Martin Ferguson (Batman, Australian Labor Party, Shadow Minister for Primary Industries, Resources, Forestry and Tourism) Share this | Hansard source

I rise this afternoon to speak on the Renewable Energy (Electricity) Amendment Bill 2006. In doing so, I indicate that the bill to a large extent implements some of the recommendations of the 2003 review of the Renewable Energy (Electricity) Act 2000. As I have said on many occasions recently, here unfortunately is yet another example of the Howard government’s tardiness and sloppiness in its attention to the legislative program and to issues of detail. Firstly, I suppose we should think about why it has taken three years to bring this legislation to the parliament—because the energy debate is not only important internationally but also of primary concern to Australia at the moment.

It is interesting to note that, in terms of access to energy, our cold war might have finished, but there is a new cold war; it is about who controls the source of energy throughout the length and breadth of the global community. It is a cause of major tension. We need only think about what occurred in Russia earlier this year, when the Russian government turned off access to gas to a number of countries that historically it had been supplying gas to, with the issue being the cost of gas. It is causing tension, for example, between the United States and China, with exploration going on throughout the world where energy options are available. So I think there should be some urgency in Australia about the energy debate, yet it has taken the Howard government since 2003 to bring forward propositions and suggested recommendations for implementation going to the review of renewable energy in Australia. This is merely another example of arrogance by the Howard government 10 years on. The member for Fisher has talked about the keys to the cabinet room. Perhaps it is time that those opposite lost the keys to the cabinet room, because they are not taking seriously some of these important economic debates that Australia should be involved in.

I also note unfortunately that, as the result of a procedural motion moved by the Howard government at the commencement of this important debate, many speakers on both sides of the House will be denied the opportunity to contribute to it. The guillotine has been used yet again, as it has been used consistently over the last couple of parliamentary days, to deny the representatives of the Australian people their opportunity to contribute to debates about their future. The debate about renewable energy is part of the debate about our future. It is not only a debate about cleaner energy in Australia; it is also a debate about additional energy at a time when energy demand in Australia is growing—in the same way that energy demand internationally is growing. If you have any doubts about that, just think about the growth in energy demand in our backyard, in our own region, in countries such as China and India. I believe it is time that the Australian community gave the Howard government a message—that they think, as a matter of courtesy, their representatives ought to be allowed to participate in these important debates in their House, the House of Representatives, the chamber in which governments are formed.

That aside, the long list of speakers who desire to contribute to this debate indicates the importance with which members on both sides of the House regard this debate about renewable energy. They care about Australia’s future energy security and supply diversity and they also indicate, by their willingness to speak in the debate, their concerns about climate change and the environment. Having said that, can I also say that the problem is at the very top of government in Australia; the Prime Minister does not care about this debate. That is not to say he has never taken the debate seriously. The truth is that, until 1979, the Prime Minister understood the issue of energy security, but it was then that he removed the excise on LPG, which is part of the debate about energy. In my contribution to the debate today, I suppose it is fair to say not only that the Prime Minister should have removed that excise but also that he has shown he is 30 years out of date. He is largely uninterested in the views of his own members, as demonstrated by his being part of the decision to guillotine debate today. Obviously, he treats the views of the Australian community with disrespect and arrogance.

On behalf of the opposition, I simply say that this is a very important debate. I expect it is unlikely that all members will get the opportunity to put their case on renewable energy and all the matters that go with it, because it has become usual for the government to exercise its arrogance by guillotining debate in the House. But the bill itself is important. There are many aspects of the bill that the opposition, the Labor Party, wholeheartedly supports. We see the issue of renewable energy as important to the overall energy debate.

For that very reason, the Leader of the Opposition made a major speech, a blueprint speech, in Sydney on 7 March this year, entitled ‘Protecting Australia from the threat of climate change —Blueprint No. 6’. That speech was about the issue of climate change. Obviously, as previous speakers on our side have said, it included support for the ratification of Kyoto, which is not a challenge to Australia—not a challenge at all because, with the little sweetheart deal we did over land clearing in Queensland, Australia would easily meet its requirements under the Kyoto convention. But I think it is important that that speech, as with the contribution of others in the community, tried to focus the Howard government on the need to get serious about these issues.

In that speech the Leader of the Opposition, Kim Beazley, not only talked about renewables but also acknowledged there is a broader debate on energy in Australia. He indicated correctly that coal, for example, will remain a dominant source of power generation for the foreseeable future in Australia—and that is a statement of fact. No-one can deny that, as important as renewable energy is, as Kim Beazley’s speech says at page 8—and it is an important speech on climate change that he made on 7 March 2006—coal will remain a dominant source of power generation for the foreseeable future in Australia.

