Gary Gray (Brand, Australian Labor Party, Shadow Minister for Resources) Share this | Link to this | Hansard source

My purpose in rising this evening is to speak on the Energy Efficiency Opportunities (Repeal) Bill 2014. It is a bill that is about red-tape repeal. It is not a bill that is about energy efficiency. I think we should understand that and accept that at the very start.

In 2004 the then Howard government, with bipartisan support, considered its white paper on energy, Securing Australia's energy future. That white paper explored a whole range of matters of great interest to do with the national need for energy and energy policy. The energy white paper, in June 2004, identified the improvement of Australia's energy efficiency performance as a key part of the then Howard government's energy policy in order to achieve greater prosperity, sustainability and energy security.

Energy efficiency is about productivity. It is about lower inputs and bigger outputs. It is about lower costs. It is about doing things better. It is about doing things smarter. It is about doing things more cost-effectively. The purpose of the Energy Efficiency Opportunities Bill 2005, which grew from that 2004 white paper, was to establish the mandatory energy efficiency opportunity assessments that were announced in that white paper. The Energy Efficiency Opportunities Program required corporations who use more than half a petajoule of energy to identify and assess energy efficiency options and opportunities and subsequently to report the outcomes of those energy assessments both publicly and to the government.

The EEO Program was put in place because, unlike other modern economies, Australia did not have an overarching energy efficiency program. It did not have a view of industry and energy use that could help shape the more efficient use of energy in our economy. The Energy Efficiency Opportunities Program was part of a framework. It took its place alongside a range of measures that pursued the benefits of using energy more efficiently. It stood alongside energy market reform, important measures that were put in place to help make our national energy market more efficient. It stood alongside the Solar Cities program, important ideas to introduce large-scale solar energy into the power supply of cities. It stood alongside improved appliance and building standards, at a time when many appliances were transitioning from older technology to new technology. In that context, television sets and TV screens become important. The TV screens of the 2004-05 era would become very hot very quickly and were very big consumers of energy. As that technology improved, those screens got better and better and began using lower and lower amounts of energy. That reduced energy consumption in the home became something that consumers took a great interest in. This program was an industrial counterpart to the domestic measures that had been in place to assist families with their own family budgets to manage more sensibly the electrical goods that they purchased.

The broad range of energy efficiency measures announced in the 2004 energy white paper had the potential to increase economic welfare and to lower the rate of growth in greenhouse emissions—so higher economic growth, lower greenhouse emissions, lower greenhouse gas intensity in our economy. These were all good measures, thoughtfully implemented by former Prime Minister Howard and his governing team, which included the current Minister for Industry, the member for Groom. These measures enjoyed bipartisan support. We often hear how measures introduced in this place become the subject of partisan debate and argument, but in 2004 when then Prime Minister Howard introduced his insightful Securing Australia's energy future white paper it received immediate bipartisan support.

I will go to some of the matters that were raised in that energy white paper, because Securing Australia's energy future became in every way the cornerstone of what happened next in sensible energy policy, designed to lower our economy's greenhouse gas intensity while lowering household bills, lowering the costs of doing business and making doing business a more sensible affair when it came to using electrons. I will quote from the Prime Minister's foreword to that very significant document, the first energy white paper our nation had produced:

The framework is backed up by substantial new initiatives, including additional incentives to encourage petroleum exploration in frontier areas; a comprehensive reform of fuel taxation to reduce the cost of fuel in business use; innovative trials of solar technology teamed with leading edge efficiency technologies to demonstrate "solar cities" of the future; a fund to generate at least $1.5 billion in investment to demonstrate low-emission technologies to reduce greenhouse gas emissions from our energy sector; extra effort to back up our world first Renewable Energy Target with new commercialisation assistance for emerging renewable technologies; and a wide ranging effort to ensure the careful, prudent use of our valuable energy resources by industry and the community.

That is the important point: 'a wide-ranging effort to ensure the careful, prudent use of our valuable energy resources by industry and the community'. That is direct language that speaks to the point of energy conservation. Energy conservation is about energy efficiency. The report goes on to say:

Improving Australia’s uptake of commercial energy efficiency opportunities has the potential to increase economic welfare and lower the rate of growth in greenhouse emissions. Increased energy efficiency reduces overall demand for energy and would also delay the need for new energy generation equipment.

This is an insightful report done 10 years ago at a time when our economy was growing rapidly, at a time when the greenhouse intensity of our economy was also growing lockstepped with that economic growth. This was an attempt by the Howard government to step back, to look at what was happening and to ask: 'What would be a light touch? What would be an appropriate set of measures that would help save business money, help reduce the cost of services to our community and, most importantly, therefore improve the economic lot of all concerned?'

That terrific report done 10 years ago asks the question: what is energy efficiency? It answers it very simply:

Energy efficiency refers to gaining the same or a higher level of useful output, using less energy input. Energy efficiency is important in both stationary and transport energy.

When we consider the repeal of this act, one might reasonably say, 'Let's repeal this act because it's failed so miserably in that cause. Let's get rid of it because, despite all of the work that went into the generation of the first energy white paper our country had ever seen, its conclusions were bunkum and inadequate. The policy framework had failed.' But guess what? The Energy Efficiency Opportunities Framework has proved to be remarkably successful. The former Department of Energy, Resources and Tourism engaged ACIL Tasman to review the Energy Efficiency Opportunities Program at the end of its first cycle of operation.

The 2013 full-cycle evaluation of the program found: 'It has been successful in its objectives of raising awareness of and embodying energy efficiency practices in Australian industry.' It came to that conclusion that it had done that for a full seven years. It also concluded: 'The program had been effective in driving down emissions and had saved industry approximately $323.2 million per year in power expenses.' This was a seven-year review. This is an energy efficiency program that had saved approximately $323.2 million per year in power expenses. But the government says: 'Let's get rid of that because that is red tape. Something that has saved industry over $300 million is something that we will get rid of because it is red tape.' I fully accept that the government has an objective to remove red tape, but sometimes we do have to step back and consider the effectiveness of programs.

When former Prime Minister Howard sat down with his ministers—and former Minister Macfarlane was one of them—to conclude what would be a light touch, an insightful way of putting in place energy conservation measures, this is what they came up with and, remarkably, what they saved was over $323 million per year in energy expenses. Corporations found government regulation to have been beneficial in providing a structure and a framework for companies to embed energy management systems.

In many ways, when this legislation was introduced Australian companies were not thinking of energy efficiency as part of a pragmatic side of asset management or, for that matter, a pragmatic response to business costs. So the program alerted businesses to this very important input whose costs could be controlled. ACIL Tasman also argued that the program had delivered benefits to participants well in excess of their costs. One would have thought that a not unreasonable measure of the effectiveness of business regulation is whether or not the benefit outweighs the cost. ACIL Tasman did not simply conclude that the benefit of this program outweighed its costs; they concluded that the benefits of this program over the full-cycle analysis had generated savings to industry in power expenses of over $300 million.

