Gavin Marshall (Victoria, Deputy-President) Share this | Link to this | Hansard source

The committee is considering the Clean Energy Legislation (Carbon Tax Repeal) Bill 2014 and seven related bills. The question is that opposition amendment (3) on sheet 7527 moved by Senator Singh be agreed to.

Penny Wong (SA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

I rise to speak in support of this amendment. In the context of this committee debate, the ending of this committee debate I anticipate, the government has made clear that it intends to gag and guillotine this debate if it is not concluded shortly. It is very clear that the deals have been done and the government is likely, finally, to have the numbers in this chamber to end an effective response to climate change.

I was in this chamber when the CPRS, the Carbon Pollution Reduction Scheme—something which would have introduced a market mechanism, a floating price for carbon—was voted down by this Senate. The reason it was voted down on that day, the fundamental reason, is the same reason this legislation is likely to be voted down today—that is, a man called Mr Tony Abbott. He decided that it was in his political interest not to look to what was responsible, not to look to what was right, not to look to an effective, credible response to climate change, but to stake his political career, his political ambitions, on fearmongering and scaremongering. That is what this debate has been about for years. It has been about Mr Tony Abbott wanting the leadership of the Liberal Party, wanting to be Prime Minister, and staking his political campaign on fearmongering. The man who told us that Whyalla would be wiped off the map now cannot even guarantee to Australians that they will get the sorts of price reductions that he campaigned on for years.

If these bills pass today, it will be a day in history where this parliament failed the test of leadership, failed the test of rising above opportunistic politics and short-term sectional interest to act in the national interest. If these bills pass, this nation will have walked away from a credible and effective response to climate change, it will walk away from reducing our greenhouse gas emissions and it will walk away from the task of transforming the Australian economy into the clean energy economy that we have to be in the 21st century. If these bills pass, this nation will be the only nation in the world going backwards when it comes to tackling climate change.

Putting a price on pollution is the most environmentally effective and economically responsible way of reducing greenhouse gas emissions. And I remind those opposite of the journey to populism and fearmongering that they have undertaken—a sorry tale indeed. Let us not forget there was once a bipartisan commitment in this country half a decade ago to act on climate change. There was a bipartisan commitment half a decade ago to do the right thing, to do the responsible thing. Those opposite talk about intergenerational responsibility. Senator Cormann talks about not giving a credit card to the next generation. That is precisely what you are doing. You are passing a credit card for all of our inaction on this serious threat of climate change to our children and our grandchildren. It is an absolute abrogation of the responsibility that we have in this place.

Let me remind those opposite of what Mr Howard said in 2007. There is a great YouTube clip that people can go back to. I am quoting:

I will also be announcing a 'cap and trade' emissions trading system that will help Australia substantially lower our domestic greenhouse gas emissions at the lowest cost.

Stabilising atmospheric concentrations of greenhouse gases will be difficult, but not impossible. We do not have to sacrifice our economic prosperity to tackle the problem.

Australia will more than play its part to address climate change, but we will do it in a practical and balanced way, in full knowledge of the economic consequences for our nation.

So John Howard in 2007 backed in an emissions trading system, the same as the Labor Party is currently moving in this place—the same principle, the same approach, that Labor is putting to this chamber: an emissions trading scheme to give the most effective response to climate change, a cap on pollution, a price set by the market, firms able to find the cheapest and lowest cost way of reducing the pollution we put into our atmosphere.

The fundamental problem is this: as long as something is free our economy will continue to do it. As long as polluting is free, we will see more and more pollution. We understand that intuitively. We understand that in so many other areas of policy, but on this the government has chosen to go down a path which is opportunistic, which is all about fearmongering. I think future generations will look back on these bills and they will be appalled at the short-sighted, opportunistic, selfish politics of those opposite. Mr Abbott will go down as one of the most short-sighted, opportunistic, selfish and small people ever to occupy the office of Prime Minister.

