Senate debates

Tuesday, 2 September 2014


Renewable Energy Target

8:30 pm

Photo of Chris KetterChris Ketter (Queensland, Australian Labor Party) Share this | | Hansard source

I speak tonight on the Renewable Energy Target. I commence my contribution with a quote:

We will be keeping the renewable energy target. We have made that commitment. We have no plans or proposals to change it … We have no plans or intentions for change and we have offered bipartisan support to that.

Those are not my words. They are the words of the current environment minister before the last election, in what regrettably went on to become another broken promise from this government.

I wish to speak today on a matter of the utmost importance to Australia's future economic growth—the increasingly partisan policy being proposed and enacted by this coalition government. This government is making decisions now which will negatively affect levels of investment in a whole swathe of industries for many years to come. Actions designed to keep a minority of their backers and supporters happy will damage key Australian industries well into the future, long after their period in government has ended.

Last Thursday, the government released the report of the Expert Panel on the Renewable Energy Target Scheme. The panel found that the RET has met its objectives. It has encouraged significant additional renewable electricity generation and delivered a significant level of carbon dioxide-equivalent savings. Yet, in the face of the objective evidence found by the panel of the RET's success, the recommendations to government basically distil down to two options: scrap it fast or scrap it now.

I intend to make two points: to touch on how devastating the report's recommendations will be for the renewable sector and to highlight how the mixed messages and inconsistency of this government's policies are damaging industries and increasing investment risk.

The most recent example of this—the knee-jerk review of the Renewable Energy Target—is a dangerous example of policy made in parallel to reality. It is a review written in reverse, with the desired outcome made crystal clear by the government well before the hand-picked panel set about their work. Since John Howard brought in the RET in 2001, it has gone through for elections with support from both sides of politics. The historical bipartisan support for the Renewable Energy Target has led to billions of dollars in investment. Since its introduction, around $18 billion has been invested in Australian renewable energy and it is estimated that a further $18 billion would have been invested before 2020 under the current RET. The additional wind and solar power energy networks are beginning to drive down wholesale electricity prices. If you scrap the RET, power prices for Queensland families will increase.

A report released yesterday by Solar Business Services showed just how wrong the government is on this issue. The research showed that, should the government scrap the rate, demand for solar and jobs in solar would both fall by up to 50 per cent. To make matters worse, Queensland leads all other states in solar jobs and it is estimated that 96 per cent of solar businesses are small- to medium-sized enterprises. Queensland truly is the solar state of Australia. Queensland has more solar-generating capacity than South Africa, Mexico, Malaysia, the Netherlands, Taiwan and many other countries. If the government accepts the recommendations in this report they are anti small business and anti Queensland.

The current government is changing its mind so fast on issues that soon any investment with a lifespan of longer than a month may have to be considered at risk. Damaging reforms to health care, education, child care, and financial advice—none of these were canvassed with the public before the 2013 election. A growing renewable energy sector delivers jobs in manufacturing, mining and many other industries, creating export market opportunities, increasing our skills base and contributing towards a clean energy future.

The report of the expert panel itself points out that 144 countries have renewable energy targets and, of those, 138 have policy measures in place to support those targets being met. As the government is fast finding out, though, it is not only the solar and wind energy sectors that will be affected by the enacting of this report. The sugar industry has directly invested over $600 million in expanded co-generation projects in regional Queensland since the RET was introduced. As the Australian Sugar Milling Council indicates:

The bipartisan support policy has driven advances in technology and efficiency, refurbishment of milling infrastructure and the creation of new jobs. These significant investments (with a 15-20 year payback) increase industry confidence and broader investment across the sugar mills community.

The Sugar Milling Council goes on to say that any reforms that seek to lessen the effectiveness of the RET are directly inhibiting a potential further investment of $1.3 billion at existing mill sites and a further $2 billion to $4 billion in greenfield investments in Northern Australia, particularly Queensland. In my home state, co-generation at Racecourse sugar mill currently contributes the equivalent of a third of Mackay's energy demand for over 50 weeks of the year. Right now this is happening—not in the future, but right now.

