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

I table the supplementary explanatory memorandum relating to government amendments being moved to this bill. This memorandum was circulated in the chamber earlier today.

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

I rise to move the first group of Australian Greens amendments, which remove solar hot water heaters and heat pumps from the renewable energy legislation. This may seem counterintuitive and I want to explain why it is critical that this actually occurs. The Australian Greens totally support the rollout of solar hot water from one end of the country to the other. We would love to see it on every rooftop in the country, which is why we have a policy position to retrofit all of Australia’s houses with solar hot water. The government has not adopted a systemic approach such as the one the Greens advance. We want to see a national energy efficiency target and we want to see assistance for energy efficiency measures clearly go with that target. That is the place that solar hot water should have in an energy efficiency scheme. By lumping it in with the renewable energy target you are actually reducing the amount of energy that you are generating under the scheme—and I will get that to that in a minute. If the government does not want to have a national energy efficiency target and a scheme of financial mechanisms to support it, then the very least the government should be doing is increasing the renewable energy target to at least 30 per cent in order to accommodate solar hot water in the system but still leave room for the expansion of those technologies that actually generate renewable energy. The failure to have an energy efficiency scheme means we are crowding out the ability of generators of renewable energy to come in in the 20 per cent target. There are many academics who have put forward substantial papers on that.

One of the submitters to the Senate inquiry, Hugh Sadler, who has a huge amount of experience in this field, has pointed out that under the current MRET Scheme the installation of solar and heat-pump water heaters earns renewable energy certificates and they are equal to the additional number of megawatt hours of electricity that is deemed would have been consumed over the lifetime of the water heater had an electric resistance water heater been installed instead. The current bill retains this aspect of the scheme. But that is not consistent with the policy objectives of the renewable energy target. It will distort markets for water heaters and discriminate against other forms of water heating which have the same—or, in many cases, lower—levels of greenhouse gas emissions.

Data available shows that solar and water-pump heaters account for 24 per cent of all renewable energy certificates generated to the end of 2008. That means that the quantity of renewable electricity actually generated under MRET legislation is 24 per cent less than the normal program target. If this trend continues to next year, it will mean that renewable electricity generated is not 9,500 gigawatt hours in that year but 7,220 gigawatt hours. Indeed, the proportion of generated renewable energy certificates from this source has been steadily increasing over the last few years, which is consistent with the ABS data on the increasing market share of solar hot water, suggesting that the overall proportion of solar and heat-pumps generated certificates in 2010 may be more than 24 per cent. Because COAG has endorsed the National Strategy on Energy Efficiency, which includes a provision to phase out conventional electric resistance water heaters, we are going to see a huge expansion in the market. If it is assumed that solar and heat-pump systems will take 50 per cent of the new build and mandated replacement market, notwithstanding the target being four times larger than the current MRET, solar and heat-pump water heaters could account for nearly 20 per cent of the cumulative renewable energy certificates generated up to 2020.

That is not what this scheme was meant to be about. We do not want 20 per cent of the renewable energy target taken up by what is effectively an energy efficiency measure. That measure should be on top. If you are going to increase the target effectively by putting coal-seam methane on top, because it is not a renewable energy source, then you should be putting solar hot water on top because it too is an energy efficiency measure rather than a generator of renewable energy. It is a displacement mechanism rather than a generator of renewable energy. So I cannot see the consistency in saying we will bring in a non-renewable energy source and put it on top of the target, but we will not take out the energy efficiency measures and put it on top of the target. One can only assume it is because you understand clearly that by leaving it in there you are reducing the amount of renewable energy space for those technologies to roll out. That has to be a deliberate government measure, and it is a bad idea. Everybody in the renewable energy industry knows it is a bad idea.

We are also seeing incredible rorts with the heat pump market whereby some retailers are giving them away because of the generosity of the renewable energy certificate arrangements. That is nothing but a total rort going on out there. What we want to see is a genuine 20 per cent of renewable energy by 2020 being delivered by the government. The Greens want to go further by saying it should be 30 per cent. If you were genuine about it you would add on the energy efficiency measures on top of the 20 per cent if you are doing it for coal-seam methane.

I would like to ask the minister, in responding to this amendment: what percentage of the 20 per cent does she estimate is going to be taken up by solar hot water and heat pumps and how much, therefore, are we actually going to get in terms of renewable energy generation? Deeming an energy efficiency measure to be a renewable energy measure does not work. What if someone puts something in the wrong place? What if you do not get the levels of efficiency, and so on? I would just like to know from the minister, given the changes in COAG in relation to this and the deeming provisions: what amount of renewable energy does she actually expect to get from her target, given that the estimation is 20 per cent of the cumulative RETs generated up to 2020 are going to come from this particular energy efficiency measure and not renewables?

Ron Boswell (Queensland, National Party) Share this | Link to this | Hansard source

I have been told that I can ask some questions before we go on to the amendments. I want to ask this question of Senator Wong. I think it is very important. Senator Wong, in their submission on RET to the committee that investigated it, Catholic Health put that it was going to cost them, on RET only, $650,000 in the first year and by 2020 that would go up to $1.685 million. That was just for the hospitals. When you add aged care onto that, it would cost Catholic aged care $355,841, and in 2020 it would be $1,350,000. If you total those two costs, in the first year Catholic Health has to fork out $1,022,436 for aged care and that goes up to $2.7 million in 2020. Then if you add onto that the cost of the CPRS, the cost goes to $10.8 million—that is, the renewable energy target combined with the CPRS.

