Barnaby Joyce (Queensland, National Party) Share this | Hansard source

I hear the sentiments that this was an unintended consequence. It reminds me of the analogy: how many people have unintended children, but, once you have them, they are there and you love them and deal with them. We have an industry and, whether people think it is unintended or not—and we could have the argument all night on the semantics of the case—it is the case that this industry exists and that people have invested in this industry. It is the case that it could have been stopped with a regulatory instrument; it is the case that it was not stopped with a regulatory instrument, so people are under the strong understanding that it is there for the long haul.

I also hear the statement about the advantage, but the main use of this biodiesel is in farming, forestry, fishing and mining. The diesel that they now buy from the major oil companies is completely on par with that, in that they will both be virtually tax-free. That is not a stimulus package for a biorenewable fuel industry. That is basically saying that, with your payment of capital, you have to compete with an established market that is immensely bigger than yours.

Looking to the forgone revenue—and this comes from the industry—the current biodiesel industry is very much in its infancy and it is currently producing 70 million litres per year. Just thinking about 70 million litres per year, if the cost is 38c a litre—the unintended double-dipping, as I have said; and I disagree and think it is a production subsidy—that is about $26,600,000. We are talking about an amount of money that is hardly huge. We will sink an industry for the sake of $26,600,000. In the scope of a trillion dollar economy, this is hardly a reasonable outcome for a government with a surplus of about $13 billion. That is hardly going to break the bank, is it?

The cost that is forgone will be returned to the Australian government and people tenfold by the economic growth and security in the towns from which this industry will be drawn from. They are the small regional towns that we have always tried to engender the growth of. We have always sat back and thought: what is a mechanism that can actually engender some growth out here? What can we possibly do that is unique to this area and can engender growth in this area? We have developed one by mistake—biodiesel—are now we are going to stop it. Environment is one of the biggest winners. This is a measure that can actually deal with the issues of climate, increasing greenhouse emissions and the uncertainty about our future in the post global warming situation.

The other thing is that, when we go back to the five per cent biodiesel, it plays directly into the oil companies’ hands. Biodiesel has an extremely good correlation in its blending capacity. Dare I say that it is even better than ethanol, in that there is no differentiation. On 100 per cent biodiesel you can run an efficient engine. That is something that has an incredible outcome as far as greenhouse issues go. As these people put it:

The crux of the situation is that the government covertly, through the drafting of this very complicated and misleading legislation, has taken away the incentive for biodiesel. It will become uneconomic for the large diesel-use industries and will consequently force the production to large metropolitan facilities in our industrial areas, which will enhance a centralist policy to government.

This has come to me from National Party people who obviously believe in the concept and the enhancement of decentralisation. They continue:

The legislation is going to penalise small-time biodiesel and ethanol producers by favouring producers who supply standard fuels—that is, small blends for big oil against groups with communities looking to set up their own production and distribution. This proposed legislation is so destructive it is unbelievable that it has not received more attention. But it is so complex and hard to decipher that I understand and sympathise with these people who are trying to work through it.

And that has been the case. I do not know how many times we have had people going back and forth, in and out of offices, trying to get to the crux of what is actually going to go on, but I think we have got to it now.

I ask the minister: does the government have any envisaged plan to deal with this and to say, ‘Okay, we’ve made a mistake. The mistake has been there for three years. Now we are going to put in place an incentive plan’—apart from what we are dealing with now—‘that is actually going to deal with this issue, that is going to keep this industry going’? Are we going to have another grant or another subsidy—call it what you want; call it a pink labrador if you like—or something that keeps that industry and the benefits of the development of this industry going? Is there anything in the pipeline in that regard?