They also argued that there is still more benefit to be gained by continuing with the Energy Efficiency Opportunities Program through a second cycle. The program has significantly lifted the energy management capability and awareness of Australian businesses, with many corporations now reporting that key elements of the program are now standard business practice. We have a government, through a light touch and an insightful view, actively changing the culture of energy consumption and, one might as well say it, wastage and building better business practices. This is not simply an efficient program and an effective program, but you would have to reasonably conclude it is an incredibly insightful program. The independent full-cycle analysis report showed that corporations found that government regulation had been both beneficial in providing a structure and a framework for companies and it had also embedded energy management systems through which information and data could be used for further energy efficiency.

What kind of energy efficiencies? Those energy efficiencies were to be found in transport systems, building design, air-conditioning systems and the adoption and adaptation of new technologies. This is a successful program. It is a program that has been closed because of an ideological desire to get rid of red tape, even if that red tape delivers benefits that are lower than the costs of the administrative burden. That is a simply astonishing decision.

I hasten to add that the opposition will not oppose the government in this measure. We made very clear that the government is able to make these decisions even though we are simply dumbfounded by the logic that appears to underpin it. The government argues that the program has run its full course and it is no longer needed. Indeed, the explanatory memorandum which has been circulated reads as follows:

Through its application businesses have built up a bank of energy efficiency projects which can be considered based on current energy prices and specific circumstances. With energy prices driving companies to use energy more efficiently and the increased capacity to respond embedded in industry, the government considers this program, underpinned by the EEO legislative framework, to be no longer required.

Fantastic. So a low-cost administrative program that had generated deficiencies in excess of $320 million a year is replaced by a simple principle that says, 'Let's just put the price up. Let's let the price drive efficiency here instead of common sense, discussion, best business practice and allowing that best business practice to be shared amongst peer companies.

The explanatory memorandum goes on to say:

The Energy Efficiency Opportunities Program has been successful.

That is what the EM to this bill says. It says:

It has lifted energy management capability and awareness significantly with many corporations reporting that key elements of the program are now standard business practice. With energy productivity now core business for many Australian industries, industry is best placed to define the right processes and make decisions on how best to manage energy within their businesses. The energy market has also changed …

This is a government that will get rid of your red tape even if it saves you $320 million and will bang up the price because that is a much better way of forcing more efficient practices. It argues in this explanatory memorandum that electricity in particular has been the driver for better energy management and the need for the regulatory response, the low-cost fit-for-purpose regulatory response designed by former Prime Minister Howard and his energy minister Ian Macfarlane, unequivocally resolved by the independent consideration that has taken place unequivocally concluding that this program has been not just in the benefit of Australian industry but in the benefit of Australian consumers.

The full cycle report conservatively estimates that during its first cycle analysis the energy efficiency opportunities program was responsible for approximately 40 per cent of the energy efficiency improvements in the Australian industrial sector—four out of 10 of the energy efficiency measures came from the culture and practice that had been established by a program that cost less than $20 million and a program that saved year in, year out over $320 million. We will get rid of that and just bang up the price of energy and electricity because that is a much better way of saving energy.

The evidence suggests that there is even more benefit that could be gained by continuing with the energy efficiency program through to its second cycle. It is been estimated that it could be responsible for a further 20 per cent of energy efficiency improvements that would be due in that second cycle. So this low cost, insightfully designed, consistent framework from the very first energy white paper that our country had ever produced, countersigned by former Prime Minister Howard, brought into this place by the current energy minister Macfarlane, would have produced after the second seven-year cycle a total efficiency gain of some 60 per cent. You could reasonably conclude from that that the over $320 million per year that have been saved through this program would have continued each year through that further seven-year cycle. The government argues that they are closing down the program to remove unnecessary regulatory burden, remove that unnecessary regulatory burden and replace it by inefficiency. Yes, obtaining and processing information is costly. Yes, it would be an efficient for a policy to provide further information if the cost of doing so outweighs the benefit that could be expected. This place is not into the generation of red tape for the sake of red tape. The independent review found that this program's benefits were not outweighed by the cost of administration. In its first recommendation the independent review said:

We find that the EEO program to date has delivered benefits to participants well in excess of their costs. Significant improvements have been seen in the performance of participating corporations against the elements of the assessment framework. Many barriers to improved energy efficiency have been reduced and the identification of opportunities increasingly integrated into normal business operations.

Anywhere else this would be seen as simply an outstanding success, not only an outstanding success but a low-cost success delivering benefits to industry, to consumers and to all concerned.

The complementary nature of the EEO program flows from it being targeted and addressing information type market failures. Such failures while reduced do still remain an important barrier, and for this reason EEO program should completed second cycle.

That was independent review's recommendation.

The program enjoyed bipartisan support. The repeal of the program will be unhindered by the opposition, but let us not pretend that that means we support the repeal of this program. It will be unhindered by the opposition. There are still more benefits that could be derived from this program. The opposition has reluctantly concluded that ultimately the government does not want to support this initiative, so in that context we will allow the bill to pass. You cannot force a government to do something it does not want to do, even if it is a program that has a pedigree second to none. This is a program that looked at an economy that was consuming energy at a voracious rate. It looked at the energy future of our economy and it concluded there are several ways in which a government can respond to the situation. One way is to keep producing energy. Another way is a low-cost, fit-for-purpose regulatory approach that brought about best business practice—and in the design of that, former Prime Minister Howard and Minister Macfarlane are simply to be congratulated.

I will say this about the bill also. I was approached today in the corridor and asked for the opposition's view of the bill, whether we would allow it to pass or whether we would oppose it. One of the practices that has grown around the current government is that they do not talk to us. No communication had taken place of an official nature to ask our view of the bill. The communication that had taken place was incidental. Our view of the bill is that if the government want to do it, we will not oppose it. But we could have engaged in a discussion with the government because I feel the government cannot be aware of the savings that amount to over $320 million a year from this light touch, fit-for-purpose regulatory approach. I feel the government could not have considered the review that ACIL Tasman had conducted at taxpayer expense, where ACIL Tasman concluded that this was an 'efficient piece of regulation whose costs did not outweigh the benefits of the regulation'. It is a real pity that such a consideration did not take place. If the government wishes to change its view then we are all ears to that view. But we do accept the need for business to be liberated and we do accept the need for the reduction of red tape. The former government exercised that intent on many occasions, reducing red tape where it could.

It is also worth quoting again from the explanatory memorandum:

Rising energy prices and the improvement of internal energy management processes have reduced the need for the EEO legislation. Repealing the legislation would reduce the compliance costs of the 464 participating businesses by over $17 million per year.

I have no doubt at all that the 464 complying companies, who would also have taken their share of the $323 million savings that were inherent in this program, would probably have thought in better consideration some pieces of regulation bring with them benefits that massively outweigh the costs.

Looking forward in the energy environment is a difficult and in many ways a flawed thing. Let me explain what I mean by that. I am a Western Australian and our capital city of Perth has enjoyed electricity reticulation of some form or other in locations for a little over 130 years. Generation started from premises in what is now the CBD of Perth and within 50 years it is said that over 140 electricity supply undertakings were offering AC or DC transmissions. Electricity was, in those days, a nascent but diverse industry in a small and growing settlement.

