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

On Tuesday I was speaking on the report of the Standing Committee on the Environment, Communications and the Arts on the Save Our Solar (Solar Rebate Protection) Bill 2008 [No. 2] when time elapsed, and I want to continue to my remarks. I was saying at the time how grateful I was for a quote from Mr Dean Mighell, state secretary of the Electrical Trades Union, who said:

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 was a very perceptive comment by a very well known trade unionist, Mr Dean Mighell, a very well known player in Labor Party circles. He, like the rest of us these days, clearly understands that Mr Rudd’s words are never followed with action.

Nothing could be clearer in relation to the way the Rudd government has handled the means test on the solar panels rebate. Nothing was said prior to the election to indicate that this was going to be part of the Labor government’s first budget. In fact, all disinterested observers had the other impression. I think the committee’s report records that before the election Mr Rudd attended at the venue of a business that supplied and installed solar panels. Mr Rudd clearly gave the indication to the Australian voting public that he not only would be supporting the solar panels industry but would be actually trying to enhance it.

When my time to speak ran out on Tuesday I was talking about two businesses in the Townsville area, where I come from, who were in great distress because they had been building up their panels installation businesses over a period of two or three years. They both said to me that they had not made a lot of money to date but that they had everything in place for their businesses. Then suddenly, without warning, on budget night their businesses were just ripped from beneath them. They were very distressed, and I was saying that one of the business owners confessed to me that for the first time ever he had voted Labor because he had been impressed by Mr Rudd’s concern for the environment, particularly the indications of his very strong support for the solar panels industry. This person was dismayed and betrayed by the approach of the Labor government on budget night.

Throughout the day of the committee hearings that I attended, which was on the day in Melbourne, we had witness after witness come in and indicate how wrong this was, how their businesses had been shattered and how orders had been cancelled. Many of them gave the figures of the orders that were on their books that were cancelled on the day after budget night. The submissions that were made repeated that story. Again, the people calling my office in Townsville gave indications of the contracts that had been cancelled overnight. Yet I see from the report that in the following days of hearings, which unfortunately I was unable to attend, the department gave some quite startling evidence. They indicated that the number of applications for the solar rebate had increased since the budget announcement. I do not for a moment suggest that the departmental officials were not telling the truth, but it seems so at odds with the evidence given to the committee on the day I was there and in the submissions about the numbers of contracts that had been cancelled, how people were being put off and how businesses were in danger of folding because of this budget announcement.

One of the witnesses to the hearings did say that they believed that if the department’s figures were correct then one of the reasons would have been—and these reasons are quoted at length in the coalition’s report on this particular inquiry—that many people believed that the means test started in the new financial year, not the day after the budget, and so would have been trying to get their applications in before 1 July came around. That was given as one of the reasons for any possible increase. Another reason was that some families’ household incomes may have been below the new $100,000 threshold during the 2007-08 financial year yet they may have been expecting a higher than $100,000 payment in the 2008-09 year. They may have been expecting an increase in the following year so they were rushing in before the end of the year so that they did not go over the $100,000 mark and therefore become ineligible. There was also a suggestion that the outrage in the media, in letters to the editor and on talkback shows from the general public at this mean-spirited action by the Rudd government on budget night had publicised this to an extent that it possibly had not been before. I understand from evidence that the money that the Rudd government has made available in the budget, even though it reduced the means test to $100,000, is likely to run out in about November or December this year, which means that if you do not get your application in quickly it does not matter what your income is, you will not get the subsidies for the solar panels.

This whole disgraceful episode of the Rudd government on budget night is indicative of the vandalising approach that this government has taken to the environment. Here was a program that was encouraging people to use solar energy so as to save on carbon energy and lessen greenhouse gas emissions. We have had a lot of talk from the government about the emissions trading scheme to reduce emissions. Here was a way that this was going to happen through ordinary people who wanted to do their bit, yet the Rudd government just shattered this good way of allowing people to contribute. It is similar to the Rudd government’s approach to the environment generally. In the razor gang cuts at the beginning of the year most of the programs that were severely impacted upon were environmental programs. The natural resource management—the NHT and NAP—programs of the previous government were slashed. Less money was made available to those community groups who were doing good on-the-ground work. Their incomes were slashed by something like 40 per cent. That meant that, in many regional communities in my state where these organisations are based, many of the jobs that had been created around caring for the environment were lost overnight.

Richard Colbeck (Tasmania, Liberal Party, Shadow Parliamentary Secretary for Health) Share this | Link to this | Hansard source

And the Landcare program.

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

Indeed, as Senator Colbeck mentions, Landcare is another program which the Rudd government has slashed. It shows the hypocrisy of the Rudd government in the field of environment, just as they are so hypocritical in the fields of inflation and economic management in their rhetoric about having a difficult time ahead with the budget. We all know that when the Howard government entered office they took over a debt of $96 billion. When the Rudd government took over they had, thanks to the Howard government, a surplus of $22 billion. It is hypocrisy the way they are carrying on. (Time expired)

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

It is my pleasure to support Senator Macdonald in relation to the report of the Senate Standing Committee on the Environment, Communication and the Arts on the Save Our Solar (Solar Rebate Protection) Bill 2008 [No. 2] and to add to my remarks on this topic in this place. It has amazed me that the government members on this committee, the government overall and Mr Garrett in the other place the other day have sought to pretend that this means test has had absolutely no impact—in fact, not only to pretend that it has had no impact but to go further in some instances and argue it has had a positive impact. The government members serving on the Senate’s environment committee in their majority report stated:

... despite short-term concerns created by the budget decision, there has been no reduction in the desire of households to install photovoltaic systems, and no slowdown in the take-up of the rebates. The budget decision has not caused a dampening of demand for the services of the solar industry.