That is why the Australian community has to accept the requirement by government, in association with the private sector, to make significant investments in cleaning up our coal-fired power stations and in clean coal technology, where there are issues of sequestration and gasification. It also means that, in a broader debate about transport fuels—which also goes to the question of energy—we as a nation have to become involved once more in nation building. We pride ourselves, for example, on our success in building the Snowy. That was about nation building. If we could do it 50 to 60 years ago, why can’t we do it now? That is about being serious about debates on transport fuel, investing in trying to encourage overseas investors who are already operating in Australia in the gas industry, for example, and being prepared to invest in Australia with respect to the gas to liquids process and issues of coal to liquids. It is all about transport fuel security and it is all part of the debate about energy supply in Australia and our security internationally. In that context, Kim also spoke about the importance of the renewable energy industry. That is part of the debate about climate change and it is also part of the debate about how we expand our access to energy supply to meet the overall demand by Australian consumers.

This bill also has to be about improved market transparency and business certainty, more opportunities for biomass, wood waste and solar technologies and better administration of the measures. All of these measures are welcomed by the opposition, but we are still concerned that the Mandatory Renewable Energy Target, the MRET, does not go far enough to maintain investment in renewable technologies in Australia over the longer term. The 2003 review of MRET recommended that the lifetime for the MRET scheme be extended from 2010 to 2020 and a target for electricity generation from renewable sources be set for 2020 at 20,000 gigawatt hours.

The government did not accept this recommendation, arguing that a better path is to more directly promote the development and demonstration of a broader range of low emission technologies and more aggressively address the impediments to the take-up of renewable energy. Labor supports these initiatives, but you also have to accept that at the same time you cannot continually tinker with a policy framework for renewables. Industry needs some certainty, and that is a matter of investment. It is about a tough global market. It is about trying to encourage an investment climate which guarantees investment certainty. The MRET measure had the support of the renewable energy industries and it formed the basis for its long-term planning. That is why this debate is so important.

Failure to continue and expand the measure has undermined the confidence of the renewables sector in investing in Australia. While MRET got the renewable industry off to a flying start in Australia, its ability to respond in the future will be diminished. The MRET generated growth in renewable energy generation, primarily from the hydro and solar water sectors, where strong growth in the wind sector coming from a small base is important. The government’s own review of MRET in 2003 identified that, without an increase in MRET, further investment in wind was likely to fall away within the next few years, and of course that is what we are seeing today.

More importantly, few inroads have been made into biomass and solar technologies, particularly solar thermal, both of which have enormous potential in the Australian context. Geothermal technology is the other sleeping giant of the renewables sector, and I believe that much more has to be done to promote its development and deployment in Australia. I also note that, despite the eligibility of wood and other biomass wastes for renewable energy certificates under the MRET, there has been very limited investment to date—and perhaps some of that is due to the ideological approach adopted by some in the green movement. Maybe it is about time they stepped back and had a hard think about their ideological approach and the short-sighted nature in the way they approach some of these complex issues. It is also interesting that forest growers and timber processors have the existing capacity to supply wood waste to produce almost 3,000 gigawatt hours of electricity each year without harvesting one more hectare of trees. Why shouldn’t we support this industry? As far as I am concerned, it is no different from the support we should give, for example, to wind power, solar or a variety of other renewables.

On that note, according to the National Association of Forest Industries, if the available resources were used to produce renewable energy, it would result in $800 million of investment in new plants throughout regional Australia and employment for over 2,300 people—not something to be sniffed at in the context of the difficulties of employment and training and economic activity in regional Australia today. Delivering these investments would supply enough electricity for 400,000 houses and would lead to a permanent reduction in Australia’s greenhouse gas emissions from fossil fuels of 2.2 million tonnes of carbon dioxide equivalent each year. It is both economically and environmentally smart. It would also add to the existing industry use of low-grade timber processing and harvesting residues to produce steam, heat and energy.

The MRET has also had only a marginal influence on generation from solar photovoltaics. The 2003 MRET review recommended a longer term deeming period of 15 years for solar photovoltaics. It would seem to be a good measure to encourage continued research and development, since, despite their potential, solar photovoltaics remain a long way from commerciality. The capital cost reduction curve for solar photovoltaics is at a critical point, where significant breakthroughs are essential if the technology is to have a long-term future. In some ways, therefore, our support for this technology has never been more important because, without that next breakthrough, the potential of the technology could be lost as other options overtake it.