Electricity generation, electricity use, electricity reticulation, electricity efficiency and energy efficiency is a growing business. It is a growing part of our economy. The government had insight in 2004 and 2005 to look to energy efficiency not simply as a one-off, a stunt, a gimmick or simply a bit of padding for a white paper but to have it form the core of the first energy white paper our country had ever produced. In 104 years of the Commonwealth government, in 104 years of the Federation, never before had an Australian government attempted to take an overarching view of the economy and of its energy needs, and to conclude a view about its energy future. As I have just related, that small, historic picture of the colony of Swan River and of Perth 140 years ago and what we knew to be the energy economy of 2004 is quite different to the energy economy of today.

In 2004, the iPad had not yet been released. In 2004, we all used a PC. It was plugged into a 240-volt outlet in the wall. We now mostly use iPads or some form of palm device. I see the member for Kooyong across the table using his now. It is an efficient way of communicating. I know that he will be communicating to his department now: 'I think we've got this wrong. I think the savings to our community through this particular energy efficiency measure are so profound and, as ACIL Tasman have independently found, the costs of the regulation were massively outweighed by the savings.' That device that would be recharged from a five-volt or a 10-volt recharging device is the very incarnation of the energy efficiency that we see today across our economy.

We are an economy that is growing, an economy that is robust and an economy that is currently reducing its energy consumption. That reduction in energy consumption is from a combination of matters. It is what makes it for the first time really difficult for governments to consider what our energy future will look like and one of the reasons that the government have begun constructing a new white paper. When the government arrive in this place with its new white paper, it will seek bipartisan support for the content of that new white paper. The opposition will ask: 'For how long? Will you support the measures in the new white paper for as long as it is fashionable or will it just be a fad?' Some of the things that we do need to be done in an enduring way.

Thought and consideration, and taxpayer dollars, went into the construction of the white paper, and into the framework that was negotiated with every state and territory government in the Commonwealth. Its processes, which, in its early days, were presented to 250 Australian companies, became the processes that saved money and cut costs for 464 companies, at a cost of $17 million. I am not saying that that cost is insignificant.

The opposition will allow this measure to pass. I am not saying that the government should not cut red tape. The opposition will allow this measure to pass. But the opposition would also say to the government: 'Please—think about these measures. Think carefully about the cost that it saves, the cost that you impose, and the culture of energy efficiency and energy saving that was created from the insightful steps first taken by Prime Minister Howard, because it is that culture of innovation and energy conservation that is the real saving. It is that culture that is the real benefit for our economy. And it is that culture that is destroyed by the removal of this program.'

Matt Williams (Hindmarsh, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Energy Efficiency Opportunities (Repeal) Bill 2014. I would like to acknowledge the comments of the previous speaker, the member for Brand, as it was great to see some bipartisan acknowledgement in the House—something we do not often see—whether he acknowledged the former Prime Minister, Mr John Howard, or the Minister for Industry, Ian Macfarlane, and the work that he has done. As we have said in the House, we have acknowledged former Labor Prime Ministers Hawke and Keating, and it would be great to see a new Labor Party going forward with such bold reforms and making a coherent argument for a better future.

But I will return to the bill at hand, which repeals the Energy Efficiency Opportunities Act 2006, which was introduced by the Howard government when Australia's use of energy was very different from today. We had rising energy prices then, in conjunction with regulated energy programs, and this has driven the improvement of energy management and productivity gains in industry over the last eight years. Although we do not like rising energy prices, this has been probably one of the most positive outcomes, in the sense that it is a market mechanism for businesses to improve their operations and efficiency and use of energy.

The consultation processes that have occurred indicate broad industry stakeholder support for repealing the Energy Efficiency Opportunities program, to reduce the regulatory burden on industry, acknowledging that market forces and other regulatory measures are driving similar energy efficiency outcomes. It is great to have the Parliamentary Secretary to the Prime Minister, Josh Frydenberg, here, because he has been championing deregulation and a more efficient market and economy with fewer compliance costs. This is one example of our program overall to reduce the compliance burden on companies.

In response to these changing factors, and in line with removing regulation where the desired outcomes can be, and have been, achieved through alternative measures such as market forces, the government decided to repeal the Energy Efficiency Opportunities Act 2006. The Energy Efficiency Opportunities program requires, as we might know, large energy using businesses to assess their energy use and identify cost-effective energy-saving opportunities. This is something that every company in Australia is now actively doing. This is what we wanted to happen, and it has occurred.

Energy prices have spiralled in the last few years, as I mentioned before. In South Australia, my home state—and it is great to see the member for Makin here today; he will know this just as well as me—electricity bills have risen 160 per cent under the state Labor government, and there are companies in my electorate who are concerned about tens of thousands in rises in electricity costs. Furthermore, and more worryingly, the average consumer faces another five per cent increase in power bills from 1 July. This price hike includes the $29.40 for Labor's solar feed-in tariffs in South Australia. A report by the Australian Energy Regulator recently confirmed that South Australian consumers face the highest electricity prices in the country. And I know why the member for Makin is concerned, because he does not want the consumers in his electorate—the small businesses that are working hard; the families that are doing it tough—to experience such high electricity costs. Well, he is right on that account.

What else have we got? We have got Labor's carbon tax that we all know too well. The cost of that to the economy was over $6 billion in its first year of operation. The carbon tax currently costs $24.15 per tonne and rises to $38 per tonne in 2019. And what has it done to emissions? Well, we know that domestic emissions under the carbon tax are projected to rise through to 2020. It has not succeeded in its objectives. And that is why we have to look at other methods, and that is why we are exploring other initiatives, whether the Emissions Reduction Fund or the Green Army.

But I want to return now to the actual bill at hand and to talk about energy management, because, as the previous speaker in this debate alluded to, companies have become quite successful in their energy management. That has become a standard business practice, whether through the use of the technology of sensor lighting or energy-saving globes, or energy efficiency. The companies have moved on, and, fortunately, this scheme has helped them. But when a scheme has succeeded, it is time to review it. And if it has done its job then why continue it? I could use the analogy of teaching a child to read or write: when they can read or write successfully, then we move on; we do not need to invest any further in those particular skills; there are other skills in other areas we need to develop.

The return on investment at some stage in the process and the scheme does diminish. Although the member for Brand laboured the fact of the successes of the program, he failed to acknowledge that things need to move on and be reviewed in an appropriate way. This is where Liberals manage taxpayers' money far better. We look at how taxpayers' money can best be spent. Compare that to our friends on the other side of the House. They like to continue throwing money around on more programs, with less diligence in the way they review them. It is almost like the denial that appears in Kafka's novels: everything goes on as if nothing has changed. We see that in the budget process that is going on currently.

But, to go back to energy management: importantly, we can now remove the regulatory burden, with annual savings of $17.7 million. This is not insignificant, in addition to all the other regulatory burdens that we are seeking to remove. The Emissions Reduction Fund that I mentioned before will help businesses and industry to take direct action to reduce emissions and improve their energy efficiency even further. The resources developed over the life of the program will continue to be made available to companies to assist them to build their energy management capacity.

The Energy Efficiency Exchange website will continue to support energy efficiency implementation by providing best practice information and other resources, so resources and knowledge are still there and still accessible for companies to utilise.

The government will continue to cooperatively explore options for improving energy productivity through the current energy white paper process. We have an ongoing series of looking at ways of doing things better, and this is one of them.