I ask the minister: has she considered how this will affect non-profit organisations? Has she responded to Catholic Health? What does she advise Catholic Health to do? Is the minister aware of the cost impacts of the CPRS where Catholic hospitals are likely to face an additional cost of $10.8 million? How will Catholic Health meet the cost of both the CPRS and the RET? Is there any provision to assist non-profit organisations such as Catholic Health? I assume these costs will be faced by Catholic Health and I understand they represent about 10 per cent of the non-profit health and aged-care industry. By a simple multiplication, that would suggest that the RET would represent a cost to the industry of $27 million.

This is a non-profit organisation. How are you going to respond to this? You cannot simply say, ‘We’ll pass the cost on to the aged-care people,’ or, ‘We’ll slug the pensioners another $5 or $6 for their accommodation,’ or, ‘We’ll close down some of the hostels.’ You cannot just inflict a cost like this on non-profit organisations—and it does not just apply to Catholic Health; this would affect many thousands of non-profit organisations. Have you considered this? What is your advice to them? I would like a response on behalf of the many hundreds of thousands of people who find themselves in aged care and those who are confined to hospital or use hospital facilities. The Catholic Health organisation is going to have to write a cheque for $10.8 million off their bottom line for an energy cost increase. How are you going to respond to that? Are there any avenues through the federal budget or state budgets whereby that cost can be picked up? This, I believe, is just one of the costs that have been overlooked by those promoting the CPRS. It is a cost that I think should be dealt with in the RET legislation before the chamber.

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern Australia) Share this | Link to this | Hansard source

We seem to be speaking in reverse order here, but Senator Boswell’s questions are very good questions and I would also like to hear the answers to them. Whilst the minister is on her feet, I wonder if she would elaborate on some issues for me. I tried to listen to the minister’s speech in reply to the second reading debate. Unfortunately I was in a meeting and only heard the second part of the speech, so I wonder if she would elaborate on whether the government is proposing to move amendments dealing with aluminium and at what stage those are at.

Also, perhaps the minister mentioned this in the first part of her speech, but I ask that she assist me by briefly outlining what the government will be doing about decoupling the renewable energy target from the ETS. Perhaps she has mentioned that, but if she has not perhaps she could respond now. I am interested in whether there will be a replication of the framework of compensation and qualification under the ETS but with a decoupling of the start date completely so as to begin on 1 January 2010, irrespective of whether the ETS legislation has been passed by then. I am also interested in whether the aluminium sector is going to face an expanded RET liability to 90 per cent and whether the government intends moving amendments on the food-processing area.

Once I get those initial responses from the minister, I also want to make some more specific inquiries—as I know Senator Boswell does. I am interested in the government’s position on gas being used as an abatement of carbon. Whilst it is not, strictly speaking, a renewable energy, it certainly will help in the abatement of greenhouse gases. I wonder if it is the government’s intention to look seriously at gas, perhaps on a smaller percentage of abatement than for renewable energies. I might perhaps explore those issues at greater length later, but I am initially interested in the minister’s intentions regarding amendments on the major issues I have raised.

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

For ease of the debate I might respond now to what has just been put by senators. I am sure that senators will return to some issues later. The last thing that Senator Macdonald raised was the inclusion of gas. I assume he means not waste coalmine gas but natural gas.

Ron Boswell (Queensland, National Party) Share this | Link to this | Hansard source

No, he meant waste coalmine gas.

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

I am sorry, Senator Boswell; I do not know if you want to get to your feet. I recall that the inclusion of gas was the coalition’s election commitment. They had, from memory, a 15 per cent clean energy target, including gas and renewables. The government’s election commitment was for a renewable energy target which comprised renewable energy, not gas.

We do recognise the importance of gas. Gas will be an extremely important fuel after the introduction of a carbon price. I think experience around the world demonstrates that. Gas has been one of the major and important contributors to baseload energy in the transition which occurred in the United Kingdom. The government would anticipate that gas in a world where there is a carbon price will become comparatively more competitive. Certainly I have had good discussions with various companies and organisations that operate in this field and they do see significant commercial benefit to them flowing from a situation where there is a carbon price. For example, Santos, which is located in my home state, has made some public comments about that.

Senator Macdonald is right: there is some greenhouse gas displacement and that it is a cleaner field than other fossil fuels. But we did go to the election with a renewable energy target commitment. We believe that once a carbon price is introduced that will certainly support the deployment of gas. I think that if you talk to industry there is a similar view there too—not that I want to speak for all of them, but that has certainly been some of their public statements.

Senator Boswell made a number of comments and asked about price impacts. The modelling the government has done in relation to the renewable energy target suggests that, between 2010 and 2020, as a result of this renewable energy target policy the likely impact would be an increase in electricity prices of around four per cent over the decade. Obviously, electricity prices may move for other reasons. State governments have made various decisions about retail prices, but as a result of this policy measure that is the estimation the government has been provided. There is a more significant impact from carbon price, which I know the senator has raised in various ways in this chamber. We have been upfront about this, and so was former Prime Minister Howard, to give him his due: you cannot introduce a carbon price and make something that was previously free have a cost without having some cost impact. We have been very conscious of that, Senator Boswell.

In the package that the Prime Minister announced at the National Press Club in December, half of the auction revenue from the permits will go back to Australian households—I will come to your non-government organisation issue in a moment, because we also had some discussions with that sector. That is a conscious policy decision by government; to prioritise particularly in low- and middle-income Australia, to enable assistance to be provided to adjust to the impact of a carbon price. My recollection is that, as a result of what the government announced, we will deliver through the tax and welfare system, if the CPRS is passed, to reflect our desire to assist low- and middle-income Australia, a package which ensures that around 90 per cent of low-income households will receive about 120 per cent of the likely cost impact, and around 97 per cent of middle-income households will receive some form of assistance. The policy that was announced by the Prime Minister enables that assistance to be delivered through the tax and welfare system. I can provide Senator Boswell the definitions and thresholds of low and middle income that were canvassed at that time, if he would like.

