Michelle Rowland (Greenway, Australian Labor Party, Shadow Assistant Minister for Communications) Share this | Link to this | Hansard source

I rise to grieve about the absolute duplicity and dishonesty of this government and in particular the communications minister with regard to the National Broadband Network long-term satellite service. The NBN satellites comprise one part of NBN's delivery infrastructure; the other two being the fixed line network and the fixed wireless network. These long-term KA-band NBN satellites will replace the interim NBN satellite service. The former Labor government announced in February 2012 that it would build these satellites to provide high-speed broadband to regional and remote Australia with a launch date due for 2015. The reason Labor embarked on constructing these long-term satellites was because we believe that all Australians, regardless of where they live, deserve quality broadband, which was not provided during the Howard years.

The massive take-up of broadband services on the interim satellite service reflected how poorly served remote Australia was during the Howard years when regional communities were left with a substandard service via the Australian Broadband Guarantee. This was one of the many utter failures of the Howard government when it came to communications infrastructure throughout Australia. It is for these reasons that Labor launched the interim satellite service and announce the construction and launch of the long-term satellite service. This journey took another step forward last Thursday when the Minister for Communications announced the specific launch date for the first of these satellites, saying:

Blasting off from French Guiana on 1 October 2015, the launch date is a huge step forward for those living in regional and remote Australia, with more than 200,000 homes and businesses set to be covered.

The nbn long term satellite service will be a game changer for those living in the bush and will help bridge the digital divide currently experienced by many.

The minister's description of the long-term satellite service as a game-changer which will be a huge step forward for those living in regional and remote Australia came as somewhat of a surprise to me. That is because the member for Wentworth, when was the shadow minister for communications and was on a crusade to demolish the NBN, condemned these satellites as a 'Rolls Royce solution' and as 'wasteful spending'. What was then wasteful spending is now a game changer for regional and remote Australia. The inconsistency is breathtaking.

But the Minister's contempt for the long term satellite service did not stop there. In 2012, the member for Wentworth argued that the NBN Co should be renting capacity on existing satellites, rather than building and launching its own satellites. He said, 'There is enough capacity on private satellites already in orbit or scheduled for launch for the NBN to deliver broadband to the 200,000 or so premises in remote Australia, without building its own.' He also said at the time, 'Once again the NBN is investing more than it is needed to achieve its mission.' And he was not done there, tweeting on 7 February 2012, 'Why buy when you can rent?'

But as we all know, he was wrong about existing capacity being sufficient to provide broadband, and you do not need to take my word for it. Optus contradicted the minister on this at the time, as reported in the Sydney Morning Herald, on 13 February 2012, we see the example of what I call 'the Turnbull triumvirate', where he criticises, then he takes credit, and then he blames everybody else. Have a look at Lucy Battersby's story, 'NBN satellite stoush: Malcolm Turnbull wrong, says Optus':

Optus chief executive Paul O'Sullivan has defended NBN Co's decision to construct and launch its own satellites, saying his company would not be able to provide the same quality of broadband service on its existing commercial satellites.

The satellites which NBN Co is building are specifically built to carry broadband traffic, while Optus's satellites are designed to carry television and video services, O'Sullivan explained. Opposition communications spokesman Malcolm Turnbull last week criticised NBN Co for building new machinery instead of buying capacity on existing services. When these two NBN satellites are launched, there will be huge spare capacity on them.

Once again, the NBN is investing more than is needed to achieve its mission. Once again, the incentive will be for this giant new Government monopoly to intrude into other markets, and undermine existing private sector providers.

The article continues, and this is instructive:

However Mr O'Sullivan said NBN Co had made the right decision because of technical differences between different satellite types.

Part of the issue around this debate is that there are fundamental differences in satellite between the Ku band, which we use, and the Ka band, which is increasingly used internationally for broadband services.

