Nick Xenophon (SA, Independent) Share this | Hansard source

I move amendment (1) on sheet 5912:

(1)    Clause 3, page 3 (line 24), omit “between 5% and 15%”, substitute “at least 20%”.

This amendment is similar in vein to the Greens amendment. I do not think it would be reasonable to revisit all the arguments that have been made previously. Senator Milne and Senator Bob Brown have articulated some of the concerns. Those who oppose higher targets have also articulated their concerns.

But I want to say briefly that, as my colleagues know, I commissioned, jointly with the coalition, modelling by Frontier Economics in terms of an alternative approach to an appropriate carbon pricing scheme. I have sought advice from Frontier Economics about having a higher target of 20 per cent. The advice I have received from Frontier is that whilst I have not undertaken modelling in respect of that—I cannot afford to undertake any more modelling; my pockets are not that deep—it is certainly feasible to have a higher target if you combine it with a number of other measures, such as a white certificate scheme in terms of energy abatement. If you moderate the cost of electricity increases, you will not need as much compensation, and I am sure I will have an opportunity later in this debate to discuss further the whole issue of Frontier and an intensity based approach.

I think it is important, in the context of this particular motion, that a higher target is possible. I think it is the appropriate thing to do in terms of risk management. I acknowledge that in increasing the reduction target there would be a reduction in carbon revenue to the government, but if the primary objective is to reduce emissions, not to raise revenue, then I think that is an appropriate trade-off. You will not need as much compensation if you adopt an intensity based scheme for the electricity sector. The likely loss to government revenue by increasing the target to 20 per cent by 2020 as a minimum would be around $2.4 billion a year, based on some calculations that have been provided to me. Again I acknowledge that there has not been modelling; I just do not have those resources.

I think there is also significant potential to abate emissions through a range of energy efficiency initiatives, the renewable energy target and white certificate schemes, and I think that having a higher target will actually drive investment and drive supplementary emissions reduction strategy. In the one minute and 30 seconds that I have left to articulate that, I commend this amendment to honourable senators. I indicate that I do not intend to divide in relation to this, but I will be dividing on my alternative fallback amendment—for the simple reason that that was modelled for the coalition and me. I thought that there was some support amongst coalition members for that alternative target of 10 per cent, although my preference is to support the 20 per cent target.