This program has done its job. It is now just an unnecessary regulatory burden on businesses for something that businesses already have market incentive to do and have as part of their core business. Repealing the bill will save $17 million, as I mentioned before, in compliance costs each year. This is important for our ongoing focus on reducing the regulatory burden and giving businesses more time to do what they do best.

Tony Zappia (Makin, Australian Labor Party, Shadow Parliamentary Secretary for Manufacturing) Share this | Link to this | Hansard source

Earlier this evening the member for Brand very clearly and thoroughly outlined the opposition's position with respect to this legislation. The Energy Efficiency Opportunities (Repeal) Bill will terminate the Energy Efficiency Opportunities Program on 29 June 2014 by repealing the Energy Efficiencies Opportunities Act of 2006.

I point out that this was an act of 2006 brought in by the previous coalition government under the leadership of Prime Minister John Howard. It was not a Labor initiative; in fact, whilst Labor, I understand, supported it at the time, it was indeed a coalition initiative. It seems quite strange that it is now a coalition government that is saying that it should be repealed—in other words, saying 'We don't need that legislation. We don't need that initiative and we are going to do away with it.'

I wonder if any of them have bothered to speak with the government members that were around in 2006—and I understand that Minister Macfarlane, who has been referred to in this legislation, was one of the people who supported it at the time. I would be interested to know what his view is on repealing this legislation.

Having said that, I will get back to the legislation before us. The program requires large energy-using businesses to assess their energy use and identify cost-effective energy savings opportunities. The program is mandatory for organisations that use over 0.5 petajoules of energy annually and may be undertaken voluntarily by medium energy users. For those organisations falling within the program, the act imposes mandatory compliance and reporting obligations. This legislation goes to the heart of energy use in this country which in turn, I believe, goes to the heart of climate change and what we as a nation can and should be doing with respect to climate change.

Labor clearly believes that the earth is warming and that the climate is changing. We accept the overwhelming body of scientific opinion that tells that man-made greenhouse gas emissions, of which CO2 is the most abundant, is contributing to global warming. We believe the scientific advice that atmospheric greenhouse gas levels are reaching dangerous levels that could have catastrophic effects on life on earth.

We accept that all nations, including and particularly Australia—being one of, if not the highest polluting countries per capita, in the world—have a responsibility to take action to reduce greenhouse gas emissions into the atmosphere. We do not accept that global warming is a con or a worldwide conspiracy of governments and tens of thousands of scientists from around the world. Australia's Chief Scientist, Professor Ian Chubb, on 15 May delivered an excellent address on the topic of climate change in which he defends the science of climate change and soundly dismisses the absurd views of those who deny the science.

Indeed it is both concerning and irresponsible that any government would ignore the advice of its own chief scientist and the multitude of credible government and university scientific bodies, whose advice we rely upon without challenge on all other matters. Yet on the question of climate change the advice is dismissed.

The climate change deniers are clearly in control of the Abbott government. They are not climate change sceptics but climate change deniers, because even a sceptic would take a precautionary approach to a possible risk, particularly a risk that has been identified by so many people not only in this country but from around the world. I know of no other country that openly denies or dismisses the risk that is being brought upon us by global warming and changes in weather patterns.

Indeed the Abbott government has gone to extraordinary lengths to erase any reference to climate change from its policies, its literature and government messaging. We no longer have a minister for climate change, and the government does not want to talk about climate change at the G20 conference in Australia later this year.

I say to members opposite and particularly the responsible ministers: the climate change debate will not go away just because you don't want to talk about it; and you can't make the concerns of the community go away or silence the scientists by airbrushing any reference to climate change from the government's communications.

Most members opposite are likely to be around to witness many of the climate changes that they now turn away from. Indeed some of those changes are already before us. What is the excuse going to themselves and to the people around them as to why they failed to take any action when they were in government?

Of even greater concern, however, is that the Abbott government, with the support of government members, including the member for Wentworth—and I point him out because I thought he was not a climate change denier—through legislation such as this bill is dismantling every greenhouse gas reduction initiative that is already in place. And the Abbott government does this at a time when the evidence is mounting and is more conclusive that greenhouse gas emissions need to be contained and also at a time that the rest of the world, including the two major emitters, the USA and China, are taking serious measures in the opposite direction.

I understand President Obama has only this week announced that he will bring in regulations to control carbon emissions, signalling that the effect of these regulations will see the closure of several coal fired power stations. Although the US was not a signatory to the Kyoto protocol, it has already reduced greenhouse gas emissions by around 17 per cent. That is much more than Australia. In fact, per capita, CO2 emissions in the US, I understand, are now at their lowest level in 50 years.

Likewise, China is also committing to worthwhile carbon reduction strategies. Seven Chinese cities and provinces accounting for about 250 million people are rolling out emissions trading schemes. China has also set itself both a renewable energy target and a carbon emissions target. I understand that each of its 30 provinces have been given individual targets to meet as well. China is also that world's leading investor in renewable energy, and I note that Japan is also now heavily investing in renewable energy.

Yet what is Australia doing? Rather than turning necessity into opportunity, we are doing the reverse. The Abbott government wants to axe the Clean Energy Finance Corporation, which has helped facilitate clean energy projects of around $2.5 billion in value, reducing atmospheric CO2 levels and delivering a net positive return to the taxpayer. Similar to this legislation, the Clean Energy Finance Corporation actually returns a profit to the community yet the government wants to repeal or axe this legislation—there is simply no logic in what this government does.

The government has also cut funding to Australia's science and research organisations, many of which do invaluable research related to climate change. We know that the government does not believe in putting a price on carbon but it now even wants to walk away from the Renewable Energy Target. The Renewable Energy Target has underpinned investments in renewable energy, creating some 24,000 jobs in the process and reducing energy prices. Yet members opposite and the fossil fuel energy companies are running a scare campaign claiming that renewable energy is driving up electricity prices. A close analysis of that claim will show that it is false and that renewable energy, both in the short-term and in the long-term, will help reduce power costs. The shadow minister for the environment, the member for Port Adelaide, clearly demonstrated and articulated that case in respect to the Renewable Energy Target only recently when he gave a speech on the question of how the Renewable Energy Target has affected power prices.

Scrapping the Australian Renewable Energy Agency, which I spoke about in this place only today, is also, I believe, a foolish move on the part of this government. The agency not only helps to create innovation in the renewable energy space but is creating employment and business opportunities at the same time. It also offers an alternative for those people employed in manufacturing to go into the renewable energy industry. As I pointed out when I spoke about this matter earlier today, in Germany currently there are more people employed in the renewable energy industry than there are in automotive manufacturing.

The carbon capture and storage flagship has also been heavily reduced by this government. I understand there is going to be an amalgamation of the National Environmental Research Program and the Australian Climate Change Science Program to form a new National Environment Science Program—note the deletion of the words 'climate change'. The National Low Emissions Coal Initiative is also going to be cut over the next two years. I note that there have been attempts to scrap the Clean Energy Finance Corporation as well as axe the Climate Commission. We have also seen that the government has appointed a climate change sceptic in Dick Warburton to review the Renewable Energy Target and there was also the attempt to scrap the Climate Change Authority.

