Senate debates

Monday, 9 December 2013


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

12:56 pm

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party) Share this | | Hansard source

There is a long list of speakers on the Clean Energy Finance Corporation (Abolition) Bill 2013. I am one of the few from the coalition who will be speaking. The Labor Party are quite clearly filibustering on this and every other bill to cause as much difficulty as possible to the Australian public. The Australian public want this bill passed before Christmas. They made their views very, very clear at the last federal election. The government is keen to honour its commitment to the Australian people to abolish the carbon tax and all the trappings that go with it, and that is why government speakers will be noticeable by their absence from this debate. We are, thanks to the Labor Party and the Greens, dealing with each bill separately, and I will not have the opportunity of speaking on any other bills, so my remarks, as I indicated earlier, are in the broader way. I am also keenly aware that we want to get on, so I will try to confine my remarks. I have already spoken for about eight minutes.

Before concluding, I just want to emphasise this point: I think this whole climate change debate will go down in history as one of the great frauds on the Australian people—similar to Y2K, I would suggest. The suggestion is that having the world's biggest carbon tax, which will reduce our emissions by five per cent—that is, five per cent of the 1.4 per cent of emissions that come from Australia—will change the climate of the world. You have heard Senator Milne time and time again telling us all that this climate change process in Australia is what is going to save the world. She cannot possibly believe that. Nobody in their right mind could possibly believe that.

I have always said the climate is changing. Clearly it is. Australia used to be covered in ice once. The centre of Australia used to be a rainforest. Clearly the climate is changing. Is it man's emissions that have done it? I do not know; I am not a scientist. But I say again that there are a great number of reputable scientists who doubt it. I acknowledge there are a great number of reputable scientists who are absolutely passionate about the argument, but I might say I am not convinced. But I do accept the climate is changing. But why Australia, which emits less than 1.4 per cent of the world's carbon emissions, should be leading the way nobody has ever been able to explain to me. Why Australia should have the world's largest carbon tax when it is such a small emitter again escapes me, and nobody, in any debate we have had in this chamber, has ever been able to explain to me why it is that we should destroy Australian industry, destroy Australian jobs, for no benefit whatsoever.

As the report I was referring to when I last spoke on this says, it is all pain for no environmental gain. It is clear that Australia acting alone cannot change anything. We will do what Australia committed to do—that is, reduce our emissions by five per cent. We will do it by the direct action method. But I emphasise, even in relation to our programs, that unless the rest of the world does something then it is not going to make one iota of difference. I have heard all the statistics, but I know the other statistics. China opens a coal fired power station every week. India continues to use fossil fuel. I am not critical of them for doing that. All I am saying is: why does Australia put itself at such a commercial disadvantage for something that is not making one iota of difference? The sooner we get rid of this authority and all the trappings that go round the Labor-Green con job, if I might call it that, of climate change, the better Australia will be.

I am quite sure that in years to come people will look back on history and say: 'Remember how Y2K was going to destroy the world? Remember global warming?'—as it was originally—'Well, we're still going.' Whilst the coalition will do its five per cent, as we have always committed to, we are not going to do it at the expense of the Australian people. We took this proposal to the election. No Australian could have been under any doubt. Mr Abbott said many times: 'This election will be a referendum on the carbon tax.' Nobody could have been in any doubt.

I know Labor Party people—I will not name names, but they might out themselves one day. I can read the papers. I knew about the debates in caucus. Most of them in the Labor Party agree with my approach that there is no point in going through all of this pain for no environmental gain. The Labor Party profess to be interested in the jobs of Australian workers, yet they have had this adherence to a carbon tax policy, a policy they promised never to introduce. They said before the last election that they had already got rid of it. Here they are with a golden opportunity to honour their 2010 election commitment not to introduce it—well, they did that but they can get some forgiveness by at least helping get rid of it. Before the last election they went around trying to pretend to the Australian voters that they had already got rid of it. We know that is simply not true.

I would like to go through every one of these bills in detail, on the actual subject of each bill, but I am not going to have that opportunity. I am luckier than most on this side of the chamber in that I have the opportunity to speak once, but most of my colleagues will be asked not to speak, because we want to get this through. We want to do what we promised we would do for the Australian public, and that is get rid of the carbon tax before Christmas so that people can have a $500 Christmas present, in the way that their electricity bills will fall.

