Graham Perrett (Moreton, Australian Labor Party) Share this | Hansard source

Because the reserve price ensures that we get the best possible price, and it also means that only serious players come to the table. You cannot be a speculative outfit just trying to leverage money out of nothing when you are nothing more than a $2 company. Only serious players come to the table. That price is based on the information provided by Geoscience Australia, which is Australia's national geoscience agency and has some of the best geologists in the world, I would suggest. So this reserve price will be determined in advance of inviting applications for the permit and, at the discretion of the joint authority, will be disclosed or not disclosed to bidders via the government Gazette. Then, where an offer is made below the reserve price, the permit will be offered only at the reserve price. There is also the separate prequalification and bidding process. This prequalification assessment of potential bidders' technical and financial capacity to hold an exploration permit will take place prior to applicants placing their cash bids. The other feature that they have brought in is the tie breaker rule: where there are two or more equal highest cash bids, further cash bids will be invited from the tied applicants and the highest bidder obviously will be offered the permit.

I had a bit to do with this in the 42nd Parliament when I was a member of the House of Representatives Standing Committee on Primary Industries and Resources, chaired by the very capable Dick Adams. The deputy chair was Alby Schultz. In that committee, we were particularly looking at the greenhouse gas storage side of the legislation in advance of putting a price on carbon, realising that it would be in people's interest to be able to use these offshore facilities to store greenhouse gases. The reason I touch on that side of the legislation is that it illustrates how, in a carbon-constrained world, much of the low-hanging fruit has gone. It seriously calls into question the efficacy of the Direct Action policy that has been proposed, which we are yet to see unpacked or explained.

The reality is that most technical innovations—as I said, the low-hanging fruit—have already been taken by industry and households. When I drive around my electorate I see that just about every second or third house has solar panels on the roof. People are making the changes because they have experienced a price on carbon—that gentle guide to change behaviour, which is a market mechanism. Obviously the Labor Party still believe in markets, not in the command and control of Canberra bureaucrats. We believe in a market achieving the best price. It has worked for the last 5,000 years and it obviously will work when we are sorting out the future of the planet.

It will be interesting to see how people take advantage of the offshore petroleum and greenhouse gas storage legislation in a direct action environment. It will be interesting to see who makes such choices, what public servant makes the decision to undertake such a speculative venture as putting greenhouse gases down in Bass Strait or the like.

The legislation we have before us is about achieving the best possible return for the Australian people for the resources, the hydrocarbons, that they earn. We know—the Labor Party and even those opposite know, because I remember what they said in the lead-up to the 2007 election when they were all gung-ho for ratifying Kyoto and putting a price on carbon—that putting a price on carbon will have the lowest possible cost to society. It will be interesting to see how direct action is rolled out.

It is 4 December today and I remember 2 December 2009 when the now Prime Minister became the opposition leader and that scuttled the deal that had been done in this parliament. Labor and Liberal had agreed to put a price on carbon. The ETS had gone through the lower house—supported by the member for Wentworth, I seem to recall. He came and voted with us. It went to the other place, where it was supported by Labor. If the Greens had voted with Labor, because two Liberal senators voted for it, we would have had an ETS back in December before we went off to Copenhagen. Imagine how the world would have been different if the biggest emitter per person on the planet, Australia, had been able to go to Copenhagen and say, 'We've done it.' Obviously, that did not take place. We cannot live in the past, even though that seems to be the prerogative of the current government. We cannot live in the past; we need to deal with today.

This legislation in front of us is about recognising that there will be a transition. Hydrocarbons will obviously play a part. They are a valuable resource for the Australian people. We can see the economic benefits that come when a country is not relying on hydrocarbons being imported. Look at the transformation in the US economy in the last two or three years. That is a story of hydrocarbons coming out of North America, rather than the Middle East. That is how the US is transforming its economy in the current climate.

This legislation is noncontroversial; it is supported by both sides of the chamber. I commend the Gillard government for bringing it forward and the Abbott government for bringing it forward. I commend the bills to the House. (Time expired)

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