This is a clear trend displayed by this government that simply wants to walk away from its responsibilities when it comes to climate change. How does this legislation affect the question of climate change? I would have thought that if you are going to have a system in place which is going to drive down energy prices as a result of the processes that major industries have to go through then in turn that would reduce their consumption of energy. In fact the member for Brand quite rightly pointed out several times in his address that it has saved industry some $323 million per year over the last few years in power costs. Compare that with the so-called $17 million it is going to save industry by deleting this process altogether. It seems as though that $17 million pales into insignificance in the savings to industry that arise.

The member for Brand also referred to the ACIL Tasman report that was done into this particular scheme. Page 2 of the report says:

While quantifying this additional impact is challenging, the weight of evidence suggests that the EEO Program has delivered a substantial additional benefit through improving the energy efficiency of the Australian industrial sector. Australian industry is also substantially more energy efficient now than it would have been had the EEO Program not been implemented. A conservative estimate is that, during the first cycle, the EEO Program was responsible for approximately 40 per cent of the energy efficiency improvements in the Australian industrial sector.

With those kinds of efficiencies it would be in the national interest, it would be in the environmental interest and it would also be in the interest of those industries to continue with their energy efficiency opportunities that this bill provides because if they reduce their power costs then clearly they also reduce their operating expenses. We know full well and we are reminded by members opposite time and time again that power costs are what are making Australian industries not competitive anymore. So if we are going to reduce their power costs then we will help them remain competitive. In fact, I have no doubt we will help them remain competitive; we will give them the opportunity to perhaps show some leadership and be able to compete with manufacturers across the world.

This legislation was introduced for that reason, for good reason, in 2006 by the Howard government. And, quite frankly, as the ACIL Tasman report says, it should continue into the future and certainly into a second phase. The report does not recommend that it is cut right now.

Energy efficiency does matter. It matters to industries; it matters to the country; it matters to business; it matters to productivity. And we have a system in place that is driving energy efficiency up in respect of the businesses of this country. I believe it is a foolish move on the part of this government to do away with—for simplistic, ideological reasons, such as: wanting to cut red tape or not believing in climate change—policy initiatives that are working for the benefit of the Australian community

Kelvin Thomson (Wills, Australian Labor Party) Share this | Link to this | Hansard source

It is a pleasure to follow and support the remarks of the member for Makin. The Energy Efficiency Opportunities Repeal Bill will terminate the Energy Efficiency Opportunities Program on 29 June 2014 by repealing the Energy Efficiency Opportunities Act 2006.

The EEO program is designed to address market failure relating to the availability and use of energy efficiency information. The program requires large energy using businesses to assess their energy use and identify cost-effective energy savings opportunities. The EEO program has been effective in driving down emissions, and has saved industry approximately $323 million per year in power expenses.

The independent ACIL Tasman review of the program found that it has delivered benefits to participants well in excess of their costs. The 2013 full cycle evaluation of the EEO program found that: it has been successful in its objectives of raising awareness of and embedding energy efficiency practices in Australian industry since 2006, when the Howard government introduced it; the program has been effective in driving down emissions, and has saved industry significant money in power expenses; corporations found that government regulation was beneficial in providing a structure and framework for companies to embed energy management systems; it has delivered benefits to participants well in excess of their costs; and there is still more benefit to be gained by continuing with the program through the second cycle.

Australia's backtracking of climate policy progress has been highlighted by the release of the GLOBE Climate Legislation Study in February 2013. The study of 66 countries across the globe, in which the European Union was considered one entity, found Australia is the only country to be taking negative legislative action in climate policy.

This bill is an ideological attack on policies expressly designed to combat climate change. It is a retrograde step at a time when the Intergovernmental Panel on Climate Change recently released its working group III report and warned that efforts to reduce carbon emissions have not been able to stop greenhouse gases reaching unprecedented levels and that energy efficiency improvements have not kept up with economic growth. 'We have a window of opportunity for the next decade, and maximum the next two decades' to act at moderate costs, Ottmar Edenhofer, co-chair of a Berlin meeting of the IPCC, said.

IPCC scenarios now show that world emissions of greenhouse gases would need to peak soon and tumble by between 40 and 70 per cent from 2010 levels by 2050, and then close to zero by 2100, to keep temperature rises below two degrees Celsius. The IPCC says it is at least 95 per cent probable that man-made emissions, rather than natural variations, are the main cause of global warming. Yet here we are in this country with a Prime Minster and a government who want to repeal the carbon price Labor implemented and hobble efforts to promote renewable energy and energy efficiency.

Cuts to renewable energy and energy efficiency risk keeping Australian workers and businesses using 19th century technology to address a 21st century challenge. Indeed even in the 19th century, physicists like John Tyndall demonstrated and quantified the fact that visually transparent gases—like carbon dioxide, the Prime Minister's 'invisible substance'—both absorb and emit infrared radiation. Tyndall used these results to explain the greenhouse effect in a public lecture that he presented in 1863 entitled 'On radiation through the Earth's atmosphere'. Tyndall stated:

… it is here pointed out that a comparatively slight change in the variable constituents of our atmosphere, by permitting free access of solar heat to the earth, and checking the outflow of terrestrial heat towards space, would produce changes of climate as great as those which the discoveries of geology reveal.

Mid-19th century scientists like Tyndall understood that slight changes in the quantity of atmospheric gases such as carbon dioxide could produce changes in climate as profound as those of the ice ages, discovered a few decades earlier by Louis Agassiz, the Swiss-American natural historian. Yet, today in this country, despite the additional scientific evidence and understanding accumulated over a century and a half, we have a government whose leader, the Prime Minister, has ridiculed climate change, and said that carbon dioxide is weightless, invisible and cannot be measured, and claims that an emissions trading scheme is, 'a so-called market in the non-delivery of an invisible substance to no-one'.

In opposition, the Prime Minister promoted these irrational beliefs to the public. Disastrously, his government has introduced these same beliefs as policies and has directed government departments to reject the verifiable findings of scientists while accepting his delusions as fact. For example, the issues paper that informs the 2014 agriculture white paper omits any significant mention of climate change, despite the 2011 CSIRO report, Climate change: science and solutions for Australia that states, 'There is a national imperative to equip Australian agriculture to be prepared to adapt to climate change'. By comparison, the United States, a major competitor in the global market for agricultural products, accepts the reality of climate change. As the US agriculture secretary Tom Visack has said:

… the fact is, across America, farmers and ranchers and forest landowners are seeing the beginning chapter of what will be a long-term challenge posed by a changing climate.

And:

This problem is not going to go away on its own. That's why America must take steps now to adapt.

I doubt that there is even the slightest chance that we would hear such a statement from the Australian Minister for Agriculture.

Recently published evidence indicates the West Antarctic ice sheet is starting to collapse and will, with a high probability, in time produce a sea level rise of up to four metres. The evidence is being entirely ignored by this government. The government says its punitive budget measures will protect future generations from financial hardship. Can the government say what a sea level rise of four metres would cost present and future generations when billions of dollars of coastal assets, public and private, are likely to be inundated in the coming decades?

