Tuesday, 14 August 2018
Questions without Notice: Take Note of Answers
That the Senate take note of the answers given by the Minister for Finance (Senator Cormann) and the Minister for Education and Training (Senator Birmingham) to questions without notice asked by Senators McAllister and Cameron today relating to energy policy.
Those listening to question time today will have heard a couple of excellent questions, if I do say so myself, asked by senators McAllister and Cameron regarding the shambles that is the government's energy policy. It's worth remembering that everyone I spoke to as I came down to Canberra this week talked about the fact that it was going to a big week in Canberra, and that finally we might see some movement forward from the government in relation to energy policy—one of the running sores of this government for its entire two terms in office.
It's worth reflecting on the fact that under, first, the Abbott government and, now, the Turnbull government, we have seen five years of chaos when it comes to energy policy in Australia. One of the first things the government did when they were elected in 2013 was scrap the former Labor government's emissions trading scheme—its arrangements to try to bring down emissions, increase electricity reliability and keep power prices down. They were so ideologically driven on their election that they got rid of that system without having anything whatsoever to replace it. It is no surprise therefore that the result has been that Australia's emissions have continued to go up and that households and businesses have literally paid the price with wholesale prices for electricity doubling over the last five years under this government.
One of the reasons that this government has been so incapable of actually coming to a resolution on energy policy, to put in place some certainty for everyone involved in the electricity industry, whether it be generators, retailers or households and businesses who actually have to pay their power bills, is the absolute ongoing disunity that has characterised this government. It's hard to think of a better example of that than energy policy. From day one, this government has been tearing itself apart about what it thought about energy policy. Did it want to support coal? Did it want to support renewables? Did it want to bring emissions down? Did it want to have emissions up? Did it want to do anything about power prices? Did it even believe in climate change? We still are aware there are many members of the coalition who still don't even accept climate change is a fact, despite the overwhelming scientific evidence that proves that it is.
This disunity over energy policy has spilled into Canberra again this week, with the two former leaders of the coalition, Mr Abbott and Mr Joyce, both threatening to cross the floor to stop this package from going forward. And even today, reports have already surfaced out of the coalition party room that there are up to 10 members of the coalition, including Senator Abetz, who are seriously considering crossing the floor. That might mean he takes some of his Tasmanian senators with him; we'll have to wait and see what they do as well.
One of the tragedies here is that ordinary Australians are paying higher prices for this ongoing disunity within the coalition on energy policy and we are still not solving the very real climate change issues we're facing. There has understandably been a lot of focus in the Australian community over the last couple of weeks on the terrible drought that so many parts of Australia are experiencing at the moment. We are all quite rightly wanting to pitch in to make sure people living on the land and experiencing drought are getting the support they need. The big problem is that if we don't take action on energy policy and climate change, droughts are going to become much more regular, not to mention the cyclones and flooding that we see so often in my own home state of Queensland.
One of the worst aspects of this package now being brought forward by the government is that it is based on a lie—that is, that this government has now wheeled out, in an attempt to pacify the hard right, a Mickey Mouse scheme to prop up coal-fired power into the future. We know for a fact that there is not one electricity generating company in this country that is seriously considering building a new coal-fired power station. There is a whole other issue about preserving and maintaining our existing coal-fired powered stations but there is not one serious proposal on the books where any generator wants to build a new coal-fired power station, and that is because it is becoming increasingly clear the most reliable, cheapest way to supply power is through renewables. The tragedy of this government's package is that, in trying to pacify its hard right, it not only misleads people living in coal communities but it is going to drive prices up further. (Time expired)
For those who aren't aware, today marks day 2 of what is the second half of the parliamentary year. Those of us like Senator Hume and myself who have spent the last five to six weeks travelling around our home states—Victoria for Senator Hume and Western Australia for myself—know that the stand-out issue for Australian electors at the moment is the economy. That manifests itself in a number of different ways. It most definitely manifests itself in the desire for people to have secure jobs for themselves and job opportunities for their children and grandchildren. Importantly, it also manifests itself in the real challenges around cost of living. Where we've seen that most notably demonstrated is in the issue around electricity pricing.