The senator raises the issue of non-profit organisations. This was an issue we discussed with the welfare sector. I am not sure I can respond specifically on the precise dollar figures you have put forth, Senator Boswell, because I do not have that submission in front of me. I again go back to our four per cent modelling, which is the advice to government. We have ensured that the Climate Change Action Fund does have a stream, which would also enable assistance to be provided to non-government organisations. That was in direct response to the representations made by that sector.

Senator Milne asked a number of questions. She referred to a national energy efficiency target and financial mechanism to underpin that. I have previously indicated in public discussions in various forums that we are reluctant as a government to set up yet another market based scheme to drive these policy outcomes, given that there are a whole range of changes that we anticipate as a result of the introduction of a carbon price. There is the National Strategy for Energy Efficiency which COAG has signed off on, which does look particularly at new commercial buildings. We also announced the Australian Carbon Trust. We want to showcase and encourage the retrofitting of existing buildings by business to drive those energy efficiency outcomes. Energy efficiency is an area which requires a range of policy mechanisms, and the government is conscious of that. We have implemented a range of those and we also believe that the introduction of a carbon price through the Carbon Pollution Reduction Scheme will be of benefit to that.

Senator Milne’s contribution also called for an increase to 30 per cent of the government’s renewable energy target. We believe a four-fold increase by 2020 is a very substantial investment. It is also consistent with what we took to the Australian people. The senator raises a very reasonable point, which is about the operation of aspects of the current eligibility criteria insofar as they relate to heat pumps. The evidence, or the suggestion, that has been made to a number of senators in this place, and also to the government, is that the operation of the heat pump aspect of the renewable energy target is problematic. I place on record that we do understand that those concerns are being raised by industry. The government is minded to consider how we manage changes such that we could restrict the arguable misuse of the renewable energy target in relation to heat pumps.

I also want to say publicly on this issue and on other issues associated with solar, which is another issue that the senator raised, that the Council of Australian Governments has agreed that by the end of this year some of the eligibility provisions of the renewable energy target for new small-scale technologies as well as heat pumps should be examined to ensure that the eligibility rules remain relevant over time to reflect new technologies and recent developments in renewable technology. We would anticipate that by year’s end COAG would have considered some of the issues that the senator has raised and the government, after considering the COAG review, would be in a position to have a more comprehensive response. The government is minded to consider interim measures, pending the finalisation of that review, designed to ensure the integrity of the renewable energy target and the way in which heat pumps, in particular, are assisted under this legislation.

The senator asked me a specific question about the amount of renewable energy that would be displaced by these technologies. She made a number of assertions based on modelling which assume no policy change and make a range of other assumptions about which I cannot comment. I can say to the senator that the modelling the government commissioned through MMA indicates that less than five per cent of the renewable energy target would be taken up by solar hot water and by heat pumps. But, of course, the ultimate proportion of the 20 per cent target by 2020 would depend on whether or not there are any changes as a result of the COAG review and also any changes as a result of the mooted 2014 review that the government has flagged.

Finally, the senator raised the issue of coal-seam methane—I think she means waste coalmine gas—and the assertion that that is not a renewable energy. The government does not disagree. I think in my summing up I made clear that it is not a renewable energy source. This is a transitional measure to reflect that there are a range of companies who are engaged in utilising this waste gas. There is an environmental benefit as well as employment in that sector. We believe this transitional measure is a sensible way forward and, to ensure that renewable energy is not crowded out, we have proposed that this component of energy be above the 20 per cent target. I think that addresses the issues that were raised by senators in the debate.

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

by leave—I move Australian Greens amendments (1) to (6), (9), (11) and (19) on sheet 5816 revised together:

(1)    Clause 2, page 2 (at the end of the table), add:

(2)    Clause 3, page 3 (lines 1 to 5), omit the clause, substitute:

3  Schedule(s)

        (1)    Each Act, and each set of regulations, that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.

        (2)    The amendment of any regulation under subsection (1) does not prevent the regulation, as so amended, from being amended or repealed by the Governor-General.

(3)    Schedule 1, page 4 (after line 25), after item 3, insert:

3AAA  Subsection 5(1) (definition of solar water heater)

Repeal the definition, substitute:

solar water heater means a device that heats water using solar energy and includes heat pump water heaters.

(4)    Schedule 1, page 5 (after line 2), after item 3A, insert:

3AA  Section 8

Omit “solar water heaters or”.

(5)    Schedule 1, page 6 (after line 12), after item 3L, insert:

3LA  At the end of subsection 17(2)

Add:

           ; (c)    solar energy used by solar water heaters, including heat pump water heaters;

             (d)    biomass from native vegetation of any kind.

(6)    Schedule 1, page 7 (after line 14), after item 3Q, insert:

3R  Subdivision B of Division 4 of Part 2

Repeal the Subdivision.

(9)    Schedule 1, page 8 (after line 10), after item 7, insert:

7AA  Subdivision BB of Division 4 of Part 2

Repeal the Subdivision, substitute:

Subdivision BB—Small generation unit return

23F  Small generation unit return

        (1)    If the sum of the number of certificates created by a person during a year under Subdivision BA exceeds 250, the person must give a return for the year to the Regulator on or before:

             (a)    14 February in the following year; or

             (b)    any later day allowed by the Regulator.

        (2)    The return must include details of:

             (a)    the number of certificates the person created under that Subdivision during the year; and

             (b)    the number of certificates the person is entitled to create that Subdivision because of rights assigned to the person under subsection 23C(2) during the year; and

             (c)    any other information specified by the regulations.