The collapse of the West Antarctic ice sheet is not some ivory tower speculation; it is a process that has very likely been initiated and is now almost certainly being accelerated by global warming driven by carbon dioxide emissions. Note that I say 'very likely' and 'almost certainly' to describe the probability of those events, since the prediction of the collapse of the West Antarctic ice sheet is based upon verifiable evidence and that very serious conclusion is reached by inductive reasoning rather than the assertion of a belief or an unfounded opinion that is so typical of members of this government. The changes driving the collapse of the West Antarctic ice sheet are linked to the documented decline in winter rainfall in Western Australia, yet the Prime Minister who denies reality and preaches from a denier's handbook, is doing all that he can to dismantle measures to reduce carbon dioxide emissions.

I note that the member for Forrest claimed in a speech made in this place on 26 February that the price on carbon and the tax on refrigerants—substances that are strong greenhouse gases—had a significant impact on costs in the dairy industry and that she supported the Prime Minister's intention to remove these imposts. She said: 'Let me tell you that the carbon tax had a significant impact on the dairy industry.' I wonder if the member for Forrest has a similar opinion about the costs of greenhouse gas emissions, given that the CSIRO estimates that global warming is almost certainly responsible for about half of the 15 per cent decline in rainfall in her electorate in south-west Western Australia since the mid-1970s.

Scientists from separate teams from NASA and the University of Washington are to publish peer-reviewed papers in the Journal of Geophysical Research and the journal Science respectively that show that the collapse of the West Antarctic ice sheet is under way and is unstoppable. Those papers report that the collapse is being driven by climate change and is already causing sea-level rise at a much faster rate than scientists had anticipated. Both papers state that the contact between the glaciers that form the ice sheet and relatively warmer water produced by global warming was the main driver of the collapse.

Dr Eric Rignot, Professor of Earth System Science in the School of Physical Sciences at the University of California, Irvine, and Senior Research Scientist at NASA's Jet Propulsion Laboratory, has stated:

A large sector of the Western Antarctic ice sheet has gone into a state of irreversible retreat. It has passed the point of no return.

He warned:

This retreat will have major consequences for sea level rise worldwide.

It should be understood that the ice sheet melts as it retreats and the melt water then flows into the oceans, raising sea levels. What sort of a gift is that to give to the future?

The collapse of the West Antarctic ice sheet is, as I said, linked to the same process that is driving the decline in rainfall in south-west Western Australia and the southern states, including my home state of Victoria. A report in New Scientist from 11 May states that Dr Nerilie Abram, who is a QE2 Research Fellow at the ANU College of Physical and Mathematical Sciences, has shown that greenhouse gas emissions are helping to spin up a giant vortex of winds around Antarctica that are exposing the western parts of the continent to higher temperatures and dragging winter rain away from Western Australia.

Dr Abram's work is supported by an earlier paper published in the Annals of Glaciology in 2004 by Broeke and van Lipzig that shows that the strengthening of the circumpolar vortex results in asynchronous change, with cooling over East Antarctica and warming over West Antarctica, a process that is exposing the West Antarctic ice sheet to higher temperatures and driving its collapse. Together these reports reinforce the message that governments everywhere must take immediate action to rapidly curtail greenhouse gas emissions by reducing the consumption of coal, oil and gas and arresting land clearing.

It is regrettable that we need to build up our defences against the growing threat from global warming, but this is a government that has set about dismantling Australia's defences against climate change as it reduces funding for institutions like the CSIRO, shuts down altogether the Climate Commission, de-funds the Clean Technology Innovation Program, abolishes the Clean Energy Finance Corporation, abolishes the Australian Renewable Energy Agency, terminates the price on carbon and now seeks to undermine the renewable energy target, and repeals the Energy Efficiency Opportunities Program. It seems to me that this is a very seriously short-sighted and foolish approach. I regret that the government has been in the process of reducing our defences in this way. I hope it rethinks its position in the months and years ahead and enables Australia to be a good international citizen but also looks after our own citizens, looks after future generations, looks after our farmers, looks after people who will be adversely affected by sea level rise or by urban heatwaves, and takes a different approach than the one which is inherent in this bill.

Julie Owens (Parramatta, Australian Labor Party, Shadow Parliamentary Secretary for Small Business) Share this | Link to this | Hansard source

I rise to speak on the Energy Efficiency Opportunities (Repeal) Bill 2014. I thank the member for Wills for reminding me of those comments by the now Prime Minister Tony Abbott when he was opposition leader about carbon dioxide being odourless, colourless and I think he said weightless as well, the implication being it cannot be dangerous. Of course, it is not weightless; it does have weight, it is heavier than air and, in the right sorts of concentrations, it is used quite often to euthanise animals. That is clearly quite a ridiculous position to take. I contrast that to the extraordinary knowledge and skill of our science community. Early in May, some German scientists and two scientists from the ANU discovered a new element. That does not happen very often. There are only a small number of them in the world and we have found most of them, but they discovered a new one, No. 117. I think they managed to create four atoms which lasted about one-twelfth of a second. For those of us who enjoy chemistry, it was an extraordinarily exciting day. There was quite a bit of celebration in my office among some of my staff; others were a bit bemused by it. When we have scientists of that calibre in this country it is surprising that the government does not take more notice of their wisdom and their warnings and the evidence they produce on the nature of man-made climate change.

It is hard to know whether the repeal of the Energy Efficiency Opportunities Bill is due to an ideological opposition and refusal to believe in climate change or rather an ideological hatred of regulation itself, maybe misplaced. It is hard to know which of those two ideologies is responsible—perhaps both—for the repeal of this bill. Certainly in climate change Australia is acting in a completely opposite direction from the rest of the world. Australia's backtracking of climate policy progression has been highlighted by the release of the GLOBE Climate Legislation Study, February 2013. The study of 66 countries across the globe, where the European Union was considered one entity, found Australia was the only country to be taking negative legislative action on climate policy. All the other countries are moving forward.

There are two tragedies in that. One is that Australia is not playing its role with this new government in addressing climate change. The other is that Australia is missing out on this incredible opportunity that new technologies bring, as the rest of the world move towards new renewable technology and enormous wealth generation. You can see its growth already right across the world. You can see in silicon valley and in Singapore, for example, where they are investing heavily, trying to be the owners of the New World, trying to make sure the patents belong to their own nationals. We in Australia are walking away from it. We are walking away from our future. We are ripping up incredibly important pieces of infrastructure which support the development of new technologies such as the price on carbon, the Renewable Energy Target and even this rather modest piece of legislation.

This legislation is incredibly important. It was originally introduced to this parliament by the John Howard government. It grew out of Australia's first white paper on energy efficiency in 2004, was introduced in 2006 and had bipartisan support across this parliament. Both sides of this House agreed that this was an incredibly important thing to do because it ensured that our biggest companies, our biggest businesses addressed their need to reduce their energy costs. In fact, it addressed a market failure, according to the explanatory memorandum back in 2006, relating to the availability and use of energy efficiency information. It required large businesses to assess their energy use and to identify cost-effective energy savings opportunities. It was mandatory for organisations that used over 0.5 petajoules of energy annually and it could be undertaken voluntarily by medium energy users as well.