The reason I want to go into detail on that point has to do with the article 'NBN rebuffs slow net anxieties', which appeared in The Australian on 3 August. We have NBN Chief Customer Officer, John Simon, saying, in relation to these two different bands, that they are 'like comparing apples with lemons'. He said:

The interim service involves leasing bandwidth from other providers to deliver a temporary service to around 32, 000 customers. By contrast, the long-term service will see two dedicated satellites launched into space purely to serve the needs of broadband users in the bush. Mr Simon described the long-term service as 'a real game-changer' for rural and remote customers.

The article goes on to say:

Communications Minister Malcolm Turnbull also sought to distinguish between the interim and long-term services, blaming in a blog post to appear on his website today the previous Labor government.

Of course he did. He is probably writing one right now. I also refer to the satellite scheduled for launch that was referred to by the member for Wentworth at the time, which was NewSat's Jabiru. NewSat has since gone into liquidation, as the Sydney Morning Herald reported in April this year:

NBN Co's former chief executive has defended the decision to build its own satellites as the much touted private-sector alternative, Melbourne-based NewSat, files for bankruptcy and heads into voluntary administration amid allegations of mismanagement and mis-spending. NewSat was repeatedly mentioned as a private-sector solution for NBN Co's satellite services for several years by its chief executive … and even by Communications Minister Malcolm Turnbull, who described the company as 'pretty capable'.

What an eye to future from this minister. We saw this lack of vision, this lack of forward planning, in the minister's much criticised cost benefit analysis of the NBN. It just reflects what an eye to the future this minister does not have.

We know from the cost-benefit analysis, which somehow concluded that Australia's bandwidth needs will actually decrease over time, that according to the minister in 2023, in less than 10 years' time, the bandwidth requirements of a median household will be 15 megabits per second. As the CEO of the Singapore telco MyRepublic, Malcolm Rodrigues, said last week to the AFR:

I don't know what [the government] is doing on the other policy fronts but on this—

that is, their management of the NBN—

they've completely stuffed it … More and more Australians will leave the country looking for jobs and you'll continue to be a resource based economy—the hope of building IT jobs and a digital economy will kind of be more difficult to achieve.

Fortunately, the contracts for the build and launch of these satellites had been finalised, and this government was not able to tear them up.

Labor's new satellites will transform health and education delivery for the bush, and improve the way businesses do business. Labor understands that broadband is an essential utility, like electricity or water. That is why we commissioned these satellites: to give people in remote areas the benefits of broadband. We have been completely consistent on the need for these satellites, and on the need for a national broadband network that will deliver fast, reliable and affordable broadband no matter where Australians live or do business. Unfortunately, this Minister for Communications has not been so consistent.

I would also like to note, talking about inconsistency, that this minister waxed lyrical about transparency, but he has also been caught removing some of his more critical NBN satellite posts on this very issue from his website. Try doing a search for this entry from 8 February 2012, 'Satellite deal—more wasteful NBN spending'. Try to find this on the minister's website, like I did recently; it appears to have been removed. But, as the minister is finding out, the internet never forgets, and this post has been archived for all of us to see. We know that delivering the NBN is critical to people and to businesses, irrespective of where people live or work. You only need to look at the 2011-12 regional telecommunications review on the issue of satellite technologies, which said:

The strong initial uptake of the ISS clearly demonstrates the pent-up demand for better broadband.

This is what Labor was left with—an incredibly huge amount of pent-up demand. Finding 4.5 said:

The NBN Interim Satellite Service … offers an immediate improvement in high-speed broadband availability to people and businesses in regional Australia.

