House debates

Tuesday, 14 August 2018

Matters of Public Importance

Energy

3:13 pm

Photo of Tony SmithTony Smith (Speaker) Share this | | Hansard source

I have received a letter from the honourable member for Port Adelaide proposing that a definite matter of public importance be submitted to the House for discussion, namely:

The division in the Government over its energy policy.

I call upon those members who approve of the proposed discussion to rise in their places.

More than the number of members required by the standing orders having risen in their places—

Photo of Mark ButlerMark Butler (Port Adelaide, Australian Labor Party, Shadow Minister for Climate Change and Energy) Share this | | Hansard source

All Australian households and all Australian businesses know all too deeply that a deep, profound energy crisis has emerged under this Prime Minister. That deep energy crisis has led to a collapse in confidence in our energy system, and it's seen power bills go up and up for households and for businesses. It's very clear what we need to start to bring that crisis to an end. We need sensible, centrist, bipartisan energy policy. But what we saw today by this Prime Minister was the final act of capitulation to the hard Right of the coalition party room on climate change and energy policy. We saw the big man at the press conference declaring victory over his nemesis, the former Prime Minister, but actually what happened in that coalition party room was a weak act of surrender. The white flag is flying high over the Prime Minister's office now because what he announced at the press conference was an energy plan that will not see a single renewable energy project built for a decade, an energy plan that will see the rates of installation of rooftop solar cut by a half and an energy plan that will channel billions and billions of taxpayers' money to building new coal-fired power stations. This is a plan that will smash jobs and investment in renewables. It will achieve no significant cuts in pollution from this sector that is responsible for a third of the total carbon pollution in our economy and it will push power prices up even further.

Whatever debate there was, and whatever media leaking and speculation there was, it is very clear that this was a victory for the right wing in the coalition party room. And the fact that the former Deputy Prime Minister, the member for New England, was able to support this energy plan tells you everything you need to know about it. This Prime Minister, who once said he would not lead a party that was not as committed to effective action on climate change as he was, has joined the war against renewable energy and bizarrely decided to spend billions of dollars of taxpayers' money on new coal-fired power stations. Any credibility this man had in supporting evidence-based policy and in taking serious action on climate change and power prices lies in tatters today.

For two years the Labor Party has been constructive about this policy area. On the emissions intensity scheme that the minister supported before he was vetoed by the former Deputy Prime Minister in 2016 and on the clean energy target, which, again, the Prime Minister and the minister for energy supported last year before being vetoed by the former Prime Minister, federal Labor offered its support in spite of the fact that they were not our preferred policy prescriptions.

On this National Energy Guarantee we have also been consistently constructive and consistently positive, but what the Prime Minister has offered up today is a plan to smash renewables and to channel taxpayers' money into building coal-fired power stations. We cannot support that. The National Energy Guarantee, which is still the subject of negotiations at the COAG process, is an investment framework, but you have to have a plan for investment to make it mean something. This government's plan for investment will not see a single new renewable energy project built for an entire decade. It will smash investment. The National Energy Guarantee is a vehicle for our energy system that this government intends to drive back to the 1950s. Australians will end up paying the price for this Prime Minister's abject weakness.

This plan will smash jobs in renewable energy. It will cause thousands of job losses, according to all modelling, in the renewable energy industry. Just as the former Prime Minister caused one in three jobs in the renewable energy sector to be lost in their last attack on this industry, according to the ABS, this plan will do nothing to cut pollution—nothing!

The firm that's done the modelling for the National Energy Guarantee for this government and the Energy Security Board, Acil Allen, has pointed out recently that a sector responsible for a third of the carbon pollution in our economy—the electricity sector—will do just one-twentieth of the job of reducing pollution to achieve this government's inadequate Paris targets, leaving all the rest of the heavy lifting to other sectors of the economy that don't have low-cost technology available to do it for them, because this Prime Minister is too weak to take the argument up for a serious and ambitious emissions reduction obligation on the electricity sector.

It will also do nothing on prices. Particularly this minister trumpets a $550 saving for households from his policy. Where have we heard that before? That's got an odd ring of familiarity to it for most Australian households, who very clearly remember this same party promising that the power bills for Australian households five years ago would go down by $550. I don't know about my colleagues on this side, or on the other side, but I suspect none of them have had a constituent come up and say how glad they are that the Liberal Party's promise was fulfilled—that their power bills went down by $550—because the experience across the country has been power bills going up and up under this government. The $550, or $400 anyway, according to the modelling—that merchant bankers' gobbledegook, to use the language of the member for Warringah—is connected to Labor's Renewable Energy Target, the bill to discharge the Renewable Energy Target, which this government, thankfully unsuccessfully, tried to abolish a few years ago. The other $150 is some theoretical decrease in borrowing costs for new energy projects. It is hard to see how that will end up in householders' pockets, when the government's own modelling shows that a not a single new project will actually be built. This is funny money that households will never end up seeing. What households will end up seeing under this government, particularly pensioner households and households in receipt of allowances, is a $365 cut to the energy supplement. If they are a couple they will see a cut of around $550 a year, not the $150 funny money through a reduction in borrowing costs. This is real money that this government has been trying for two years now to cut from some of our lowest income households.