What we could have had today is a very constructive debate, first in question time and now in taking note of answers, about the real policy alternatives for this country in terms of providing electricity that is affordable and reliable, and about an electricity plan or framework that will drive Australia's prosperity into the future. But no—senators on the other side can't avoid the temptation to talk about the politics of energy instead of the policy of energy.
Today what we very clearly have, as a result of the discussion in the coalition party room this morning, is a plan that drives energy reform forward—a plan that will drive energy reform, deliver lower prices, deliver reliability, and, over the long term, deliver real security for businesses but also for Australian families. We've got a plan that is designed by experts, a plan that is backed by industry, a plan that is supported by business and consumer groups, a plan that is supported by independent modelling and a plan that will deliver benefits of up to $550 per household every year. Compare that to what you hear from the other side. You don't hear a plan that is independently supported by experts. You don't hear a plan that is supported by the business and community groups across our country. You don't see any independent modelling. What you do see, or what you could see, is a plan that will drive up energy costs for Australian families.
Just last week we saw the COAG Energy Council—and let's be clear about this: the COAG Energy Council is that forum of state and territory energy ministers—endorsing a framework that will deliver electricity security for Australian businesses and families. It agreed—Labor energy ministers agreed—on plans for better transmission and work towards an integrated system, better cybersecurity for our energy infrastructure, plans for new hydrogen opportunities and, importantly—perhaps even critically—endorsement for the ACCC's most recent report when it comes to electricity prices. This idea that energy policy in our country is stagnating or even invisible is just not true. It is just not true.
The good thing about the momentum that's been achieved this morning, as a result of the coalition party discussion, is that what is now occurring is that Australians will have a very clear and stark choice between an energy plan that will deliver for the now and for the medium and longer terms, and an energy security plan that—good luck if you can find it! Good luck if you can find it! It's only a matter of time before someone on the other side chirps up and says: 'Oh, we've got a plan! We've got a plan!' Do you know what that plan is? Greater reliance on renewables, which will drive up costs, and an emissions reduction plan that is totally out of step with international expectations and will drive down the Australian economy. So, rather than being on the back foot, the government is most clearly on the front foot. We know that cost-of-living pressures are critical to the consideration of Australian families and Australian businesses. You can talk to any coalition member in this place, and they will reel out anecdotes of how electricity price costs are crippling businesses. The coalition has a clear plan. (Time expired)
What Australians want is lower electricity prices, and what we are seeing on the other side is hopeless, deeply divided government and chaotic energy policy. We know that the chair of the Energy Security Board, Kerry Schott, has said, 'there would be absolutely no way that anybody would be financing a new coal-fired generation plant'. Because of this policy uncertainty on the other side, there is no new capacity coming into the system. Because of the uncertainty, business will not invest under the current arrangements. This government, over the past five years, has been at war with itself on energy policy. In that environment, business would have to be crazy to invest long term in coal-fired generation. Because of that lack of new generation capacity coming into the system, we are seeing energy prices go up. It's the economic argument that Senator Cormann got so wrong in question time today.
We are seeing a hopelessly divided government. The Prime Minister used to believe in addressing climate change, but somehow, along the way, he has turned his back on the environment. Former Prime Minister Abbott has trashed energy policy in Australia. He is the great wrecker of Australian politics. He has abolished Labor's work, and the Turnbull government has for five years now failed to provide policy certainty. Through the chaos and infighting, those opposite are now failing to deliver. We know that business needs certainty and the sector needs certainty, and the Liberals and the Nationals can't lift business investment, particularly in energy.
This policy that we're debating is a Frankenstein policy; it is a political fix to keep the coalition party room together. We know that significant parts of the coalition party room deny climate change. We can't even have a sensible policy discussion when climate change isn't seriously on the table. In question time today, the government claimed that $550 on average is going to be taken out of the energy costs of the average consumer. What the government did not say, as part of all that, is that $400 of that $550 saving actually comes from the good work that Labor did in our last couple of years of government, with our Renewable Energy Target, which has driven waves of investment in wind and solar. We are seeing that coming through. So the NEG, in its current form, would only provide a saving of about $150 a year for consumers. We also know that it will basically drive no new investment in renewable energy.