What we will see and what we are seeing from those opposite are short-sighted politics to dismantle a policy which has been supported by them, by the overwhelming majority of scientists and the overwhelming majority of economists. It is easy to run a campaign against a price on carbon, because you are saying to people: 'What we are doing is polluting the atmosphere and we now have to stop doing that. We have to change how our economy works.' But it could have been done if those in the Liberal Party—Mr Turnbull and other moderates—turned their backs on a man who describes climate change as 'absolute crap' and did the right thing by the nation.

There is a lot of talk in politics today about the need to have the reform imperative—about the need to have the courage to reform. If you look back to the great economic reforms governments have implemented—and I particularly want to talk about the opening up of our economy, the liberalisation of trade, the floating of the dollar under the Hawke and Keating governments—it would have been easy to run scare campaigns on those policies. But there was a modicum of bipartisanship for the betterment of the nation—responsibility being taken at that time for future generations. Where is that now? The man who killed it is the man who occupies the Lodge—or, not the Lodge, Kirribilli. The man who killed it is the man who occupies the office of Prime Minister—a short-sighted, opportunistic scaremonger. That is this Prime Minister.

These bills dismantle a policy which has been in place for two years which is working exactly as it was intended, reducing emissions, reducing pollution while supporting the households of Australia and the competitiveness of our economy. I think future generations will look back at the people who claim the carbon price was a wrecking ball and identify the real wrecker—a Prime Minister who has practised hypocrisy, deception and destructive politics when it comes to the challenge of climate change. We on this side of the chamber accept the science. We on this side of the chamber accept the responsibility to do something in this time for the next generation and we in this chamber will never walk away from a serious and credible response to climate change.

Anne Urquhart (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

Yesterday I asked the minister a question that I did not get the answer to. I will repeat that question and then I will ask it again after I have read out a couple of letters I have received. My question was: Minister, can you guarantee that average Tasmanian household costs will drop by $550 each and every year, as guaranteed by the Prime Minister? This is a question that not only myself but many Tasmanians are interested in. I received a letter via email from a small-business owner in Tasmania and I want to read it out:

Hi Senator,

Can you advise me how much I can expect to save this financial year by the abolition of the carbon tax.

I have heard that the Government has stated it should be on average $550 however Aurora Energy today advised me that their power charges will not reduce as a result of the carbon tax being taken away. I do recall this being a reason used by them for the increase in the market wholesale price of electricity.

The small-business owner also then sent me a letter that he had received from Aurora Energy, the suppliers in Tasmania:

Dear Customer

YOUR AURORA ENERGY CONTRACT PRICES FROM 1 JULY 2014

We write to you with regard to the prices in your Aurora Energy electricity supply contract that will apply from 1 July 2014, in light of the likely repeal by the Australian Government of the carbon pricing scheme.

As of 1 July 2014, there will be no change in the price of your supply contract, as the wholesale energy purchasing arrangements which underpin the provision of electricity to you have not changed. There will also be no change to prices in the event of the carbon tax being repealed, as the costs of providing energy to you will remain unchanged with the wholesale energy market having already factored in the probability of the carbon tax being repealed.

When the time comes to sign a new supply contract with Aurora Energy, the cost of carbon, if there is any, will be captured in the energy pricing that we quote you in your next contract. There will be no separate rate for carbon.

Should you have any questions relating to your contract and the impact of carbon, please do not hesitate to call our Business Sales Team … and we will be able to answer any questions you may have.

So, again, my question is: Minister, can you guarantee that average Tasmanian household costs will drop by $550 each and every year as guaranteed by the Prime Minister?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

Firstly, in relation to the last question in terms of electricity price reductions in Tasmania: as I said yesterday, the Office of the Tasmanian Economic Regulator released a statement on 19 June 2014 that electricity prices would fall in real terms by 7.8 per cent with the removal of the carbon tax. In relation to the $550 reduction in cost of living for the average household, that assessment is based on the exact same methodology as used by the previous government when they claimed a reduction in costs of $380 on the basis of replacing the carbon tax with an emissions trading scheme. We are basing our advice to you in relation to this on the exact same methodology that the previous government did.