(11)  Schedule 1, page 8 (lines 14 to 16), omit item 7B, substitute:

7B  Section 25A

Repeal the section, substitute:

25A  Form and content of certificates—small generation units

        (1)    Certificates under Subdivision BA of Division 4 are to be created in an electronic form approved in writing by the Regulator.

        (2)    Each certificate is to contain:

             (a)    the registered person’s registration number; and

             (b)    the year; and

             (c)    a number in an unbroken sequence that is used for all certificates created in respect of the small generation unit concerned in that year and that starts at one and has increments of one; and

             (d)    the electronic signature of the registered person who created the certificate; and

             (e)    the date on which the small generation unit concerned was installed; and

              (f)    details of the eligible energy source in respect of which the certificate was created; and

             (g)    the date on which the certificate was created.

(19)  Page 24 (after line 20), at the end of the bill, add:

Schedule 4—Amendment of the Renewable Energy (Electricity) Regulations 2001

Part 1—Solar water heaters

1  Subregulation 3(1) (definition of accredited body)

Repeal the definition.

2  Subregulation 3(1) (definition of component certification)

Repeal the definition.

3  Subregulation 3(1) (definition of product certification)

Repeal the definition.

4  Subregulation 3(1) (definition of Register of solar water heaters)

Repeal the definition.

5  Regulation 3A

Repeal the regulation.

6  Subdivision 2.3.2

Repeal the Subdivision.

7  Application of item 6

To avoid doubt, the repeal of Subdivision 2.3.2 of the Renewable Energy (Electricity) Regulations 2001 made by item 6 means that certificates can no longer be created for the installation of heat pump water heaters.

8  Division 2.4

Repeal the Division, substitute:

Division 2.4  Small generation unit returns

20C                Information to be included in return (Act s 23F)

For paragraph 23F (2) (d) of the Act, a small generation unit return must include the following information:

               (a)     the year to which the return relates;

                    (b)     the person’s registration number;

                     (c)     the telephone number, fax number and e-mail address (if any) of the person;

                    (d)     the number and type of unit for which a certificate was created in the year and the period of time for which the certificate was created;

                     (e)     details of any certificates assigned under subsection 23C (2) of the Act;

                     (f)     the number of certificates found ineligible for registration in the year;

                    (g)     the reasons for certificates being found ineligible for registration in the year;

                    (h)     the process used by the person to ensure that certificates created or assigned under Subdivision BA of Division 4 of Part 2 of the Act are eligible for registration.

Note       For other information that must also be included in the return, see Act, subsection 23F (2).

9  Paragraph 28(1)(b)

Omit “23 (2) or”.

10  Subregulation 28(2) (table)

Omit “or solar water heater” (twice occurring).

11  Subregulation 28(2) (table item 1)

Omit “23 (2) or”.

12  Schedule 4

Repeal the Schedule.

Part 2—Wood waste

13  Paragraph 8(1)(d)

Omit “; and”, substitute “.”.

14  Paragraph 8(1)(e)

Repeal the paragraph.

15  Subregulations 8(2), (3) and (4)

Repeal the subregulations.

16  Subregulation 9(2)

Repeal the subregulation, substitute:

        (2)    For section 17 of the Act, biomass from native vegetation is not an energy crop.

Ron Boswell (Queensland, National Party) Share this | Link to this | Hansard source

Mr Temporary Chairman, if Senator Milne moves her amendments, does that cut out all further general debate on this bill or can we continue? Senator Macdonald and I want to debate some of these issues that are not related to the Greens amendments.

Cory Bernardi (SA, Liberal Party) Share this | Link to this | Hansard source

The call is with Senator Milne. There is a relevance question, of course, related to the debate but chairs have previously interpreted relevance quite widely and I would anticipate that we will continue to do so.

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

I return to the amendments, which the Greens have moved, and the two components of these amendments. Solar water heaters and heat pumps are no longer eligible to create certificates, and biomass from native vegetation is no longer an eligible renewable energy source. I just want to go back to the minister’s response in relation to what I had to say about heat pumps and solar hot water crowding out, from the renewable energy target, new renewable energy generation technologies.

Those that are likely to be impacted most are things like concentrating solar thermal and hot-rock geothermal because, to date, these technologies have not played a significant part in the MRET to the end of 2008. In fact it is around 0.01 per cent of the total from geothermal anyway. But they are seen as having great potential in the longer term. What the minister said was that her modelling does not suggest it is going to be a problem. It seems to me that if you have academics saying it is going to be 20 per cent of the RETs to 2020 that are going to be taken up by these technologies, there is a vast difference between what that modelling shows and what the government says. So I would like to have further detail about whether the government can confirm that, to date, about 24 per cent of all the RETs generated to the end of 2008 have come from solar and heat-pump water heaters. If that is the case they are going to crowd out renewable energy, and I return to my point that it should be over the top, as indeed the coal gas is, because it is not renewable energy. It is energy efficiency—we like it, we love it and we want it to be there—but we do not want it to crowd out renewable energy. We want 20 per cent of renewables.

The other point I want to make is taking out the burning of native forests to generate energy. This is an absolute disgrace and it ought not to be classified as a renewable energy source. We have the largest carbon stores in the Southern Hemisphere being logged. Just because the industry can say, ‘Our intention is to log them for sawlog,’ the other 90 per cent of the forest therefore goes as woodchips and is eligible to be burnt in a furnace. I want a guarantee from the minister that not one single renewable energy certificate is going to be generated from native forests that are logged in Tasmania, Victoria or New South Wales.

We have had many forest campaigners say that they are ready to go into action over this. As soon as the government tries to continue this rort by encouraging the logging of native forests to burn there will be court cases. And, of course, there will be court cases over this because it is so wrong. It is doublespeak and doublethink to go to Copenhagen and say that we are interested in reducing emissions from deforestation and degradation. We tell the Indonesians we are going to provide $200 million to stop them logging their forests and here we are putting the logging and burning of native forests into a so-called renewable energy target.