This policy totally lacks ambition. We know that 24 per cent in reductions will happen by 2020-21, so, of the 26 per cent, there will only be a two per cent reduction over the remaining period of the NEG. We on this side have ambition: a 45 per cent emissions reduction target on 2007 levels by 2030 and 50 per cent renewable energy by 2030. We've even seen the backbench talking with the Prime Minister about underwriting baseload coal generation. But we know, as I said earlier, business will not invest in coal. The future is in gas, hydro, solar and other renewables. This is where business wants to invest, and the government should be encouraging that.
If the government wants to look for a role model, look at the Queensland Labor government, with a 50 per cent renewable energy target. There are great things happening in the Sunshine State. In recent times, I visited Gladstone and went to a couple of new solar farms that are in the process of being constructed—the Renew Estate solar farm at Bororen, south of Gladstone, and the Acciona solar farm, which is part of the Gladstone State Development Area, in Aldoga. There is a place for coal along with renewables as we transition, and Gladstone is an excellent example of this.
Labor has a strong record on protecting the environment and addressing climate change. We want to work constructively on addressing energy at the state and federal levels. Let's put the politics aside and get some certainty. We know that this is what businesses want. They are crying out for the certainty to get the long-term investment that's needed to get prices down. It's only Labor's energy policies that will get business investment flowing to provide power bill relief to struggling households.
It's not often during taking note of answers that I would say that I agree with those opposite, but I have to admit Senator Ketter made some very important points. Yes, lower prices. Of course lower energy prices are a priority of any energy policy, but most particularly they are the priority of the coalition's policy. And, yes, investor certainty is a priority in energy policy, and it certainly is the priority of the coalition's energy policy. Other than that, Senator Ketter, I feel that your narrative was entirely untethered from the truth, because I cannot see what the Labor Party's energy policy has to do with either of those two priorities—lower prices or investor certainty.
What seems to have been forgotten in this conversation is that wholesale energy prices have in fact already fallen quite significantly over the last 12 months, and that is entirely due to the coalition's energy policy, of which the National Energy Guarantee, which we were discussing today, is only one part. The National Electricity Market spot price fell to $68 last week, compared to $101 last week. On average, spot prices have come down 25 per cent in the last 12 months alone. In fact, future contracts for electricity in 2020 are at the moment being traded around the $50-per-megawatt-hour range. Already there have been significant inroads.
Why have there been significant inroads? Gas prices have fallen dramatically. Why have gas prices fallen dramatically? The ACCC has confirmed that they are down 50 per cent since February 2007 largely because of the Prime Minister's intervention in the gas market to secure the domestic gas supply. We have also abolished the hideous, insidious limited merits review introduced by the Gillard government, which added $6.5 billion to power bills since 2005. Customers have been getting a much better deal out of retailers since the Prime Minister's meeting with retailers in August 2017. In the last 12 months alone, 1.6 million households have been offered better power deals from their retailers. More than half a million households have moved off either their default plans or their expired plans, and another 1.3 million households have switched to get better deals after prompting from the retailers themselves. These are all coalition policies to reduce power prices. The NEG is just one part of the coalition's comprehensive plan to help out consumers, to help out households and to help out businesses with their costs of living and their costs of doing business.
The National Energy Guarantee has six significant features: it lowers prices; it increases reliability; it reduces emissions; it is technology neutral, most importantly; it is recommended by experts; and it is backed by business and consumer groups. So let's not assume that the ignorance of those opposite is emblematic of the population at large. However, we will for the sake of clarity explain just how the NEG works. It increases investment by dealing with policy uncertainty. More investment equals more supply, which equals lower power prices and, as Senator Ketter correctly said, $550 for households and a 20 per cent wholesale decrease for business. That's $550 for households has absolutely nothing to do with any Labor policy ever; it is entirely due to the National Energy Guarantee and the modelling and forecasting that is associated with that.