Quite often in this House, particularly from people who are now on the government side, there is some scepticism about renewable energy and becoming more energy efficient. I would like to make this point. In many cases the way we use energy is historical. In the US, for example, power plugs in the home do not have switches. They just plug straight into the wall, which means that you can never turn them off at the wall—you have to unplug them. This means that any appliance that is plugged in stays on all the time, constantly using a little bit of energy, with transformers warming up and using energy even when they were not being used. It is an incredible waste of energy but that is the way it was always done and that is the way their appliances come, so that is the way they do things.

In Australia, we have plugs on the wall but we also have switches on the wall and are able to turn ours off, but quite often we do not. Even in my household where I have been reducing energy use and managing to keep my electricity bills relatively stable for the last six years, I discovered there was one charging device which I had left on for nearly two years. I used the appliance maybe twice a week, so it probably needed only 10 minutes of charging of week. So for two years that charger has been draining energy unnecessarily.

Recently I was talking to a woman about the price of electricity and how, now that it has gone up, she has to go around and turn the lights off in rooms she is not in. For years she has left the lights on in other rooms. It is not something we did as children because we were struggling financially. Even as children when electricity prices were low, we turned our lights off when we were not in the room, but this woman had a habit. So there is waste built into the way we do things. There is waste built into the use of old technology in lighting and in air conditioning, in letting heat dissipate rather than recycling it. There are all sorts of ways that business and households historically have wasted energy because we did not think it was a problem. The point of this program was to cause the biggest energy users in the country to consider the way they used energy and to find ways to reduce its use. It has been incredibly effective.

The Energy Efficiency Opportunities Program has been effective in driving down emissions and has saved industry approximately $323.2 million per year in power expenses. So this is a bit of regulation that requires business to actually do a bit of work, to do a bit of planning, to look at their circumstances, to come up with a plan. But it has saved them $323.2 million per year in power expenses. The program has been reviewed independently by ACIL Tasman, and the review of the program found that it delivered benefits to participants well in excess of their costs—an extraordinary success for this quite simple, highly targeted program that just looked at the energy use of major users of power.

I heard the government speakers talk about the need to reduce red tape. Yes, of course. Of course we do. We did that when we were in government. In fact, we were remarkably effective and reduced compliance costs by about $6 billion per year across the COAG reform agreements. But regulation, where it actually provides a benefit in excess of its costs, is actually good regulation. The government is talking about managing to save the business sector $17 million per year in compliance costs. That is $17 million per year in compliance costs for a saving in power bills of $323.2 million. That is $322 million per year in savings and a $17 million per year compliance burden. I think in anyone's language that is a success.

There has also been quite a lot of unhappiness in the industry because, as has become the pattern with this government, there was not consultation on this. In fact, according to energy efficiency groups it was a surprise. Media reports and quotes from them use words like 'shocked' and 'livid' about the fact that the government had cut funding to a Howard-era program that made it mandatory for businesses using large amounts of energy to improve their efficiency. The Sydney Morning Herald reported:

The Energy Efficiency Council said members were ''livid'' about the surprise cut in funding of millions of dollars for the Energy Efficiency Opportunities program in the mid-year economic forecast.

There is a quote from Rob Murray-Leach, who is the Chief Executive of the Energy Efficiency Council, who said:

The Abbott government has just created huge uncertainty in a fragile economy—people are absolutely livid … The government haven't scrapped the Energy Efficiency Opportunities program because it's legislated, but they've cut funding to administer the program after June 2014. People are confused and very, very angry.

It is not surprising that that is the case. The Energy Efficiency Council also points out that every dollar invested in the program delivered $2.90 of benefits to Australian business, and that cutting funding to help business save energy was just going to hurt the economy.

I would like to stress again that this was an incredibly effective program introduced in the Howard years as a result of Australia's first energy efficiency white paper. It has been incredibly effective, resulting in savings to industry of approximately $323.2 million per year for, in the government's own words, a compliance cost of $17 million. We know, from looking at other estimations of compliance costs, that there will be some very rubbery figures in there. I have not been through the regulatory impact statement on this one to see if it is as shonky as the one for the Paid Parental Leave Amendment Bill. But, given their track record, I think we can assume that there is a lot of fat, even in that compliance burden of $17 million. But savings of $17 million in compliance that has managed to save an industry $323 million is a false economy at best.

I would suggest to the government that in future it consult more broadly on matters like this. We will support the bill and let it go through the House because there are many more pressing matters for us, and the government does need to be able to govern. But they might like to just reconsider their ideology against regulation, particularly if it is effective, and they might like to rethink their attitude to climate change as well. The rest of the world is acting very fast, and if we do not act with them we will be left behind in terms of not just our environment but our ability to compete in the world that is coming through new technology.

Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Energy Efficiency Opportunities (Repeal) Bill 2014. Before I start on the bill I would like to congratulate the member for Parramatta because she just said something that was very correct, and that is that the government needs to get on and govern. She is exactly right. We appreciate the opposition's support on this bill. But we would appreciate the opposition also supporting us to get rid of the carbon tax and to help pass a lot of other legislation that they are currently blocking in the Senate. At the moment the opposition are stopping us from getting on and governing this country.

Turning back to the bill, this bill repeals the Energy Efficiency Operations Act 2006. That act created a compulsory compliance and reporting obligation on 460-odd of the largest energy users in the country. So we in government said to those companies: 'We want you to write to us and tell us how you are going to become more energy efficient.' When I read through some of the sections of the original act, I could not help but wonder what was in the water down here in 2006 that such legislation was actually passed. I will give you the example of sections 26 and 28 of the act. Section 27(1) of the act authorises a government bureaucrat to enter any premises during normal business hours or, if the entry is made under a monitoring warrant, at any time specified for that warrant. So the act we are repealing allows government bureaucrats to enter those businesses' premises to check if they have filled their forms out properly.

It gets more bizarre. I move on to section 28 of the act. It says it gives the powers for government bureaucrats when they enter a business premises. It says they have 'the power to search the premises for any thing on the premises that may relate to compliance with this act'. Under subsection (1)(b), it gives government bureaucrats 'the power to examine any activity conducted on the premises that may relate to information provided' under the act. Subsection (1)(c) gives 'the power to examine any thing on the premises that may relate to information'. Subsection (1)(d) gives 'the power to take photographs or make video or audio recordings' or even sketches. That is right: this act gives a government bureaucrat the power to enter premises and take sketches of what is going on in case the company has not filled out its government forms correctly yet. Subsection (1)(e) also provides 'the power to inspect any document on the premises that may relate to information provided' on this government-required form. There is 'the power to take extracts from, or make copies of, any such document' and 'the power to take onto the premises such equipment and materials as the authorised officer'—read government bureaucrat—'requires for the purpose of exercising powers in relation to the premises'. And it provides criminal penalties for a private business getting on with work and getting on with driving the economy, driving economic growth and creating employment and exports. This act creates criminal penalties for these people unless they comply with this act to provide the government with a report about how they are going to increase their efficiency. Of course, it goes on. Under section 37(1) of the act, those companies are required to provide that government bureaucrat 'with all reasonable facilities and assistance for the effective exercise' of his powers.

