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

by leave—I move:

That the Senate take note of the report.

I will try not to speak too long on this. I understand some other senators may wish to speak on this matter as well. I am pleased to note the tabling of the report of the inquiry into an opposition private member’s bill entitled Save Our Solar (Solar Rebate Protection) Bill 2008 [No. 2], which was considered by the Senate Standing Committee on the Environment, Communications and the Arts. The bill requires new rebate guidelines to be determined via a legislative instrument subject to parliamentary scrutiny and potential disallowance by either house of parliament but effectively by the Senate.

The opposition hoped that the inquiry from this bill would uncover some kind of approaching Armageddon in the PV solar panel industry in Australia. However, the inquiry found that the industry, while changing, is in fact very robust because Australian consumers and domestic households in particular are taking up rebates offered under the government’s rebate program at higher rates than before the budget announcement about the means test.

The committee received 150 submissions from witnesses in this inquiry and we heard evidence in Canberra, Melbourne, Adelaide, Perth and Brisbane and telephone evidence from other states and territories. The majority report is supportive of the government’s handling of the rebate program and it recommends that the opposition bill does not proceed.

The report’s main findings include the increased uptake of the Solar Homes and Communities Plan since the budget. A recommendation addresses the fact that households are installing systems of around one kilowatt that are largely affordable within the maximum rebate allowable of $8,000, while perhaps larger sized systems would be preferable. The committee also found that the industry itself would much prefer the introduction of a feed-in tariff scheme that offers more certainty over a longer period of time than rebate schemes which can be vulnerable to government policy or, as this bill anticipated, vulnerable to the whim of the Senate.

I note in that context that several states and territories are putting in place, have considered or are considering feed-in tariff schemes to further support the use of solar PV systems and possibly other forms of microrenewable energy. The government recognises that fact and agrees that adopting an approach that is as consistent as possible across the country can go a long way in helping reduce the regulatory burden and costs on the electricity market as well as on consumers. I am pleased to note that COAG will consider options for a harmonised approach to feed-in tariffs at its October meeting this year. The committee that inquired into this bill will also be examining such a scheme during our coming inquiry into the Renewable Energy (Electricity) Amendment (Feed-in-Tariff) Bill 2008.

The opposition has put in a fairly predictable dissenting report which projects gloom and doom in the industry, an industry that is actually showing signs of moving from being a cottage industry to being a very mature industry. Yes, there are some adjustments. But we are also seeing potential investment in the industry from companies operating in the global market.

The opposition, throughout this inquiry, did nothing to address the repeated calls of the industry in Australia for certainty about what was going to happen in the future, and instead we had the opposition, throughout this inquiry, whipping up fear and uncertainty in the PV industry by alleging—like Chicken Little—that the world was going to end, the sun was going to stop shining and that everything was going to be disastrous when, in fact, there was no good evidence to support that at all.

It was intriguing that earlier on today in this chamber we heard, on a number of occasions, other senators on this side noting that the opposition could have different opinions on the same topic on different days, depending on which different members of the opposition were speaking. We heard that certainly in the context of the River Murray during question time. It is not unusual for this opposition to support something one day and then reject it the next, and perhaps that is why they were rejecting a policy that, with regard to the means test on the rebate scheme, is in fact a policy very similar to their own. I wonder whether they have forgotten about the $100,000 means test on solar hot water rebates that was implemented by the then Minister for the Environment and Water Resources, Mr Malcolm Turnbull, when that program was introduced in July 2007. It is probably worth reiterating that on the 17 July 2007, Mr Turnbull issued a press release stating:

The rebate is available to eligible applicants who are replacing existing electric storage hot water systems with eligible solar or heat pump systems purchased and installed after today and verified by a registered agent. The home must be a principal place of residence and the applicant’s taxable family income must be less than $100,000.

That sounds very familiar. Never let the facts and history get in the way of a good story when it comes to the opposition!

Our change to the Solar Homes and Communities Plan rebate brings it into line with the Solar Hot Water Rebate Program. That program, as I said, was introduced by the previous government. So we have brought those two programs into line but, more importantly, we have greatly increased the funding available for the program per year. Whereas the previous government’s plan was to budget $150 million over five years for 15,000 rebates, I am proud to say my government dedicated $150 million over three years for 15,000 rebates in the recent budget and we doubled the number of rebates available from 3,000 to 6,000, doubling our election commitment and doubling what the previous government had budgeted for this year.