Mr Garrett has even gone further in some of his comments both in the other place and in the media, almost suggesting the means testing has had a positive impact on the industry, and that somehow by excluding more people from being eligible for a rebate will actually encourage more people into the market. Not only is the logic perverse, but it stands in total contrast to all of the evidence that was received during this inquiry. Some 157 submissions were received, overwhelmingly from individuals and small businesses—most had never participated in these types of parliamentary proceedings and chose to do so for the first time. And each and every one of them, barring the government submissions, reported negative impacts as a result of this decision. Let us look at a few of them. Blackmore’s Power and Water submission said:

Initially, I thought the means test wouldn’t deter families earning over $100,000, to continue to install solar power grid connect systems. However NOT one customer has installed or intends to install a system, that hasn’t applied for the $8000 government rebate.

They have not had one customer since the government introduced this means testing out of the blue on budget night. This is a business operator saying ‘not one customer’, despite the fact that government members wanted to conclude that there had been no reduction in the desire of households. Blackmore’s Power and Water had not had one customer who was ineligible for the rebate come forward. Sun Wise Electrics said:

The decision to means test the solar PV rebate has all but stopped my business in its tracks. Customer desire has almost disappeared over night.

…            …            …

I am currently considering what to do with my business as a result of the means test decision.

We have hundreds of examples of businesses like this all around the country who say that there has been a very definite and very deliberate impact on their business. Self Sufficiency Supplies Pty Ltd said:

I, and I speak for many small business owners in the industry, feel that whilst the signing of the Kyoto Protocol was a nice symbolic gesture, when it came to doing something that really made a difference, the Government not only failed to do something that kept the status quo, but have gutted a scheme that made a positive difference to ‘working families’, to our solar industry and to climate change.

These are real people in real small businesses who genuinely know about the impact of this government’s decision on their industry, the solar industry. It is quite remarkable that we see the government trying to turn a blind eye to these people and trying to suggest for some reason that in fact they are not actually being affected at all by this decision to means test. The impact has not only turned so many people away from the industry but has also seen a further perverse outcome, and that is that people are getting smaller systems installed. Smaller systems are now being installed for the same sized government grant.

Stephen Parry (Tasmania, Liberal Party) Share this | Link to this | Hansard source

What a waste!

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

As Senator Parry says—and he made some remarkable contributions on this committee, and it is possibly my fault that he does not receive the credit that he should in the minority report—it is quite remarkable that the government is now giving away its $8,000 rebates to get smaller systems installed. We have Conergy saying:

The reduction in PV panels distributed around the country means the emission reductions occur at a greatly reduced rate. Isn’t the idea to have as many solar panels on rooves in order to reduce our emissions? Emissions are not means tested so why should the rebate be means tested?

That is a very valid question. Emissions are not means tested for households that may earn more than $100,000, so why should this rebate be means tested?

The industry could see, and feared, what would occur as a result of the means testing. They could see not only that you were shutting a large portion of the market out but also this impact of smaller systems being installed. Mr Ric Brazzale, from Green Energy Trading, told the committee:

We have a major concern that what will happen now is it will drive, if you like, the lowest common denominator, a roll-out of smaller, one kilowatt systems and it is not going to leverage customer demand.

That is exactly what has happened. The average size system under the rebate up until the means testing was introduced was a 1.57 kilowatt system. The average size system installed since the means testing was introduced is 1.24 kilowatts. That is a more than 20 per cent reduction in system size, on the government’s own figures.

The government want to claim that the means testing is a success and claim against all evidence that it has inspired more involvement. Not only has it driven many people out of the industry, but their own figures demonstrate that for each $8,000 that they spend today they are getting 20 per cent less renewable energy generated than they were previously. How on earth can the government claim that this is a successful policy?

They talk about certainty for the industry as well. The industry certainly needs some certainty. It had this policy of means testing dropped on it out of the blue in the budget, as Senator Macdonald was saying previously. Now the industry is concerned about the surge in bulk purchase schemes, and particularly with the Queensland government having effectively run a giveaway of one-kilowatt schemes. More than 1,000 households in Queensland are propping up the government’s numbers since the budget. They have had 1,000 kilowatt PV systems installed for less than $200.

We see that the budget amount for these $8,000 rebates is likely to be exhausted by the end of September. So what is the government going to do now? Maybe it will reduce the means test again. Maybe instead of a $100,000 means test it will bring it down to $10,000. That might prolong the life of the program further. Maybe the government could revisit the commitment that former Prime Minister John Howard made in May of last year when he said that if demand outstrips the budgeted resources for this program the government will commit extra funds to it.

Stephen Parry (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Commendable.

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

Yes, indeed. And why did he make that commendable commitment? Because the previous government, unlike this government, had a genuine commitment to growing our renewable energy sector, to growing the solar industry sector and to supporting photovoltaic systems. That is why in this report opposition members have sought to outline some plans for the future of the industry. We urge the government to step away from this means testing, to give a solid five-year commitment to funding and to start the transition pathway towards the introduction of feed-in tariffs, something that could provide some longer term sustainability for the industry. That is why we have offered a positive alternative to a government that wants to try to claim a policy that is obviously a total failure as a success. Unfortunately, after they have botched a successful policy of the previous government, we now find that we have to give them the way out and urge them to adopt our plans and change the means testing.

Concetta Fierravanti-Wells (NSW, Liberal Party) Share this | Link to this | Hansard source

Order! Senator Birmingham, your time has expired.

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

I seek leave to continue my remarks later.

Leave granted; debate adjourned.