This reads like something out of 'Collectivist Centralised Economic Planning 101'. Then there is section 15 of the act, which requires private businesses to set out their five-year plan and report that five-year plan to the government. Firstly, we all know where we have heard 'five-year plans' before. They have been constantly used by centralised central planners from way back. They love those five-year plans. But that just shows how ridiculous this legislation is, because the technology in energy efficiency—the technology we are seeing in compact fluorescent globes, in LEDs, in dimmable systems, in dimmable PLs and in motion sensors—is moving so quickly. To think that you have to do a plan for five years and you sit there and leave it and do nothing in that for five years time and that creates all this great efficiency is just absolute nonsense. That is why this bill needs to pass the House, and that is why this original legislation should be repealed in great haste.

I asked myself: what happened in 2006 that allowed this legislation to go through? Going back to the explanatory memorandum of the bill, it notes that even the Productivity Commission was against this. It says that the Productivity Commission 'had strong in-principle reservations' about these energy efficiency opportunity reporting requirements and that the program targeted 'high-energy users as opposed to inefficient energy users, was counterintuitive and counter evidentiary on the basis that energy intensive businesses already have a strong incentive to use energy efficiently'.

So what was in the water here back in 2006? We are talking about energy efficiency, when as a nation we have 111 years supply of black coal, and we have over 539 years supply of brown coal in our nation. So what drove this back in 2006? If we remember 2006, that was the height of the climate fear and the hysteria. The public were told that the science was settled; the time for debate was over. We were told that the drought was endless. We were told that even the rains that fall were not going to fill our dams. We were told that the polar icecaps were going to melt away by 2013. We were told that there would be an increase in the frequency and intensity of tropical cyclones. We were told that children in Europe would grow up without knowing what snow was. We were told that the warming would continue and that there was a strong correlation, a locked correlation, between CO2 increases and temperature increases.

We can look back from 2014 in a rational way and reflect that this was nothing more than alarmist nonsense. We know that the rains fell. Our dams are full—full to the top—again throughout the country. We know that the icecaps have not melted away. In fact, today there are 767,000 square kilometres of additional ice over and above the 1981 to 2000 average. There is more ice than there was back then. We also know that there has been no increase whatsoever in the incidence and intensity of tropical cyclones. In fact, you can look at the statistics from the Bureau of Meteorology. You actually see a decline. But this was the environment back in 2007, so there perhaps is some excuse for why this legislation was brought in.

I have heard speakers from the opposition say that this scheme actually saved $300 million, but they forget something. They think that it was driven by government regulations. They simply do not understand how markets work or how business thinks, and they lack belief in free markets and competition. They fail to understand our economic history—that efficiency improvements and the advances that we have seen are not driven by government bureaucrats forcing firms to fill out forms; they are driven by the requirement of firms to be in competition with each other. Innovation, experimentation, risk taking, entrepreneurial effort—that is what drives efficiency in markets, not government regulation. Just look at the energy efficiency and other efficiency improvements we have seen in our lifetimes—in communications, in photography, in motor vehicles and in jet aircraft, just to name a few. These efficiency improvements did not arise because central planning required firms to fill out some form to submit to some government bureaucrat to say how they were going to achieve these efficiencies. It was the complete opposite: they came about through letting firms get on with the job. That is what this repeal bill does. We do not want firms in this country to be wasting their time filling out bureaucratic, inefficient forms. We want them to get on with the job of being efficient. That efficiency is driven by the market. It is driven by competition.

There have been many calls for this act to be repealed. A study that was done said that over 60 per cent of companies that are required to fill out these bureaucratic government forms said, 'Please stop it now.' They basically said that over 40 per cent of the government forms that they have been required to fill out over the past few years were completely and utterly useless. Businesses can allocate their time better than in dealing with red tape and green tape. This will save firms $17.7 million and let them reinvest their time in getting on with doing the job and being efficient, as they have done for decades.

While we are on the subject of energy efficiency, the great irony is that, while we are asking private firms to fill out government forms to explain how they will increase their efficiency, we in government have been running red-tape schemes which have actually decreased the efficiency of electricity generation in this country. I refer to the RET. We are simply mandating the production of electricity through an inefficient source. The fact is: generating electricity from wind turbines is inefficient. No-one would build a wind turbine unless they were given a government subsidy. Many of the promoters of these schemes, mainly generated from overseas, have been running around the parliament in New South Wales and here claiming that, if we have this inefficient method of production, it will somehow lower prices. They talk about lowering the wholesale price. This is simply voodoo economics. The only things that count are the cost of production, the cost of distribution and the competition to get it through to the retail level.

I hear the member for Parramatta down there laughing. The member for Parramatta supports a carbon tax which pushes up prices by $550 for every household in her electorate. They sit there and they think this is funny—a $550 hit on every household in the electorate of Parramatta. They want to impose more red and green tape. They are not satisfied. They want to continue to push costs up.

If we are going to sit here in this parliament and talk about energy efficiency, we have to lead by example. We cannot mandate in this country inefficient methods of production, irrespective of what they are, because that will be paid for, in higher prices, by the consumer. That is exactly what is happening in this country today. That is why we need this bill. It should be passed. I commend this bill to the House. The original act needs to be repealed. We want to free the hands of our companies, take away the red tape, take away the green tape and let them get on with doing what they do—let them get on with business, let them get on with being efficient, without having to fill in bureaucratic forms to report to some government agency. I commend this bill to the House.

Pat Conroy (Charlton, Australian Labor Party) Share this | Link to this | Hansard source

In the time allowed tonight in this second reading debate on the Energy Efficiency Opportunities (Repeal) Bill 2014, I want to comment, in passing, on the previous speaker—who is walking away—and his abandonment of the only three environmental policies that the Howard government ever implemented with any credibility. They were the Renewable Energy Target, the Energy Efficiency Opportunities Act, which we are discussing tonight, and the emissions trading scheme. These three policies were the bedrock of the Howard government's climate change agenda, and the previous speaker derided them because he does not accept the science of climate change. Well, I have got some news for the previous speaker: 97 per cent of published scientific papers in this area, by climate change experts, have concluded that climate change is real, that it is occurring and that it is man-made. To the previous speaker, I would rather be on the side of NASA, CSIRO and the Bureau of Meteorology than on the side of Alan Jones and the cranks that you have been quoting. Scientists now say that climate change is real and man-made with a certainty of 95 per cent. To put that into context, that is the same certainty with which they say tobacco causes cancer. But that is not good enough for the previous speaker or, quite frankly, for the coalition, who reject the science of climate change because it is inconvenient for some and others are mired in Alan Jones radio talkback land.

What was more even more incredible was the hypocrisy about the power of markets in this area. This is a party that is rejecting a market based mechanism to combat climate change, also known as an emissions trading scheme, as first proposed by the Prime Minister Howard and adopted by the Labor Party, as recommended by Lord Nicholas Stern, Ross Garnaut, Paul Krugman and every serious economist, and instead it has endorsed Direct Action, the worst form of Soviet command and control since Stalinist Russia, where the government dictates which businesses will reduce their emissions and pays them accordingly, but no other emissions count. Under Direct Action, which is supposed to replace legislation and policies like this, each company is supposed to put in their emissions-intensity baseline every year and report against it. So I do not see how this is reducing red tape if you are replacing it with something else and then picking only a few companies to reduce their emissions.

As I said at the beginning, this legislation yet again demonstrates the intellectual bankruptcy of the coalition— (Time expired)