Senate debates

Monday, 9 December 2013


Clean Energy Finance Corporation (Abolition) Bill 2013; Second Reading

8:50 pm

Photo of Deborah O'NeillDeborah O'Neill (NSW, Australian Labor Party) Share this | Hansard source

I want to commence my remarks on the Clean Energy Finance Corporation (Abolition) Bill 2013 by expressing my complete agreement with the remarks that have just been placed on the record by Senator Ludwig. As a representative of a regional area, I believe the need to make sound investments for our future could not have been more clearly enunciated. I appreciate the work that my fellow senators on this side of the chamber are endeavouring to undertake in debating this particular element of the carbon bills, because it is such a critical dimension of how we organise moving forward as a country to ensure that there is a pool of funds adequate to make the sound investments that are necessary for our future.

I would like to commence my remarks tonight with a bit of an overview of the custodianship of the place in which I live and why that informs the decision making behind the point of view that is put by the Labor Party on these matters of great importance for our country. I want to make some very specific remarks about the CEFC, and, in closing, have a bit of a look at the public debate, some of which did get some airing in the press in the last week with the very hasty Senate inquiry that was called.

Where I live, I see the sun rise from the ocean at the horizon and I hear the of rolling waves of the grand ocean that surrounds the island home that we share. Where I live, I hear the waves that beat on the shore like a heartbeat. Where I live, I see the whales that pass by on their way north growing in number each year. Where I live, I experience every day the incredible beauty of this land, which I see as a gift from those who have taken seriously their stewardship of land, sea and sky. Living where I do informs my contribution to this debate on the stewardship of our earth. We do not own the land, sea or sky; we simply pass through. It is our responsibility to make sure that we do not leave it corrupted and impoverished to those who follow us. This is what I believe.

I am not alone in that belief; I am supported by my Labor colleagues in this legislation, which does evidence that we take our responsibility for the local, national and global environment very seriously. We have legislated in ways that reflect that belief in science. Our policy is an expression of belief in the integrity of the academy of scientists, and, indeed, this piece of legislation is an expression of our belief in the academy of the financial institutions of this country—people who know about money, people who know about investment and people who have a grander vision for this country than the miserly and narrow-minded dogmatic representation of climate science denial that we are seeing represented in this legislation from those opposite.

The legislation that we as Labor advanced and enacted is an expression of our belief that our responsibilities to this great nation must not be determined in mere election cycles. Our legislation to price carbon was difficult, but it was informed and it was a visionary response to addressing the structural challenges of a carbon-based economy. Despite the shameful fear-mongering of the then opposition, we achieved in the 43rd Parliament that important structural economic reform and transition while presiding over continuing growth in our economy. We effected a reduction in emission intensity of 7.6 per cent and we did it in a way that was mindful and supportive of families on fixed incomes.

We, the Labor Party, believe in assisting Australians who are doing the very important work of parenting. We are the party that believes in supporting senior Australians, particularly those on fixed incomes, who have already given so much to the country, as we undertake economic reform that is necessary for the future of people who we want to grow and become elders in Australia. Heck, we are the ones who brought in the pension! We are proud of that expression of our beliefs. On that set of beliefs, and on this piece of legislation, you could not find a more stark contrast. Those opposite do not share beliefs about our legacy for the future, our important responsibilities to people who are living now, our economic care and concern for them as we undertake reformative legislation or our sense of commitment to the future of this country.

The piece of legislation that we are debating this evening will be looked back on with shame by children and grandchildren of the people who are in this place because it is about political expediency, it is an expression of a rising cynicism and it is certainly all about a short-term political gain—a branding exercise, if you will, trying to position themselves as the goodies on this issue and the rest of us who oppose them as the baddies. The reality is that this complex matter requires a much more sophisticated, a much more ethical and a much more nuanced debate and discussion.

As Senator Ludwig has just pleaded in his speech, by separating this part of the legislative package out, we are providing an opportunity for those opposite, who I can see are extremely studious and paying attention to the important work of state before them! Look further than the papers that are on the desk in front of you right now. Look to the future for your children, your grandchildren, my children and my grandchildren—all of us together as Australians. This is a national appeal and a time we should be considering this rather than acting in a party-political, partisan and small-minded way.

