Wednesday, 15 May 2013
Questions without Notice
Thank you, Mr President. I redirect the question then to Senator Lundy, the Minister representing the Minister for Climate Change, Industry and Innovation. Given the government has said that the funding to climate related programs has been cut or deferred because, when trading starts, the carbon price is likely to be lower than anticipated, and since the trading period does not start until 2015-16 and there are no changes to the value of carbon permits in the fixed-price period, why have you reduced funding to the Australian Renewable Energy Agency to the tune of $113 million over the next two years?
First of all, I would like to be absolutely clear about one thing, and that is that the carbon price introduced last year is working extremely well. The carbon pollution in our National Electricity Market fell by 10 per cent—
Opposition senators interjecting—
Mr President, I rise on a point of order. The question went to Senator Lundy couched as a climate change question. But if it is a question about ARENA it does fall within my portfolio of resources. As the question unfolded, it seemed to go more to ARENA than to a climate change question. Be that as it may, Senator Lundy is certainly answering the question. But I will just make the point that in future if questions are about ARENA and not climate change then they should come to me.
I understood the question was directed to Senator Lundy. I understand Senator Lundy is in the process of answering the question. If the question should be directed otherwise in the future, that will be taken note of and that will be something that can be worked out by others behind the scenes.
A lower price means that the cost impact of the carbon price on households and industry is also projected to be lower from 2015. Key elements of the plan were designed to move in line with changes in the carbon price, and this remains the case. The government has taken the revised revenue estimates into account in making adjustments to the priority and timing of clean energy and related expenditure to ensure the Clean Energy Future package is budget neutral. These adjustments are modest.
But, in relation to ARENA, the government is fully committed to ARENA and to improving the competitiveness of renewable energy technologies in Australia. With over $3 billion of funding still available, the government has decided to re-profile a small portion of ARENA's funding to better fit with its investment plan and funding strategy on advice from the ARENA board. This re-profiling will extend funding for ARENA for an additional two years, until 2021-22.
We have also increased departmental funding for ARENA in 2013-14 to further bolster the organisation's capacity and ensure it has the appropriate staffing to deliver project investment. When ARENA was established, $200 million from the Education Investment Fund rounds for Solar Flagships was earmarked for investment in solar energy projects. The government has decided to reduce that allocation by $159.1 million. This funding is managed by the Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education and was never under ARENA's direct control. (Time expired)
Mr President, I ask a supplementary question. I understand from the minister that it was the board of ARENA who said they were quite happy for the cut. So I now ask: given that there are no changes to the carbon permits during the next two years of the fixed-price period, why have you reduced funding to the Low Carbon Communities program to the tune of $66 million, denying councils and low-income households energy efficiency and lower power bills? This is not to do with flexible pricing; the money is guaranteed for the next two years.
Mr President, I rise on a point of order. This is a question which should be directed to the resources portfolio. The energy efficiency initiative, which helps reduce the household energy bill, is within the resources portfolio. I make the point again that Senator Milne might want to consider when asking a question of the climate change portfolio whether it is a climate change question and not a resources question.
I go back to my first point, which is that the carbon price is working very effectively in Australia. Australians have a choice coming up. They have a choice between a government that is investing in our future, making the transition to a low-carbon economy, or they have the choice of those opposite, who still ridicule the idea of climate change.
The Community Energy Efficiency Program and the Low Income Energy Efficiency Program will provide almost $200 million in grants to around 200 projects throughout the life of the Low Carbon Communities initiative. These projects provide demonstration projects spanning a large variety. Given the scope and breadth of projects currently supported, there is likely to be minimal additional benefit derived from further expenditure on these Low Carbon Communities measures, as they would not add to the outcomes achieved by the current trial and demonstration activities. (Time expired)
Mr President, I ask a further supplementary question. I finally ask the minister, since she said before that it was a government decision to make this net carbon neutral: given the defence budget is not revenue neutral, especially during a war, why should the carbon-pricing mechanism or the clean energy package be revenue neutral in a climate emergency, where urgency is everything and where the world has just ticked over to 400 parts per million of carbon dioxide, a dangerous level for a dangerous climate?
Carbon pricing remains the most effective and economically responsible approach to reducing emissions. The carbon price is working to cut emissions. During that period, the economy continues to grow, thanks to the economic management by the Labor government. What the fixed-price period shows is that it provides certainty to business while the scheme is introduced, kick-starting the investment in renewable energy and clean technologies which will transform our economy.
As I was saying, from 1 July we will move from a fixed carbon price to a market price linked with Europe, and we are now expecting the carbon price to fall from $25.40 in 2014-15 to $12.10 in 2015-16. This is relevant because we are committed to implementing a carbon price in an economically responsible way. We are expending a huge amount of money through our carbon reduction programs, through our support for clean energy, and we will continue to do that. (Time expired)