Ian Macdonald (Queensland, Liberal Party) Share this | Link to this | Hansard source

I wanted to ask the minister some questions. I might ask whether he has the figures for the Queensland regulator and what prices would fall in Queensland. I also seek from the minister confirmation that I am not—and I am asking the minister this—living in another world. I heard the Leader of the Opposition filibuster for about 12 minutes at the beginning of this committee session this morning. She did not even pretend to ask a question of the minister. The debates in the Senate and, particularly, in the committee stages are intended to allow senators to ask precise questions about the bill and the amendments before the chair.

We heard from the Leader of the Opposition in the Senate—one of the leadership group of the party which went to the 2010 election promising there would be 'no carbon tax under a government I lead' and then, when it got into government, immediately introduced a carbon tax—not a question but just a 12-minute rant to waste the time of this committee and to prevent other senators from asking questions. We got that from that senator who is supposedly the leader of a party in this chamber. You would expect that a leader might, at least, show some responsibility. That is my recollection.

After hearing the Leader of the Opposition, I have to ask the minister whether my recollection is correct in that the Australian people at the last election voted overwhelmingly against the Labor Party and the Greens political party. Is it also true—and is my recollection correct—that it was made very clear for about 2½ years before the last election that the last election would be a referendum on the carbon tax? That is my recollection. But, after hearing the Leader of the Opposition, I must have been on a different planet! Clearly, Australians went to the last election accepting this was a vote on the carbon tax or otherwise. The Australian public answered that question, giving Mr Abbott and his team an overwhelming response—an overwhelming answer—in the election held last year.

Similarly, those senators in this chamber supporting the lied-about carbon tax lost one-fifth of their number. Parties in this chamber which indicated they also opposed the carbon tax—which included the coalition, Palmer United Party, Senator Xenophon, as I recall, and I think Family First, Democratic Labour Party and the Liberal Democrats—did very, very well. And yet, if you heard the Leader of the Opposition in the Senate today, you would think that the Australian public said something else. So my question to the minister is: Am I right that the last election was said to be a referendum on the carbon tax? And was the result such that the Australian public spoke?

Senator Wong gets up here and says that she and her colleagues in the Labor Party know everything and know what is best for Australia. She says there are a lot of scientists and economists who also think that this should be abandoned. In the minute I have left to me, I just want to ask again: Did the Australian public clearly say at the last election they wanted to get rid of the carbon tax? For all of the economists, for all of the so-called scientists that Senator Wong quotes and for all of those people in the Labor Party who say differently, wasn't it a fact that the Australian people, voting at the last election on what was clearly a referendum on the carbon tax, gave their answer and gave it overwhelmingly?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

I thank Senator Macdonald for those questions. He is of course right—the last election was a referendum on the carbon tax. The verdict of the Australian people was very clear: they want the carbon tax gone. That is why the government is determined to deliver on our commitment to the Australian people.

In relation to electricity price determinations by the Queensland regulatory authority, I can indeed confirm that the Queensland Competition Authority has stated that electricity prices would fall by 8.5 per cent in a typical household as result of scrapping the carbon tax.

The CHAIRMAN: The question is that amendment (3) on sheet 7527 moved by Senator Singh be agreed to.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

by leave—I move amendments (1) and (2) on sheet 7531 together:

(1) Schedule 2, item 3, page 75 (line 33), omit "electricity; or", substitute "electricity.".

(2) Schedule 2, item 3, page 75 (line 34), paragraph (f) of the definition of electricity retailer in section 60A, to be opposed.

Yesterday, I made it fairly clear that the way that the bill is written captures households with solar panels on their roofs and the Royal Children's Hospital, which has a co-generation plant, because the definitions are that an 'entity' includes an individual, the 'energy retailer' definition captures people who produce energy, and 'customer' captures those people who buy energy. I note in today's media:

Martijn Wilder, a partner at Baker & McKenzie, said that “on a plain reading, the law does apply to power sold from solar roof panels” and the letter of the law did not reflect the assurances the minister had given. “At best, it is legally ambiguous,” he said.

