Jenny McAllister (NSW, Australian Labor Party, Assistant Minister for Climate Change and Energy) Share this | Hansard source

Senator Duniam, you offered. It was a rhetorical question. I do accept that you don't have to answer my questions in this forum—I accept that's not how it works—but you chose to. I was interested to hear that net zero remains your policy. The issue was that your implementation arrangements in government were catastrophic. You didn't land an energy policy. You had 22 different energy policies; none of them landed. And what did business say about that? What did they say about it? The Energy Supply Association said this about your government:

The current uncertainty will itself drive up prices. Banks have put away their cheque books on energy projects. Policy uncertainty has rendered electricity generation projects unbankable—

unbankable—

That cost has been masked because lower demand has meant we haven’t needed new projects but when new assets are needed, that risk premium will be there and it will push up … prices.

That's what the Energy Supply Association of Australia said. They're the suppliers. What do the users say? The Energy Users Association said there was 'a dysfunctional political environment'—dysfunctional—'that had dramatically increased the risk associated with investment.' And it is why, prior to us forming a government and since, organisations have lined up to call for clarity around how the safeguard mechanism could be improved to give certainty to covered facilities.

Senator Duniam, in all of the contributions you've made, you have given no indication about whether or not you think that reform of any kind is necessary. It appears that you think the status quo is fine. That is the only thing that we can conclude from your engagement, or your failure to engage, with the policy process that has been undertaken over the last eight months. It's the only thing we can conclude. One of your frontbenchers went on television and said that you are the opposition and don't have policies, and I suppose that that is true. I suppose that is true in relation to climate and energy. It was certainly true when you were in government, and it caused the problems that we've been discussing this morning and that we'll continue to have to deal with on behalf of the Australian people from government.

Business is looking for us to implement these reforms, and it's a reality that you have failed to engage with over the course of the debate. The Ai Group talked about the approach:

The treatment of new facilities appears to strike a workable balance—

a workable balance—

providing pathways for new projects that stack up to go ahead without adding to burdens on existing facilities or threatening national emissions goals.

Those groups essentially confirmed those views earlier this week in response to the remarks made by Minister Bowen.

There is a need for reform, and the government would have happily engaged with the opposition had the opposition been willing to do so. We made it clear that we would work with anyone across the government and across the parliament who was willing to engage but, regrettably, you chose not to do so, and that will be for you to explain.

The decisions taken by individual businesses in response to the revised approach to the safeguard mechanism will depend on the specific circumstances of those businesses. As we've canvassed already, the design of the mechanism includes a whole range of flexibilities so that businesses can choose the least-cost pathway for compliance. There are options, of course, for businesses to reduce their emissions on site. There are options for businesses that choose to make those investments to generate credits that may be sold if such an investment reduces their emissions below their allocated baseline. There are options for businesses to borrow credits from the future if they plan to make an investment at a future point. There are options for businesses to purchase ACCUs from the market.

These are features of the design—a design to provide business with flexibility—and they are a consequence of the consultation undertaken with business over the eight-month period we've described. But they necessarily mean that government can't prescriptively say how an individual business will respond. That would be for an individual business to decide, and they will make their best judgements based on their assessment of the technology, their assessment of their operating environment and their assessment of their investor appetite. The question you're asking is a question for business. But we have consulted with them and engaged with them about the mechanism, because we want to deeply understand what they think would provide the necessary flexibility for them to be on the path to net zero. As we've pointed out, there are costs and consequences for the Australian economy and for businesses if we don't get on this pathway. They arise from uncertainty, they arise from the response from the international community, they arise from responses that might be made by our trading partners and they arise from decisions that might be made by investors.

All the information before us suggests it is important that we make clear how we are going to achieve our targets. It's why the BCA said:

Australia needs a credible, durable framework to reach its climate targets and grow the economy.

It's why the Investor Group on Climate Change said:

The reforms will help to unlock investment in the new and existing industries that will maximise Australia’s competitive advantages in a net zero world.

They also said this:

The willingness of a diverse range of lawmakers to work together provides investors with the greater clarity they require to deploy the billions of dollars Australia needs to reach net zero by 2050.

It's important, isn't it, because these reforms will help to unlock investment in the new and existing industries that will maximise our competitive advantage. I don't know why the opposition wasn't interested in the conversation about how to do that, because our stakeholders wanted it. Your business stakeholders wanted it. But it wasn't a conversation you wanted to be a part of.