The abolition of the Clean Energy Finance Corporation is a clear example that the Liberal Party—the self-proclaimed party of capital—has absolutely lost the economic plot. The action in this legislation is proof that the Abbott government's claim that Australia is open to business is yet another lie. It is yet another example of an economically illiterate government that cannot seem to fathom the simple equation that economic growth requires capital investment. We have on display here this evening the government's lack of economic understanding and we have seen it on too many occasions already. We have seen it with Qantas, we have seen it today with its response to Holden, we have seen it with GrainCorp and, no doubt, we are going to see it again and again.

The CEFC is part of our market-based solution to climate change. It adds to the equation of pricing pollution. It acts by providing low-cost loans to stimulate investment in low-emission practices and technology. For example, there are the Macarthur, Taralga and Pacific Hydro Portland wind farms and the Moree Solar Farm, with 30 per cent going towards energy efficiency loans and 14 per cent going towards low-emissions technologies.

The fact that the CEFC-projected lifetime yield exceeds seven per cent is a powerful indication that it actually raises money. For a government that claims that there is a budget emergency, its actions are absolutely proving otherwise. This is a government that has spent almost an extra billion dollars each week that it has been in office. So I guess throwing away more money by winding up a profitable market-based investment mechanism is just par for the course of the way in which this government has started its term.

The risks posed by climate change are compelling, but it is also important to recognise the huge potential that we have unlocked for business through this market-based solution. By pricing pollution, Labor has established a cost incentive for companies to lower their greenhouse gas emissions. In the short time that it has been operating it certainly has already helped to foster and expand new and established companies to invest in services and infrastructure for a low-carbon economy, such as carbon abatement and renewable energy. I know that the farmers on the plateau in the electorate of Robertson and into Dobell on the Central Coast are very interested in this carbon abatement. They have been undertaking research and looking at their business models as to how they can be part of this transformation of our economy, grow their businesses and continue to grow their employment for the region.

Pricing pollution through a market based solution allows the government to get out of the way and simply provide a regulatory oversight role. Now, you would think that that would have to have an appeal to the Liberal Party. But here we are in this place as they seek to shut down, if you like, an effective business.

Labor's scheme recognises that the market establishes and develops the most efficient and effective means available to lower our greenhouse gas emissions. Indeed, a considerable part of the business community has already embraced a market based solution. And I am not talking about any small players here: the Australian Industry Group, for example, has long supported an emissions trading scheme. The chief executive of that group, Innes Willox, is on the record stating:

… emissions trading is the cheapest and most flexible path to reducing emissions.

And he is right.

The Australian Industry Group's policy mirrors the one that Labor took to the election, to move from a fixed price to an ETS one year earlier than initially scheduled. It also links Australia's ETS to Europe's, and will expand international carbon abatement in line with our liberalised trade practices, ensuring that our nation is well placed to profit—to profit from the international community's progressive embrace of market based solutions.

By and large, business recognises the need to act on climate change to preserve our way of life because business people are also mothers, fathers and grandparents, and they understand through their intimate connections with their families how vital it is that we act now—but not just for now. Action now must always have an eye to the future. In fact, that is the demand of us in this place, that we do not get so distracted and caught up in the pettiness of the things that might titillate those who want to report on what we do. Our challenge is as if we are in a helicopter, to rise above the traffic so to speak—to rise physically above and have a look—to rise ethically above and have a look to the future, which is in our gift at this time to do not just the most expedient, short-term and miserly response to the challenges that face our nation but to look with vision to the future as those who have come before us in this place have taken that responsibility. They looked to the future and provided us with this great nation and the opportunities that we have benefited from.

Business also recognised potentialities by pricing a commodity that was previously uncosted. Effectively, we have created a powerful market, a market that is growing and a market that has the potential to improve the life and living outcomes not just of Australians but of people who share this planet with us. Costing pollution means that companies have to think about the expense incurred by polluting. Once upon a time, I can remember growing up and the pall of smoke from local backyard incinerators on Saturdays and Sundays out in the western suburbs of Sydney; it was something that just used to lie over us. Anything could get tipped at the tip; recycling was a concept that we did not even talk about—really it was not a word that I heard until my children were at school and we started to think about it in a completely different way.

