Senate debates

Monday, 9 December 2013


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

1:26 pm

Photo of Lisa SinghLisa Singh (Tasmania, Australian Labor Party, Shadow Parliamentary Secretary to the Shadow Attorney General) Share this | Hansard source

My apologies, Mr Acting Deputy President. The Prime Minister's plan is to give taxpayers' money to polluters to encourage them to change some equipment and perhaps plant some more trees. But even with a price tag of almost $3 billion, it is hard to find a scientist who believes that direct action will come anywhere near its target. Reducing emissions—and let us make it very clear—is very much a secondary goal in the coalition's policy. The main game very much continues to be playing politics with climate change. In fact the Prime Minister's direct action plan will have a net cost in the end to the taxpayer. This is really bad policy.

Labor's policy, on the other hand, created an incentive for all businesses to cut their pollution by investing in clean technology and for finding more efficient ways of operating, thereby cutting costs to their business. It provides an opportunity for clean producers of energy and goods, those who have taken into account that impact on their environment, to have a competitive advantage commensurate with their social contribution to the effort to reduce the world's carbon emissions. It encourages businesses across all industries to find the cheapest and most effective way of reducing carbon pollution rather than relying on more costly approaches such as the government regulation and direct action. It is the policy that provides the spark for Australian ingenuity, for innovation in responding to climate change. It is a policy that translates the motivation we have in science into motivation for economics. The CEFC has been working to unleash some amazing economic opportunities, be it wind, solar, biomass and geothermal energy, all providing sustainable options to deliver our energy and transport needs and create new innovative industries for Australia to embrace. All pretty good stuff!

Australians have a proud history of sustainable industry. My home state of Tasmania is one example of that. In the early 20th century—I think about 1914—the Tasmanian government set up the Hydro-Electric Scheme, later the Hydro-Electric Commission, to create the first state-owned hydro-electricity generator in Tasmania. At its heart was the recognition of forward-thinking investment in the infrastructure of the future and what we can create, and opportunities for sustainable development and the jobs that they create. In Tasmania the early adoption of hydro-electricity paved the way for industry to come to the state and access our cheap energy. In these days of the national energy market, hydro-electricity continues to provide Tasmania with opportunities to sell premium clean energy, and gives further credence to our reputation as a state of pristine beauty.

We need to foster innovation in this country. We need to embed the carbon costs of doing business into the thinking of our entrepreneurs and job creators, and we need to do that now. We need to deepen our capacity to produce high-quality, low-emissions goods and services that we can sell to the whole world. They are the new jobs that look and feel like the kind that we have been familiar with for some time. The difference with the clean energy jobs future is that they do not have a use-by date. They will not be rendered obsolete when commercial, environmental and technological pressures mean that only the innovative will be able to survive. It is only Labor that has ever had that courage to introduce the kinds of broad economic reforms that are necessary to ensure that jobs in Australia stay competitive, that conditions stay decent and the opportunity to find and keep work remains open to this generation of workers, their children and their children's children.

The CEFC is a prime example of just that. It is a prime example of successful policy in the clean energy sector. So why on earth would you abolish it? Why on earth are we debating this bill to abolish the CEFC? It works to overcome capital market barriers, which have hindered the clean energy industry in Australia by investing in firms and projects which are using innovative technology. It is not, as incorrectly labelled by the government, 'Bob Brown's slush fund'. How insulting to the CEFC and its chairwoman!

Senator Whish-Wilson interjecting—

And to Bob Brown—thank you, Senator Whish-Wilson. It is commercially oriented and that has made positive returns on its investment. It is critical to understand that this corporation is making a profit on the taxpayers' investment. Isn't that a good thing, making a profit on a taxpayers' investment? Why would a party that supposedly stands for the free market get rid of something which has such a positive economic return the government investment?

That is why Labor has taken responsibility and stood by our principles in advocating for protecting our environment and the Australian people during a period which will decide the stability of Australia's future. The leadership displayed by Labor, I believe, has pioneered a scheme in Australia which is very progressive and critical for our future. The latest Intergovernmental Panel on Climate Change report says that we can be 'as certain that humans are to blame for global warming as we are that smoking cigarettes causes lung cancer'. The scientific evidence of climate change and the case for action to both mitigate anthropogenic climate change and adapt to its effects have been mounting for decades. For sometime now the need for action on climate change has been beyond reasonable doubt. The best science tells us that research and development is vital for the continuous creation, improvement and adoption of new technologies to help mitigate climate change. The distinction needs to be made between science that is robust and science that is relatively uncertain. All conclusions should be based on peer-reviewed literature.

The OECD study Effective carbon prices found that emissions trading schemes provide the lowest cost for reducing carbon pollution among the different approaches available. The report 'shows that taxes and trading systems are preferable to other policies, such as feed-in tariffs, subsidies and other regulatory instruments.' The findings were 'in line with textbook suggestions that trading systems and broad-based carbon taxes are the most economically efficient policy tools to mitigate climate change.'

