Senate debates

Wednesday, 26 November 2014

Questions without Notice

Renewable Energy Target

2:39 pm

Photo of David LeyonhjelmDavid Leyonhjelm (NSW, Liberal Democratic Party) Share this | | Hansard source

My question is to Senator Cormann, the Minister representing the Minister for the Environment. The government and the opposition have abandoned talks on reform of the Renewable Energy Target. There is growing concern that, without extra generating capacity being introduced quickly into the scheme, the already legislated penalty rate of $65 will be applied to renewable energy certificates within two years. This will take the cost of renewable energy certificates to an unprecedented $95 or more at current levels, thereby directly impacting on electricity prices. Does the government accept that the scheme in its current form will not achieve the 41,000 gigawatt-hour target by 2020, therefore triggering in the renewable energy certificate penalty rate?

2:40 pm

Photo of Mathias CormannMathias Cormann (WA, Liberal Party, Minister for Finance) Share this | | Hansard source

I thank Senator Leyonhjelm for that question and for his generous remarks on the weekend. Firstly, the government has not abandoned talks on reform of the Renewable Energy Target; it is Labor which has walked away, clearly still intent on pushing up the cost of electricity for families and businesses across Australia into the future.

As to the question whether the government recognises the target in its current form is not achievable, well, that is certainly the advice that we are receiving from the many experts in the renewable energy sector. The government remains firmly committed to reform of the Renewable Energy Target because that is important for our efforts to strengthen the economy and for jobs. The government wants Australia to be the affordable energy capital of the world, as the Prime Minister has previously indicated. That is because we want to keep building a stronger, more prosperous economy where everyone can get ahead based on improving our international competitiveness and by reducing the cost of doing business in Australia. That is, of course, why we got rid of Labor's carbon tax. That is why, while we support renewable energy, we want to improve the operation of the Renewable Energy Target moving forward.

Australian households have already installed more than two million solar systems with the help of the renewable energy target, and the cost of solar PV installation is less than a quarter of the price it used to be. But Labor, by walking away from talks with the government about reform to the Renewable Energy Target, is putting the jobs at risk across all our energy-intensive and trade-exposed sectors—in particular, across our manufacturing sector.

Labor seems intent to again punish Australian families and Australian businesses with higher energy costs. That is not our approach. The government's proposal of full reform is centred around four key elements: the RET should present a real 20 per cent of the amount; support for household solar systems should not be changed— (Time expired)

2:42 pm

Photo of David LeyonhjelmDavid Leyonhjelm (NSW, Liberal Democratic Party) Share this | | Hansard source

Mr President, I ask a supplementary question. Does the government accept that higher electricity prices are inevitable unless the RET scheme is reformed?

Photo of Mathias CormannMathias Cormann (WA, Liberal Party, Minister for Finance) Share this | | Hansard source

Yes, we do, and that is why the government remains firmly committed to the reform of the Renewable Energy Target, as I have indicated. Labor knows some of the problems. Put simply, the current scheme is out of balance and needs fixing because electricity demand is declining. Forecast demand in 2020 is lower than previously anticipated. Forecast for total energy demand in 2020 is now 15 per cent lower. So what was intended to be a 20 per cent target for 2020 is now tracking towards an effective 26 per cent target by 2020, with all of the related consequences in terms of additional cost pressures that comes with that. That is why, as I have indicated before, we are committed to ensuring that the 20 per cent is a real 20 per cent and not a 26 per cent target.

We want to support household solar systems to remain as it is. Pressure on energy-intensive and trade-exposed sectors should be reduced to provide additional support for Australian jobs. The renewable energy sector should have greater clarity by removing the need for review of the target every two years. (Time expired)

2:43 pm

Photo of David LeyonhjelmDavid Leyonhjelm (NSW, Liberal Democratic Party) Share this | | Hansard source

Mr President, I ask a further supplementary question. Will the government now work with the crossbench to bring about reform to the Renewable Energy Target scheme.

Photo of Mathias CormannMathias Cormann (WA, Liberal Party, Minister for Finance) Share this | | Hansard source

The government will continue to work with all reasonable people right across the Senate and right across the community. We are committed to reforming the RET because we are committed to building a stronger, more prosperous economy. We are committed to reforming the RET because we actually want to ensure that Australian manufacturing has a chance to be competitive internationally and that we can continue to compete with businesses in other parts of the world that are not facing the sorts of government imposed cost pressures that manufacturing businesses in Australia are exposed to.

That is of course why we have put to the Labor Party—and we will put to anyone in the Senate and indeed across the parliament: work with us to ensure that our energy-intensive, trade-exposed industries are protected from the excessive pressure that the RET in its current form is imposing on them; work with us to ensure that we protect jobs and can create more jobs into the future by helping Australian business to be internationally competitive. (Time expired)