It increases reliability. For each National Electricity Market state, AEMO has assessed supply and demand over the next 10 years. That's how it confirms reliability. After that, retailers are required to provide their share of dispatchable power in the event of any gap that AEMO identifies. But, most importantly for those opposite, it also adheres to our emissions targets as agreed to in the Paris Agreement. It adheres to our international commitment. The federal government has set a 26 per cent target with emissions intensity decreasing from 0.7 per cent in 2020-21 to 0.6 per cent in 2029-30, and there will be a review in 2024. What is their alternative? There is no alternative. A vote for Labor is a vote for higher power prices; a vote for the coalition is a vote for lower prices.
The remarkable thing we've seen from the contribution of those opposite is that you would think they've only been in government for about six months, the way they're carrying on and talking about, 'We've come up with this fantastic policy'. You've been in government for five years. What's your record? That's what the Australian people will judge them on. Their record after five years is a simple one: prices up, emissions up and reliability down. That is their record after five years in government.
The fact is, we've been talking about this policy for about 12 months. It's taken them 12 months to come up with this and there is still chaos and division on their backbench. The reason they are so divided on this is that, with the policy that they have come up with, they didn't have the Australian people in mind, they didn't have Australian workers in mind and they didn't have Australian businesses in mind; they had their backbench in mind. That was their motivation in coming up with this policy. There are so many flaws in this that they will be responsible for. They will be held to account for this. When you look at their record and you look at their motivation, this isn't about the Australian people; this is about their own internals. And the chaos and division that we've seen for 12 months is only going to continue because of the way that they have been behaving.
Regarding the stance that the Labor Party has taken on the National Energy Guarantee, it's quite amusing that those over there are starting to run a scare campaign against Labor. That's all they've got: a scare campaign. They've been doing it since Tony Abbott. Malcolm Turnbull promised something different as Prime Minister, but we're seeing the same again—they're trotting it out today. They're not defending their policy; they're attacking Labor's policy.
I agree with federal Labor leader, Bill Shorten, and the shadow minister, Mark Butler, who said that we want to work in a bipartisan manner. We understand the importance of the price and reliability of electricity to Australian families and businesses, and to creating jobs. We've been patiently waiting for those opposite to settle their differences so that we can try to come up with a bipartisan solution that the Australian people can have confidence in. But they didn't reach out across the aisle to try to work with Labor on this. They are so divided on their own side that they can't talk to us. Any policy that we could sign up to is obviously too much for their backbench. That is the division we've seen from those opposite.
The fact of the matter is that what they are talking about—I think every one of their speakers has talked about it—is the $550 price reduction. That's exactly what they said when it came to the carbon tax and Tony Abbott said he would abolish it: $550 was the amount prices were going to be reduced by. I challenge any Australian family who pays their electricity bills to say that is true, and that they believe them this time. The reality is that this is a hoax from those opposite in terms of how they are presenting this policy. They proved it when they axed the carbon tax and they are going to prove it on the back of this as well. Australian families will see through what they are purporting to represent.
There are some other consequences from the National Energy Guarantee that Labor will be putting on the record. The government's own modelling in this shows that there will be no large-scale investment in renewables after 2021. The rate of rooftop solar will halve in this time as well. So, in terms of what the Australian people are wanting to see from a new policy and what they want to see from governments, this National Energy Guarantee is actually going to achieve the opposite of what Australian families and businesses are looking for.
It is also worth pointing out that there are still complaints now about the cost of gas and the impact that is having on electricity and also, importantly, on Australian businesses. Those opposite try to claim that they have ticked the box and solved the gas crisis. Well, day after day we are constantly seeing businesses highlight the fact that they are paying exorbitant rates for gas, which is limiting their ability to invest and create more jobs in their businesses.