This was the legacy left by a Howard government with no foresight whatsoever to do anything about improving broadband in regional and remote areas. We know that John Howard was at least consistent on being stuck in the past; unfortunately, his communications minister's inconsistency is— (Time expired)

Rowan Ramsey (Grey, Liberal Party) Share this | Link to this | Hansard source

I rise to speak after that complete rewriting of history. This week the coalition announced its policy of CO2 reductions going forward to 2030. I thought it might be of benefit to the House to give a precis of my recent trip to Germany during the winter recess—a private trip—to, amongst other things, look at Energiewende, which is the German policy of transformation from fossil fuel to renewable energies. I met with a large range of government officials, industry groups, generators, regulators, green lobbyists, a parliamentary member and the Australian ambassador, David Ritchie, to discuss Germany's progress in its plans to make the country 80 per cent reliant on renewable energy by the middle of this century. Like most major issues facing governments worldwide, there is nothing simple and there are almost always responses to policy changes that are not necessarily predicted.

When it comes to electricity, one of the most salient points as far as Australia goes is understanding the interconnectivity of Germany to greater Europe and the opportunities this offers—and the negatives as well, but I will come to that later. The Germans' emissions trading authority is largely based in Dassel and, in combination with the Berlin contingency, they employ 1,500 to 1,600 people. Heavy industries using in excess of 20 megawatt hours per annum are exempt from the system and they are also eligible for low interest loans. In 2010 the German government set 12 goals to transition to renewable energy. Their policy of Energiewende—or, in English, energy transformation—plans a 20 per cent reduction of CO2 by 2020 and 50 per cent by 2050—not just electricity but the whole market. How they will achieve this outcome is not clear, but they do have the benefit of quickly evolving technologies.

Other events have driven their commitment to prematurely retire their nuclear power plants by 2022. They have eight left, totalling 20 megawatts of capacity. For my constituents, that is almost 20 times the size of the Alinta power station at Port Augusta, now scheduled for premature closure sometime in the next 18 months. Eighteen per cent of Germany's electricity comes from fermented agricultural products—ethanol—and it is of interest that the policy encouraging farmers to grow corn for this purpose is now being wound back because it was displacing food production. It reaffirms my thoughts that biofuels should be developed from agricultural waste products, not from food. This decision probably means there are no upsides left for the German energy market in biofuels.

Germany still consumes a significant amount of coal- and lignite-generated electricity, and two new coal power stations have been opened in the last few years. They have, though, now announced an intention to phase out hard coal, which is black coal, by 2018 and lignite by 2040. It is hard to believe that this will not lead to significant litigation from companies seeking compensation.

I met with E.ON, one of three major electricity producers in Germany. They have long-term gas contracts with Russia. However, political instability is a concern. Norway is a good, reliable supplier. A number of representatives I met with, including the head of the Australian-German parliamentary friendship group, Volkmar Klein, expressed a keen interest in Australian gas supplies to reduce their dependence on the Russian market. Sovereignty of supply is a very important issue in Germany. E.ON operate a number of nuclear facilities that will be forced to close by 2022, and at this stage they have not been offered any compensation, but it is difficult to see that this too will not become a major issue. It is of note, perhaps, for the South Australian Nuclear Fuel Cycle Royal Commission that they have 14 billion euros in reserve to deal with the clean-up and long-term storage of waste.

The very low price of the emissions trading scheme in Europe at the moment is a concern and is having mixed effects—so much so that they are actually mothballing a new, highly efficient gas-fired power station. Small solar and high feed-in tariffs are causing some issues as well, leading to a situation where more than 50 per cent of consumers' electricity bills are now taxes and subsidies.

There are concerns about how Germany will cope with the large amount of baseload electricity which will be removed in the near future—nuclear, lignite and hard coal. The effects of the policy mix are resulting in new investment in electricity all being renewable, which one would think is a good thing, but there is no clear plan on how to deal with the loss of baseload generators except by importing more nuclear power from France. I met with the department of economic and environmental affairs. They informed me that wind is now producing 38 gigawatt hours per annum, 20 to 25 per cent of which is coming from offshore facilities. Offshore it is windier and is achieving better than 50 per cent efficiency, which is very encouraging, with only 100 hours a year becalmed. So it is much more stable than onshore, but it is also much more expensive. The better sites on land are taken, and there is some resistance, particularly in the south, to more wind farms.

