Alan Ferguson (SA, Deputy-President) Share this | Link to this | Hansard source

The President has received a letter from Senator Siewert proposing that a definite matter of public importance be submitted to the Senate for discussion, namely:

The overwhelming benefits of a gross national feed-in tariff for renewable energy for creating jobs, revitalising regional communities and reducing greenhouse emissions.

I call upon those senators who approve of the proposed discussion to rise in their places.

More than the number of senators required by the standing orders having risen in their places—

I understand that informal arrangements have been made to allocate specific times to each of the speakers in today’s debate. With the concurrence of the Senate, I shall ask the clerks to set the clock accordingly.

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

I rise today to speak on what I regard as an extremely urgent matter of public importance, and that is the critical nature of the need to reduce our greenhouse gases and make the transition to a low-carbon economy as quickly as we possibly can. In order to do that, we need a gross national feed-in tariff. This debate has been going on in the Senate for some years. I have moved legislation in here and we have had a debate on that legislation. The debate has been suspended. We have not had a vote on it yet, but it is critical that we do it. The reason for this is that in every other country where there has been an explosion in renewable energy it has been because they have brought in a gross feed-in tariff.

If you want to see an example of the poor framework for supporting renewables in Australia compared with overseas, look at what happened in Australia only last week: Solar Systems went into voluntary administration. They were scheduled to build a large-scale new-technology plant at Mildura and they went into voluntary administration. In the same week, First Solar, an American company, announced a decision to build a two-gigawatt solar power station in China. This is what the Chief Executive Officer of First Solar, Mike Ahearn, had to say:

The Chinese feed-in tariff will be critical to this project ...

He went on to say:

This type of forward-looking government policy is necessary to create a strong solar market and facilitate the construction of a project of this size, which in turn continues to drive the cost of solar electricity closer to ‘grid parity’—where it is competitive with traditional energy sources.

Frankly, I could not have put it better myself. China is going ahead with large-scale renewables because of its feed-in tariff. Japan last week announced its intention of going to a 25 per cent reduction in greenhouse gas emissions and the introduction of a feed-in tariff to support that initiative. In the UK, where they have gone to a 34 per cent target to reduce greenhouse gas emissions, the government has acknowledged that its certificate system, which the Australian government has based its renewable energy certificates on, is not working like feed-in tariffs work and so the UK is going to go to a feed-in tariff. In France there is a feed-in tariff. In Germany there is a feed-in tariff. Why is it that in Australia we cannot and will not learn that the best way to support the bringing on of renewable energy technologies is through a gross feed-in tariff?

The legislation that I introduced into the Senate was referred to an inquiry. There were more than 125 submissions to that inquiry and at least 120 of them supported a gross national feed-in tariff. All of them said it was silly to have different jurisdictions in different states, that we needed a national arrangement and that it needed to be a gross tariff. How does it work? A gross tariff works whereby you give a fixed price for a fixed volume of energy that you produce over a fixed period of time. You can go to the bank and borrow the money in order to invest in a project because you know exactly what your return is going to be for 20 years. That is why in Germany we saw farmers go out and borrow the money to cover their winter barns, for example, with renewables—because they knew what their return would be over 20 years and the bankers could see that they could cover the repayments as a result of that.

In Australia we have rural communities desperate for a gross feed-in tariff because, particularly on some of those large properties in outback Australia, they can see huge potential for leasing part of their property or going into a joint venture arrangement with renewable companies to build large-scale solar thermal or wind energy plants on their properties and to make money from the climate instead of being constantly stressed by the climate because it is undermining what they used to do on those properties. So it is good for Australia. It is good for the Australian economy. It is good for the transition to a low-carbon economy. It helps to build manufacturing, because once you get the national gross feed-in tariff you will get investment in those technologies.

Solar Systems fell over, went into voluntary administration, because it could not raise the capital. Why could it not raise the capital? Because there is no economic framework in Australia to support large-scale renewables. The renewable energy target does nothing to bring on solar thermal, to bring on wave power or to bring on geothermal. There is no arrangement in Australia to bring on those technologies. In the absence of a gross feed-in tariff, it is not going to happen. We will see increasingly that not only do we need to have the economic framework in place for the national gross feed-in tariff but governments need to invest in the grid so that there is an intelligent grid going out to areas where the private sector will invest in these large-scale facilities. That is why they have done so well in Germany.

Just today I worked with Greenpeace International on the release of a report. They say in their report that if Australia is serious about maximising the potential of renewable power and clean energy job creation, it will introduce a national gross metered feed-in tariff for renewable energy technologies. It is that clear, that obvious. The jobs are there—250,000 jobs in renewables in Germany. There are now many more jobs in renewables than there ever were in coalmines in Germany. They are much more sophisticated jobs and they are exporting the technologies. If you go to Denmark, you see that a requirement of their wind industry is that they use Danish technology. They support the technologies, the rollout of the technologies, and then they sell the second-hand turbines overseas while they take on the latest technologies themselves.