With the ongoing success of this program, we have now said that we will continue to meet demand for the program—a fact that the opposition chooses not to throw into the mix of scaremongering when it is whipping up the industry to be afraid of the future of government support for renewable energy sources in this country. It is clear that the driving force behind the opposition bill was that it hoped for—it actually wanted—a decrease in the number of solar rebate applications following the introduction of the means test. That is what it wanted, and it was very disappointed when the numbers did not stack up and the number of rebates increased.

As of a couple of weeks ago, an average of 522 applications per week had been lodged since the budget for the rebate available under this excellent program. That is 150 more applications per week than were made prior to the budget and way beyond the 30 weekly applications at the time of the last coalition budget. In one week alone we noted that there were 794 applications for the rebate, post the budget change which included a means test so that this program could be targeted at low-income Australian families who most need assistance to install alternative energy sources in their homes.

Of course, I could go on about other excellent measures that the government has taken to improve the uptake of renewable energy sources, not just in people’s homes but in our communities and schools, but perhaps I will leave that for another day, given the time. The committee did note, as I said, the trend to smaller systems as people use the maximum amount of rebate to buy what they can afford, and the committee realise that that trend is not new. In fact, it started when the previous government increased the rebate to $8,000, and that information was verified by the federal Department of the Environment, Water, Heritage and the Arts. The department alerted us to that fact.

The fact that solar systems are becoming more affordable for low-income families is an excellent thing, a great thing for our nation. Actually, that is exactly what a former environment minister, Ian Campbell—they have had a few former environment ministers over there—called for in 2006 when he said that the solar rebate scheme should be targeted at low-income families. But, of course, that was another day and another position from the opposition on this very important issue.

In closing, I would like to thank the other members of the committee, who participated in this inquiry with goodwill and cooperation. Also, I would like to thank the secretariat and the many people who made an effort to contribute to the inquiry into this bill.

Simon Birmingham (SA, Liberal Party) Share this | Link to this | Hansard source

I am pleased to rise to speak on the committee report of the inquiry into the Save Our Solar (Solar Rebate Protection) Bill 2008 [No. 2] and related matters. I am amazed to have heard Senator McEwen wanting to talk about certainty for the industry in regard to this inquiry. I am quite amazed because Senator McEwen knows all too well that this is an industry desperate for certainty, desperate for clarity, and it is finding absolutely none of it from the current government.

What was very clear through this inquiry was that the introduction of means testing came with absolutely no consultation with the industry beforehand. They had every belief, every high hope going into the budget this year, that the new Rudd government would, if anything, expand support for their industry. They believed quite strongly that the new Rudd government would actually deliver for the solar industry, because they had seen all the hype. They had heard all the noise. They had seen the now Prime Minister go and stand alongside solar operators just outside Canberra. They saw him actually stand beside Phil May at his business, Solartec, praise the industry and talk about the potential of the solar industry.

They had every reason to believe that the new government was going to be a friend of the industry, and yet instead what happened on 13 May this year with absolutely no hint, no consultation, nothing at all, was of course that the government—the government that had with much fanfare signed Kyoto, the government that had spent the entire election campaign talking about climate change at every opportunity—just suddenly introduced a means test on the solar panels rebate. It did so at a time when the industry itself was just starting to gain some confidence, was just really taking off. It did so at a time when the industry was looking forward to the future, having built strong capacity in that sector.

Having seen the rebate increase from $4 per watt to $8 per watt up to a maximum of $8,000 early in 2007, the industry had confidence in its future. It had confidence that the rebate was there to stay to meet demand, and it had that confidence because the coalition government had given a five-year commitment and appropriation to the rebate. It had confidence that the funds would be there because the then Prime Minister himself gave a public and personal commitment that, if demand outstripped the funds that had been allocated, more funds would be made available. That was the type of certainty the industry had enjoyed. It enjoyed the clear certainty of a five-year program, an $8,000 rebate with funding committed by the then Prime Minister.

Instead, we get the change of government. Despite all their rhetoric around climate change, they come in and pull the rug of certainty out from underneath the solar industry. They pull that rug of certainty out and leave the industry with a program radically diminished. It is radically diminished because they cut the length of the program from five years down to three years. It is radically diminished because they cut off at the knees the types of installations happening in this sector that were going to give it the capacity and strength it needed for the long term. By that I particularly mean the size of the installations that were occurring.