It is interesting to note that, while small business and household consumers have some of the dearest electricity in the world—about 50 per cent higher than here in Australia—their heavy industries are exempted from the system, have benefited from oversupply in the market and have access to cheap electricity driven by policies designed to promote investment in renewables. Like Australia, Germany has chosen a path where subsidised investment in renewables had led to an oversupply in the electricity market and depressed wholesale prices. The market, as I referred to in my opening comments, has a safety valve where they can export surplus electricity. However, this is relatively expensive electricity, with its price reduced by subsidies from German households and small to medium business. I said before that heavy industry, of course, is exempt. The German public have been very supportive of Energiewende, but it is unknown, as the price continues to rise, whether they will continue to tolerate this. One supplier told me that 30 per cent of their customers were under duress, meaning they needed assistance to meet their electricity bills.

I met with another energy company, Vattenfall. They informed me that they had made big advances in efficiency in their newest lignite power stations—43 to 45 per cent efficiency, or 930 kilograms of CO2 per megawatt hour. It is important to understand that Germany has a seemingly different disposition to lignite insomuch as they have domestic supplies as opposed to hard coal and gas, which is all important. Vattenfall claim the German electricity market is about 60 per cent oversupplied and are very concerned for new investment. At this stage, there is only subsidised investment in the pipeline, meaning wind and solar, and there are rising concerns as to what will replace the baseload generation. It is a very familiar issue to us here in Australia. Perhaps the conundrum of cheap, affordable storage for renewables will be met by the revolution in battery production, but it seems to me that at this stage they are just not sure.

Interestingly, in Northern Europe peak demand for energy is for heating in winter, not summertime air conditioning, as is the case here. Much of the energy required for heating is not provided by the electricity grid but by direct heating systems affecting total CO2 emissions but not those associated with electricity. It is just another of the idiosyncrasies to consider when comparing our system with theirs. The Danes have been held up as world leaders in the switch to renewables but have had to construct giant hot water tanks to facilitate the use of renewable energy in city heating systems. Germany is just beginning to follow that path. The Danes are seeing their generation industry being corrupted by cheap subsidised German electricity flooding their market in times of surplus. One would think they may be very happy with this outcome, but unfortunately this in turn is undermining their business models.

Vattenfall operate 40 per cent of the German hydro system, which for many years has operated as batteries by pumping water uphill at night on cheap energy to release in the afternoon market peaks. This is something we do in Australia too. It is the perfect battery. However, the advent of solar PV has curbed the afternoon peak, thus destroying the profit motive for water storage. In effect, a subsidised renewable source has replaced another unsubsidised and profitable renewable energy source. It is definitely one of those conundrums for policymakers and is one of the things we need to be very mindful of in Australia as we move forward in our energy transformation. We have all been in awe of the German economy, which to a large extent holds the EU together. It is worth noting that Deutsche Bank has reported that there has already been significant carbon leakage from the German economy, particularly in small to medium businesses which do not receive the exemptions from the ETS policy. They consider it to be a slow burn. Long-term investments are increasingly going somewhere else. The reduction in CO2for electricity, as opposed to total emissions, was to be 30 per cent by 2020, and then in 2010 the government decided to go for 40 per cent. It was at this time that it extended the nuclear envelope from 2020 to 2030. The Fukushima disaster occurred and within three weeks they had abandoned the 2030 time line and reverted to 2020, but did not review the 40 per cent target, which is likely to impact quite heavily. There are now concerns about the impact of the short-term targets. It is a bit of a perfect storm.

I have more to add to that at a later stage. It is valuable information, so I hope to come back to it.

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

Before I call the member for Fraser, I understand it suits the convenience of the Federation Chamber for the grievance debate to continue for a further 60 minutes. There being no objection, the chair will allow that course to be followed.