At the same time, the ACCC has said that they would be guided by what the minister had said in his second reading speech, but the point here is that the High Court, on several occasions recently, has shown that what parliament intended by legislation means nothing if the statute gives rise to a clear explanation, which, in this case, it does. So the courts will take notice of the law, not what the minister cobbles together in a second reading speech

On that basis, my amendment removes any ambiguity about whether this captures people who are producing electricity from their solar panels, or a hospital that is producing electricity with co-generation, or any other. Since that clearly is not the intention of the legislation we ought to remove the ambiguity from the legislation. That is why I am moving to remove from section 60A, this amendment, section (f), that was put in House, which says:

(f) any other entity who produces electricity in Australia.

By removing that you would remove any ambiguity so that people with solar panels and people who are into co-generation—in hospitals and the like—would not be captured by this piece of legislation. It would leave the ACCC without the burden of having to have on the statute books something that it will not enforce, even though it is the law that it does enforce it.

Our job is to make laws that are clear to people, and not to leave the law ambiguous, which will mean that it will land up somewhere in the courts. So I ask the government, the opposition and other crossbench members to support this amendment to give clarity to the law and to give comfort to people who have solar panels, people who are into co-generation and other people who were never intended to be caught up in this legislation in the first place. I recommend the amendment to the Senate.

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

The government does not agree to this amendment, which waters down the protection to consumers. The government has made it clear already that the interpretation of 'electricity retailer' is limited to electricity retailers and electricity producers selling electricity, in a wholesale electricity market, to a retailer. This means that small-scale electricity producers such as families and businesses with solar PV on their rooftops are not covered.

The government considers that protections for electricity consumers are an important part of ensuring customers receive the full benefit of the removal of the carbon tax. That is why we have added various new protections to these bills, which will apply to electricity retailers.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

The minister is wrong because all the minister is doing is referring to Minister Hunt's second reading speech by saying that that is how they have made it clear that this applies with regard to selling into the wholesale market, but that is not what is in the legislation. So the government is refusing an amendment which clarifies the situation. I think that is a very sad thing.

Before we vote on this amendment I would also like to have the minister clarify what he said yesterday. In here he said yesterday that airlines and supermarkets would be legally required to remove the carbon price. In fact, that is not the case. I note in the ACCC's brief to the big polluters—the Australian Industry Greenhouse Network—that despite the ambiguity in the final form of the repeal bills the ACCC would only enforce price reductions for electricity and gas retailers and bulk importers of synthetic gases used in refrigeration and air-conditioning. They would not be enforcing price reductions anywhere else.

So the minister needs to clarify that. The ACCC is telling people that they would only be doing that. I think this really puts the lie to the government's claim that they will be forcing price reductions on everything. They cannot and they will not. The ACCC went on to say that, under the false and misleading conduct powers, they will be looking at the public statements made by companies in relation to what they have done. But that is a vastly different thing from the enforcement of price reductions.

It is very clear on the record, from the ACCC now, that the only enforceable price reductions will be electricity, gas and synthetic greenhouse gases. For everything else there will be no requirement, and therefore the $550 claims about the community being better off are simply hot air. I would like the minister to clarify: is the government's understanding and intent the same as what the ACCC said yesterday? Isn't that the case?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

I thank Senator Milne. Firstly, Senator Milne did not accurately quote what I said to the chamber yesterday. She is right, though: we did go through this in some detail. As I pointed out yesterday, as a result of this bill, the ACCC will have price-monitoring powers under section 60G. The ACCC will be provided with new powers to monitor the prices offered, displayed or advertised of electricity, natural gas, synthetic greenhouse gas, synthetic greenhouse gas equipment and any other goods designated by regulation in relation to the carbon tax repeal.

False or misleading representations are obviously also prohibited, consistent with section 60K, so all corporations—and that includes airlines and others—will be prohibited from making carbon specific false or misleading representations during the effect of the carbon tax repeal on prices. This prohibition covers all goods and services and carries a penalty of up to $1.1 million for a corporation and $220,000 for an individual.

