Julie Owens (Parramatta, Australian Labor Party) Share this | Link to this | Hansard source

On behalf of the Standing Committee on Economics I present the committee's Advisory report on the Clean Energy Finance Corporation Bill 2012, Clean Energy Legislation Amendment Bill 2012, Clean Energy (Customs Tariff Amendment) Bill 2012, Clean Energy (Excise Tariff Legislation Amendment) Bill 2012, incorporating a dissenting report, together with the minutes of proceedings.

In accordance with standing order 39(f) the report was made a parliamentary paper.

by leave—The Australian government's clean energy future legislation package in 2011 included a commitment to establish the Clean Energy Finance Corporation to facilitate the flow of finance into the clean energy sector. Following a review by an expert panel, chaired by Jillian Broadbent AO, the government adopted the recommended design and introduced the Clean Energy Finance Corporation Bill 2012.

The CEFC's objective is to overcome capital market barriers that hinder the financing, commercialisation and deployment of renewable energy, energy efficiency and low-emissions technologies. In short, this market failure in Australia means that the private sector is not investing in clean energy technology projects on a scale that is desirable if we are to realise our potential as an innovator and producer of clean energy. The CEFC is a mechanism to bring the finance and clean energy sectors closer together.

In establishing the CEFC, the government is making a significant investment in Australia's clean energy future. While the government will provide the organisation with a broad mandate, the independent CEFC board will be responsible for investing in clean energy projects. All investment decisions will be made through a commercial filter. Finance will be offered on the least generous terms—enough to enable a project to enter the commercial arena, but not to create substantial negative externalities or market distortions. It is envisaged that there will also be co-investment with the private sector.

The CEFC will expect to make returns on investments, but in making its investment decisions will also take into account other positive community and environment benefits that the private sector would not necessarily consider. This commercial approach to investment decisions, combined with its consideration of the positive external benefits, make the CEFC a key component of Australia's clean energy strategy.

The CEFC will complement the carbon price, Renewable Energy Target and other programs and initiatives to encourage and facilitate development of the clean energy sector. The CEFC will be part of an innovation chain, investing in projects and technologies that are at the later stage of development and are viable commercial prospects. Other programs such as the Australian Renewable Energy Agency provide grants at the earlier research and development stage. To give effect to these agency and program relationships as part of the clean energy future package, provision is made for the sharing of appropriate information between the CEFC and relevant agencies.

As part of its inquiry, the committee also looked at the Clean Energy Legislation Amendment Bill 2012, the Clean Energy (Customs Tariff Amendment) Bill 2012 and the Clean Energy (Excise Tariff Legislation Amendment) Bill 2012. Changes in the Clean Energy Legislation Amendment Bill: support the establishment of the CEFC; give effect to other government commitments in relation to the coverage of gaseous fuels—liquefied petroleum gas, liquefied natural gas and compressed natural gas; and make other technical amendments to improve the operation of the carbon pricing mechanism.

In response to calls from the gaseous fuels sector and the recommendation of the Joint Select Committee on Australia's Clean Energy Future Legislation, LPG, LNG and CNG not used for transport purposes will now be covered by the carbon pricing mechanism rather than the fuel tax system. This amendment will mean that it will be easier for industry to manage its cash flow, firms will have more flexibility in managing their carbon liabilities and compliance costs will be reduced.

The treatment of LPG and LNG that is not used for transport purposes will align with the arrangements for liquid fuels under the carbon pricing mechanism. The changes to the coverage of LPG and LNG will take effect from 1 July 2013 to allow transitional and compliance arrangements to be considered, developed and implemented. Bringing non-transport CNG under the carbon pricing mechanism will reduce compliance costs for small producers and reduce administrative costs for government in relation to excise. If the bill is passed, the CNG changes will be able to commence on 1 July 2012 as CNG is produced from a natural gas that is already subject to an upstream price under the carbon pricing mechanism. The excise and tariff bills also give effect to changes to the treatment of non-transport CNG by exempting it from customs and excise duty.

The Clean Energy Legislation Amendment Bill also contains provisions to enhance the operation of reporting entities under the National Greenhouse and Energy Reporting Act by streamlining the nomination of the person responsible for reporting on the organisation's carbon emissions. The bill also seeks to remove the requirement for regulators to publish 'total energy consumption', and retain the more appropriate 'net energy consumption' requirement, as it does not include the transformation of one energy commodity to another. The bill also proposes to enhance the security of the Australian National Registry of Emissions Units, by providing the regulator with additional time—from 48 hours to five business days—to make decisions about giving effect to a transfer instruction and dealing with suspicious transactions.

This bill also includes technical amendments to the Carbon Farming Initiative by simplifying the process of finalising methodology determinations to provide more time to approve the methodologies of existing projects and facilitate their transition to the CFI. I would like to thank the organisations that participated in the hearing in Canberra. I also thank my colleagues on the committee for their contribution to the report.

Steven Ciobo (Moncrieff, Liberal Party) Share this | Link to this | Hansard source

by leave—I welcome the Chair of the House of Representatives Standing Committee on Economics's contribution with respect to tabling this report. Indeed, it is almost equal to the total time the committee had to actually explore the bills that were before the committee. In fact, another 30 seconds or so and it would have been longer!

Liberal members of the committee that participated in the inquiry were frankly gobsmacked at this government's approach to dealing with the CEFC. Our primary concern rested with the fact that we are seeing invested $10 billion of Australian taxpayers' funds over five years, $10 billion that will be going into the CEFC, for which Liberal members of the committee were allocated just on two hours for a public inquiry. At $5 billion an hour Liberal members of the committee were astounded that the Labor Party would spend $10 billion of taxpayers' funds and in a complete aberration, completely inconsistent with their desire to so-called 'let the light in', as the Prime Minister said, they then shut down the inquiry after only two hours.

Apart from that I rise to raise a number of concerns that were evident to Liberal members of the committee as a consequence of the public hearing. Those relate to a number of comments that have been made and outlined, indeed, by the chair of the committee. These were the actual words that the chair used just now in this contribution that the CEFC will be part of an investment 'chain' supporting 'viable' projects.

It begs the question—and this is what became very evident to Liberal members of the committee—that if these projects were viable then they would be funded by the commercial sector. Make no mistake, the entire rationale of the CEFC as outlined to the committee, which we picked up upon as part of the Liberal contribution to the inquiry, was that these are not commercially viable projects because the commercial sector is not investing in them at the extent required in order to receive 100 per cent commercial support. That underscores the serious concerns that Liberal members have when we see $10 billion of taxpayers' funds being decided upon by the Labor Party to invest into projects that are not commercially viable by definition.

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

Order! The members statement is interrupted in accordance with standing order 43.