According to all of the modelling and all of the expert advice, the surest way to bring down power prices is to expand renewable energy. Modelling by RepuTex released only a few weeks ago showed that wholesale power prices under Labor's more ambitious plan to cut emissions by 45 per cent would be 25 per cent lower through the course of the 2020s than under this government's inadequate plan, which will see no investment and no downward pressure on power prices.

But perhaps the most abjectly weak element of the Prime Minister's announcement today is that over the last few days he has decided to channel billions of taxpayers' dollars into building new coal-fired power plants, which the industry itself has said are uninvestable. Kerry Schott, the Chair of the Energy Security Board, the board providing advice on energy policy to this government, has said there is no way companies will be investing in new coal-fired power stations, not just because they take eight to 12 years to build, not just because they're massively more expensive than solar and wind power, a fact borne out by the government's own modelling, and not just because of the enormous carbon risk, the price risk and the regulatory risk that investors are shying away from, but because they're simply not going to work in the modern electricity market. The member for Eden-Monaro pointed out in his first question to the Prime Minister—and I'm sure he will have more to say about it this afternoon—that Snowy Hydro has made it very clear that you can have new coal or you can have Snowy 2.0. You simply cannot have both. Snowy 2.0 works only in an environment where there is substantial new building of renewable energy, something that the Prime Minister has weakly vetoed in his announcement today. For this government—which I originally thought had a plan to land an energy policy that would have broad political and industry support—to achieve that plan, this Prime Minister had to stare down the hard Right. We've seen today that he's too weak to do it. He has completely capitulated to the anti-renewables ideology of the hard right wing of the party room. Australians will pay the price. They will pay the price for his weakness. They will pay the price in fewer jobs, more pollution and higher power prices.

3:23 pm

Photo of Josh FrydenbergJosh Frydenberg (Kooyong, Liberal Party, Minister for the Environment and Energy) Share this | | Hansard source

When the coalition came to government, it inherited a basket case of an energy system from the Labor Party. We all remember the chaos and dysfunction that characterised the Rudd-Gillard-Rudd years. We remember prices going up each and every year. We remember Australian households being hit by a doubling of energy prices when Labor was in office. We remember that great Athenian model of democracy, the citizen's assembly. We remember Cash for Clunkers, that great idea that was right up there with pink batts. And we remember the dreaded carbon tax, which imposed a multibillion-dollar impost on Australian families and businesses, so much so that Labor had to spend billions of dollars of Australian taxpayers' money shovelling it out the door in one hit to the coal-fired generators. You don't hear them talk about that much anymore. That was the Labor Party's record when they were in office. We know that the member for Port Adelaide was quite embarrassed by it, because he put out a book called Climate Wars, in which he said:

The truth is that we in Labor had sent too many mixed signals about climate policy …

… we've made mistakes in … the design of our policies—

and, wait for it—

… Australia's voters were determined to see the back of the Labor Government.

That's the reality of what happened when Labor was in office. They also ignored the advice of their own Energy Market Operator about the impact that the large gas export industry on the east coast of Australia would have on the supply-demand dynamic, driving prices up and reliability down. That was the impact of their ignoring of the Energy Market Operator's advice in their own energy document.

We came to government with that situation. What did we do? We abolished the carbon tax. The member for Port Adelaide seems to dispute how much of a saving went to Australian families. The ABS said that the abolition of the carbon tax resulted in the single biggest drop in electricity prices ever recorded. I'm reading from an ACCC press release on 28 July 2015:

The ACCC believes that, given all the available information, the Commonwealth Treasury's estimated $550 cost savings to households is reasonable.

That is the ACCC. Since that time the Abbott and then Turnbull governments have been taking action across the board to reduce power prices. We've done a number of things. We've intervened in the gas market to ensure more gas goes to Australians before it's exported overseas. The ACCC have reported that making that available to the market has seen gas prices drop by up to 50 percent. That is good news not only for electricity users, because, as some of the big coal-fired generators have come out of the system, gas has been setting the price of electricity about twice as much as previously, but also for large energy users for whom gas is an important feedstock. I'm talking about the fertiliser, chemical and paper industries and so forth.

Wholesale electricity prices are falling significantly. The wholesale electricity price is down by about 25 per cent this year. Last week the wholesale spot price was around $68 per megawatt hour compared to $101 per megawatt hour at the same time last year. That is happening as a result of the Turnbull government's interventions. Network costs have also been cut. Rates of return when Labor was in office were about eight to 10 per cent. It has now fallen to around five to six per cent. That can be worth a couple of hundred dollars a year to households. I took legislation through this parliament successfully abolishing the limited merits review, which has meant that no longer are the networks gaming the system. If Labor had done that when they were in office, they would have saved Australian consumers $6.5 billion, but they didn't do it; it has been up to us. Now we have a new binding rate of return, which could also save significant costs to consumers.

We're helping customers to get a better deal through the retail market. Since the Prime Minister's meeting with retailers last August 1.6 million households on expired or default plans have been contacted and offered better deals, half a million households have moved off the expired or default plans to better deals, and another 1.3 million households have got better deals. There's also the government's Energy Made Easy website. For those who are listening on their radios across the country, energymadeeasy.gov.au is the government's comparator website. When you go on it, you can compare your electricity bill to those offered by other retailers and save hundreds of dollars that way. It has had over a million hits since the Prime Minister met with the retailers. Electricity prices turned the corner on 1 July this year when prices came down in Queensland, New South Wales and South Australia, and we're hoping to see the same thing happen when Victoria does a reset in January.