Photo of Lin ThorpLin Thorp (Tasmania, Australian Labor Party) Share this | | Hansard source

Five hundred dollars by Christmas—is that what you're promising?

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party) Share this | | Hansard source

Well, it'll be a good start, Senator, and you can help.

Photo of Lin ThorpLin Thorp (Tasmania, Australian Labor Party) Share this | | Hansard source

Five hundred dollars?

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party) Share this | | Hansard source

Let's not argue about the amount and let's not argue whether it is this Christmas or next Christmas, but not even you, Senator, could say that the carbon tax is not having an impact on the price of electricity that all your constituents are suffering from.

Photo of Brett MasonBrett Mason (Queensland, Liberal Party, Parliamentary Secretary to the Minister for Foreign Affairs) Share this | | Hansard source

It was designed to do that.

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party) Share this | | Hansard source

It was designed to do that, Senator Mason; you are absolutely correct. That is why the Australian public in droves, in safe Labor seats, voted for us. I know we are pretty good apart from that, but people in safe Labor seats voted for Liberal candidates because they would get rid of the carbon tax. I do not know how long it is going to take the Labor Party before the penny drops, but that is what the people of Australia want. I desperately hope that you will knock it back this time and the next time and go to a double dissolution election on it, because it would mean the end of the Australian Labor Party as it is known. It may mean the increase of the Democratic Labour Party. It may mean that the Greens will pick up that ultra-left-wing vote, a little bit of which still goes to Labor. So, if you want to see the end of the Labor Party, please knock this legislation back. If you have any interest in your own principles and what you believe in and what you think needs to be taken to parliament every time—

Photo of Scott LudlamScott Ludlam (WA, Australian Greens) Share this | | Hansard source

Senator Macdonald, I ask you to refer to other senators through the chair.

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party) Share this | | Hansard source

Thanks, Mr Acting Deputy President. You are quite right. Members of the Labor Party in the Senate should understand that their own future depends as much on a sensible vote on this particular piece of legislation as anything else.

I will confine my remarks there. We want to get on and try and get this voted upon. I do not want to delay the chamber anymore except just to appeal to those opposite to allow us to honour our commitment to the Australian people. The Australian people made their voices and their wishes very, very clear at the last election. Please listen to them as we have and allow these bills to go through.

1:07 pm

Photo of Lin ThorpLin Thorp (Tasmania, Australian Labor Party) Share this | | Hansard source

The plan to close down the profit-making Clean Energy Finance Corporation is not just a narrow-minded act of economic and environmental vandalism, but it is completely devoid of any rational justification. This decision runs counter to expert opinion and global thinking at the expense of future generations, our international reputation and the future of our planet. If ever there was concrete evidence that this government is hell-bent on ignoring the advice of experts in order to maintain the integrity of their welded-on climate change blinkers, the repeal of the Clean Energy Finance Corporation is it. Simply put, the government plans to shut down the very organisation that has cut our nation's carbon emissions while returning a profit to Australian taxpayers. This is an organisation which has not only leveraged $1.5 billion of private sector investment and cut carbon emissions by an estimated 3.9 million tonnes, but it has added millions of dollars to our national coffers in doing so.

Let us take a step back to consider the logic of the government's position. Let us cast our minds back only a few months to the point when those opposite could not talk for more than a few minutes at a stretch without screeching about a budget emergency. Of course even the most basic perusal would show that the facts did not support this perspective, but let us give those opposite the benefit of the doubt, that they do not understand the fundamentals of economics and that they truly believed that this was the case. If they do truly believe that the budget is in such a dire situation and if, as they say, they believe wholeheartedly in the very real risks of human created climate change, then why would they make one of their first acts the shutting down of an organisation that has a proven track record of cutting carbon emissions while turning a multimillion-dollar profit? Frankly, it baffles me.

The truth of the Clean Energy Finance Corporation is that it has been a spectacular and lauded success. The truth of the Clean Energy Finance Corporation is that it is run by some of the brightest business minds in this country and has leveraged investment from the biggest investors around. The truth of the Clean Energy Finance Corporation is that it actually brings profits to government coffers to the tune of $200 million a year. So it is indeed a mystery that the coalition would set out to dismantle something that is so undeniably successful in meeting its objectives—the very objectives that they purport to support. How could it be that those opposite are willing to force a $200 million hit to the budget whilst the chance to meet our carbon targets recedes further and further into the distance?

