Chris Bowen (McMahon, Australian Labor Party, Shadow Minister for Climate Change and Energy) Share this | Hansard source

Labor created the Clean Energy Finance Corporation in 2012 with $10 billion worth of funding to support emerging renewables and energy-efficient investment and to reduce the cost of capital for important investments which have great benefits for our country. Since then it's become one of the world's leading green banks, described as such even by the current Prime Minister. It's deployed $6 billion worth of funds and leveraged around $27.3 billion in private investment. In doing so, it has helped finance around 18,000 projects and is responsible for around a million tonnes of abatement annually. This success comes despite the efforts of the current government. This government has sought to attack the CEFC on multiple occasions. It's sought to abolish it, undermined it and dilute its purpose, and there is much of that in the bill before the chamber today, the Clean Energy Finance Corporation Amendment (Grid Reliability Fund) Bill 2020.

There are some things in the bill that are sensible and which the Labor Party would support. For example, we support the CEFC having an expanded remit to help deliver a modern electricity grid. That's a sensible idea, and it's one that we've spoken about. In the Leader of the Opposition's budget reply, he announced the Rewiring the Nation initiative, under an Albanese Labor government. So it's a sensible idea. But what we won't do is allow the government to use the sensible idea in this bill as cover, as a Trojan Horse, for the undermining of the integrity of the CEFC to give unprecedented powers to the minister and to change the role of the CEFC away from its original intention.

It appears that the government have given up on their dream of abolishing the CEFC, but they are still finding ways of undermining it. They are still finding ways of trying to take the CEFC away from its original purpose. They even attempted to stop the CEFC from investing in wind or rooftop solar. I can't think of anything better for the CEFC to invest in than wind and rooftop solar, and yet the government are trying to expand the remit of the CEFC—they tried to reduce it before and now they're trying to expand it—into areas it should not be investing in. I'll deal with that a little later. They've also altered the investment mandate, significantly limiting the degree to which CEFC could support new technology deployment. Since then, they've used the CEFC's $10 billion to create announcement after announcement of reallocated funding as a fig leaf for their inaction on climate change. The government have said that they believe in the CEFC, but this bill is really a mechanism to undermine it.

Former leaders of the CEFC and ARENA have written a letter expressing their concerns and their opposition to the bill as it stands. They've said:

We do not support changes to the CEFC's legislation that undermine its independence, low emissions remit, commitment to profitability, or its avoidance of fossil fuels as part of a clear commitment to assist in the reduction of Australia's climate emissions.

So the experts say the CEFC should be independent, have a low-emissions remit, support economically viable projects and avoid fossil fuels. That makes sense to me, so I will move amendments to make sure that those principles remain. It's up to the government to decide whether they will accept those amendments or not—whether they will continue to undermine those commonsense principles by insisting on their approach. That will determine whether we vote for the bill in its final form. If our amendments are accepted, we will happily pass the bill. If they're not accepted, we will oppose the bill.

This bill seeks to make the most significant changes to the CEFC since its establishment. With that shaky record of the government when it comes to investment in renewable energy, these changes should be seen in this context. Again I say that Labor particularly welcomes changes that would make it easier for the CEFC to invest in transmission, storage and reliability assets. These are sensible changes. They're a small step towards Labor's own policy to invest $20 billion to rebuild and modernise our outdated electricity transmission system, which is so important for reasons of grid reliability as we transition to renewable sources. But we won't support the bill as it's drafted, because of three fundamental concerns.

The first goes to independence. This bill would undermine the independence of the CEFC and hand unprecedented powers to the minister. In our view, a fundamental reason for the success of the CEFC thus far has been its independence. That's how the previous Labor government designed it: to be at arm's length from the government of the day to make investment decisions based on their merits. The CEFC does not need political interference. The bill includes a provision which allows the minister to directly determine whether an investment is eligible for CEFC support or not. It will give the minister unprecedented powers in shaping CEFC investments. There's no explanation from the government as to why this is necessary. They haven't outlined the problem that they're trying to solve. They haven't pointed to a mischief or a shortcoming in the CEFC's current operation. They simply say they want more power.