We have also invested in important energy infrastructure. Most importantly, as the member for Eden-Monaro celebrated, welcomed, was delighted, was excited, was jumping from his chair with joy, that the Turnbull government is delivering Snowy 2.0, a major energy infrastructure project, a pumped hydro scheme which will be the largest of its kind in this part of the world, that will be 2,000 megawatts, that will create 5,000 jobs, that will power 500,000 homes. That's the reliability that we are bringing to the east coast of Australia, which Labor never did. We're investing in pumped hydro projects, through ARENA and elsewhere, in Cultana in the Upper Spencer Gulf, in the member for Grey's electorate in South Australia, and in Kingston in Queensland. We've identified 14 high priority or highly probable pumped hydro projects and hydro projects across Tasmania, to help Tasmania become the battery of the nation. We've talked about a second interconnector to provide Tasmanians with energy security and also to provide more power into the east coast of Australia.

All this work is having an impact, but it also leads us to the National Energy Guarantee, which I'm so pleased that my colleagues endorsed today to take to the next stage, when the states will hopefully sign on before the end of October. The states now have no excuse. They asked our party room to endorse it, and we did. The National Energy Guarantee was put together by the independent experts. Together with our other policies, it will drive electricity bills down by $550 for the average household, and wholesale prices by 20 per cent, which could be worth millions of dollars to the large energy users. It also has the enormous support of industry, business and energy consumer groups. Listen to what Energy Consumers Australia said:

… the Final Detailed Design of the National Energy Guarantee … includes updated modelling which confirms that the Guarantee can deliver much needed savings for households and businesses.

That was Energy Consumers Australia. What about the Queensland Chamber of Commerce and Industry, representing more than 400,000 Queensland small businesses? I'm speaking to the member for Dawson, because the member for Dawson has many businesses that would be involved with the Chamber of Commerce and Industry. The Queensland Chamber of Commerce and Industry says:

At the end of the day, the National Energy Guarantee (NEG) promises what we’ve all been waiting for – a downward pressure on electricity prices and policy certainty.

In New South Wales, the 190-year-old New South Wales Business Chamber, with 19,000 businesses, said:

Australia can't afford more flip-flopping on energy policy. We need to get a national energy policy that provides certainty, improves energy affordability and security and reduces emissions before the end of 2018.

There are similar endorsements in Victoria, in Tasmania and across South Australia. We've seen BHP, we've seen Rio Tinto, we've seen Aurora, we've seen Dow Chemical, we've seen the National Farmers' Federation, we've seen BlueScope. We've seen Energy Users Association and Manufacturing Australia. We've just seen the Australian Industry Group; Chemistry Australia, representing a $40 billion industry—the likes of 3M, Dow, Ixom, Qenos, Orica. These are the companies that employ millions of Australians—blue-collar workers. They are imploring us to support the National Energy Guarantee. They say, 'Listen to the experts.' They say, 'Put aside your politicking and your posturing. Get behind a policy that puts consumers first. Get behind a policy that maintains our international competitiveness. Get behind a policy which will reduce the bills of Australian families.' That's why the Turnbull government is getting on with the National Energy Guarantee. That's why the Turnbull government can deliver lower power prices. (Time expired)

3:33 pm

Photo of Pat ConroyPat Conroy (Shortland, Australian Labor Party, Shadow Assistant Minister for Infrastructure) Share this | | Hansard source

I'm proud to rise to speak on this MPI. I'm very delighted to follow the minister, the member for Kooyong, who follows in the proud traditions of the most memorable member for Kooyong, the first colt. I think the current minister is probably the second colt. He certainly replicates Andrew Peacock in being all potential but never realised. That's the sad truth of the minister's contribution, because he skips over one important fact in his speech. He has been in power for five years. They have been in power for five years. They are responsible—

Photo of Pat ConroyPat Conroy (Shortland, Australian Labor Party, Shadow Assistant Minister for Infrastructure) Share this | | Hansard source

In office, maybe, not in power. They're responsible, over those five years, for a doubling of wholesale energy prices and for the retirement of 5,000 megawatts of coal-fired power without adequate replacement. That is on his desk. That occurred on his watch, but he would have us forget all about that. He would have us forget it, think that we'd just woken up and that yesterday was September 2013 and now we're here, with nothing in between. But what we've had is five years of coalition infighting on energy policy that has led to a doubling of wholesale energy prices. We had Direct Action for three years—that 'fig leaf' and 'fiscal recklessness', as the Prime Minister referred to it. We had Josh's emissions intensity scheme for 12 hours, and what a glorious 12 hours it was! The minister did an interview with Fran Kelly in the morning, which was quite articulate, quite reasonable, quite sensible. Within 12 hours, he'd surrendered. I've had indigestion for longer than Josh's EIS policy! That's the sad truth of Josh's approach.