This is nothing more than a propping-up program for failing native forest businesses. That is what this is. It is the loggers saying they can no longer sell native forest woodchips overseas because the world does not want them and the result is that the price has dropped. This is a propping-up mechanism and it should not be tolerated. Apart from just saying it is government policy to log native forests and to support regional forest agreements, which destroy biodiversity, which destroy native forests, I would like to hear a justification for destroying ecosystems for supposedly renewable energy. It is not renewable energy; it is ecosystem destruction.

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern Australia) Share this | Link to this | Hansard source

I indicate that the coalition will be opposing Senator Milne’s amendments. Amongst other things, if the amendments were passed, I am advised they would destroy many, many jobs. Given the particular state of our economy, that is the last thing we want to do. Senator Milne demonstrates why the Greens will continue to be an irrelevancy in the political scene in Australia. Their inconsistency and hypocrisy are seen by most Australians, and indeed voting results in recent elections—the Queensland state election, for example—clearly show that the vote of the Greens political party has fallen quite substantially. They have lost seats at recent federal elections and have not—

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

Mr Temporary Chairman, I rise on a point of order on relevance. We are debating an amendment to take the logging and burning of native forests out of the renewable energy target. Senator Macdonald is straying into an analysis of election results, which I do not see as having any relevance to a renewable energy target and a government decision to log native forest—apart from being totally wrong, of course.

Cory Bernardi (SA, Liberal Party) Share this | Link to this | Hansard source

Thank you, Senator Milne. I did indicate that there would be a wide range of interpretation given to relevance. I think that Senator Macdonald is being relevant.

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern Australia) Share this | Link to this | Hansard source

I have been speaking for 1½ minutes of my 15 minutes in relation to this amendment, and I was simply indicating the Greens were a political irrelevancy because of their inconsistency on many issues, including this one.

I want to address the particular comments made by Senator Milne on the amendment. There is in Australia a very good sawlog industry. It is an industry that does employ a lot of people, but it also provides a valuable resource of carbon storage for Australia. Our sawlog industry is one of the most sustainable in the world and it is an industry that assists in construction within Australia. If we did not have a sawlog industry like this within Australia, we would be importing all of our sawlogs from places overseas that have an awful record of dealing with their forests. They deal with them in unsustainable ways, whereas the Australian forests are very sustainable. In fact, they are amongst the most sustainable forests in the world.

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

Seventeen species on the endangered species list is a brilliant record!

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern Australia) Share this | Link to this | Hansard source

Senator Milne, I did not quite hear the interjection, but it is typical of the Greens: destroy the forest industries at all costs. It has been the thing that spawned and converted the Greens from the old very ultra left-wing Communist Party of Australia into a Greens party. Here was a way they could perhaps do what the old communists used to do: destroy industries and jobs by using the veneer of an environmental approach.

As I was saying before I was interrupted, we have a sawlog industry that is sustainable. It is very, very useful. Of course, if you do not use logs in construction, what do you use, Senator Milne? Steel? Concrete? Those sorts of resources, rather than a renewable resource like timber? I talked about hypocrisy before. The Greens would have us build everything with cement and steel rather than renewable timber.

There is a very good, very sustainable job-creating sawlog industry in Australia. When you saw a log, you have waste: there are leaves, there are branches, there is bark. There is a lot of the tree that cannot exist in the sawlog that is being created. What do you do with that? Let it rot on the ground?

Ron Boswell (Queensland, National Party) Share this | Link to this | Hansard source

No, you bury it!

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern Australia) Share this | Link to this | Hansard source

Sorry?

Ron Boswell (Queensland, National Party) Share this | Link to this | Hansard source

The Greens would want you to bury it!

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern Australia) Share this | Link to this | Hansard source

Bury it? I accept that some of that is needed for the ecology. Some little lizards do like living in those sorts of things, I understand that. But it is a resource. It is there, it is the waste product from a sawlog industry. It should be able to be used as part of a renewable resource, a renewable electricity-generating activity. I can never quite understand the Greens’ opposition to this. We have, for a long period of time now, accepted that waste product from sawlogs can be used to create energy, and that should continue. That is one of the reasons the coalition will not be supporting this amendment.

In fact there are many calls for the facilitation of and an increase in the use of wood waste for the creation of electricity. It is a renewable resource; it will grow again and it has grown again. If you look at the forests around Australia, in many cases they have been logged for sawlogs for over 100 years and those forests are still magnificent. Compare that with the forests in Victoria that were decimated in those horrific bushfires earlier this year. One of the reasons that the bushfires were so intense was that pressure from people like the Greens political party had stopped the proper management of fuel in those forests. Because fuel could not be managed as it should have been, those fires were more intense and more destructive than would have otherwise been the case. The number of trees in the forests that were destroyed in the bushfires as a result of bad management of the forests—that is, not being able to manage fuel—is just mind-boggling.

If the Greens want to talk about the destruction of forests in Australia, perhaps they could give us a bit of a lecture on what happens when those intense fires go through the native forest and the intensity increases because people like the Greens political party will not allow proper management of the fuel and the understorey system. I might also say that, in the days when these forests were sustainably managed, you had on the spot a workforce of trained, experienced people who watched out for fires and who, at the first indication of a fire, had a team of people, trucks and equipment there to put the fires out. Unfortunately those days are long gone because logging is not allowed in most Australian native forests now.