As things have changed and as there has been a cost attached to us in how we manage our local family waste we have changed how we behave, because money matters in the equation. By creating an expense when big businesses incur pollution—in my view, evening the playing field between ordinary households and big business—business has found ways to mitigate this as much as possible. And in doing so they have absolutely reassessed and audited their practices, and found more efficient ways to create and produce. In doing that they have not only improved the bottom line of their business practice but also had a positive impact by creating a cleaner atmosphere.

Releasing this incentive through an ETS is the most efficient means of effecting a reduction in carbon emissions, encouraging economic and environmental sustainability in the process. Too often the policy argument for climate change is framed around economic growth versus environmental sustainability, but essentially they go hand in hand. This is exactly what I was trying to say in my remarks earlier, that this determination to brand as different this new government is such a short-term, cynical play that is absolutely taking away from the much richer and vital conversations we should have about growing business and growing our environmental sustainability. If there was any vehicle that was implemented in the 43rd Parliament that has ensured that has happened, it is the element that is at the heart of this piece of legislation, the CEFC. This has been a powerful and effective body that has done great work in a very short period of time, and it does not deserve to have its head chopped off by those opposite in this quite disastrous and, in my view, limited-vision-view of the world.

Of course, the profits to be made in a low-carbon economy form as much of an incentive as the costs associated with inaction. In July, climate scientists produced new research published in the journal Nature, warning that the melting of the Arctic permafrost could slash $60 trillion from the world economy if nothing were done to mitigate the effects of climate change. Melting of the permafrost would release huge methane reserves that scientists predict will cause global mean temperatures to rise by over two degrees 15 to 35 years earlier than previously thought. Considering that the global economy was worth around $70 trillion last year, this piece of research absolutely highlights the financial cost of not acting in a way that looks to the future. It is also a powerful incentive for us to act and for us in Australia to retain the CEFC.

The coalition's supposed alternative offers no specific details beyond a series of one-line comments, a collection of thought bubbles, and motherhood statements about direct action. As they stand there with their hands in the air, smiling as sweetly as they can manage, they say: 'Just trust us, and we'll be doing the right thing for you. Don't ask any questions and don't look at any of the detail, because if you look at the detail you'll see that we're ripping the heart out of a powerful transformer for the Australian economy, and we just don't care enough about it to bother to do the right thing.'

Direct action is a joke of a policy. It has the government front and centre in true Soviet style, picking winners and subsidising polluters, all at the taxpayers' expense too. For the coalition, the self-proclaimed party of capital, to be abolishing a market based mechanism in favour of an inefficient centralised model that costs more to achieve less is an act that defies logic. Direct action is so ridiculous that the government has hidden its detail from public ridicule. One constituent wrote to the environment department in early October asking for documents or web pages explaining the direct action policy. Fortunately, he decided not to hold his breath, because to this day he is still waiting for a definitive response. Such is the lack of transparency of those who sit opposite me in this chamber, ready to destroy this very significant vehicle of transformative change for the Australian economy and for our environment.

In closing my remarks this evening I would like to refer to a very interesting article by Peter Hannam in 'News Review' on the weekend of 30 November and 1 December in which he put on the record a response to that very, very short—one day—Senate inquiry into the repeal of the carbon laws and especially the CEFC. It has a very nice summary of what has been going on and the level of investment. The article reported:

The fund's board told the inquiry that for every dollar invested, the private sector had spent three, for a total of $2.2 billion. Chief executive and former Macquarie Banker Oliver Yates said the CEFC would approach $1 billion in investments this financial year.

A little further on in the article, and in contrast with the claims of those opposite that this is a dead duck and liability to the Australian economy, we find that the Commonwealth Bank has tipped in half of a $200 million fund investment. We also find that China's biggest bank, ICBC, Spain's Banco Santander and FRV, Denmark's export credit agency and Shinsei of Japan have each embarked on forays into Australia or the local renewables sector because of the Clean Energy Finance Corporation. People who know, people who invest wisely , are into this. It is only the Liberal Party that are going to walk away and they should hang their heads in shame. (Time expired)


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