The most damning evidence we received during this inquiry came quite clearly from those who said that the size of solar systems being installed was now much smaller than had been the case previously. In fact, when the government officials finally appeared at this inquiry—and I will come back to the government’s approach to the inquiry in a moment—we saw evidence given that the size of the systems had reduced by more than 20 per cent. It is not that the government is actually giving smaller rebates—the government is still giving the maximum $8,000 rebate for each of these systems—but it is doing so and getting 20 per cent less renewable energy as a result. I would love to hear Mr Garrett try to tell us how it is a good policy outcome to spend $8,000 a pop to generate 20 per cent less renewable energy thanks to his policy of means testing. What he has done by introducing the means test is he has cut out all of those households who could actually afford to put in larger systems—households that were looking at putting in three-kilowatt or four-kilowatt systems, households that would have put in systems that would have met their own energy consumption and fed into the national grid. They have been cut out of the system as a result of this means testing.

Instead, we hear the government wanting to crow about the fact that applications have continued to increase. Yes, applications have continued to increase. They have increased for a number of reasons. One of those reasons is the surge in bulk purchase schemes of the smallest possible system. The Queensland government themselves introduced a bulk purchase scheme for 1,000 systems of one kilowatt in size—so the smallest system to get $8,000. We saw them introduce that scheme in a manner that has artificially propped up the number of applications for the smallest possible system. They are one-kilowatt systems that will not meet the energy demands of most of the households, certainly will not feed into the grid, and are a long way short of actually delivering the type of growth in renewable energy, the type of growth in capacity in the industry, that is needed. So one reason we see the surge in numbers is certainly this surge in bulk purchase schemes.

Another reason we see this surge in numbers is actually the very lack of that certainty that Senator McEwen was speaking of before, because the industry and consumers are concerned that, having seen a means test implemented, having cut off a large swathe of the population—all households with a gross income over $100,000—from being eligible for this rebate, people are understandably concerned that maybe the whole rebate will go sometime soon. Of course, as speculation mounts that that whole rebate could be cut off, people are getting in while they still can. They are getting the applications in. They are scared at the lack of certainty given by this government and so they are getting in and boosting those short-term applications.

There are also concerns because you are now dealing with a much smaller marketplace. We did not have one industry operator come to us and tell us that this was good policy—far from it; every industry operator who came to us came and said they thought this was a bad policy decision. They came and told us that they had lost sales as a result. Most told us that in fact they had not managed to sell a single photovoltaic system to a household which was over the means test threshold. So that entire section of the community has been cut off from purchasing systems because there is no incentive.

Many people came to us and said to us that they were happy to spend a little bit more on a system—that, indeed, if they had to dip into their pockets a little deeper, they would have done so. But for households who were looking at contributing between $5,000 and $15,000 of their own hard-earned towards buying a system, suddenly discovering that it was going to cost them an extra $8,000 on top of that was just too big a burden to bear. So it is little wonder that that sector of the population now are not purchasing systems.

There is a concern, with a rush in households under the threshold but no market in households over the threshold, about what is going to happen. Slowly but surely there is concern in the industry that that rush in the marketplace will dry up. Many people put it to us that the government had messed up its priorities on this—that it had confused what is an environmental objective with social policy objectives. As one witness put it to us quite clearly, ‘Carbon emissions are not means tested.’ Far from it. In fact, of course, a lot of those larger households with larger household incomes are emitting more—they are using more energy. So, far from it being that their emissions are means tested, it is quite the reverse. Yet the government for some reason wants to means test an environmental policy—and they did so in the crudest and bluntest of possible ways: a $100,000 household means test. (Time expired)

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I rise to comment on the Save Our Solar (Solar Rebate Protection) Bill 2008 [No. 2] report. One of the problems with a government-dominated committee system is that the report does not actually reflect the evidence that came before the committee. The overwhelming majority of submissions came out saying strongly that the means test was a bad idea, that it had not worked, and that, quite apart from how many were taking it up, what it did do was reinforce the stop-start-stop nature of government support, or lack of support, for solar. As a result, accountants were saying to businesses: ‘We are not prepared to have a five-year business plan or a 10-year business plan because we have no certainty. This could be cut off again next year.’ What they overwhelmingly said was that, whilst they want the rebate reinstated in the way it was and to get rid of the means test, what they really wanted was a gross feed-in tariff to give certainty into the long term for industry. Overwhelmingly, businesses came before us and said that they had been planning on putting on more staff, expanding the business and so on and have not been able to do it because they now have no certainty.

The really interesting thing with this is that the government is facing an embarrassing situation. My understanding is that, since the budget, they have had around 6,000 applications and all the money that was budgeted is effectively gone—in four months what was effectively a year’s allocation is gone. What is the government going to do now? Is it going to say, ‘Our intention at the start was that it is overheating—that is, we are spending too much money on this’? It is actually the planet that is overheating, not anything else. So the upshot here is that the government have a situation where they have so many applications they have run out of 12 month’s budget in four months. What next? When are we going to have the announcement from the government saying that the rebate is over for this year? Or are we going to see an announcement from the government saying, ‘Next year’s budget allocation is going to be brought forward,’ which is clearly one thing they could do and should do in order to make sure that there is no stop-start again, because you will have a stop in a minute if you have spent all the money allocated in the first four months since the budget. What are we going to do? Wait eight months before the rebate starts again? What is the government going to do?