In the old days, there were logging tracks through the forests. They were there to enable the selective logging of timber and for the timber to be hauled out. They provided egress and ingress for the industry’s vehicles. But they also had a very important role in firefighting. If fires were around, there were trained people able to use these tracks to get in and deal with the fires straight away. Yet the Greens have succeeded in persuading governments—I might say mainly Labor governments, although one or two coalition governments have been confused or conned by the Greens into thinking they would get preferences if they shut the forests down or created some reserves—to shut down many native forests. It has never worked, although I am pleased to say the Labor Party has now realised that you cannot keep shutting down these sustainable forests.

But when you do have sustainable forestry, as we do in Australia, there is wood waste which should be used for creation of renewable energy, amongst other things. For that reason, amongst other reasons, and because of the job-destroying nature of these amendments, the coalition will be opposing the Greens’ amendment.

Ron Boswell (Queensland, National Party) Share this | Link to this | Hansard source

Before I address Senator Milne’s proposition, I would like to continue my questioning of Senator Wong. I pointed out to Senator Wong that the RET was going to cost Catholic Health Australia about $2.72 million in 2020. Virtually what she told me was that you cannot have an omelette unless you crack an egg. Then she referred to something called the climate action stream. Senator Wong, have you discussed the climate action stream—I presume it includes some money somewhere—with Catholic Health and assured them that they have a way to access the climate action stream? How would they go about accessing some compensation for their $10.8 million claim under the CPRS and under RET?

I understand that Catholic Health have asked you—not you personally, but your department, which is sitting next to you—but they have not received any response. In fact, I believe that you have not even acknowledged their problem. We are not talking about Catholic Health as a standalone entity, we are talking about Catholic Health in its capacity representing about 10 per cent of non-profit organisations. If $10.8 million represents about 10 per cent of the non-profit organisations, we are now talking about $100 million that will have to be passed on to either age pensioners in aged-care homes or people in public or private hospitals. You cannot add $100 million to the costs of non-profit organisations and expect them to be able to pass it on.

You were very flippant in saying, ‘Senator Boswell, don’t worry about it because we’ve got a climate action stream.’ But be more specific. How do people—whether they be Presbyterians, Methodists, Catholics, Brethren—access this climate access stream? Where does your legislation say that there is a way to fund these costs of $10.8 million? While on this subject, you made reference to the fact that you were going to compensate low-income or middle-income people. What is the cut-off point—is it $100,000, $10,000, $55,000? What is a low-income family?

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

Mr Temporary Chairman, I rise on a point of order. I understand we are debating the Greens’ amendment which is to remove solar hot water, heat pumps and native forests from getting renewable energy certificates. Can I ask that, if Senator Boswell wishes to address that issue, he do so, but this is elsewhere in the legislation.

Cory Bernardi (SA, Liberal Party) Share this | Link to this | Hansard source

Thank you. I am sure Senator Boswell is coming to addressing his remarks in regard to the amendment.

Ron Boswell (Queensland, National Party) Share this | Link to this | Hansard source

On the point of order: Senator Milne sought leave to move her amendments and I then asked whether I could speak, and whether Senator Macdonald and I could make references to this bill that did not necessarily refer to Senator Milne’s amendment. I would have denied Senator Milne leave had I thought she was going to prevent further debate on this. Mr Temporary Chairman, your interpretation, as you told the Senate, was that we could have a wide ranging debate. I accepted that. If I did not believe you—and I know you are an honourable person—I would have denied Senator Milne leave.

Cory Bernardi (SA, Liberal Party) Share this | Link to this | Hansard source

Thank you, Senator Boswell. I have already ruled on this. You did indicate that you were going to be addressing the amendments. You are in order; continue.

Ron Boswell (Queensland, National Party) Share this | Link to this | Hansard source

Thank you. I will address the amendments, but I want to ask: what is the cut-off point that Senator Wong considers middle income? I think that is a very important point. I understand it is not a very high figure. Is that household income? Is it a primary earner or a combined primary and secondary earner making up a total? I would like you to recommit—not ‘recommit’, because you have not committed at all—or to explain your position to the Senate in relation to the hundreds of thousands of people who are living in aged-care homes or forced into hospitals. I would like you to advise the Catholic health organisation, and any other non-profit organisations, how they access this climate action stream. It seems it is a magic pudding, that it will fund anything that you want—but where does it say in the legislation, ‘If you are impacted by these increased costs, this is how you address that’? Can you explain that to me, to the Senate and to those hundreds and thousands of people who continue to be worried about this, particularly those people who are in these non-profit organisations that have to pay their bills on a yearly basis? They are particularly worried about this.

I will address Senator Milne’s amendments. We cannot support these amendments because they do not allow the use of forest by-products. As Senator Macdonald correctly said, when you saw a log into planks, you create sawdust. That by-product—the sawdust, bark or whatever it is—goes to refire the generators of Visy, who are trying to do what they can to get their carbon footprint down. What do you do with it? I want to draw your attention to a situation I am aware of. I actually reported this in the Australian. At Eidsvold at Allies Creek there was a little saw mill—in fact, it was a little village. It had 18 houses, two-men single quarters, big machinery sheds; it was a home for probably 30 or 40 people. Some people had lived there for 40 years. One guy had even retired, but it was his home. The owners of the mill said, ‘You’ve been a good and faithful servant for 40 years; you can stay in the home as long as you want to.’ So he pottered around the mill and he would not retire. But along came—her name escapes me at the moment, but she is embedded with the—

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern Australia) Share this | Link to this | Hansard source

Ailsa Keto.

Ron Boswell (Queensland, National Party) Share this | Link to this | Hansard source

Ailsa Keto. She is embedded with the Labor Party government. It was her wish that—

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

Mr Temporary Chairman, I rise on a point of order. I think that it is unparliamentary to reflect on members of the community in that way. Clearly, it is entirely appropriate to name people involved in the story, if the senator wants to, but to make those kinds of inferences about members of the public is unacceptable.

