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

I move:

That this House:

(1) recognizes the need for households and small businesses to access affordable, reliable energy;

(2) notes that the Government’s National Energy Guarantee is recommended by the independent Energy Security Board and that it:

(a)involves no taxes, subsidies or trading schemes;

(b)creates a level playing field that ensures all types of energy are part of Australia’s mix;

(c)provides certainty for investors in new and existing power plants; and

(d)reduces price volatility; and

(3)condemns the opposition’s plan to replicate South Australia’s 50 per cent renewable energy target, which will mean more subsidies and therefore higher prices.

Firstly, last week, I believe we saw a bit of a turning point in this debate on energy in our nation. It came from the CEO of Tomago Aluminium smelter, Mr Matt Howell. He deserves to be congratulated for the comments he made. In fact, I've even gone as far as to say that he should be nominated for the Australian of the Year for the comments he made. I would like to read them into Hansard. He said, 'What we'—Tomago Aluminium—'need is constant energy supply. The question is, when the sun is not shining and the wind is not blowing, where does that energy come from? If it's not coming from coal-fired power, where is it going to come from?' I will give you an example. Last Saturday, 9 June at 6.00 pm, our national grid needed 26,000 megawatts. That was the demand: 26,000 megawatts. At 6.00 pm, we had zero coming from solar power—the sun had set—and the several thousand megawatts of wind capacity was only generating 100 megawatts. So do the numbers: we had 100 megawatts in total coming from solar and wind, and we needed 26,000 megawatts of electricity to avoid blackouts. That's what Matt Howell was saying. But he went on, 'We have people saying "batteries". The truth is this: the largest battery in the world'—in South Australia—'would power this smelter for all of eight minutes.' Eight minutes—one plant, eight minutes, and the world's largest battery. It is clearly a nonsense. Matt Howell has belled the cat on that—we had the previous Labor government of South Australia running a fraud, a con and a hoodwink on the population of South Australia, telling them that their big battery was to back up their renewables. And yet it could only run an aluminium smelter like Tomago for eight minutes.

Matt Howell continued, 'You've got to have access to baseload power. As we see the continued penetration of'—subsidised—'renewables, it's hollowing out our baseload fleet. If we want to be a nation that makes things, rather than imports them, we need to have internationally competitive energy.' It's worth noting that, at the moment, the cost of energy or electricity in this nation is more than double what it is in the United States of America. He went on: 'And I would say, if it's good enough to export millions of tonnes of high quality thermal coal from Australia to feed the world's growing fleet of advanced low emissions, high efficiency, coal-fired power stations, then it must be good enough to do the same thing here. To do anything less is rank hypocrisy.' Matt Howell, hear, hear to you, Sir! And yet we have the Labor Party of Australia: their plan for energy in Australia is to replicate the failed experiment that we saw in South Australia.

In South Australia, we saw this mad experiment inflicted upon the residents of that state where they had a 50 per cent Renewable Energy Target, and that is the exact policy that the Labor Party wants to inflict on the entire nation. And what were the results of that experiment in South Australia? It gave South Australia not only the highest electricity prices in the nation, it gave South Australia the highest electricity prices in the world. And that is what members of the Labor Party want to inflict on the entire nation. Not only did it have the highest energy prices in the world, but South Australia also had the highest rate of electricity disconnections in the nation. There were kids unable to do their homework at night because they couldn't turn the lights on; people living without a refrigerator, unable to keep food fresh in their fridge; and people unable to charge their phones or iron or wash their clothes. That is the policy that was inflicted upon South Australia—with record disconnections—and that is the policy that the Labor Party wants to inflict on all of Australia. It is simply not good enough.

We have a very big job: we have to get the cost of energy down in this nation, and down substantially. Everything the Labor Party will do will push the price of electricity higher and higher and higher in this nation. We've seen the results in South Australia. That is what they want to copy.

Kevin Hogan (Page, National Party) Share this | Link to this | Hansard source

Is the motion seconded?

Luke Howarth (Petrie, Liberal Party) Share this | Link to this | Hansard source

I second the motion.

Kevin Hogan (Page, National Party) Share this | Link to this | Hansard source

I thank the member for Petrie.

