Dan Tehan (Wannon, Liberal Party) Share this | Hansard source

It is very unusual. It is interesting to ask, once you delve into these things, how they came about this figure of 7½ per cent. This was a question that was asked during the economics committee hearing. It was asked, 'There must have been some potential investment disasters that government has already been involved in which have made you come up with this figure. What is the basis of your decision that there will automatically be a 7½ per cent loss? Surely, there must be a Solar Flagships program or something else that has led to the 7½ per cent figure.' But they could not come up with anything. So it seems that they have plucked this figure out of thin air, which should be extremely worrying for the Australian taxpayer. They know it is going to make a loss.

An opposition member: $750 million bucks!

Yes, $750 million straight up, it is pointed out to me. And yet, when they were asked how they came to this figure, they did not know. There was no evidence based approach to coming up with this figure for the loss. One might think that this would worry this government. I got the feeling it did embarrass the Treasury officials who were there trying desperately to give some sort of credence to what was going on. You would think that the government would be embarrassed by this, but I must admit that those members of the government who sat on the House economics committee blindly sat there, shrugged their shoulders and went, 'Well, if $750 million is the price we have to pay, that's what we have to pay.' It is a real shame.

Not only that, there was a follow-up question to this which asked, 'Given that there is no substance to this 7½ per cent figure, what happens if it loses more money than that?' Everyone just shrugged their shoulders. No-one knew. As a matter of fact, it seems to be wholly reliant on the board to make sure it does not. The information on how the board and its staff is going to be governed was very interesting as well. The board's salaries are going to be along the lines of those paid to members of the Future Fund board—we are talking of a chair on maybe a $2 million salary. Who will decide the salary of the staff? Will it be the Remuneration Tribunal? No. The board is going to decide what the staff salaries will be.

An opposition member: Like the NBN.

Yes. In this situation is the board really going to care what rigour is put into this? I do not think so. Seven and a half per cent, 9½ per cent, 15 per cent—if those are the losses, I think the board is just going to be sitting there saying, 'Oh well, it's all right—we're not losing from this.' It is the taxpayer who is ultimately losing.

This committee hearing was a real eye-opener and it was even more of an eye-opener when the representatives from the Department of Climate Change and Energy Efficiency were asked: 'But isn't the 20 per cent of renewable energy required by 2020 already delivering investment into renewable energy anyway? Isn't this bipartisan commitment actually delivering this? Do we need the additional $10 billion if our Renewable Energy Target, and the renewable energy credits which are delivering that target, are already doing this job?' There was no answer to that—no answer to the effect that this $10 billion is not needed because we already have a bipartisan mechanism to deliver this anyway.

What we have is $10 billion being spent as a bribe to keep the Greens happy. I would have thought there were better ways to keep the Greens happy than giving them $10 billion, but it seems that is what this government is prepared to do to cling to power. It is an unnecessary $10 billion because, as we heard in the evidence, the Renewable Energy Target—20 per cent of our energy from renewable sources by 2020—is going to deliver this anyway. That is very important because it also means that those companies which have already invested privately in renewable energy technology—in wind, solar and wave—will now see their competitors come in, using this $10 billion fund as a leg-up, and gain a commercial advantage over those players who are already in the marketplace.

I must ask the government, how can this be fair? How can it be fair that existing players in the renewable energy space will now face competition from late entrants who can use this $10 billion fund? What the government is doing is saying to those companies who have made investment decisions based on private enterprise with a little bit of assistance under the Renewable Energy Target: 'We don't care about those investment decisions you have made. We are going to support new entrants into the market which could potentially blow the investment decisions you have taken out of the water.' This bill hammers home another example of sovereign risk and shows that this government does not care. We see time after time that the government does not understand this.

I am in my first term in this place—

See this speech in context