Importantly, the RET allows Australia to keep pace with international renewable energy policy and not fall behind the rest of the world. As the Sugar Milling Council goes on to say:

… As the international focus on enhancing energy security through renewable electricity and biofuels increases, international competitors are leveraging expansion of their industry through generous renewable energy and biofuel subsidies, generating a step change in the economic profit possible from sugar production. The Australian sugar industry does not have the support of similar subsidies—and the Australian RET is modest in comparison.

Put simply, the RET in its current form is creating jobs, driving investment and increasing energy security in regional Queensland. I wonder if the National Party senators in the chamber will stand up for investment in the sugar industry in Queensland. My guess is that they will not, but we can hope.

The lack of any credible replacement for the RET in the report takes this from farce to high farce. The government got rid of an effective and operational carbon pricing scheme, and they now want to scrap the RET. The apparent replacement, Direct Action, has to be one of the least credible environmental policies in Australia's living memory. Last year, a Fairfax Media survey of 35 prominent university and business economists found that only two out of 35 believed that Direct Action was a better way to limit Australia's greenhouse gas emissions than Labor's carbon pricing scheme. The report's reliance on the widely panned and detail-light direct action plan to pick up the slack of a scrapped RET is almost laughable.

I will now move to the broader economic risks that this report presents—the investment risks that this government seems all too ready to dismiss. But the government has an answer for that too: a change in terminology. I quote from the report:

The panel considers that the risk of significant policy change is better characterised as regulatory risk and is always present.

Yet calling a spade a bucket does not completely resolve the issue. The report goes on to say:

… the Panel recognises that repeal may result in adverse financial implications for existing investors.

The current RET policy is working, creating jobs, increasing competition and broadening our electricity supply base. Yet this government would put it all at risk to prop up a small sector of interest. While the government is going over the report, I would ask them to consider the approximately 24,000 jobs in the renewable energy sector currently on notice, the success of the scheme to date, and the risk to investment in Australia they would be creating by going down the murky road this report suggests.

In summing up, Australians overwhelming support renewable energy. The RET will drive down household electricity prices in the medium and long term. Changes to the RET will force small solar businesses to close and lead to a 40 to 50 per cent decline in jobs in the solar sector. More than half of Australia's rooftop solar panels are installed in non-metropolitan suburbs and rural and regional areas, with 61 per cent of solar businesses located outside capital cities. The evidence in favour of keeping the RET is overwhelming.

8:40 pm

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

I rise tonight to talk about Tony Abbott and the renewable energy target to remind us what we always knew and what we already know. We know that this conservative Liberal government is actively pursuing a vision of returning Australia to the 1950s: the decade in which the only conceivable limit on coal powered generation was how quickly we could burn it; the decade when no one thought it obsolete or awkward that a man was a minister for women; and the decade when scientific reports cited by a male leader of the government linked abortion with breast cancer.

We know that Tony Abbott is leading a government—

Photo of Gavin MarshallGavin Marshall (Victoria, Deputy-President) Share this | | Hansard source

Point of order Senator Singh. Prime Minister Abbott, if you would. Thank you.

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

We know that Prime Minister Abbott is leading a government of yesterday's men, furiously advocating last century's ideas. We know that Prime Minister Abbott was always going to break the promises he told Greg Hunt to make about the coalition's commitment to keeping an unchanged renewable energy target. We know that the key points about these promises are not their clarity but their time frame. They were clear promises that the coalition made before the election, and every Australian knows by now the coalition's attitude to promises it made before the election.