I note that the member for Grayndler has moved a second reading amendment addressing some of the opposition’s concerns about the government’s ad hoc approach to energy policy in this country, and I ask those contributing to the debate to focus on this second reading amendment. As part of my contribution, I would also like to address the issue of energy efficiency, because I think it is important. As the member for Grayndler has said, the opposition calls upon the government to support measures to improve energy efficiency, such as making an effective five-star building code the national standard for new homes and developing partnerships with energy utilities so that they just do not sell electricity and gas but also help people use energy and cut their bills. It is smart for householders and it is smart for business.

I think it is fair that, whilst we would all support practical measures that increase energy efficiency, it seems to me that the current national energy efficiency standards for residential buildings in Australia and the various state and territory standards are underpinned by too many questionable assumptions and too little scientific evidence. The Productivity Commission has reported concerns about the analytical basis for the standards last October. The key issue is on the focus with respect to reducing household energy running costs and the thermal performance of the building shell. At least at the time the Productivity Commission was undertaking its investigations, the Australian Greenhouse Office’s home design manual noted that true low-energy building design should consider—and I think this is important because it is lost from the debate—embodied energy and take a broader life cycle approach to energy assessment. Merely looking at the energy used to operate the building, as far as I am concerned, is not really acceptable. It is a broader scientific debate. I say that because timber frame construction is lightweight in nature. It does not fit the thermal performance philosophy.

The analytical basis used also means that concrete slab on ground comes up trumps for efficiency over suspended timber flooring—an interesting concept. Consequently, $70 million worth of sales a year have been lost in the Victorian timber flooring market since the Victorian rating system was introduced. That is despite the fact that a 1999 study undertaken for the Australian Greenhouse Office found it would take 62 years to get a net greenhouse benefit from a concrete floor over a timber floor—never let the facts stand in the way of some policy decisions. And recent research indicates a concrete slab produces a net increase in CO2 emissions of 15 tonnes per house compared to a timber floor. The problem is the standards ignore the fact that cement is highly energy intensive to produce, while timber is a renewable resource, grown using direct sunlight and processed using relatively little energy in sawmills. And sometimes the energy in sawmills is produced using biomass from wood waste itself.

The Productivity Commission has recommended the Australian Building Codes Board commission an independent evaluation of energy efficiency standards to determine how effective they have been in reducing actual, not simulated, energy consumption, and whether the financial benefits to individual producers and consumers have outweighed the associated costs. And the sooner the government ensures this is done—and it is a complex issue for the Australian and the state and territory governments—the better, because in the meantime the timber industry is suffering, regional Australia is suffering, and it may well be doing so for no good reason.

I am therefore pleased to see that the industry has successfully lobbied the Victorian government for an amnesty on wooden floors in new homes until April 2007 to allow time to address the issue. Perhaps in this context, the Victorian government should also be reviewing why native hardwood timber—harvested, used and regrown using sustainable methods—is not available for use in Victorian government construction. Perhaps they should also reassess this issue at the same time.

But it is clear that, unfortunately, the Greens are now much more sophisticated in their attack on the forest industries, directly targeting industry markets to achieve their ends. The Wilderness Society responded to the Victorian amnesty by saying it was a ‘cynical attempt by the industry to maintain market share’ rather than improve energy ratings or environmental sustainability—an interesting response from a so-called Green organisation. This is an issue I am confident the industry will win on a sound scientific basis over the shallow political rhetoric of some in the environmental movement.

National building standards that increase energy efficiency are a must, but we have to make sure we get them right as a community. Demand management is exceptionally important, and making sure that our national building standards are energy efficient is also important. In conclusion, there is no point having national standards that do nothing for energy efficiency and nothing to reduce greenhouse gas emissions, but instead create artificial trade barriers against certain products and add unnecessary costs for new homebuilders. Ordinary people are doing it tough enough today, trying to raise the money to buy a new home, without having imposed on them artificial standards that do not do anything environmentally. Let us get it right and approach it from a scientific basis.

As I have said, the Labor Party supports this bill and welcomes the fact that by 2010 the renewable share of electricity consumption will be around 11 per cent. It is off a low base, and we have to do what we can to encourage its uptake. But our view remains that much more could and should be done to encourage further growth in the deployment of renewable electricity sources over the next decade. This contribution by the government takes us part of the way; there is still a lot further to go.

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