It's a fundamental concern of the opposition that this ministerial discretion and power will be provided to the minister of the day. I would have this concern about any minister. I would have this concern regardless of who the minister for climate change and energy was. I would oppose it on principle. But I must say I'm particularly concerned that it's this minister, with his track record of problems in his portfolio and of not accepting the fundamentals of climate change science. This embattled minister has in so many instances found himself having to answer questions about his performance. Whether it's the Sydney City Council, whether it's matters in his electorate or whether it's conflicts of interest, this minister has been very embattled. I certainly would not support this minister having those powers. But, as a matter of principle, I don't believe any minister should have those powers, including if there were a change of government. I myself would not want those powers. I would want the CEFC to do its job. It has a highly credentialed board and management structure. Very respected individuals have served on the board of the CEFC over the years—some of Australia's most senior businesspeople. They don't need ministerial interference. They don't need ministerial direction in relation to how the CEFC does its job. So our amendments will seek to reverse that change, which has been unexplained. I would suggest that it's unexplained because it's inexplicable, apart from being a power grab.

The second issue relates to changes in the definition of 'low-emissions technology' to include gas. At the moment, there is no explicit prohibition on the power of the CEFC to fund projects related to gas; they simply don't meet the emissions standards that are required. Gas can't be regarded as a low-emissions technology. I understand the importance of gas to the Australian economy. I understand its importance and the role it will play for years to come in firming up the grid as we transition to more renewables. I understand its importance in providing feedstock to manufacturers for plastics across a whole range of manufactures. Gas will play a role in our energy supply for the foreseeable future as we transition to other mechanisms which can firm up the grid, like hydrogen. But that is not going to happen today or tomorrow, so we're going to need gas in the system.

The question is not about the role of gas; the question is whether the CEFC should be providing a public subsidy for gas projects. The experts say the case for public funding of new gas power generation is weak. It's a well-established technology. The CEFC is designed to support emerging technologies and work that is at its earlier stages—and at various points along the continuum—which requires investment but can make a contribution. Gas, despite its importance to the system going forward, does not meet those criteria. If gas were a low-emission technology, the government wouldn't need an amendment; gas would pass the test that already exists for CEFC investments. There would be no need for legislative intervention by the government. The CEFC Board could simply approve and fund gas projects because gas is a low-emissions technology. The fact of the matter is that it is not. Gas does not meet the test of being a low-emissions technology simply because it isn't. It has a role to play and it's important, but it is not a low-emissions technology, and the government is engaging in sophistry by suggesting that it is. Changing the definition to allow investment in gas flies directly in the face of the CEFC's mission, which is to support renewables generation. We on this side of the House believe that the CEFC should remain a renewables and decarbonisation funding agency—not one that can be directed by the minister of the day to fund fossil fuels, as important as gas is. It should not be the remit of the CEFC to fund those projects, and our detailed amendments will reflect that.

The third concern of the opposition goes to the bill's removal of the requirement that the CEFC investments make a positive return. I would have thought the government, which wraps itself in alleged fiscal responsibility, would want the CEFC to be making investments projected to give a positive return. It's been crucial to the success of the CEFC. Since its inception, the CEFC has returned $718 million to the Commonwealth. I suspect that's why the Prime Minister himself has referred to the CEFC as 'the world's most successful green bank', due not only to the investment projects it has created, the jobs it has created and the investments it has leveraged from the private sector but also due to the returns to the government. That is a good thing, and it beggars belief that the government would want to overturn that. Do they want the CEFC to make investments that don't provide a positive return? Are they encouraging that sort of investment by the CEFC? It's the only explanation one could reach. Again, our amendments will deal with that. We'll be moving amendments to this bill to protect the independence and financial integrity of the CEFC and to ensure that it remains focused on low-emissions technology.

Before giving way to the honourable member for Groom, I move the second reading amendment which has been circulated in my name and which goes to the issues that I have outlined to the House:

That all words after "That" be omitted with a view to substituting the following words:

"whilst not declining to give the bill a second reading, the House:

(1) notes the failure of the Government to adequately address energy policy uncertainty, undermining investment in the sector and the affordability, reliability and security of Australia's energy system;

(2) further notes that this failure has undermined the economic recovery from the COVID-19 recession, as well as Australia's long-term economic development; and

(3) calls on the Government to implement a national energy policy that will support the investment needed to modernise Australia's energy system and deliver affordable and reliable energy."

I commend the second reading amendment to the House. I also commend the detailed amendments that I will make to the bill when it reaches the third reading stage and reiterate the position of the Labor Party that, if our amendments are accepted, we will vote for the bill willingly. If our amendments are not accepted by the government, we will not be voting for the bill.

I am happy to yield to the member for Groom and wish him the best for his inaugural speech. I will leave my remarks there in order to facilitate the consideration of the second reading amendment.

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