Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Hansard source

I accept that there are a number of aspects of the legislation before the Senate which do involve some complexity because they obviously deal with what is a significant economic reform. I am advised that, consistent with what I said earlier, in relation to the provision of units under the energy security package, the regulator will obviously allocate a portion of the pool of units available to eligible entities. To ensure it does not underallocate, there is a true-up subsequent to that, I think in the second year, which takes into account the actual free units and the estimates of what would have been provided to that identity under the legislation. The policy point here is that the provision of these units is linked to the government's policy objective of energy security. If you read the explanatory memorandum and the act, you will see there is discussion of the power system reliability test. I will just quote that:

To ensure energy security at the beginning of the mechanism, the Government has imposed conditions on assistance. This is designed to reduce the risk of unexpected behaviour from owners, controllers or operators of generation assets (or their creditors) affecting the supply reliability in Australia’s electricity markets. …

Generation complexes must comply with the ‘power system reliability test’ in order to receive assistance. The power system reliability test uses the value of free carbon units to influence the decisions of owners, operators or controllers of some generation complexes about when to withdraw generating capacity, to promote the secure supply of electricity.

So these provisions are about ensuring the continued security of Australia's electricity supply in the context of a significant transition.

I was not sure if the senator has asked this, but I have asked the question of whether the concept of reasonable estimate was reviewable in any way. I am advised it would be the subject only of judicial review. I am also advised that the concept of reasonable estimate is quite a common concept, not only in the bills before the Senate but in a range of federal and other legislation.