Julie Owens (Parramatta, Australian Labor Party, Shadow Assistant Minister for Citizenship and Multicultural Australia) Share this | Link to this | Hansard source

What a shemozzle this government is making of action on climate change and energy, and of ensuring that Australia has a world-class electricity system supporting our economy and our prosperity. The Finkel report laid out a blueprint for the future after five years—nearly six years now—of inaction by the Turnbull-Abbott government. The Finkel report sought to maintain security and reliability in the National Electricity Market that is facing significant transition and technological change. We welcome the recommendation from the Chief Scientist to establish the Energy Security Board and the call for increased security, future reliability, rewarding consumers and lowering emissions. But this Prime Minister keeps pandering to the conservative climate change deniers in his coalition, and he fails to take action. We've seen the entire dismantling of our carbon price framework, making Australia the only country to entirely dismantle a legislative climate change policy. This government's budget saw not one measure to tackle climate change—not a single cent. Power prices have skyrocketed under this government, and the ongoing energy crisis and the chaos in the coalition over policy mean higher power prices for Australian families and businesses. Those on that side of the House don't help matters when they cut the energy supplement, costing pensioners $14 a fortnight. If you're living in a harbour-side mansion, it doesn't matter, but it certainly matters if you're struggling to make ends meet.

This national energy crisis needs leadership and long-term planning to ensure the reliability of the national energy market and emissions reductions to meet our international obligations, but this government is overseeing one of Australia's most significant public policy failures, and there's quite a bit of competition for that award. They've been fighting amongst themselves over climate change policy for years. They are failing to act on climate change and failing to deliver climate change policy. During the last Labor government, we decreased carbon pollution by 11 per cent, but pollution has increased by six per cent and risen every year under the Liberal government. For the third consecutive year, the Turnbull government has overseen an increase in Australia's pollution levels. Emissions rose 1.4 per cent last year. And the government's own emissions projections show that Australia will not even come close to meeting our obligations under the Paris Agreement, and that agreement has a ratchet mechanism that will see countries increase their pledges to meet the two-degree target.

Current pledges under the Paris Agreement are consistent with three to four degrees of warming, but our government pretends that their 26 to 28 per cent target is all they have to do. If the government is serious about meeting its obligations under the Paris Agreement, it will have to strengthen its 2030 targets as well as implement real policies to reduce emissions, especially in the electricity sector. After coming down by 10 per cent under Labor, the government's own data shows pollution will rise and continue to rise all the way through to 2020. Australians want action on climate change and more investment in renewable energy, and that's why a Shorten Labor government will target a 45 per cent cut in emissions by 2030 on 2005 levels, net zero emissions by 2050 and 50 per cent renewable energy by 2030. And we'll do this because we have a plan. Unlike those opposite, we know Australia must act.

Australia's energy system must deliver reliability, security and affordability, and that's what Australia's national energy market needs, plus a plan for future needs to ensure investor confidence and certainty in the market, or else energy prices and pollution will continue to rise, and confidence in the reliability of the sector will continue to plummet. The Australian Energy Market Commission tells us that electricity retailers are taking a battering in terms of consumer sentiment, now ranking lower than the banking and telecommunications industries in terms of trust in the sector, falling from 50 per cent in 2017 to just 39 per cent in 2018. This is a massive vote of no confidence not only in energy companies but in the Turnbull government. We need to shift to a clean energy economy and take real action to achieve decarbonisation. With the national focus on the National Energy Guarantee, as Mark Butler said, there's a risk of overdoing the reliability obligation and underdoing the emissions reduction obligation, but we can do both. Australia has the opportunity to invest more in renewables. This is where the future lies. It's not just that renewable energy is cleaner and, increasingly, cheaper; it's also because investors, increasingly, are alive to climate-related financial risks. What we see from the government is just not good enough for Australia's future. We must act decisively to guarantee the reliability of our energy systems across the entire energy market.

Luke Howarth (Petrie, Liberal Party) Share this | Link to this | Hansard source

It's great to be able to rise and speak on this motion that the member for Hughes has put forward. The member for Hughes has moved that this House recognise the need for households and small businesses to access affordable reliable energy. He notes that the government's National Energy Guarantee is recommended by the independent Energy Security Board, and that it involves no taxes, subsidies or trading schemes. It creates a level playing field that ensures all types of energy are part of Australia's mix, and it provides certainty for investors in new and existing power plants and reduces price volatility. Finally, it condemns the opposition's plan to replicate South Australia's 50 per cent Renewable Energy Target, which will mean more subsidies and therefore higher prices.

On that final note, that's an important point that the member for Hughes raises, because we saw the unreliability, the unaffordable situation that South Australia found itself in—a capital city within Australia with blackouts for a couple of days. What does that do to small and family businesses? Getting back to the point that the member for Hughes starts with: the fact that households need affordable energy. Yes, they do. But so do small and family businesses. I think of restaurants in my electorate of Petrie, like The Golden Ox, where Mr Nick Tzimas has told me that his bill keeps going up and up and up. The member for Parramatta didn't mention that under six years of Labor electricity prices doubled. I also think of manufacturers like Packer Leather in my electorate, employing over 120 people. They have got probably over $100,000 worth of renewable energy on their roof, and that cuts their bill by five per cent. I really worry for the future of manufacturing and jobs in this country if our electricity pricing continues to go up and up for those small and family businesses.