The Temporary Chairman:

I have been advised that only certain people are protected under standing order 193, and they have the right of reply. Senator Boswell is in order.

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

Through you, Chair, I would invite Senator Boswell, given that it is a member of the public who does not have a right of reply, to consider withdrawing that.

Ron Boswell (Queensland, National Party) Share this | Link to this | Hansard source

I was not aware that I had made any unseemly inferences on Ailsa Keto. I said she was embedded in the state Labor government, and she is.

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern Australia) Share this | Link to this | Hansard source

Perhaps you should say, ‘In cahoots with’.

Ron Boswell (Queensland, National Party) Share this | Link to this | Hansard source

Someone is drawing another connotation. It is not me who has that mindset!

The Temporary Chairman:

Senator Boswell, just continue with the debate, please.

Ron Boswell (Queensland, National Party) Share this | Link to this | Hansard source

I shall. Continuing with the story, there are 60-odd jobs there. Over the years there had been a build-up of sawdust and off-cuts. There was enough material there to fire a generator for six or 12 months. The government decided it would close the mill down. Part of that closure was the instruction, ‘You bury all these off-cuts and sawdust.’ The build-up was the size of a football field. Part of the compensation, if compensation were to be paid, required the sawdust to be buried. It took weeks to bury it. The point I want to make is that that renewable energy had enough power to fire a generator for six months. That was refused—the government would not allow it to happen—so they had to bury it. The generator wanted it. The operator wanted to sell it to the generator, or even give it to him, but no, the government said to bury it. So, what did the generator use? Black coal. There was a renewable source that could have been used and could have replaced black coal—but no. This is how stupid this thing gets. It was not allowed to be used: wood offcuts had to be buried and coal had to be used in a generator. That is why we are not supporting these amendments.

You can just go down the road to Visy. They have an operation where they power their generators with sawdust and wood offcuts. We would put out another couple of hundred blue-collar worker jobs. That does not seem to worry the Greens. We understand that. The environment is their No. 1 priority. But I would have thought it would worry the Labor Party. If we pass these amendments, we are going to knock off more blue-collar worker jobs. I do not know how we are going to power these generators. I suppose we will close them down. We will close down the Visy generators, the generators that use sawmill offcuts. We will close them down. That will probably affect the viability of the whole operation. For goodness sake, when is the Labor Party going to show a bit of backbone and stand up for the people? The people are out there. They are not earning big money, but they are paying their union fees and they are making a huge sacrifice to do it. When are you going to stand up for them? Why are you trying to take their jobs off them?

Senator Milne, I think I have explained it to you. Because you read about these sorts of operations, I believe you would have seen that in the Australian. There are 60 jobs down the tube. Do you know what they sold those 55 acres for? They sold them for $270,000. There were 18 homes, two men’s quarters, a dining room and a kitchen. It all went for $270,000. With that went 60 jobs. People had been out there happily working. They received a home for $20 or $30 a week and free electricity. They were happy there. But they lost their jobs. You want us to continue that. I am sorry, Senator Milne; I cannot accept your amendments.

I ask Senator Wong to address the issues that I raised regarding Catholic Health and tell us what she has done to talk to them. They have talked to you, your department or your office. Tell me how you have said to them: ‘Don’t worry about this $10.8 million. There is a way to get this money.’ If you would address that, I would be very grateful.

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

I want to return to the issue of native forest logging and this legislation being a driver for more destruction of native forest. There is a Gunns pulp mill proposed for Tasmania. They have a 30-year wood supply agreement for native forests with the Tasmanian government. They can access Tasmania’s native forests for the next 30 years. At this stage, only one bit of equipment has arrived at Bell Bay for this pulp mill. What a surprise: it is a forest-burning furnace. Regardless of whether or not they get their pulp mill up, they want to be able to burn native forest woodchips and generate energy. The Gunns pulp mill furnace is for 184 megawatts. I want to know from the minister whether those 184 megawatts will be eligible under this scheme for renewable energy certificates. Considering the renewable energy target, Australians would be horrified to know that the government is actively proposing that that occur. I would like the minister to comment specifically on whether she is prepared to give out the renewable energy certificate—that correspond to 184 megawatts of power—to Gunns, when they are destroying ecosystems.

Just this week I pointed out by interjection to Senator Macdonald that the minister for the environment released a report saying that we had 1,750 species on the threatened species list in Australia. As my colleague Senator Siewert has pointed out, we have the highest rate of mammalian extinction in the world. What a record for this country! We have seen destruction of forests, and this will drive further destruction of forests. To that end, there has been quite a lot of lobbying in relation to this. The Australian Forest and Climate Alliance have got together and put out a statement today on this legislation. The statement is endorsed by a large group of people across Australia who do not want to see burning native forests in these so-called renewable energy targets. I will read out the names, because it is worth the government and the coalition understanding just how many people object to what is an obscenity. In an age of global climate change—when 20 per cent of greenhouse gas around the world comes from deforestation—we are encouraging the logging of native forests. To add insult to injury, we are going to pay people a premium to do it through this renewable energy target.

This statement has been endorsed by Lawyers for Forests, the South East Region Conservation Alliance, Environment East Gippsland, the Western Australian Forest Alliance, the Australian Youth Climate Coalition, Coastwatchers, Chipstop, the Huon Valley Environment Centre, Friends of the Earth, GECO, the Wilderness Society, Environment Tasmania, the South East Forest Rescue, Still Wild Still Threatened, the Australian Conservation Foundation, the Environment Network, the North East Forest Alliance, the Forest Action Trust and Healthy Soils Australia. They represent a lot of people who are working very hard on the ground to try to protect ecosystems and to try to protect species in front of bulldozers. Here we have in this parliament, it seems, a consensus between the government and the coalition. It is exactly what I said last night about George Orwell. He wrote in his novel Nineteen Eighty-Four:

The power of holding two contradictory beliefs in one’s mind simultaneously, and accepting both of them … To tell deliberate lies while genuinely believing in them, to forget any fact that has become inconvenient, and then, when it becomes necessary again, to draw it back from oblivion for just so long as it is needed, to deny the existence of objective reality and all the while to take account of the reality which one denies—all this is indispensably necessary.