I was hoping to gain some insight into this mystery by listening to the speech of Senator Abetz in this place last Tuesday. I thought there was a chance that there was something I and a multitude of experts across the country and around the world had missed in our analysis. But do you know what? In his whole 20-minute speech, Senator Abetz did not even mention the Clean Energy Finance Corporation, let alone provide reasons for eradicating it—not a peep; not a whisper. This is despite the fact that Minister Abetz was speaking directly to the Clean Energy Finance Corporation (Abolition) Bill. This leads me to believe that Senator Abetz knows, just as I do, that the arguments to justify this action do not exist and that it is, quite simply, indefensible. Perhaps this is the reason that we have barely heard from any other speaker of the Liberals or National Party, despite the fact that they have spent the last three years waging vicious scare campaigns against Australia's clean, green energy policy. This should be their moment in the sun and their realisation of victory in their three-year war against action on climate change. So where are they?

The $10 billion Clean Energy Finance Corporation was set up by the previous Labor government to mobilise private sector investment in the commercialisation and deployment of Australian-based renewable energy, low emissions and energy efficient technologies. Its self-described mission is:

… to accelerate Australia's transformation towards a more competitive economy in a carbon constrained world, by acting as a catalyst to increase private sector investment in emissions reduction.

That is exactly what it has been doing. The CEFC was created to respond to a slow uptake on the behalf of investors when it came to adopting green investment opportunities. This was not due to a lack of financial viability of energy-efficient projects, but it resulted from investor unfamiliarity, the size of the loans required and the relative level of technical complexity involved. The CEFC helped address these problems by acting as a bridge between investors and projects. It provides invaluable independent advice, tailored finance and advocacy in the marketplace. In its short life, the CEFC has provided $1 for every $2.90 of private sector investment in green initiatives. In doing so, it has leveraged more than $1.55 billion in private capital investment and facilitated more than $2.2 billion in projects. Together, these projects account for a reduction of 3.9 million tonnes of carbon—an impressive outcome for an organisation so young.

On its own, this is a very worthwhile outcome, but it becomes even more remarkable when you learn that the CEFC has also been able to secure a return to Australian taxpayers of over seven per cent for their investments. This is particularly laudable when you consider that the five-year bond rate across the portfolio was only 3.11 per cent. The CEFC has invested in a diverse portfolio mix across the economy. It has invested in projects including wind, solar and bioenergy across Australia as well as energy efficiency and low-emissions technology projects in manufacturing, building and local government. They boast benefits including improved energy productivity, faster technological advances and greater acceptance of green projects in the finance sector. We have also seen improvements in technology design, supply chain depth, construction practices, operating skills, financing structure and market risk appetite.

As at 20 August this year, the CEFC had active discussions underway with 37 project proponents who were seeking finance of more than $2 billion, which would help leverage projects worth more than $4 billion. They had also received proposals from over 170 proponents for green projects with an estimated value of close to $15 million.

They have also set the ball rolling for some very worthwhile projects. In New South Wales the large-scale solar PV plant to be built near Moree will generate enough power for about 15,000 homes and abate more than 95,000 tonnes of carbon emissions. In Port Augusta, South Australia, Sundrop Farms is building a 20-hectare greenhouse facility which will use a renewable power supply and a sustainable water supply to produce over 15,000 tonnes of tomatoes a year.

In Queensland, JBS Australia, the country's largest meat processor and exporter, will capture and use biogas in its existing natural-gas-fired boiler plant at its Dinmore facility to reduce dependence on grid connected natural gas by over 48 per cent. The project will cut the facility's greenhouse gas emissions by the equivalent of 44,000 tonnes of carbon dioxide per year. In my own home state of Tasmania, the Clean Energy Finance Corporation supported a project in Kingston which has cut the civic centre's lighting costs by 75 per cent. By replacing the existing fluorescent lighting with more efficient LED tube lighting, the Kingborough Council was able to make savings of more than $11,000 a year.

Through projects like these, the CEFC is also supporting 21st century jobs in rural and regional Australia and building Australia's clean energy supply chain capability. If allowed to continue to do their good work, the CEFC has the capacity to make investments that would make up half of our five per cent emissions target by 2020, and in doing so they would return a profit to the taxpayer of $2.4 per tonne of abatement.