Deborah O'Neill (NSW, Australian Labor Party) Share this | Link to this | Hansard source

The question is that Greens amendments (1) and (2) on sheet 7531 be agreed to.

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

I move opposition amendments (4) to (6) on sheet 7527:

(4) Schedule 2, page 71 (line 1) to page 101 (line 20), to be opposed.

(5) Schedule 3, page 102 (lines 1 to 26), to be opposed.

(6) Schedule 4, page 103 (lines 1 to 29), to be opposed.

I would like to highlight the importance of the Steel Transformation Plan, which this government seeks to abolish in this legislation. Senator Cormann, given the state of manufacturing in this country, I do not understand why you would not keep the Steel Transformation Plan and, given the wrecking this government has done to the car and ship industries, will you justify why the government would not retain any mechanism that improves investment, innovation and competitiveness in the manufacturing sector?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

I thank Senator Singh. What is described in an Orwellian fashion as the 'Steel Transformation Plan' was in fact nothing other than a last minute bit of compensation at the behest of various union representatives to repair the injury that the carbon tax was putting into the steel industry. Of course, by getting rid of the carbon tax we remove the injury but we make sure that Australian business can be more competitive again internationally and is able to compete on more of a level playing field. As such, there is absolutely no reason to keep the compensation for an injury that this government is about to remove.

Deborah O'Neill (NSW, Australian Labor Party) Share this | Link to this | Hansard source

The question is that schedules 2 to 4 stand as printed.

Gavin Marshall (Victoria, Deputy-President) Share this | Link to this | Hansard source

The question is that schedules 2 to 4 stand as printed.

The question is that schedules 2 to 4 stand as printed.

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

The opposition opposes schedule 5 in the following terms:

(7) Schedule 5, page 104 (line 1) to page 105 (line 4), to be opposed.

Schedule 5 absolutely cripples ARENA. It drops the amount of money available for this very valuable organisation to enable and encourage development in critical renewable energy projects. That value of projects funded to date, we know, has been unquestionable. Australia has all the raw ingredients and talent required to be a world leader in renewable energy development and commercialisation and yet this government is trying to rip the heart out of ARENA, cripple its funding, take Australia backwards, take a whole new investment in renewable energy backwards, which surely is an economic driver of innovation and prosperity for our nation. We do not support the government's schedule.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

The Greens oppose schedule 5 in the following terms:

(7) Schedule 5, page 104 (line 1) to page 105 (line 4), to be opposed.

I am moving the same amendment, because it is critically important that we keep the Australian Renewable Energy Agency. For the benefit of people thinking about this, we set up the Australian Renewable Energy Agency as part of the deliberations of the Clean Energy Package. At the time, renewable energy projects, grants, the Solar Flagships and so on were all across the government. It was a complete mess, and so we pulled together all of the renewable energy programs and we set up a new statutory authority, the Australian Renewable Energy Agency, and it was linked to the Clean Energy Finance Corporation so that you had the whole spectrum from early research and development, pilot stage to the commercialisation of these projects.

It was a very good piece of architecture in terms of legislation. It meant that, as the Clean Energy Finance Corporation project started to make money, the profits would be cycled back through to ARENA to fund early research and development so it would become a self-sustaining system of money going back in. The government has a schedule to abolish the clean energy bills and to take a vast amount of money out of ARENA. As the government has proposed, over the next three years, if the government's schedule stands, ARENA's funding would drop from just over a billion dollars down to $341 million. In other words, if you vote for the bill as it stands, you are voting to take $717 million out of the Australian Renewable Energy Agency. What does that mean? It means ARENA will not be able to fund new projects. Effectively, what they do need is $150 million a year to keep the high-quality research and development moving. If you end up with only $89 million in 2014-15 and $59 million the following year, you end up with no new projects. ARENA has 152 projects in their pipeline worth $5.6 billion in investment that will just disappear. This is our reality.

