Alan Tudge (Aston, Liberal Party) Share this | Hansard source

This goes straight to the heart of how this is financed. The other side of this chamber will say, 'This actually isn't borrowed money because it doesn't appear on the budget papers'. No, this is the accounting trickery that also goes to the heart of this particular proposal, because the government would like to proclaim this as being a commercial venture and therefore it does not have to appear on the budget papers. It does not have to appear on the underlying cash balance of the government finances. We all know from a few weeks ago the Treasurer proudly proclaimed that the government was going to be delivering a $1.5 billion surplus in 2012-13, but if you just took this fund alone and you added it to next year's budget it would rapidly turn that tiny budget surplus into a deficit. That is the accounting trickery that also underpins this particular proposal. Ten billion dollars, whether it is on the budget or off the budget, is still $10 billion of taxpayers' cash that will be added to government debt. That is the bottom line. More debt means more upward pressure on interest rates and it means mortgaging future generations.

My final point is that this bill will not actually grow the renewable energy sector, but worse it will probably end up with literally billions of dollars wasted. It may seem incredible that there is a $10 billion fund that is going to invest in renewable energy projects and that it will not expand the renewable energy market in Australia. The reason this is the case is that the size of the renewable energy market in Australia is entirely driven by the mandatory renewable energy target, which yesterday, before this bill was introduced, was set at 20 per cent. Today and tomorrow it will still be 20 per cent. So all that $10 billion of investment into renewable energy will do is simply replace projects that otherwise would have got up on a commercial basis with more expensive renewable energy that will be funded through this particular fund. That is what will occur. It will not change the amount of renewable energy that we will actually consume in this country.

Most egregiously though, this bill will result in the waste of billions of dollars—that is my prediction. I say that for two simple reasons. First, by definition, and as outlined in this bill and the explanatory memorandum, the $10 billion will be invested into projects that the private sector would not invest in because there would not be a sufficient return and because they would be too speculative. This is where this $10 billion will be invested—into speculative projects. Second, governments have a terrible record at investing into projects generally. It is astounding that we have to repeat the arguments as to why this is the case. It is astounding that we have to repeat the arguments that it is better for the private sector rather than the government sector to invest in commercial projects. The reason is that the government sector (a) does not have the expertise and (b) does not have the same skin in the game that the commercial sector has. The commercial sector has the expertise, has the financing, has the skin in the game, can analyse projects properly and can take the risk.

This will be invested into projects that will be highly speculative and it will result in billions of dollars of taxpayers' money simply wasted. You do not have to believe me, but you can look at some of the evidence abroad and you can look at some of the evidence back home when governments tried to invest in speculative projects. Abroad, of course, most recently we have had the Solyndra projects: the United States set up a similar type of fund and put $700 million into the Solyndra project and, of course, that has all disappeared—$700 million. We have also seen the Solar Trust of America project, which had a $2.1 billion loan guarantee from the US Department of Energy, again under a similar program to what the Labor government is proposing here, and that $2.1 billion just disappeared because it was in a speculative investment which the private sector, quite rightly, did not want to touch. And of course, for the Victorians in this parliament or in the gallery, we only need to look back a decade or two to when Joan Kirner and John Cain were running our state and we had the Victorian Economic Development Corporation, which was investing in all sorts of speculative commercial projects, which quite rightly should not have been invested in with taxpayers' money. That almost bankrupted the state.

We thought that we had moved on from this style of economics from the Labor Party, but clearly we have not. I say in conclusion that if the member for Throsby, who will be speaking next, and the other members on the other side of this House honestly believe that this is such a great idea—to appropriate taxpayers' money to invest in speculative projects—then I suggest this weekend, before they vote on this bill, they go out to their community and speak to constituents and say, 'We're going to put $1,250 against your household's credit card to invest in speculative projects' and see what they will have to say. (Time expired)

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