We had the clean energy target for a year. Again, it was junked because he couldn't get it through the conservatives in his own party room. Now we've landed at the National Energy Guarantee, the NEG, founded on a six-page letter. We had the minister and the Prime Minister claiming credit today that they stood up to the bullies in the party room and they stood down the conservatives. They stood them down. Unfortunately, seven words undermine his argument completely. Seven words undermine his argument about the NEG: as endorsed by Barnaby Joyce. 'As endorsed by Barnaby Joyce' is the sad truth of this policy. This is abject surrender. This is the equivalent of a nation that's been invaded—as the foreign troops are walking down their main avenue—doing a press conference, saying, 'That was our plan all along. Having those foreign troops walking down our avenues was the plan all along.' It's a sad, sad indictment of energy policy in this country. Such is their abject surrender.

What would the NEG deliver in terms of decarbonising our economy? It would deliver four wind turbines over a decade—not four wind farms, four wind turbines. That is less than what we put in place each week! That is the sad truth of this policy: emissions reductions of fewer than two per cent over a decade. What's even worse is that we're now at a stage in the energy market where investing in renewable energy is also investing in lower power prices. So, by standing in opposition to renewable energy and decarbonising our economy, they are also standing in opposition to reducing power prices. That is the sad truth of their stance. It's been confirmed by RepuTex's economic modelling, which said that if Labor's policy of around 45 per cent emissions reduction is adopted then power prices will be 25 per cent lower than under the proposal by the coalition. Even if you look at the government's claimed $550 of power savings, $400 of the $550 comes from Labor's Renewable Energy Target, not their NEG.

The sad truth is they are standing against the tide of history. The brutal economic facts are that if you support renewable energy you will not only decarbonise the economy; you will also drive lower power prices. You can achieve both. They stand in opposition to both, because the Prime Minister and the minister couldn't stand up to the former Prime Minister, the member for Warringah; they couldn't stand up to the member for New England; they couldn't stand up to all the other fossils in the party room. But it's not just them who will suffer. It's households in our electorates that will suffer. It's our children who will suffer. It's our grandchildren who will suffer. The government will be condemned by history for this abject surrender. They truly are the quislings, the Vichy French in this debate, giving up all the— (Time expired)

3:38 pm

Photo of Tim WilsonTim Wilson (Goldstein, Liberal Party) Share this | | Hansard source

Let's face it: that was five minutes of our lives that we will never get back! It was not a hole in one on the mini golf course speech. In fact, it was quite the reverse. It was a long diatribe off the worst drive down the fairway from the member for Shortland. But this is the problem that we now have with the Australian Labor Party and their position on energy—incoherent and lacking an understanding about the fundamental nature of the market and what is necessary to deliver cheaper prices to households and reductions in emissions, or how to make sure that when people turn on the switch the light comes on.

I make these remarks as somebody who, frankly, was proud to oppose the emissions trading scheme introduced by the former Labor government—proud of the fact that I fought the carbon tax, which was fundamentally bad policy. It would have undermined the security we needed in this country, it would have shifted too much of the burden onto technology that wasn't able to deliver the outcomes that Australians needed and, ultimately, it would have delivered price hikes well in excess of even the ones we incurred under the bad policies of the previous government.

That is also why I support the National Energy Guarantee. It's the first policy put down on the table of the nation that actually allows for technologies that produce energy to be compared like for like because they carry obligations. Renewables, with their role of making sure that we provide energy using the forces of the earth, carry with them obligations that they have to be reliable at the same time and they have to compete in a fair marketplace. Fossil fuels—coal or gas, traditional and conventional fuels—have to meet emissions reduction obligations as part of competing against renewables. But you get like for like, apple for apple, not the current opposition's policy, which is simply to favour some technologies, force them into the market and pass the buck onto Australian households and consumers.

That's what the NEG seeks to do—stabilise the market to drive investment to improve the outcome for Australian households. It also spells the end of the bad policy that has infected the national energy grid, led by bad policymaking by people in this place in years past, and the end of programs by allowing them to go to a natural end, like the Renewable Energy Target, which no-one's disputing has forced a lot of renewable energy into the grid but at the incredible expense of reliability—having a stable market—and, of course, at the incredible expense of households, who have had to pick up the bill to subsidise the interests of multinational corporations.

On the other side of this chamber, they're concerned about the top end of town, despite their protests, but they're only interested in the multinational renewable top end of town. They're interested not in consumers or in the interests of Australian households but merely in the people who come in from overseas and bring technology. And they think they should enjoy a subsidy along the way, often to the extent of tens of millions of dollars.

I compare the end of the RET and all these other programs, and what's being done with the NEG, to the end of tariffs, where you had huge distortions in the economy and the market that were mostly picked up by passing the costs on to consumers. The challenge for this government, which it is actually going to meet through the NEG, is to undo that damage to create a stable environment for new investment and to actually have a competitive market operating that seeks to drive down prices and deliver the outcomes that households and consumers need.