Coming back to the National Energy Guarantee, there really are some key parts of this that are concerning. One is their record. We know that prices are up, emissions are up and reliability is down. We know that their motivation in pursuing the National Energy Guarantee is all wrong. It's all about trying to appease their backbench and not about delivering for Australian families. We know that some of those opposite are prepared to sign up for what is effectively a hoax on the Australian people, whether it be around the price reductions that they're promising or the coal-fired power generation as well—there is no proposal for that.
Question agreed to.
That the Senate take note of the answer given by the Minister for Finance (Senator Cormann) to a question without notice asked by Senator Di Natale today relating to the National Energy Guarantee.
We know the NEG is now a con. This is a con job. It's a dud, and this parliament should vote against it. We put forward a very clear motion yesterday, calling for the modelling that underpins the claim that there will be a $550 saving to electricity prices. It's coincidently exactly the same amount that consumers were promised after the repeal of the carbon price, which—surprise, surprise!—didn't happen. We wanted to see what modelling was used to justify that claim. And what came back? Absolutely nothing. It was a spreadsheet that a year 10 student could have cobbled together in their bedroom. That's what we've got to justify this claim.
Consumers know that the NEG will not bring down prices. People know that this is doing nothing to address our emissions. This is designed to solve a political problem; it is not designed to bring down prices and to bring down emissions. This is a policy designed to appease the climate deniers within the coalition party room. Well, we won't surrender to the climate deniers—we will not. We agree with the criticisms that were made of the policy earlier by opposition energy minister, Mark Butler. Indeed, we've just heard a very articulate critique of this policy from Senator Chisholm.
My message to the Labor Party is: vote against it. I've heard a lot of criticism of the policy, but I've not heard one member of the Labor Party come into this place and say, 'That's why we will not support it. That's why we're voting against it. That's why we will take a stand and make sure that this parliament isn't fooled twice.' Don't take our word for it; take the word of Oliver Yates, the former head of the Clean Energy Finance Corporation. He made his views on this very, very clear. His view is that the only thing that this energy plan does is help coal companies to know that they don't have to reduce their pollution over the next 10 years.
We've now seen NEG-plus, which is a dud-plus. It gives an opportunity for the climate deniers within the coalition to purchase coal-fired power when the rest of the world is moving away from coal-fired power, knowing that it's going to increase emissions and that it's a much more expensive form of energy. This policy concentrates power within the hands of the three big gentailers—Origin, AGL and EnergyAustralia—who, in the large part, are responsible for the gouging that's going on of individuals. The big three are now being given more power by the Prime Minister. It seems that the Prime Minister's response, whenever he's in a spot of trouble, is to write a big cheque to his mates at the big end of town. He did it with the Great Barrier Reef Foundation grant. He walks into a room and hands Liberal Party donors half a billion dollars. Here we are, with a huge dilemma where energy prices are continuing to increase. The coalition government have overseen that increase, despite a promise to bring down energy prices. And what's their response? To hand more power to the big three—that is, to hand more power to the companies that are responsible for the price hikes that people are experiencing right now.
We know that we've got a mechanism which might actually mean that the states can't lift their level of ambition for that to be counted. We've got the potential for targets that will mean that the heavy lifting has to be done by the agriculture sector and by the transport sector. We know that the most efficient, low-hanging fruit here is in the energy sector. If we're going to bring down emissions through increasing renewable energy technology, through battery storage technology, through demand management and through energy efficiency, we know that we can do that, at least cost, through the electricity sector. We know it's good for consumers and it's good for emissions, and yet, what this does is say, 'We're going to cave in to the climate deniers. If we're going to meet our Paris targets, we're going to have to let the agricultural sector and transport sector do the heavy lifting.' Well, that's just not going to happen. If this deal gets over the line with these targets, we will effectively be pulling out of the Paris climate agreement. We'd be doing what Donald Trump did, but with a little less fanfare. This is a policy designed to appease the climate deniers in the coalition party room. It does nothing to bring down prices or bring down emissions. All it does is solve a political problem for the Prime Minister, while consumers will be dudded. (Time expired)
Question agreed to.