I put to the government, and particularly Minister Garrett: what are you going to do now? The solar rebate was overheating and now it has boiled over completely. They have spent the money and they have run out of their allocation for this year. Bring forward next year’s allocation at the very least so that things do not stop. More particularly, there has to be a huge amount of effort going into getting a national gross feed-in tariff because it is very clear the community wants to be enabled to take up photovoltaics. The community also wants to be enabled to go beyond rooftop solar and to have, for example, utility size solar thermal facilities.

I welcome Premier Carpenter’s announcement yesterday in Western Australia that he is bringing in a gross feed-in tariff, but again it is only at residential scale. We need it to be for utility scale as well. We need this to be rolled out on a large scale because the lie has been put absolutely to the claims that have gone on around this place for years that renewable energy is only a fringe dweller and cannot produce the kinds of loads we need. It not only can but would, if it were enabled to do so.

I respect the fact that the government have at least acknowledged that the submissions have overwhelmingly said a gross feed-in tariff is where people want to go. I am glad the government have acknowledged that the changes have simply meant that there are smaller systems and so we are not getting the maximum uptake of renewable energy that we could from the rebate that is being paid. But the big question hanging in the air for every solar business is: what is going to happen now that the rebate is fully taken up?

Could the government and Minister Garrett tell us: has the full amount been expended—applied for and effectively allocated? If so, what are you going to do about it? Is next year’s allocation going to be brought forward? Please announce it soon, because every one of the small businesses whom we have spoken to and who have put in submissions wants to know. If you have this massive application load now and they are refused on the basis that the allocation has run out, then that will dry up and these small businesses will be stuck for the next eight months—going out of business, having to put people off. It will just be reinforced that, as long as the solar industry is dependent on the whims of government ministers deciding on the basis of budget allocations whether they want to stoke or choke renewable energy, we are just going to have a situation where investors, venture capitalists in particular, are going to back away.

I think it is unfortunate that this report does not reflect the evidence that came before the committee more accurately. Nonetheless, I look forward to a gross feed-in tariff. I have a bill in front of the Senate and I am looking forward to the inquiry into it. But what we need right now is not only an acknowledgement from the government that there have been a lot of applications but the acknowledgement that the money has been expended. The question we want the answer to is: what is going to happen for the next eight months?

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary Assisting the Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

I start my contribution with a quotation:

The Rudd Government does not appear to be serious about tackling global warming. Rudd’s claim that ‘climate change is the great moral challenge of our age’ has clearly been forgotten or blatantly disregarded.

That quote comes not from a Liberal Party fancier but from none other than Mr Dean Mighell, the State Secretary of the Electrical Trades Union, Southern States Branch, in his submission to the inquiry. This act by the Rudd Labor government at budget time, without any warning, without any mandate, without any consultation—simply introducing a means test for the subsidy—clearly shows how hypocritical the Rudd government is in relation to climate change and alternative energy.

Unfortunately, I was only able to attend one day of the hearings. Somewhere along the line it got difficult for the participating members to find out when the committee was sitting. The day of hearings that I sat through in Melbourne clearly showed that the industry, environment groups, community groups, councils and individuals from the general public were absolutely aghast at a government that many of them conceded they had voted for because, amongst other things, they liked Mr Rudd’s ideas about Kyoto and saving the planet’s environment. They went with him in the election in 2007, and they more than others felt absolutely betrayed by the action in relation to the means test on this rebate. We heard witness after witness in Melbourne and we read submission after submission of those that came in—small businesses, industry people and tradesmen whose lifelong ambition to have a successful small business was shattered by Mr Rudd overnight on budget night.

The submissions we got mirrored the response I got the day after the budget in Townsville in North Queensland, where I have my office—a city that boasts 300 days of sunshine every year and, because of that, a city that is very keen on the use of solar energy. Two small business men in Townsville came to me almost in tears. One of them admitted that for the first time ever he had voted Labor because he had liked Mr Rudd’s approach to the environment and to alternative energies in particular. They were almost in tears because the businesses they had been building up over the last two to three years were shattered overnight. They gave facts of people ringing up the day after the budget saying: ‘I’m sorry. I know I have a contract with you, but I simply cannot afford to go through with it.’ I seek leave to continue my remarks later.

Leave granted; debate adjourned.