It is not surprising that Mr Nathan Fabian, CEO of the Investor Group on Climate Change, outlined five reasons we need to retain the CEFC. In his words:

Firstly, governments cannot sufficiently finance low-carbon alternatives to meet a two-degree outcome and private capital is needed. Secondly, the low-carbon investment market is relatively young and so deal flow needs to be supported. Thirdly, capacity in the finance sector must be increased through the experience of financing investments. Fourthly, financial participants welcome investment opportunities presented in a new market by an objective third party, even more than by investment banks. Lastly, co-financing organisations can actually earn financial returns for governments, delivering abatement at negative costs—and we think this is appealing and makes sense to all parties.

Clearly, he has not been talking to Senator Macdonald. He went further to say:

Given the government's infrastructure agenda, we think that dismissing co-financing as a useful policy instrument may be premature.

This perspective is backed up by Rob Murray-Leach, chief executive at the Energy Efficiency Council who said of the CEFC that it has encouraged:

… a lot of investment in energy efficiency, probably more than we’d have expected in a short period of time, and we’re also seeing it really catalyse changes in the finance sector.

He also said that it is not clear:

… whether the finance sector will continue to evolve and invest heavily in energy efficiency and clean energy after the CEFC is repealed.

The truth is that co-financing is a tested and proven model to encourage private sector investment, reduce emissions and provide a return to taxpayers.

The CEFC is just one of 14 such co-investment schemes across the globe. As I said earlier, the work is guided by some of brightest economic minds in the country. Its work is overseen by chair and respected businesswoman Jillian Broadbent, who has a distinguished career in the banking sector and was one of the longest-serving members of the Reserve Bank Board. In her evidence to the recent inquiry into the package we are considering today, Ms Broadbent presented a compelling overview of the incredible achievements of the CEFC. I recommend that all senators revisit this inquiry, in particular Ms Broadbent's evidence, as she presented a persuasive case for retaining the CEFC and saliently showed us what we stand to lose if it is abolished.

Ms Broadbent was also clear when asked about the government's proposed Direct Action scheme which will provide grants to big polluters. She said:

I don’t think you have to make a grant to get that emissions reduction. Our experience is you’re better to make an investment to get the emissions reduction.

Of course, this opinion is entirely in keeping with the opinions of climate scientists, economists and policy makers right around the world. It baffles the mind that the Coalition would choose to spend billions of dollars on their Direct Action plan, which has been widely and vigorously criticised by experts, rather than maintain a body which has proven itself not only to reduce emissions but also to bolster the budget bottom line.

I share Jillian Broadbent's frustration when she said how disappointed she was that such a vital issue has become so politicised. I understand exactly how she felt when she said:

You just want to get on with what you think is in the public good, which is positioning Australia for a low carbon world.

This is exactly what we on this side of the chamber are trying to do. But unfortunately, the national interests have run counter to the coalition's desperate ploy to gain power at any cost by waging a massive scare campaign about Australia's clean energy policies.

Despite what those opposite say about believing in climate change, it is hard to believe them when they are systematically dismantling all the tools we have at our disposal to tackle it. They are not only flying in the face of scientific evidence but they are seriously threatening our international reputation in the process. Ironically, as we debate today whether we should let our climate policies disappear into oblivion, they are doing the exact opposite in China's second largest province, Guangdong, which has a population of around 100 million. In fact Guangdong is set to introduce an emissions trading scheme this week, if not next, which will be second in size only to that of the European ETS.

I cannot help but think it is ironic that, in the very week that China is making this progressive move, we in this place are talking about how we in Australia can turn back the clock and turn our backs on our ethical obligations, the planet and generations to come. But it is not just China that is making progressive changes to limit carbon emissions. The truth is that 99 countries have pledged to reduce or limit emissions by 2020. This covers 80 per cent of global emissions and includes all major emitters. In this context it is not surprising that, if the coalition is successful, Australia's rating will drop to 57 out of 61 countries on our efforts to mitigate climate change, according to the Climate Change Performance Index.

