Greg Combet (Charlton, Australian Labor Party, Minister for Climate Change and Energy Efficiency) Share this | Hansard source

Without wishing to prolong the situation, I really do need to place on the record that the government has discharged its obligations that it entered into under the Multi-Party Climate Change Committee agreement. That agreement never guaranteed the closure of 2,000 megawatts of high-emission coal fired electricity generated capacity. It never guaranteed that. The commitment was that there would be a process entered into allowing those generators to tender and enter into a negotiation with the government in an appropriate way for the potential closure of up to 2,000 megawatts of high-emission electricity generating capacity, providing it provided value for taxpayers' money.

The suggestion by the member for Melbourne that the government have not met their commitments is completely wrong and false. We have met the commitments that we entered into. If the Greens did not understand what they were entering into then that is most unfortunate. But, nonetheless, at the end of the process for the discussion and negotiation with the owners of the high-emission electricity generation capacity that had voluntarily come forward and participated in the contract for closure negotiations, the government could not agree with those entities that the values that were being discussed for those assets represented value for taxpayers' money. Indeed, on our calculation the cost of emissions reductions to be achieved, should the government have accepted the valuations of those assets that those companies believed were appropriate, would have vastly exceeded the $23 per tonne carbon price. This is not the sole criterion, but of course it was a consideration in the government's thinking. The fact is that the market will now decide the life of those electricity generators. That was always the position that obtained under the Multi-Party Climate Change Committee agreement and it is the position that the government discharged.

Having said that, it is important also to note that the market has already led to the mothballing, closure or curtailment of hundreds of megawatts of high-emissions electricity generation capacity, such as the Playford B and Northern power stations in South Australia, and the curtailment of significant electricity generation capacity at Energy Brix in the Latrobe Valley in Victoria. I think it is in order of 800 or 900 megawatts of brown coal high-emissions electricity generating capacity that has in fact been curtailed, without the necessity for the government to enter into contract for closure agreements with those particular operators. The market will attend to that issue under a carbon pricing arrangement. The government has met its obligations under the agreement. We therefore reiterate that we oppose the amendment.

Generally, in relation to the issues raised by the shadow minister, the package overall has been very carefully calibrated. There has been years of extensive engagement with stakeholders in every conceivable sector of the economy. It is not at all an issue of sovereign risk. Packages have been carefully designed and modelled in some of the most extensive modelling work ever undertaken by the Commonwealth Treasury and other organisations to ensure that this package will work, that it will lead to a reduction in emissions in our economy over time. We have attended to all of the issues that we believe are appropriate, particularly in the electricity generation sector and particularly in businesses that are in the trade-exposed and emissions-intensive part of the economy.

Furthermore, in relation to the pass-through of carbon pricing into electricity prices, it is of course the case that the majority of the carbon price revenue is being used to implement tax cuts, a tripling of the tax-free threshold, increases in family tax benefits and increases in the pension and other social security payments. Millions of people will be better off as a consequence of this important reform and Australia will play its fair share in global greenhouse gas emission reduction.

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