What will we see if we go down the NEG path? Yes, we will see an increase in investment, and, yes, it will be technology neutral, so we're going to leave it to the market to decide what to invest. Yes, there will be an increase in supply, including of low-cost energy sources, which will deliver cheaper bills for Australian households. That's a pretty good outcome. What are the obstructions to this path, to building the investment that will grow the future economic opportunity of this nation? It is those that sit opposite, as they carry on like a bunch of schoolchildren over whether they should support this policy, and of course the Victorian state government, who seem to have no interest— (Time expired)

3:43 pm

Photo of Mike KellyMike Kelly (Eden-Monaro, Australian Labor Party, Shadow Assistant Minister for Defence Industry and Support) Share this | | Hansard source

Well, it's happened again, hasn't it? The Prime Minister, the Deputy Prime Minister, all of them, are selling out once again. Brave, brave Sir Malcolm, like a character out of Holy Grail, has bravely turned tail and fled! This man, in his cowering, craven capitulation to the carbon-captured members of his own party room, has given up on the very things he said in this chamber. We were all here, weren't we? We watched that speech he gave, backing in Labor's climate change and renewable energy policy and crossing the floor to vote for it. Where are those days now? Where is this hollow man?

And we've been discussing, of course, the effect of this NEG on the market, renewable energy and climate change. This Prime Minister and this policy are the biggest threat to the Snowy 2.0 project, which they've touted as their great vision. In fact, we know it wasn't. It was just a project Malcolm photobombed that the Snowy Hydro Corporation had in train well before he discovered it. They'd put in their feasibility funding application to ARENA, the body those opposite tried to destroy in February last year before Malcolm turned up in March. And, of course, the Snowy 2.0 project will be funded from their own money and from private investment—not a cent from this government. That's a critical factor: private investment. One of the most important factors of the Snowy 2.0 project was that an economic feasibility study was conducted by Marsden Jacob Associates. That report tells you everything you need to know about the way the market needs to go and about the relevance of Snowy 2.0. This government tried to bury that report. They told Snowy Hydro: 'Don't put that out there, for God's sake. Please don't do it.' That's been confirmed by Snowy Hydro. They've said their shareholder asked them not to put it out there. Eventually, Snowy Hydro did anyway because they had to. Why? Because their investors need to know this information. And the decision that's going to be made in December will be affected by the factors spelt out in this report.

And here is the report. This is it. It exists on the Snowy Hydro website. None of these guys have read it, and I think that is the greatest advertisement for the need for more investment in education, because these guys didn't read the Finkel report and they haven't read any of this. And some journalists need to have a closer look at this, too. What you'll see spelt out, when they talk about the economics, is that the long-term commitment on renewable energy makes the Snowy 2.0 project feasible economically. It gives it its greatest economic and market impact. And what is the long-term commitment that is spelt out in this report? There it is on page 4. That long-term commitment is a target of 60 per cent renewable generation by 2040. There it is in black and white, and it matches, by the way, perfectly with Labor's renewable energy target trajectory.

So it is an ambitious renewable energy target that makes Snowy 2.0 viable. That is the way it will work in relation to the market, by providing the firming to that transition to 100 per cent renewables, so any attempt to slow down that transition to renewables or to reintroduce coal-fired power will threaten the viability. And we know that because the CEO of Snowy Hydro and their chief operating officer have told us that. Paul Broad said: 'From our perspective, new coal doesn't stack up. We'll outcompete them on price and reliability. We can outcompete a new HELE plant. And Snowy 2.0 only stacks up when more coal power exits the market. The amount of coal base load that comes out of the market determines the viability of Snowy 2.0.' And, of course, that's been backed up by other experts, including David Carland, an energy finance specialist, who said that the government has a choice. This is really what underpinned my question today. He said:

The development of a major new coal-fired station will destroy the viability of Snowy 2.0. The federal government needs to make a choice: does it want Snowy 2.0 or does it want a major new coal-fired station.

And everything in this Marsden Jacob report underlines that coal is dead as a future source of power. It will gradually phase out. It spells out the time lines for the major power stations that will die. But it also says that carbon capture and storage and these technologies they tout are not sustainable for the future of the market. In fact, they say:

… the technology is not yet commercially deployed and is unlikely to be viable without a significant price on carbon … This technology has not been proven on a commercial or large scale, its costs are not known, and it is considered unlikely that it will be commercially viable until well into the 2030s.

(Time expired)

3:48 pm

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

One would read into the wording of this matter of public importance today—which is 'The division in the government over its energy policy'—that the Labor Party, of course, doesn't have any division on major issues. I welcome the fact that my party is able to discuss things in a robust way and that there are alternative points of view. I well remember the lead-up to the 2013 election when the member for Hunter was caught on television laughing at the Prime Minister's talking points. The Prime Minister at the time was Julia Gillard. The member for Hunter said: 'I brought the manual with me. I'll see what it says.' There is only one view from the Labor Party because having an alternative view means expulsion from the party. Are we to assume, for instance, by the wording of this MPI, that 100 per cent of Labor Party members are in favour of lifting the renewable target to 45 per cent by 2030 and there's no division in the party? Are we to assume that they are in favour of raising taxes on small and medium business owners? In fact, are we to assume that there is no dissent in their ranks over the policing of the integrity of our borders? Is it 100 per cent over there? Is there no alternative view in the Labor Party? Goodness me! What a load of rubbish! Well, of course there is in the Liberal Party. There are alternative views are on all major topics, and that's something we should be proud of, and we actually foster that within our ranks.

