland. All of the freight went off the railways. All that the railways carry in Queensland now is minerals. They do it very efficiently and make a lot of money, but all of the rest of it was given over to road transport. So the taxpayers picked up the bill. As for us poor people at the end of the line, we paid nearly 700 per cent more for our rail freight. But here it is. It is free marketeering that has put up the electricity prices and there is no way to overcome it except to go back to regulation. (Time expired)

Debate adjourned.