It is clever. It is investment in new technology, in new manufacturing, in new jobs, in skills upgrading—in everything. In fact, there is no downside to a national gross feed-in tariff. So, if there is no downside, why is the government so studiously refusing to allow it to happen? Why did it drive it to COAG to get the lowest common denominator outcome? Why is it that the only people objecting to a national gross feed-in tariff were the federal government, the government of South Australia and the large industrial generators like the coal sector? The only answer to that could be: the faith that the government places in coal and its desperate need to keep channelling all of the money. They say that they do not pick winners; well, they did. They have picked a winner and that is carbon capture and storage, which does not exist.

Premier Bligh’s latest notion of her coal-fired power station in Queensland with CCS is a joke—it is just another coal-fired power station minus CCS, which is the green gloss to try to pretend that there is some technology in sight. One can only assume that the Prime Minister, Mr Rudd, and the Minister for Climate Change and Water, Senator Wong, are so intent—along with the Minister for Resources and Energy, Mr Ferguson—on holding up the rollout of renewables in Australia in order to wait for so-called clean coal to come on board that they are prepared to do anything, even if it means undermining the jobs.

Greenpeace modelling shows that, by 2020, ‘By maximising Australia’s potential for renewable energy, Australia can have 33,900 jobs in the renewable power sector alone.’ That is pretty impressive, and they have modelled that by considering the total number of jobs in construction and installation, manufacturing, operational and maintenance and fuel supply. The breakdown of that is that there are 10,700 jobs in photovoltaics, 6,400 jobs in wind, 5,200 jobs in bioenergy, 1,800 jobs in geothermal, 6,900 jobs in solar thermal, 900 jobs in ocean and 2,000 jobs in the hydro sector across the country. That is the kind of potential that we are missing out on.

We must have this tariff in Australia. The House of Representatives will have a chance to vote on this tonight when Rob Oakeshott introduces my legislation there. But this Senate has the opportunity to pass this, and I would be keen to hear from anyone in here who can tell me why it is that Australia will not adopt the very framework that has worked so well in so many other countries overseas in generating jobs, new manufacturing industries and new exports. I thought that was what we were trying to do in Australia, rather than driving those people overseas. That is what has happened with solar heat and power, with Zhengrong Shi and with so many of our best and brightest leaving the country while we simply focus on digging more holes and filling them in again with so-called carbon capture and storage.

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

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

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

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

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

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

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

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

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

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

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

The matter of public importance we are debating today says that a feed-in tariff will create jobs, revitalise regional communities and reduce greenhouse gas emissions. The Greens have got a trifecta there. It will not create jobs unless they are heavily subsidised jobs. It will kill regional Australia; it will increase costs for the people who can least afford it. And it will reduce greenhouse gas emissions but at three times the cost of an ETS. That is what the research from the Productivity Commission, Treasury and a number of other sources has said: yes, it will reduce greenhouse gas emissions but at three times the cost of an ETS. So I have to inform the Greens that they have got it completely wrong, as usual.

A gross feed-in tariff is one where, under gross metering, the tariff is paid for the total amount of power produced without any deduction being made, irrespective of how much of that power is used and fed back into the system. A kilowatt per hour is worth about 16c to 21c. When you put it into a gross feed-in tariff, it goes up to 60c. So a gross feed-in tariff that started at 21c is now 60c. But, due to the generosity of the Greens, people who put these photovoltaic cells on the roofs will get it for the power they use and the power they put back into the grid. It is a wonderful system for those who do not have to pay! A 21c product becomes a product worth 60c, and 60c is the rate paid for all the electricity generated under a gross feed-in tariff. There are only two territories—no states—that have agreed with this, the ACT and the Northern Territory. Every state has avoided a gross feed-in tariff like the plague. They will not accept it.

We can all stand here—and Senator Milne is very good at it—and paint a rosy picture of renewable energy. But let us get down to basics. What is renewable energy? Renewable energy costs, and it costs a lot of money, and it will not work unless it is heavily subsidised. Let us go back. Coal power is $40 a megawatt hour of power. Gas is about $50 to $55. Wind is $100 a megawatt hour of power. Photovoltaic cell power is $200. So you have got a $40 product that has to be subsidised $60 before it will work. Even then it only works when the sun is shining or the wind is blowing. It does not work all the time. You have to have baseload power there, churning away in the background to back it up, and when the power fails you kick it up a bit. So it is an absolute fallacy.

Senator Milne, it is not true to say that these things will create prosperity. They will cost prosperity, and you know it and I know it. And to go back to renewable energy and to give some detail of what it will mean, say, to the Catholic hospitals, it will cost the Catholic health hospitals and their health department and aged care homes $3 million by 2020. That is renewable energy. Someone has got to pay for it; someone has to pay for renewable energy. And who is going to pay, Senator Milne? Is it going to be the pensioner? Is it going to be the unemployed, the single mother, the battling family, the blue-collar worker? Who is going to pay for your generosity? Someone has to pay these subsidies.

You say it will create jobs. Yes, it has created jobs in Germany and in Spain—but are they going down like a brick! The Wall Street Journal has reported the collapse in Spain’s photovoltaic sector, saying that it ‘has been so drastic that jobs plunged from a peak of 41,700 early last year to 13,900 in the spring of 2009’. It went on to say that Q-Cells, the world’s largest producer, had been exporting huge quantities of cells. In the first half of the year it operated at a €47 profit but then in the second half of the year 500 workers were laid off and they took a loss of €47 million. So, yes, photovoltaic cells, wind and everything else will work. You can create jobs but you have got to subsidise those jobs. They just will not work because they are up there.