But let me tell you a little bit about electricity. I've said to my party room this morning that I have been around this story of electricity in Australia for, I think, longer than anyone in this House, because it was in 2011 that Alinta came to me and said: 'We are having trouble at our Northern Power Station. What's happening in South Australia is that we're getting an explosion of renewable energy under the auspices of the RET, and it's actually reducing the number of days on which we can sell electricity into the market at a profit.' In 2012 I met with the AEMO commissioner, and he said to me at the time: 'Don't worry about it, Mr Ramsey. Even if the Northern Power Station at Port Augusta closes, the upgraded interconnector will take care of that. South Australia will be all right. You've got nothing to worry about.' Well, he was wrong and I was right, unfortunately. We were plunged into darkness. South Australia currently has 52 per cent renewable energy, and let me tell you: even though there are no longer incentives there in the RET, people are still building. That's fine. I'm not upset about people building wind farms and solar farms. But every one that gets built undermines the business case of the baseload generators. It reduces the number of days a year that they can supply electricity into the market at a profit. But we need them. Even though it might be only 20 days a year or 40 days a year, we absolutely need them, because there are no other answers in the system at the moment.

What the NEG does is provide an incentive for operators to build baseload electricity, because at the moment, as long as those on that side of this House sit across there and say, 'Whatever you do, when we get into government we're going to undo it,' there will be no investment in baseload electricity. We've had an investment freeze for years now. We've got the business community on side. We've got the consumer groups on side. I think we'll get all of the state governments on side, but we've got most of them. What we need is for the Labor Party to come on side and say, 'All right, we accept that for Australia's benefit we need to land on some mutual ground, and we will not promise destruction if elected to parliament.' That's when you'll see the coffers of private investment open up, and they will start to invest in new generation capacity in Australia that will provide baseload electricity to us.

This is our best chance. We have nearly all the balls lined up. This morning in our party room, there was overwhelming support for pushing ahead with this course of action. I am very confident that the minister will reach agreement with the states in the next month or so. What we need—what Australia needs—is a signal from the Labor Party that they'll come on board too and we'll get bipartisanship. I heard a call for bipartisanship on the other side. This is your opportunity. Show the investors of Australia that you've got faith in Australia, you've got faith in the citizens and you want to help reduce power prices, not send power prices northward. Do you really want to go to the next election saying, 'I'm in favour of higher power prices?' (Time expired)

3:54 pm

Photo of Anne AlyAnne Aly (Cowan, Australian Labor Party) Share this | | Hansard source

I note the member for Grey in his previous contribution kept on deflecting to Labor and calling for bipartisanship, but the biggest threat to energy security in this country is this coalition government's chaos and internal battles. National policy on energy security should deliver two things: it should deliver reliable energy and it should meet our renewable targets. The Prime Minister keeps trying to convince Labor that his government has the settings right, but it's not us that they need to convince. We know where we stand. In 2016, Labor supported an emissions intensity scheme. That scheme was vetoed in the coalition's party room by the backbench. In 2017, we supported the Clean Energy Target. Again, it was vetoed in the coalition's party room by the backbench. And now we get to see the real Prime Minister—a Prime Minister who is unable to lead a party, a Prime Minister who is held hostage by climate change deniers and right-wing ideologues, a Prime Minister who would sell out the future of Australia's energy security to appease a small, vocal minority in his party room.

At the 2018 Future Thinking Conference, hosted by the Energy Users Association of Australia, Dr Kerry Schott opened her presentation with some ideas and with an assurance that no new coal power would be built, NEG or no NEG. She said that there is no longer an investment case to build new coal-fired power stations in Australia, because 'the cost of coal is always going to be more than the cost of wind and sun'. Let me repeat that: 'the cost of coal is always going to be more than the cost of wind and sun'. She continued:

You are unlikely to see a new coal-fired generation plant built unless there is a change in technology and a decline in the price of coal.

The cost of running a clean-coal plant is much more expensive than running a combination of wind, solar and gas, or, better yet, wind, solar and pumped hydro.

She said that her view was 'not contentious at a factual level'. She added that there would be absolutely no way that anybody would be financing a new coal-fired generation plant.

What has been the response to this learned doctor's commentary on the government's proposed NEG? The member for Warringah said he was very disappointed and it suggests 'the system is not technology-neutral and that it is in fact anti-coal'. The member for New England called it 'utterly ridiculous' and the member for Hughes called it 'clueless' and 'misleading'. That is how this coalition government's backbench deals with advice from their own panel of experts.

In my electorate I have a company called Sunvertech, which is a small family-run business owned by Kevin Davies and his son, both of whom are engineers. For several years now they've invested their time, their knowledge, their skills and their resources into developing new renewable technology—into developing inverters and batteries for solar power. They've come a long way in what they've achieved, pouring their hearts and souls into their work. Kevin Davies came to see me the other day, concerned about this government's NEG, and particularly concerned, as we are, that the woefully low emissions targets will ensure that there will be no investment in renewables, despite the fact that renewables are cheaper. The low emissions target that this government has put forward, because this Prime Minister has capitulated to the right-wing of his backbench, will not encourage investment in any large-scale renewable projects for a decade. These are all facts. They are undeniable facts, and the Prime Minister needs to stand up and listen. (Time expired)