On this issue it's really important that we have bipartisan support in relation to the NEG. It looks like a lot of the states are signing up to it, which is really healthy. In relation to renewables and what Prime Minister Turnbull has done here, he is the first Prime Minister to actually mention that we need storage around renewables. There was nothing from the Labor Party about that when they were in office, and nothing from the South Australian government in relation to storage. It's Prime Minister Malcolm Turnbull that has mentioned storage and has been there for it. When we look at things like Snowy Hydro, if I talk to people in my own electorate about Snowy Hydro, they will say, 'Well, that was a nation-building project.' When you talk about Snowy Hydro 2.0, they say, 'Woop-de-do. Who cares?' But the fact is that that is a plan to provide reliable energy as more coal closes and so forth, and it will have that project that our Prime Minister has put forward for decades to come. That's a good thing.

In relation to coal, in Queensland most of the generation is government owned, so the Queensland Labor Party owns the generation there. Ninety per cent of it is coal, and they too want to get to 50 per cent straightaway. The fact is that the NEG does provide stability and certainty. We need the opposition to get on board because we need to have the best interests of businesses and residents at heart, and we will. We have signed up to the Paris Agreement. We will meet those renewable goals, but we can do it in a timely manner without rushing to the 50 per cent that those opposite want to do. The fact is that I have solar on my roof, both in my home and in my family business. The member for Dickson has solar on his roof and in the family business as well, I'm pretty sure. It makes sense for businesses to have solar on their roof because they actually use it during the day when they're generating electricity, when the sun is up, between nine and five, for businesses to invest in it.

So I fully support what the member for Hughes is saying. We still have a lot of coal jobs in Australia, where our coal is cleaner than overseas. Our black coal is much cleaner than our brown coal. We can't just throw those workers out on the scrap heap by moving to the 50 per cent renewables that they want to. We are moving there steadily, smartly, with a plan. The NEG is worth supporting. We really need some bipartisan projects here, and I think that would be a good one to start with.

Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Assistant Minister for Treasury) Share this | Link to this | Hansard source

It's quite sad that we actually have to debate this motion here today. If we lived in a commonsense world, if the parliament adopted a commonsense approach to this, we wouldn't have to debate an issue such as this. If we were in a commonsense situation, we would all accept the scientific evidence of climate change—that it's occurring and that it is a real threat to our economy, our living standards, our environment and our children's future. We would accept that the major cause of climate change is burning fossil fuels to produce energy—that is the major source of carbon emissions here in Australia and throughout the world. If the parliament adopted a commonsense approach to this issue, we'd accept that, if we care about our kids' future, we must, over time, reduce the amount of energy that we produce from fossil fuels and increase the amount of energy that we produce from renewable sources. And, if we were in a commonsense situation, we'd be mature enough to work together on policies that achieve the outcome of reducing reliance on fossil fuels and increasing renewable energy. If we did this—if we made an orderly transition to a situation where we did have 50 per cent of our energy produced from renewable sources by 2030—we'd have a cleaner environment, we'd have lower electricity prices, we'd have new industries being generated in Australia, we'd have more jobs created in the energy sector in this country, and, importantly, we'd be making a smooth transition to a cleaner future with as little disruption as possible to our economy and the livelihoods of Australians.

That's how it works in most of the world. In most countries throughout the world they've adopted a commonsense approach to this important issue. But the actions of this government represent everything but a commonsense approach to this issue. The major source of conflict in this government over the last decade has been the issue of climate change and energy policy. In fact, it's fair to say that a policy war has been going on in the Liberal Party for the last decade, which has resulted in indecision, a lack of actions, increases in emissions, a lack of a mechanism to make an orderly transition to a cleaner future—in fact, the mechanisms that the previous government put in place were dismantled—and a lack of investment and creation of jobs in the renewable sector. Most importantly—and this is the government's greatest shame out of the lot of them—we've seen skyrocketing electricity prices in our economy. This has made it harder for families, for workers, for pensioners, and for small and big businesses to make ends meet in Australia.

Those opposite come in here and start arguing and blaming Labor, but the reality is that they've been in government for five years. For the last half a decade there's been a Liberal-National coalition government. You've had plenty of time to work on developing a policy in this area—just work on one policy that you can agree on to reduce emissions and make a clean transition to a cleaner energy future. Because of that policy indifference, because of the war that's been going on, Australians have suffered. And it's our kids who will suffer in the future because of a lack of decision by this government on this issue.

It is winter now, and I regularly speak to pensioners in my electorate who can't afford to switch on the heater because of the increase in electricity prices. Families are entering repayment plans with their electricity provider, because they can't afford to pay the bill up-front. This lack of policy certainty and this government's war and indecision has created a lack of investment in a new generation of renewables in this country. On this issue alone the government do not deserve to be elected at the next election. They've had five years to sort this out, and they've failed.

