Nick Sherry (Tasmania, Australian Labor Party, Assistant Treasurer) Share this | Hansard source

The government will be opposing the amendment. Senator Brown, you sound so reasonable about what I would consider and argue is such an unreasonable amendment in terms of the application of it. The amendment says:

Scheme Rules must include provisions that limit the Deed of Guarantee so that it cannot be applied to borrowings relating to projects that will have a significant negative environmental impact or result in significant greenhouse gas emissions locally or internationally, and for which there are prudent or feasible alternatives.

That is what it says. We are not supporting the amendment. I argued that the previous amendment from the Liberal opposition was impractical. If this amendment were to pass and if there were to be a serious attempt to follow what you suggest in this amendment, the AOFM, presumably—which is not equipped but presumably it would have to go and equip itself—would have to examine every project that a state government seeks borrowings for in order to fund. That would be for every project. I just do not see how that is practical in any sense.

Secondly, you have legitimate concerns. I do not necessarily agree with you, but you have concerns about a range of proposed state government investments. You mentioned the desalination plant proposed to be built in Victoria. I do not know the detail of Victorian legislation, but I am sure that the desalination plant project will be subject to state environmental legislation and other legislation—planning legislation at Victorian state level—in its assessment and that it will be subject to whatever relevant federal legislation that may apply. The desalination plant would be subject to assessment under a whole range of other legislation—state and possibly federal. So why would we add a further assessment process of a particular project, in this case the desalination plant, by, presumably, the AOFM? Why would we add another layer of examination of these issues? Once all of the assessments have been gone through at the state level for this project, it would then be over to the AOFM to carry out further assessments before it said to the state government, ‘You can be covered by a deed of guarantee.’ If in fact they did need to borrow to carry out the project, there would be a whole range of new assessments.

So we do not believe that this is the appropriate place to impose such a significant guarantee. You refer to it being very general, reasonable and unspecified. The very nature of the generality means that it would impose very significant assessment requirements to carry out the meaning of the amendment, should it be passed. You referred, I think, to ‘a little bit of quality control’. It sounded so reasonable, Senator Brown, but this would have significant additional quality control assessment requirements over and above that which are currently required under state and federal law.

You may agree or disagree with current assessment processes on environmental impacts and greenhouse gas emissions that take place at the state government level and/or the federal government level, but, at least with respect to the federal parliament, there will be legislation that will deal with the issue of greenhouse gas emissions quite directly. The government believes that it is inappropriate to attempt to impose significant new compliance and assessment processes that will add to costs and time delays, as this particular mechanism would.

The guarantee being offered by the government is to provide certainty to investors. What you are suggesting would not provide certainty. It is to provide certainty to investors once a particular project has gone through the current state and/or federal legislative requirements for planning, environmental impact et cetera that exist in different laws. The guarantee allows the states and territories to access the credit market, maintaining the discipline by paying a market price for their securities. That is what this legislation is about. So the government will not support the amendment.