3:59 pm

Photo of Damian DrumDamian Drum (Murray, National Party, Assistant Minister to the Deputy Prime Minister) Share this | | Hansard source

Right now, for the first time in quite a while, there is an absolute gulf between the coalition's energy policies and those of the Labor Party. Whilst the Labor Party have previously been sitting on the fence, it now seems they are coming out in abject opposition to the National Energy Guarantee, and it seems as though they are now talking about the fact that higher electricity costs are not a problem for the Australian people but are in fact proof that the system is working. The Labor Party now has this modus operandi which effectively says, 'When we have really high electricity prices, that's proof that everything is just fine.' It's a huge gulf in policy. It's a difference in priorities between those of us representing regional areas, where we understand that many people are having trouble paying their energy bills, be they electricity or gas. More importantly, when they head off to work in high-energy industries and businesses, they're under pressure to hold their jobs, because of the sheer cost of running those businesses.

All this has happened in a state where the Labor Party has a moratorium on gas extraction and exploration. They have some scientific process to look at where the reserves of gas are, but if you want to cut through all the rubbish, you'll find that nothing has happened in relation to gas. They are scared senseless in Victoria, and the state Labor Party are doing absolutely nothing when it comes to onshore gas. They're happy for another part of Australia, like Western Australia, to develop a gas industry and pipe or ship gas over to Victoria, but they don't want any onshore gas in Victoria, because while it's okay for another state, somehow or other it's not okay for Victoria. They are quite happy for the cost of energy and electricity in Victoria to go through the roof, because they have a system of thinking that says, 'We're going to be the environmental guardians of our own state,' but are happy to bring gas into the system that has been extracted in other states. I heard the previous speaker talk about how we should be looking at more wind and solar, backed up by gas. That's fine for Western Australia. I hope that's what they do in Western Australia. We're not allowed to do that in Victoria, because Victoria has stopped any drilling or extraction of gas in that state.

Any onshore gas is taboo, even though none of the 1.5 million gas wells around the world have any scientific evidence to suggest contamination of aquifers or some health problems for the people surrounding them. However, the GetUp!s, the Lock the Gates, the Labor Party and the Greens are all still talking about the evils associated with extracting natural gas from wells around Australia. Unfortunately the poor people in Victoria have to wear this, because that's the leadership that they have. The arguments around gas were previously described by former Labor Party Queensland Premier Anna Bligh, I think, as the worst policy debate that Australia has ever had, because fear, sensationalism and lies have overcome the science. As we know, many of the people in the Greens, and the GetUp!s and the Lock the Gates, are continually putting to the National Party, 'Why don't you believe in climate change and accept the science?' I accept the science associated with climate change; why don't the Labor Party and the Greens accept the science when it comes to gas? They're too scared to accept that there is no science with a negative view of gas exploration.

The current main industry players in Australia are hugely supportive of the NEG. The vast majority of the government party room are hugely supportive of the NEG. The Labor Party seem to think it's a crime if you have a view outside that of the party room, but we in the National and Liberal parties think it the best thing ever that you can speak your mind in this parliament. (Time expired)

4:04 pm

Photo of Susan TemplemanSusan Templeman (Macquarie, Australian Labor Party) Share this | | Hansard source

What must it be like to know that the future you're leaving your precious grandchildren faces dangers that you could act upon, but those around you won't let you? What must it be like to say to Alice or Isla or Jack or Ronan, 'Sorry kids; as much as I love you, there were some big bullies who wouldn't let me do what I knew was right'?

It must be absolutely galling, but that's exactly what we're seeing opposite, with a hopeless division that means the Prime Minister faces something within his party room that he has no power to control. His weakness means that the future he is leaving, not just for his grandchildren but for all our grandchildren, is a much poorer future. The one legacy he might have been able to leave, the one ambition, the one that cost him his job first time round, the one policy that could have shaped Australia's future as a 21st century energy market and the one policy that could lower energy prices for consumers is yet another thing that the Prime Minister is profoundly failing at. He's too weak to fight the Neanderthal view within his party that we need new coal. That view is not shared by anyone with any credibility anywhere in the world. The chair of the Energy Security Board, Dr Kerry Schott, says the cost of building a new coal-fired power plant is always going to be more than the cost of wind and sun. Dr Schott says the cost of running a clean-coal plant is much more expensive than running a combination of wind, solar and gas, or, better yet, wind, solar and pumped hydro. She is one of many. There is consensus. Now all we need is consensus on that side of the House. That's what we're not getting.

I have not come to this place in my 50s only to focus on what life is like for Australians in the second half of their lives. We need to focus on what life is like for my children now, for when they're my age, for their whole generation, for their children and for their children's children. It's time those opposite got their heads out of the sand. There is a clear and pressing need to act and to act now. The fight that they're having gives the lie to the fact that for years the industry investors have been saying they need a clear set of rules, a framework which allows them to make decisions and which doesn't get dumped from one government to another.

In my work before parliament, with investors, I remember the relief at a policy announcement that Australia would have a price on carbon. There was the hope of certainty. That was years ago. Since then it's been a shambles because of the lack of leadership on that side of the chamber and by this Prime Minister. As soon as the investment framework is in place the industry will be able to move forward. It is so keen to move forward. It's vital for us to have a framework now and then to have enough ambition to drive investment. That's what the government's plan lacks. Their target will be reached before the NEG really starts, with rooftop solar alone helping it achieve that target. How ambitious is their target? We're talking two per cent. That's the actual target that we're really talking about.