It is called ‘doublethink’, and that is what is going on here. We have a government engaged in doublethink on the one hand running to Copenhagen saying they are interested in reducing emissions from deforestation and degradation while on the other hand, in this place, having a renewable energy target which is derived in part from burning native forests. If that is not doublethink, I do not know what it is.

Senator Macdonald might suggest that you would expect these groups to have a view about burning native forests—of course they do, because they are rational about ecosystems, they are rational about the loss of species and they are worried about climate change. They are saying that over 70 representatives from forest groups around Australia have recently formed this alliance, that peak environment groups, local and regional forest protection groups, young people and NGOs are all calling on the Rudd government to secure Australia’s climate future by protecting native forests from logging, woodchipping and burning. And so they should, because they are worried about their future. They are worried about the collapse of ecosystems. They are worried about the lack of resilience and the loss of biodiversity. And so they should be.

Even this Senate agreed in a Senate committee report that the regional forest agreements are not protecting biodiversity, and there is a review into that at the moment. It is not good enough to say that it is just government policy. As these groups have said, burning native forests for power generation is a ridiculous proposal cooked up by a logging industry desperate for alternative markets for woodchips. That is exactly the reality of what is going on here. Native forest furnaces are bad for the climate, bad for water supplies and bad for wildlife and must be rejected. These groups go on to say that without eight million tonnes of native forest woodchipping in Australia each year there would be no waste. That is absolutely right. When you take account of the whole life cycle of the fuel that industrial burning of native forest wood generates, it is about six times the greenhouse gas emissions of coal fired electricity. ‘It’s not renewable, it’s not clean, it’s definitely not green,’ said Harriet Swift, who is a spokesperson for Chipstop.

Around Australia people want to see this aspect of the legislation taken out. It was a mistake when it was put in there. At the time, the Australian Conservation Foundation, the Wilderness Society and all these groups were coming out very strongly, opposing it being in there. They saw this as an opportunity to expand the renewable energy target, to have genuine renewable energy, not use this as an excuse to prop up the destruction of ecosystems and to drive climate change and make it worse. The whole thing here is that these forests are not accounted for in the greenhouse accounts. You can log an old growth forest—and studies by the ANU have shown that these are some of the most carbon-dense forests in the world—and you can put all that carbon to atmosphere, with the soil carbon, the whole shebang, and you are deemed to be carbon neutral in doing it. That is an outrage in terms of the greenhouse accounts. It bears no resemblance to reality and it is nonsense to be carrying on like that. So we are seeing precious native forests knocked down, with huge carbon stores released to atmosphere, then the wood taken and put in a burner, and renewable energy certificates given.

I want to hear the minister tell all these forest groups and people in Tasmania who are so vehemently opposed to native forests going into the Gunns pulp mill that not one renewable certificate is going to be granted to energy that comes from the Gunns forest-burning furnace, because 184 megawatts is a lot of energy. We want to hear the minister say whether or not certificates are going to come from that furnace. We also want to know how the minister can justify her position, telling the Indonesians not to log their forests whilst subsidising the logging of ours and asking taxpayers to pay more for their electricity to prop up the woodchip industry, just as we are going to be asking every energy consumer to pay more for coal gas—a fossil fuel within a renewable energy target. It is a complete nonsense and it is a browning-down of this. Consider the crowding out of renewables that is going to occur from energy produced from logging forests and energy produced from coal gas. They should be outside, in an energy efficiency scheme, not in a renewable energy scheme, so that we can increase the impact we are having on reducing emissions. But no, we get none of that.

So I think the minister really needs to explain to the Australian people how she can justify the logging of native forests when the market for woodchips is not there. That market has collapsed. That is why the woodchip mills are on two days a week in many places around the country—because there is no market for woodchips. She is creating an expanded market through the renewable energy target and giving them the opportunity to move on to forest furnaces.

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

I remind all senators we are about to go to MPIs. Whilst I am very happy to continue debating this, I remind them also that the Clean Energy Council has estimated that the industry is losing about $2 million a week in the absence of this legislation being passed and certainty being provided. It is the government’s intention to do all we are able to pass this legislation this week. Given we have three pages of amendments and we have not even voted on the first one—

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern Australia) Share this | Link to this | Hansard source

Senator Ian Macdonald interjecting—

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

I was not particularly directing that at you, Senator Macdonald, for a change. I invite senators in this debate to consider their approach to this debate. In the time remaining, I do not have time to respond to everything Senator Milne or Senator Boswell put. I am happy to do it subsequently in the committee debate. Senator Milne has launched into an aggressive attack on others, including accusing the government of Orwellian doublethink. I do not think that that language is appropriate or helpful. If the senator is accusing us and others of that, perhaps the senator should consider the inconsistency of a position where a party which says it is supportive of action on climate change could vote against the first legislated limit and reduction of carbon pollution in the nation’s history. The senator should consider, perhaps, how she ends up on the same side of the chamber as Senator Fielding and Senator Boswell on an issue such as the Carbon Pollution Reduction Scheme. When she accuses others of doublethink, I would invite her to consider the logic of the Greens’ position on the Carbon Pollution Reduction Scheme. In relation to Senator Boswell’s response, I have a range of things I can say. I am happy to do it now and we can put this amendment to the vote or we can do it subsequently.

Progress reported.