This bill and the others that make up this package are designed to systematically dismantle all the good work that has been done towards meeting our national obligation to combat climate change. This package, if passed, puts our future quality of life at risk. Of course, those opposite are so determined to shut down the Clean Energy Finance Corporation that they have not let such a small thing as legislation being passed in this place get in their way. In fact, in his very first day on the job, Treasurer Joe Hockey is reported to have written to the CEFC requesting that they desist immediately from making any new investments—never mind the fact that the CEFC are legislatively required to undertake this task by an act of parliament; never mind minor details such as the need for legislation to pass through this place before the CEFC can be abolished. This was an audacious act that showed complete disregard for parliamentary process.

The government would have you believe that just because they won a majority in the other place that gives them carte blanche to do whatever they choose. Given the chance, those opposite have proven they will gladly dispose of all the annoying dissenting voices, particularly those who provide rational, reasoned evidence of their failed policies. We have seen this happen already in this young parliament when they gagged debate in the other place on this bill. They seem to hold the curious idea that winning an election makes it somehow illegal or unethical for anyone to oppose them. They seem to be arguing that no-one in this place has the right to maintain opposition to their policies, regardless of how ludicrous, counterproductive and ideologically driven they may be.

The idea that a mandate somehow abolishes all rights to opposition smacks of totalitarianism. I and my colleagues will not be bullied by those opposite into selling out future generations. What the government did achieve a mandate for on 7 September was to introduce their policies and present the arguments for their passage through this place. They most certainly did not win the right to ram through any ham-fisted, ill-considered nonsense like this bill before us today.

We in Labor will not just sit down and acquiesce to the regressive and dangerously anti-scientific policy regime that the government seems to be waging. We also have a responsibility to the Australian people to fight as hard as we can to ensure the best policy outcomes for all Australians. We also have a responsibility to the people in our states and electorates to represent the policy stance that we took to the election, which was for a rapid move to an emissions trading scheme. So, no, a mandate does not mean we will simply wave through bad policy that runs counter to our strongly held beliefs, which are solidly backed up by the advice of experts. We will stand strong on our beliefs and will not be bullied by those opposite into supporting a policy that will be detrimental to the budgetary bottom line, our nation and the planet. I can only hope that the coalition recognise how breathtakingly irrational they are being in shutting down the Climate Change Finance Corporation and come to their senses before it is too late.

1:26 pm

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

I rise to speak to the Clean Energy Finance Corporation (Abolition) Bill and do so with a sense of frustration and pity. Why? Because there is mounting evidence of the human impact on climate change, making it no longer acceptable not to act. The previous Labor government acted because we believe that policy, not politics, is required to fight global warming. But today the coalition have let their politics dictate policy, and I have to say this is a very dangerous thing. They have been blind to the proven benefits of the Clean Energy Finance Corporation and what it has brought to Australia.

Those things were alluded to by the chairwoman of the Clean Energy Finance Corporation, Jillian Broadbent, during a Senate committee hearing last week. She made very clear that her organisation is making money, cutting emissions and fulfilling a role that the private sector could not. This was reported in The Australian Financial Review last Friday, yet Senator Sinodinos thinks that the CEFC's functions could be fulfilled by the private sector. That is completely contrary to the view of the chairwoman, Ms Jillian Broadbent. She has made it very clear that to abolish this body would be a mistake because the private sector could not fulfil this role. I think Senator Sinodinos has some clear reflection to make on his point of view. Is it a point of view only based on ideology or is it a point of view that is based on good public policy, on science and on economics?

We know when it comes to climate change that the position the government takes is ideological. It is not a policy that is based on science or economics, and that shows, because as soon as the new Prime Minister, Tony Abbott, was sworn in he instructed his department to prepare to repeal Australia's climate change policies. It was the very first thing he instructed his department to do because of this fixed ideology that the coalition have about climate change. It was to be replaced—they do have some kind of policy—by the most expensive climate policy they could come up with. Abbott's plan, let's make it very clear, is to give taxpayers' money to polluters—

Photo of David JohnstonDavid Johnston (WA, Liberal Party, Minister for Defence) Share this | | Hansard source

A point of order, Mr Acting Deputy President, about referring to the Prime Minister.

Photo of Scott LudlamScott Ludlam (WA, Australian Greens) Share this | | Hansard source

Yes. Senator Singh, I ask you to refer to members of the other place by their correct titles.

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.