What it means is that we have to take threats of severe environmental degradation seriously and that we have to be mindful of the effect that we are having, and are able to have, in redressing environmental damage. It says that we should use the tools we have at our disposal before it is too late. This is attested to by the Intergovernmental Panel on Climate Change, the CSIRO, the Bureau of Meteorology and the Australian Academy of Science.

I want to briefly explore some of the ideas about the intersection between science and public policy by reflecting on approaches taken by international organisations of which Australia is a member, including the Convention on the Conservation of Antarctic Marine Living Resources. This organisation, which is charged with managing environmental resources, is based on the precautionary principle. The precautionary principle holds that:

Where there are threats of serious or irreversible damage, lack of full scientific certainty should not be used as a reason for postponing measures to prevent environmental degradation.

There is another important component when we are talking about science and public policy, and that is the ecosystem approach. I think it is worth mentioning a few words from the Food and Agriculture Organization's definition with regard to fisheries:

An ecosystem approach to fisheries strives to balance diverse societal objectives, by taking into account the knowledge and uncertainties about biotic, abiotic and human components of ecosystems.

That approach means a number of things: it means that we need to take into account the full effects of our actions on the environment; it acknowledges that humans unquestionably have an impact on the world around them, often in unpredictable and unanticipated ways; it explains that an ecosystem is an interdependent thing and that the human community is firmly a part of it; and it recognises the significance of serious environmental degradation now and into the future and the effects that recklessness towards our environment have on our human prosperity. It says that when we risk our environment we risk our own prosperity, and yet the coalition would rather mischaracterise not just the Australian and global scientific community, but also the very properties of elements such as carbon itself. They would rather play disingenuous semantic games with words like 'pollution' and 'natural' than face up to the issues that a responsible public policy maker would take account of.

The CEFC is specifically about all of that: it is about sustainability; it is about our environment; it is about rewarding forward-focused businesses and giving traditional industries an incentive to think ahead; and it is about making sure that Australia is prepared for the new types of industries and jobs which will allow us to maintain our economic prosperity into the future.

It has also brought economic certainty for businesses in co-financing models. As chairwoman Jillian Broadbent, who I mentioned earlier, commented on the success of the CEFC:

Over the past year, the CEFC has achieved real success in addressing its challenging objective of funding transactions with a public policy objective, applying a commercial filter, and achieving financial self-sufficiency and a return on capital.

A return on capital. A positive economic outcome. That is what the CEFC has provided to the Australian taxpayer. Further indications from the industry show strong support. For example, Epuron secured government co-financing loans due to the CEFC and stated:

The role of the CEFC is pivotal in enabling renewable energy projects, particularly solar PV, to reach financial close so that more are built and the market in Australia matures at a faster rate. In our own experience, the CEFC has not been providing concessional loan finance that undercut the market but rather debt that fairly reflects project quality on market terms from a perspective and in a way that does not crowd out the local banking community.

That is a pretty positive comment there, among so many other positive comments that have been made about the Clean Energy Finance Corporation, making it clear as day that the position of this coalition—particularly of Senator Sinodinis—that the private sector can simply replicate the work of the CEFC is not only short-sighted but simply wrong. We have an organisation providing a return to taxpayers—it has a positive investment for taxpayers and for the government—so why on earth would a government now get rid of such a successful organisation? Of course there is only one reason, and that is that they are ideologically bent on doing so. It cannot be based on economics and it cannot be based on science, because those arguments simply do not stack up. It can only be based on their ideological fixation to get rid of anything that the last government was involved with when it came to positive public policy around tackling climate change in this country. That, I have to say, is a real shame.

It is a real shame not just for our generation and not just for current taxpayers; it is a real shame for our children, because it is about the new jobs that will come about through the innovation of businesses being part of wanting to create a clean-energy future. It is that generation that will miss out because the incentive will not be there

There is no incentive that this coalition government is providing, if they get rid of this Clean Energy Finance Corporation, for businesses, corporations and companies to change their behaviour—and this is exactly what this CEFC did as it provided that support. That is exactly what the whole carbon pricing mechanism did. It provided that support, that incentive and that meaning to business and Australians to make a change to a new, clean energy future, one based on new, clean energy jobs, one based on cutting our emissions and doing our part as a middle power in Australia on the issue of climate change.

As a middle power, what does that actually mean? It means that we are setting a bit of an example in our region. We know that in our Asian region a number of countries have some way to go on acting on climate change and yet even China is going ahead in leaps and bounds when it comes to pricing carbon. But as Australia we can set the example and we can lead the example and show them how positive economic outcomes can come about through transforming an economy to one with a clean energy future, one where a clean energy finance corporation—a government body—can be set up and can actually provide a return on investment to their taxpayers, just as it has to our taxpayers here in Australia. To abolish this organisation is short-sighted and simply stupid.


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