We already have companies out today—for example, GE, a US multinational and one of Australia's largest foreign investors, saying its $3.5 billion pipeline of investment in green energy in this country is at risk because of possible changes to the RET. That is a separate issue, I agree. But it demonstrates how much interest there is in rolling out these technologies across the country. So it is a very bad mistake for the government to be taking $717 million out. I have heard some crossbench senators say that they want to save ARENA. You do not save a renewable energy agency by taking $717 million out of it over the next three years and leaving it with no ability to fund new projects.

Secondly, the ARENA board have all now had their positions ceased because their contracts have all run out and as of the 17th, I think it is, there are none of them with an ongoing contract. Yesterday in the Senate, as a result of the motion that I moved, the Senate asked the government to reappoint people to the ARENA board. If this motion is unsuccessful and they lose $717 million, and they have no board anymore—the secretary of the department is effectively heading ARENA, overseeing their existing projects—frankly, by the time the bill comes in later this year to save ARENA, it will be a shell of its former self. You either vote to keep ARENA as it is with the ability to fund the projects in its pipeline and you get people reappointed to the board, because it is an independent statutory authority, or you accept that if you are going to wrench this money out of it and let it lapse with no board, then effectively you are killing ARENA through the back door. That is what is going on here.

I urge the Senate: if you are serious about saving the Australian Renewable Energy Agency, and if you like the kinds of programs that it is supporting, then support my amendment. ARENA is supporting programs right around the country; there are fantastic projects. Out in communities people are excited by this investment in renewable energy and by the innovation and jobs that are coming with it. The point that I just make very seriously is that there is a funding schedule here to take the money out of ARENA. The Greens are standing firm saying do not take that $717 million out of it and please reappoint people to the board, as the Senate asked yesterday, so we are not left with a shell of a former organisation with the departmental secretary overseeing the projects for which the money has already been allocated and that is virtually it. So I urge the Senate: if you are serious about supporting and saving ARENA, it is not enough to leave it to three months down the track to vote against the abolition bill. The fact is that you will be voting for its abolition if you take this money out and the board is gone—it is just a shell. I really urge people to support my amendment.

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

Senator Singh's comments just now, that this schedule would cripple ARENA, are really quite unbelievable, because what this schedule does is give effect to a Labor savings measure out of their last budget. That is all it does. We are giving effect to a savings measure that you put in your last budget, that you initiated, that you banked in your last budget and that you failed to legislate. Now you come in here and say that somehow we are crippling ARENA. That is just unbelievable. Of course, the government that initiated that savings measure and banked it in the last budget—the Labor government—when I last looked, was supported by the Greens political party in government.

The Greens were standing behind the budgets of the previous government. The Greens have said that they were part of guaranteeing supply to the previous government. They have got a member in the House of Representatives who was a part of guaranteeing supply to the previous government. The previous government delivered a budget which reprofiled $370 million in funding over the forward estimates into later years—2019-20 to 2021-22—and reduced funding for ARENA by $435 million over the forward estimates. The changes in this schedule give effect to the Labor Party's last budget. So for Senator Singh to come in here and say that we are somehow crippling ARENA by giving effect to their last budget's savings measures is really quite hypocritical, I would suggest to the Senate.

As Senator Milne and Senator Singh would well know, the future of ARENA, structurally, is going to be the subject of different legislation. It is not the subject of the package of bills that is in front of us here today. The government will not be supporting these amendments. We will be voting for the schedules to stand as printed and that is what we would recommend every senator to do in this Senate—in particular given the absolute mess that the budget is in after six years of Labor waste and mismanagement.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I would just like to ask the minister to inform the Senate how the government intends to respond to the motion passed yesterday to reappoint the board of ARENA.

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

That is not a matter related to the bill before us. It is not a matter related to the amendment before us. It is obviously a matter for Minister Hunt. Obviously, in the ordinary course of events, Minister Hunt, on behalf of the government, will respond to the motion passed by the Senate.

The CHAIRMAN: The question is that schedule 5 stand as printed.

Gavin Marshall (Victoria, Deputy-President) Share this | Link to this | Hansard source

The remaining amendments are consequential on amendments that have not been passed. So I now put the question that the bills stand as printed.