1:46 pm

Photo of Carol BrownCarol Brown (Tasmania, Australian Labor Party, Shadow Parliamentary Secretary for Families and Payments) Share this | | Hansard source

I rise to also speak on the Clean Energy Finance Corporation (Abolition) Bill 2013. This bill cannot be supported. There is not a logical reason to tear down the Clean Energy Finance Corporation. Labor support terminating the carbon tax but we do not support doing nothing. There is no reason to get rid of the Clean Energy Finance Corporation, no matter how the other pieces of legislation proceed, and the Labor opposition will not support the abolition of the Climate Change Authority.

The coalition government is trying to abolish a profitable entity simply because it is hell-bent on removing any trace of positive policy relating to tackling climate change. The Clean Energy Finance Corporation is making a profit, as you have heard, Madam Acting Deputy President, from the many contributions from this side of the chamber. The corporation is making a profit, reducing emissions and helping to invest in Australia business as we transition to a low carbon economy.

So why is the Prime Minister, Mr Abbott, along with those opposite, so determined to get rid of it? Is it because the Clean Energy Finance Corporation was a Labor idea—a petty-minded approach so typical of this new government? As you have heard, Madam Acting Deputy President, from the many contributions that have been given on this bill, we on this side believe that this is a typically petty-minded approach of the government to remove what is a profitable corporation. The Prime Minister, Mr Abbott, has himself so worked up about scrapping the carbon tax that he is ready to scrap a market based mechanism and replace it with taxpayers' money to pay grants to the big polluters to reduce their emissions. That flies in the face of the Liberal Party values: don't let the market dictate matters; leave it in the hands of the government. Mr Abbott's policy removes the legal cap on pollution and allows the big polluters open slather. Instead of polluters paying, Mr Abbott is setting up a slush fund of billions of taxpayers' dollars to hand to polluters. Experts agree this will cost households more while failing to cut pollution. That is in stark contrast to the opinions of the many experts that have given a view on the government's direct action policy. In contrast, the CEFC lends money for both renewable and clean energy technology investments and is set to fund emissions reductions at a negative cost to government. It is turning a profit. The government's alternative plan for an emissions reduction fund will consume billions from consolidated revenue. But Mr Abbott and those opposite are so determined to follow through on their three-word slogan that they are willing to turn their back on the very principles of their own party.

Here we have an entity facilitating loans to clean energy technology aimed at increasing power efficiency for businesses and industry. This, in turn, has been reducing carbon emissions and developing valuable renewable energy technologies. We should be lending this money to those who are reducing pollution, not paying money to those contributing to it, as the Prime Minister wants to under his Direct Action Plan. The Clean Energy Finance Corporation is ticking all the boxes. It is making money for the government and is helping to reduce Australia's carbon footprint. Why won't this coalition government—Mr Abbott and those opposite—listen to reason? Why won't they listen to the Chair of the Clean Energy Finance Corporation, who has pressed the government hard to spare the corporation from Mr Abbott's savage cuts? The corporation's chair is Jillian Broadbent. She told the Senate Environment and Communications Legislation Committee on Tuesday, 26 November, that the Clean Energy Finance Corporation is making money for taxpayers and that if it were to continue would account for half of Australia's 2020 emissions target at no cost—half of that bipartisan target of five per cent. Where do those opposite suggest that the slack will be made up for if they have their way and scrap the CEFC, which is making money for the government's bottom line and helping the nation reach its emissions target free? Why would you say no? No, they prefer to scrap this revenue-raising corporation in favour of handing out money to big polluters. Why would you want to scrap an entity that is making significant headway in reducing Australia's emissions? It is simply not good enough to stick our heads in the sand and leave the next generation to tackle the issue of climate change. Climate change is real. The Labor Party supports real, meaningful, effective action on climate change. Something must be done. We cannot sit back and do nothing. Our parliament, as leaders of our country, must send a clear message on this issue: why is it so important to our children and generations into the future? We must tackle climate change with a long-term view.

It will take time to effect change and reach targets, but we must stay the course set by bodies like the Climate Energy Finance Corporation. The CEFC has been strongly supported by private investors. For the $536 million the CEFC has invested, $1.5 billion has been poured in by private investors. Those private investors have seen the benefit of investing in clean energy, energy efficiency and renewable energy. The coalition should not destroy the business confidence in this growing young industry that has so much potential, especially when, at its expense, the government is taking the Direct Action Plan—that is, paying grants at a net cost to the taxpayer.

