Kylea Tink (North Sydney, Independent) Share this | Hansard source

Australians from all walks of life are facing a cost-of-living crunch. Residents in my electorate of North Sydney are amongst them, with rising costs of mortgages and rents, food and groceries, energy and gas bills and petrol. Some of the most vulnerable in our committee still can't afford the energy they need. Too many people are depriving themselves of energy by taking fewer showers, cooking less, not heating or cooling their homes or going without food, medicine and other essentials to pay energy bills. It is clear that business as usual is not good enough for households and families.

At the same time, as a nation we are facing a climate crisis. Sea levels are rising, the arctic is melting, coral reefs are dying, oceans are acidifying and forests are burning. It is clear that business as usual is not good enough for our planet.

A solution to these dual challenges is available if we step up to grab it. The solution is to electrify everything. Renewable energy solutions are becoming cheaper, more reliable and more efficient every day. Our current reliance on fossil fuels is unsustainable and harmful to the planet, which is why we have to change the way we produce and consume energy. Every year the decision to transition to ever cheaper renewables becomes a financially beneficial decision for more and more households. The average Australian household that switches from fossil fuels to electricity and efficient electric devices for transport, cooking and heating experiences benefits on three fronts. Firstly, annual household energy emissions decrease from 11 tonnes to zero tonnes. Secondly, daily energy usage reduces by about two-thirds, from 102 kilowatts per hour to 37 kilowatts per hour. Thirdly, households save around $3,000 to $5,000 dollars per year. These savings are so important for families struggling with rising inflation and the cost-of-living crisis.

The question then becomes: how can we in this place ensure the maximum number of households across Australia benefit from these cost savings? We can learn much from the Inflation Reduction Act which was passed last year in America. The Inflation Reduction Act is a spending bill. It isn't so much a question of new legislation as it is a question of redirecting funds, mostly through tax credits. It includes taxpayer funded incentives to turbocharge investment in renewable energy and electrification. This spending stretches across households, businesses, large-scale energy supply projects and industries like green hydrogen. Crucially, it is called the Inflation Reduction Act. It is an act designed to achieve mass electrification and climate benefits all while reducing inflation. For example, fossil fuel prices rise at approximately the rate of inflation. With these increases, Australian households are forecast to be spending $9,500 on energy per year by 2050. If that same household was electrified, it could expect to be paying one-third of that per year—a third!

The Inflation Reduction Act shows that investing in electrification will help to reduce cost of living and inflation. It marks a step-change in the global transition to a decarbonised economy. It establishes America as a magnet for clean energy investment, technology and workers, all of whom are making a beeline for a country which has signalled its readiness to lead the world in the energy transition.

America's example highlights how much more we could be doing in Australia. If we don't step up our investment in electrification, we may find ourselves the losers in a rapidly accelerating global race for the labour, material and money needed to decarbonise. So what would investment in an inflation reduction act look like in Australia? Models run by Rewiring Australia show that an overall investment by government of around $12 billion over the 2020s would finance electrification of all suitable households with electric devices and electric vehicles. Importantly, this investment would also generate energy bill savings in the order of $3,000 to $5,000 per household per year in 2030. This spending could be achieved through a variety of measures—for example, grants to low-income households for energy efficient upgrades and renewable installation.

Another measure which could be rolled out in my electorate of North Sydney is an electrification pilot. Our community is ready to allow market design, grid integration and new business models such as community ownership to be tested so it can be rolled out more broadly. Other measures might also include directions to the Clean Energy Finance Corporation to allocate funds towards electrifying both households and businesses in the form of zero interest loans.

There is much more Australia can do to match the scale of investment made by America in the Inflation Reduction Act. It's clear our efforts to reduce emissions and lower the cost of living go hand in hand. Electrification is the key, and I urge the government to commit strongly to the ambitious measures I have described. I'd like to cede the remainder of my time to the member for Indi.

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