Penny Wong (SA, Australian Labor Party, Minister for Climate Change and Water) Share this | Hansard source

I am very pleased that I actually have the opportunity to respond because there have been a lot of questions raised and people being more interested in having a further debate in the chamber than having the government respond—which is fine, if that is how they wish to proceed.

Let’s go through the various questions that the senator asked. I will go to the technical one. She has raised this with me previously, and I thought we had finished the discussion. Perhaps we are simply not of the same view about this. The senator refers to the wholesale price. It is the case that the modelling demonstrates—and of course this is modelling—quite a range of potential impacts on wholesale price. I think the senator herself referred to the MMA modelling, which suggested a range between minus five and eight per cent to 2020. It did of course indicate an average increase of 0.5 per cent. However, what people pay is not the wholesale price; what people pay is the retail price, which of course is the wholesale price plus the REC liability. So the reality is that the wholesale price may be relevant for your speech; in terms of public policy consideration, it is not what we look at to consider the potential price impact on a sector or particular sectors, because you need to consider the REC liability.

The second point is on the fair share argument. We agree people should pay their fair share. That is our argument against those in this place who argue for trade-exposed industries to get 100 per cent exemption. That is our argument when some industry sectors seek 100 per cent exemption. This is an argument about who funds the costs of transforming the Australian economy, whether it is via CPRS or the renewable energy target. The question is how best to spread those costs. I accept that Senator Milne has a different view. The government’s view is that we do have to recognise the potential cost impact on very high energy users. The reality is that, although the cost impact for the RET alone is small for most industries, the aluminium industry probably faces a cost impact, with our other policy mechanism, that is around 10 times that of other industries. I am sorry, Senator Milne, but we do think that is relevant. That is something the government has to consider. We are not proposing 100 per cent exemption for anyone. The thresholds in the CPRS which are agreed as the basis for assistance via partial exemption under this legislation are 60 per cent and 90 per cent, depending on their exposure to the cost increases.

The senator asked who was paying for the current mandatory renewable energy target. This government does not make policy on the basis of what state governments may or may not do. We have to make a policy decision for this legislation that is transparent, that is across the economy and that is certain. We did not accept the coalition’s original position that aluminium and other sectors—but particularly aluminium I think—should be exempted for the existing renewable energy target as well. We said that, from the Commonwealth’s perspective, we do not think that exempting and assisting somebody to reach a target that is already in place is good policy. We think there is an argument to provide assistance for the impact of the expanded policy, and that is what we have done. In response to your asking who is paying for the current MRET, that is not information that is comprehensively in the public arena. It is information in relation to contracts to which the Commonwealth is not a party. From the Commonwealth’s perspective, we have not exempted people from the existing renewable energy target.

Senator Milne asked about the price impact and made what I think is a reasonable point. She said that when you make decisions about exempting you are shifting the costs from one sector to another. That is precisely the policy issue—I do not want to go back to the CPRS—that is challenging—