As reported in the Australian Financial Review on Wednesday, 27 November, Ms Jillian Broadbent and the Clean Energy Finance Corporation Chief Executive Officer, Mr Oliver Yates, put the strong case for keeping the corporation going to the Senate environment and communications legislation committee. They said the $10 billion loan facility was exceeding all expectations. They said it was making money for the government. They said it was effecting real reductions in emissions. But this is a coalition government that shuts down independent advice and any organisation that dares to accept that climate change is real. This is a government that thinks it knows better than the experts. This is a government with its head in the sand on climate change. This is not the government the Australian people thought they were voting for. This is a government that would rather lose money from its budget bottom line than face up to the fact that climate change is real and that something must be done by this generation to tackle it.

The CEFC is one of about 14 organisations across the globe that are a catalyst for investment in renewable energy and clean technologies. It fills an important role in mobilising capital for investment. It is absolutely not a slush fund; it is making the Australian taxpayer money. In contrast, the coalition plans to keep a pile of dollars to dole out to big polluters. The average return on the CEFC's investment is seven per cent, a clear argument for retaining it. Ms Broadbent and Mr Yates made it clear that abolishing the Clean Energy Finance Corporation would cost the Australian government and Australian taxpayers up to $200 million a year in lost revenue—that is, up to $1.5 billion by 2020. All that while reducing carbon emissions. Ms Broadbent said it would cost the taxpayer more to shut down the CEFC than it will save. I will repeat that: it will cost more to shut down the Clean Energy Finance Corporation than it will save. What is this government thinking?

This is a naysayer government of climate change deniers that cannot get its head around the issue, so it will torch everything associated with it. This government, when in opposition, slammed the setting up of the Clean Energy Finance Corporation, saying it would fail and cost the taxpayer. Not for the first time when it comes to climate change action, the Liberals and the Nationals were wrong. The Clean Energy Finance Corporation is a roaring success by the two most important measurables: it is making money for the government bottom line and it is putting a dent in this country's emissions output. It beggars belief that the government would want to junk this successful enterprise, but as part of Mr Abbott's three-word scrap the tax policy, it is on the chopping block. He would rather bankroll the polluters at taxpayers' expense.

Senator Bernardi interjecting

Mr Abbott wants to scrap the meaningful steps made on climate change under Labor and put in his poorly thought out and widely ridiculed Direct Action Plan—probably authored by Senator Bernardi, who has a lot of poorly thought out policies that he puts forward—and an emissions reduction fund plan. Guess what: if direct action goes ahead, the Climate Energy Finance Corporation could work under direct action as well. Ms Jillian Broadbent told the Senate environment communications legislation committee as much on 26 November.

Mr Abbott will thumb his nose at science, logic and reason. He is prepared to put pressure on the budget bottom line simply to get his way. He is prepared to turn his back on the Liberal Party philosophy of letting markets dictate affairs rather than the government. Mr Abbott is more prepared to hire a stack of bureaucrats to task them with the job of writing cheques to big polluters. Mr Abbott is happy to rip up $200 million a year in revenue from the Clean Energy Finance Corporation from the taxpayer. All because he denies the science and does not believe that action should be taken.

Mr Abbott could not be more in contrast to what my party, the Labor Party, believes. We know climate change is happening. We put measures in place to tackle the problem. In government, we knew it was not good enough to just leave the problem to a future generation. The Clean Energy Finance Corporation was a key plank in our body of legislation to take on the challenge of climate change. The Labor Party cannot support abolishing an effective entity that will cost the taxpayers of Australia. It is the Australian people who will pay for this mean-spirited, antiscience and expensive move if Mr Abbott's government has its way. And as the Australian Financial Review's chief political correspondent, Phil Coorey, wrote on 27 November this year:

It is set to be abolished along with the carbon tax and the government has budgeted a saving of $760 million over four years from its demise. But because the CEFC is making money, the combined blow to the budget from its abolition could be as high as $1.5 billion.

That is $1.5 billion out of the budget bottom line, along with the handbrake of effecting meaningful reductions to Australia's carbon footprint.

Ms Broadbent and Mr Yates went on to say that the Climate Energy Finance Corporation had lent $536 million, which had seen—

Debate interrupted.