Anne McEwen (SA, Australian Labor Party) Share this | Hansard source

I am pleased to be able to speak on the matter before the chamber. I do acknowledge Senator Milne’s longstanding interest in this matter and her pursuit of legislation to introduce a feed-in tariff scheme. If only it were that simple! Once again, we have heard a speech from the Greens that ignores the reality of how difficult it is to change Australia’s culture from one of using non-renewable energies to one of using renewable energies. I am pleased to say that the current government have already taken significant steps to effect that change.

Since coming to power in 2007, the government have made many changes. As I have said before in this chamber, the first decision we made was to ratify the Kyoto protocol, thereby establishing once and for all that Australia wants to take a leading role in reducing our greenhouse emissions and tackling the insidious problem of climate change. We have also gone to initiate the Clean Energy Initiative: this solar flagship program committed over $4 billion towards energy efficiency measures through the energy efficiency homes package. We have also implemented a $12.9 billion national water strategy, which, for the first time, made a direct Commonwealth investment in water security projects. That, of course, addresses the issue of water security in the face of climate change, which has seen the reliability of Australia’s water supplies under threat. Those are just a few of the initiatives that the federal government have already initiated and will continue to pursue in the war against climate change.

The feed-in tariff scheme is the centrepiece of the matter before us today. Feed-in tariff schemes, for those who may not be aware, are policy mechanisms used to encourage the use of both small, dispersed generating capacity and large, utility-scale generators. The feed-in tariff is a rate, usually set by a regulator or a government, which electricity retailers or a regulator are required to pay to particular electricity generators who want to feed power into the electricity grid. The tariff puts legal obligations on utility companies to buy electricity from renewable energy producers at a premium rate, usually over a guaranteed period, hopefully making the installation of renewable energy systems a worthwhile and secure investment for the producer. So that is the policy position and the theory behind it. I am on the record as saying that I understand the public sympathy for those kinds of feed-in tariff schemes, and, of course, the federal government has not necessarily ruled it out. The matter has been referred to the Council of Australian Governments, where it should properly be referred, for further investigation.

It struck me as somewhat hypocritical to get this motion from the Greens that focuses—or is said to focus—on creating green jobs and reducing greenhouse gas emissions, when it comes from a senator and a party that rejected the government’s CPRS legislation, which was intended to do exactly the same thing. If the Greens were really serious about addressing, in a comprehensive manner, the problem of greenhouse gas emissions and climate change then why didn’t they support the government’s CPRS legislation? Why didn’t they support those initial steps to reduce our greenhouse emissions? That was one of the biggest environmental reforms that had been put before this chamber. That legislation had the capacity to once and for all change Australia’s direction and convert us into a nation that uses renewable energy sources. Of course the Greens said it did not go far enough, and that is just an indication of how irresponsible they can be in this matter. For them, the most simplistic option is to close down the coalmining industry while somehow expecting that renewable energy will jump into the void left by that. The government takes a much more responsible attitude to this matter.

As I said, the Greens voted against the CPRS legislation. It is galling to have them now introducing legislation for a feed-in tariff when they could not commit to what is probably the most significant legislation this chamber has considered. We hope that, when the CPRS legislation returns to this chamber for debate later in the year, they will have a more responsible attitude. The bill that this matter of public importance motion alludes to, the Renewable Energy (Electricity) Amendment (Feed-in-Tariff) Bill, was put up by the Greens last year. I was chair of the Senate committee at the time that held the inquiry into that particular piece of legislation, and it was a welcome opportunity to hear the pros and cons of feed-in tariff schemes. Certainly, from that inquiry, it was quite clear that, while the Greens would like us to have a simplistic take on things, it is in fact a very complex issue. There are a number of FIT schemes already operating in some Australian states and territories, including in my own state of South Australia, and they vary significantly in design. It was also clear from the inquiry that, if there were to be a national feed-in tariff scheme, it would require very careful administration and design to succeed and do the things that Senator Milne in her contribution alleged such a scheme could do.

I am sure we all wish that we could introduce a scheme as simply and as easily as Senator Milne says that we can. But when you go into these issues—and it was investigated at some length by the Senate environment committee—you find that it is not all about benefit to the consumer and, indeed, it is not that simple. There can be a number of unintended consequences of feed-in tariff schemes. Artificially pricing one energy source 300 or 400 per cent higher than others diverts investment from technologies that might in fact produce better environmental outcomes at lower cost. Legislating a feed-in tariff scheme effectively picks the jurisdiction’s renewable energy of choice, and the result can be very expensive. These are the kinds of policy matters that you have to carefully take into account when designing these schemes.

Senator Milne mentioned European countries where such schemes operate. We know that Germany in particular is often used as an example of where a gross feed-in tariff scheme has worked successfully. That is true, but there has been a cost to the German consumer. In fact, in 2007 German consumers still paid more than €1 billion in additional power bills to cover the cost of that scheme. That would be equivalent to about A$2.5 billion per year. If the government is going to make these sorts of decisions on behalf of the people of Australia, the people of Australia need to know exactly what is at stake, and that there will be a cost.

I should also mention, in connection to Senator Milne mentioning the German situation, that recently in Germany a solar panel manufacturer, Q-Cells, announced that it was laying-off 500 employees. These are facts that are sometimes left out of such debates. We would hope that any kind of feed-in tariff scheme that created jobs in renewable energy would in fact support and sustain those jobs, but that is not always the case. It is a bit glib to stand up here and say that in Germany there have been thousands and thousands of new jobs in the sector when, at this very moment, jobs are being lost.

The federal government are very mindful of the importance of sustaining jobs in the current global financial crisis and would not do anything to jeopardise the jobs that we have. We will strive to keep those jobs. It is all very well to introduce new renewable energy schemes, but, if people are not in work and cannot afford to buy the solar panels to put on their houses, it is a bit pointless. So, Australia’s government is going to take a very responsible attitude in this matter. The matter is with the Council of Australian Governments and with the government as we speak, and I look forward to further developments in this important area of public policy.