We knew what the Prime Minister was planning when his office established the wrongly described 'independent review' of the RET, instead of taking expert advice from the Climate Change Authority's statute-mandated review of the RET. We knew what the Prime Minister was thinking, even though we knew his thinking was factually incorrect, when he blamed the RET for significant price pressures in the system—an opinion so inaccurate he must have borrowed it from Maurice Newman. We knew what the outcome of the review of the RET was going to be when the Prime Minister hand-picked an assortment of fossil-fuel boosters and climate-change sceptics to sit on the panel, but did not appoint anyone—not anyone—with any in-depth industry experience from the renewable energy sector. We knew the recommendations that the Prime Minister was demanding from the review when he refused to accept it in July and sent it back for more work to be done to illustrate the abolition of the renewable energy target.

I will admit that we did not know that the review would recommend the abolition or crippling of the renewable energy target because, despite its success, there are cheaper ways of abating carbon. For instance: an emissions trading scheme, which, being a market-based system, somehow goes against the coalition's new DNA; a carbon tax, which has been triumphantly abolished by Tony Abbott; and the purchase of international emissions permits, which Prime Minister Abbott also will not allow. We did not know that the review would describe the fact that the renewable energy target has created thousands of jobs and encouraged billions of dollars of investment as a problem, because it created too many jobs and encouraged too much investment. We cannot remember Dick Warburton ever describing the thousands of jobs created by the mining boom, and the billions of dollars invested in it, as a problem. No. We do know that about 96 per cent of Australia's 3,800 solar PV businesses are micro, small and medium-sized enterprises. And we do know that the solar small business industry took the Prime Minister at his word when he said that he would not axe or slash the renewable energy target.

The WA Renewable Energy Alliance has said killing off the subsidies could turn away thousands of customers who would have otherwise been expected to buy their systems. We know that in Australia's renewable energy powerhouse—my home state of Tasmania—Premier Will Hodgman is worried about the Commonwealth's response to the RET. We know he should be worried, because Hydro Tasmania has warned that any winding back of the renewable energy target would threaten its wind farm developments worth $2 billion, while the proponent of a $150 million wind farm at Granville Harbour, on the investment-poor west coast of Tasmania, has said both renewable energy target options place its project in jeopardy.

We know that no Australians will benefit from the options in the Warburton report, but, lo and behold, the review's modelling estimates that the big companies operating existing coal-fired power generators will enjoy financial gains of about $9.1 billion. We know that these profits will come from increased electricity costs for consumers. We know that, rather than support innovative, 21st century renewable energy technology, the Prime Minister and his government want our early 20th century fossil fuel infrastructure to extract every tonne of coal and every molecule of gas. This is despite the fact that the renewable energy target is already driving down Australia's carbon pollution. It is despite the fact that nearly five million Australians have embraced solar power because it protects their families and small businesses from soaring power bills. It is despite the fact that, as at 31 January this year, two million solar installations had been supported by the renewable energy target, meaning that 24 per cent—nearly one-quarter—of the 8.4 million occupied private dwellings in Australia have a solar system. It is despite the fact that abolishing the small-scale renewable energy target would make the installation of solar rooftop panels up to $1,200 more expensive. It is despite the fact that families living on lower incomes are much more likely to install solar than families living on higher incomes. It is despite the fact that two-thirds of Australians support the renewable energy target in its current form and that, of the 24,000 public submissions to the government's compromised review of the renewable energy target, less than one-quarter of one percent of those submissions favoured reducing the renewable energy target.

Despite all of that, Prime Minister Tony Abbott wants the renewable energy target dead. We know this. He has been listening too long to Maurice Newman and Dick Warburton's antiscience and antieconomics agenda. I want to remind Prime Minister Tony Abbott's antiscience and antienvironment government of one important point that it is either forgetting or completely ignoring in the policy debate about climate and environment policy—that is, there is no planet B. The Labor Party know this. We have not forgotten it, and we are not ignoring it. We understand that this is the only planet we have and that it has finite resources and a finite ability to absorb the waste from our exploitation of those resources. Prime Minister Abbott has already shifted the impact of the carbon price from the carbon polluters to the planet. He will now say nothing about the existence of an extra 240 million tonnes of carbon dioxide pollution or its $14 billion cost. Why would he? We know they did not worry about that sort of thing in the 1950s.