The Australian National University found the proposal—reduction targets of 26 per cent on 2005 levels—will put Australia towards the bottom of 35 OECD countries. Guess what? That weakens our investment potential. The ANU College of Law researcher Dr James Prest said that Australia may even be at risk of failing its international obligations. Let's be clear: our international obligations under Paris were very, very modest. By international comparison, he says that Australia's aim for renewable energy is clearly quite unambitious. That's what we're talking about: ambition. My ambition is that we leave a better future for our children. This policy doesn't do that. Dr Prest says that the review of renewable targets in all OECD countries shows that only five of the 34 countries have a lower target than Australia and some of these already have high levels of renewable electricity production. Who will be below us? The Czech Republic, Hungary, Israel, Canada and—wait for it—the United States.

What is the consequence of having such an unambitious target? It is a disaster for this country going forward. We're throwing $444 million at the Great Barrier Reef but not addressing the real issues that matter. We need decent targets that protect all our children and grandchildren. (Time expired)

4:09 pm

Photo of Andrew LamingAndrew Laming (Bowman, Liberal Party) Share this | | Hansard source

Acknowledging the incredible passion around this topic, a topic that for 11 years has galvanised Australia like no other OECD economy, the debate between environment and energy, we are slowly getting to the point where experts have come together to design a structure that looks after three mutually exclusive fields: affordability, responsibility and reliability. You can toss a dime, and it's not going to land on an area that's going to cover those three areas adequately. I guess our great concern is that the Labor Party, until now, in their six years in government, simply watched energy prices double. The Labor Party, at federal and state level, continue to exacerbate the situation with their job-destroying bans and moratoria on exploration, and their unrealistic renewable targets—which at this point cannot be met in a way that allows pensioners to pay their power bills—and their open hostility to dispatchable, reliable baseload power. This is a real fatwa against these areas of power policy.

The Turnbull government just takes another approach to this. We are taking action to fix this mess to make sure that people can afford their power bills. We are focusing on just keeping the lights on before we start worrying about renewable targets for 10 and 20 years in advance, when I'm sure we'll be apologising for the actions of Labor governments right now. The National Energy Guarantee cuts electricity prices, ends subsidies, ends the picking of winners and ends the passing on of these costs directly to consumers. We're endeavouring now to create a level playing field, an agnostic energy source approach that means more supply and ultimately lower prices. It's about having all forms of energy competing equally in Australia's energy mix. That $300 a year that we are reliably informed can be saved—an average of $550 a year deep into the 2020s—under the NEG will make a real difference to families.

We're requiring power companies to cut better deals, to inform customers of the better arrangement and to secure gas supplies for Australia rather than exporting gas overseas and putting downward pressure on network costs. Labor's alternative indicates some scotoma—a blind spot—that they are unable to address. Our actions are already having some impact. Wholesale prices are already down, thanks to gas availability, by about 25 per cent. My state of Queensland has had an 8.5 per cent drop in small-business power prices, and around 5.4 per cent for households. Labor's alternative has primarily been one of blackouts and higher energy prices, which they get away with by offering small payouts to pensioners to keep them onside. We know that when Labor was last in office these prices doubled, and then we had a leader of the Labor Party with a 50 per cent renewable energy target and no idea of how we'll get there, no idea of what price will be paid by pensioners. We're going to put pensioners first, put low-income households first.

This new tax on electricity means that if Labor's back in office power bills could be $500 a year higher than they would otherwise need to be. That's way too much of a burden on Australians' shoulders. Let's put our shoulder to the wheel and do our part and allow others to do the same before reckless policies harm jobs—because once you lose a local job it often doesn't come back. This guarantee has been backed by the expert Energy Security Board. It's made of these two obligations. First of all, the thing you never hear Labor say, is the reliability obligation. It's set to deliver the right level of dispatchable energy from ready-to-use sources. That might be coal, gas, hydro or whatever, but it's got to be there, in the thousands of megawatts, to make sure that when wind and solar enters irregularly into the grid we can cope with it. This makes retailers responsible to have that base load available; otherwise, they can pay large penalties for failing to do so, and a price fall is the result.

People ask, 'How can the NEG reduce prices?' Well, it does so by reducing those spikes where power is inordinately expensive for very short periods of time. This allows Australians to have more money in their pockets. That's where they want the money. They don't want it going to energy retailers. Memo to Labor: we don't enjoy paying high power bills where we don't have to. When it comes to reliability, no longer should intermittent sources like wind and solar be surging into our grid, causing the risks of brownout and the inability to have base load go to go with it.

I want to thank a number of the groups that got behind the NEG: the BCA, ACCI, AiG, Manufacturing Australia, and all of the energy users—BHP, BlueScope, Rio, Santos, JBS, Origin, AGL, EnergyAustralia, Energy Networks—and all of the irrigators and the mineral councils, the forestry product producers, infrastructure partnerships, Grattan and energy consumers. They're all lined up against the Labor Party. They have this party in the crosshairs. Stand up for reliability and affordability and support the NEG.

Debate adjourned.