They've come up with several policies. They came up with the Clean Energy Target—they had two goes at that. They asked the Chief Scientist to come up with a policy, and twice they've rejected it within their own party. Labor said that we'd agree to it with some amendments, but they couldn't even agree on it. Now they've got the National Energy Guarantee. Again we've said that we'll agree on it, albeit with higher emission standards for the future, but they still can't agree. Guys, before you come moving motions like this, sort yourselves out in your own party room about climate change and energy policy.

Pat Conroy (Shortland, Australian Labor Party, Shadow Assistant Minister for Infrastructure) Share this | Link to this | Hansard source

It's always a pleasure to speak on a motion moved by the member for Hughes, the second shadow minister for energy in the federal parliament. It's really interesting. This is a motion that is supposedly on the National Energy Guarantee, the NEG. The member for Hughes didn't mention it once in his entire five-minute contribution.

Honourable Member:

An honourable member interjecting—

Pat Conroy (Shortland, Australian Labor Party, Shadow Assistant Minister for Infrastructure) Share this | Link to this | Hansard source

I was listening well, because that was a foretaste for the civil war that we will see in their party room tomorrow, the civil war that the member for Hughes and his allies have been running for the last five years, the civil war that is the reason this government has flip-flopped on energy policy so often. We had Direct Action, which did nothing for energy transformation. We then had the glorious period of the emissions intensity scheme, which the Minister for the Environment and Energy floated for 12 hours. He did a great interview on the ABC. After that he got ripped to shreds by the member for Hughes, Alan Jones and ex-Prime Minister Mr Abbott, and within 12 hours he folded. I've had cases of flu that have lasted longer than energy policy in this country. Then we had the clean energy target, under Chief Scientist Alan Finkel, which lasted for about six months. Again the government folded to the backbench insurgency. And now we have the NEG, which the member for Hughes is trying to undermine. He's undermining it very actively right now.

I turn to the other part of this motion, which is about ending energy subsidies and having a level playing field. I couldn't agree more with the member for Hughes, except he didn't mention one subsidy—the negative environmental externality of carbon pollution. Any good economist knows that a free negative environmental externality is a subsidy to that production because it imposes a cost on the broader economy. There is no greater example of that than carbon dioxide spewing into the atmosphere from the fossil fuel industry, from conventional thermal energy generation. That's why the last Labor government put a price on carbon, because we wanted to level the playing field, place a hard cap on emissions and give industry the best incentive to reduce their carbon emissions. So, if the member for Hughes were serious about cutting down on subsidies, he'd talk about the negative environmental externality that is carbon pollution. Yet again he is running down renewable energy.

The fact is, every independent expert and every independent commentator in this field agrees that the cheapest and most reliable form of new generation in this country is a combination of renewable energy, solar and wind, backed up by peaking gas and pumped hydro storage. Every single independent commentator has agreed on that. It is only the fact-free zone in the coalition party room that doesn't agree that that is the cheapest and most reliable form of replacing our ageing coal-fired power stations, which have reached or are approaching the end of their life. They are very old; they are breaking down, as we saw with the Tomago example two weeks ago, which the member was so keen to talk about. Two weeks ago, three of the four power stations in my region were losing units, because these power stations are very old and very expensive to run. We need urgent replacement, with renewable energy backed up by gas and pumped hydro, and possibly battery storage.

We've got a great opportunity here. Not only is this cheaper and more reliable; it is the basis for us becoming a renewable energy export superpower. We will be able to export that energy either directly through high-voltage DC connectors to South-East Asia, as they are talking about in the Pilbara region right now, or through power to gas, converting that solar and wind energy into ammonia or hydrogen and exporting that to North Asia, where it's desperately needed. That will give us a great export industry in the future. Once the world makes its transition, we will also be the home of cheap energy. We will regain that standing of cheap energy because we've got the best solar resources in the world. So, when it comes to energy-intensive manufacturing, whether it's aluminium smelting, bauxite refining or steelmaking, we've got a great opportunity to have those industries powered by renewable energy, backed up by gas and storage, and we will be the cheapest possible energy producer supporting those industries into the future.

On renewable energy metals, we have 60 per cent of the world's current lithium reserves that can be mined, so there are great opportunities. All we need is a plan, support for renewable energy zones, and a vision, and the Labor Party opposition provides that. By contrast, we've got a civil war being run by dinosaurs in the coalition party room, by the member for Warringah and by my friend the member for Hughes, and this nation is suffering because of that civil war.

Kevin Hogan (Page, National Party) Share this | Link to this | Hansard source

There being no further speakers, the debate is adjourned and the resumption of the debate will be made an order of the day for the next sitting.

Federation Chamber adjourned at 19:14