The Greens cannot understand this. I think that they can understand it. I do not think that it is very hard to understand, but ‘none are so blind that do not want to see’ and when it comes to green energy there are none so blind as the Greens. They say that it is going to revitalise regional communities. Every regional community of any size—15,000 or 10,000—will have a fish factory or a fish processing works—and I am thinking of Urangan fish works—or an abattoir. There is a little place like Boonah where they have Bunny Bite food processing. Places like that are all going to pick up this tab. Not every town, but most towns, have some form of primary industry processing, whether an abattoir or a fish processing works or a fruit and vegetable processing works, all using tremendous amounts of power. How is it going to revitalise these communities? How is it going to work for the processing works that have 400 people working in the abattoirs, for example, as Senator Williams would know? How is it going to work when already the ETS and the RET will put their power bills up by 50 per cent? Then we throw this in on top of it. It is not going to do anything positive. It is going to cost jobs in regional communities.

If you think you are going to talk a few farmers into putting a few photovoltaic cells on their roofs and spread the cost out to the rest of the community, I do not think that they are so selfish to start with. I know that Senator Brown is going to tell us about the two-hectare piggery where the farmer got out of pigs and put photovoltaic cells on his two hectares in Germany. He may have found a loophole but it did not do anything for the farming industry at all. Where did the jobs go in the abattoirs and what happened to the people who helped on the farm? They are not there any more. So just wake up. This is a nonsense. What is worse, you know it is a nonsense. I can understand Senator Brown, but Senator Milne, you understand that this cannot work.

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

It does work!

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

It does not work. Let me quote to you Tony Maher, the CFMEU—

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

I never thought I would hear you quote the CFMEU.

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

Mr Tony Maher, when the ETS was first announced, was a cheerleader out there. He thought the ETS was the greatest thing since sliced bread. He went out and advocated an ETS. It was going to create jobs; it was going to do all sorts of things. I believe that Mr Maher’s blue-collar workers have told him, ‘Hey, brother, you represent us. You represent the workers of Australia. You represent the people who work in the mines.’ Well, today, in a 180-degree turn, he said:

Green jobs don’t exist.

That was CFMEU leader Tony Maher. He went on:

One of Australia’s most powerful union leaders has lashed out at the push for green jobs, labelling it a “dopey term”, and has dismissed environmental campaigns against some of the nation’s major export industries as “judgmental nonsense”.

Hurrah for that. Hurrah for the people who represent the blue-collar workers coming in and actually saying that these greens jobs are a nonsense. Green jobs are not going to fill the positions in the mining industry. These guys get $120,000 a year and they work hard for it. They go and work two weeks on, 12 hours a day, and then they take two weeks off. They do it the hard way. What sort of green job are you advocating that will replace that sort of money? There are no green jobs that will pay that sort of money. This matter of public importance that we are debating in the Senate that says that greenhouse emissions will be reduced is a nonsense too. Very helpful evidence was given by the Productivity Commission to the Standing Committee on Economics inquiry. We were reminded by the Productivity Commission of its submission to the Garnaut review:

… with an effective ETS in place, the MRET would:

• not achieve any additional abatement but impose additional costs
• most likely lead to higher electricity prices
• provide a signal that lobbying for government support for certain technologies ...

Then the Garnaut review itself says:

There is an interesting and seemingly perverse consequence of expanding MRET at the same time as the emissions trading scheme … Having both schemes operating side by side could see an increase in coal-fired power generation (by more than 2000MW) as gas-fired plants are crowded out …

Treasury says that the impact on GNP of the expanded renewable energy target, taking into account an increased GDP cost, will cost $5.5 billion. So on all scores, Senator, you fail. It does not create jobs and it does not revitalise communities. It does reduce greenhouse emissions but at a huge cost—at the cost of three times what emissions trading will do.

I started off by saying that when you introduce these schemes they are subsidised. By a gross feed-in tariff you are making a 20c product worth 60c. You are not charging the person that actually generates the electricity. What he uses is free but it goes back into the grid. So that probably becomes another 30c or 60c. Who pays for this? You just cannot create or destroy things. It is rule of nature, Senator Milne, and I would have thought you would have known that. What happens is that it gets passed back to the diary farmers, the cheese-makers and every little employment creator in regional Australia. These are the jobs that you should be protecting. These are the real jobs that do not depend on subsidies. They do not depend on false economies. They have been there and they are the backbone of regional Australia. An abattoir is a great employer of people. For every three beasts an abattoir kills there are maybe two people employed. A small abattoir that kills 400 beasts will probably have 350 people working there. You are increasing the charges on that through an ETS and renewable energy. Now you are passing on even further charges through this subsidy for gross feed-in tariffs. I hope the Labor Party has woken up to itself. It sounds like it has. I see Senator Faulkner over there, who is listening to me carefully, and he will understand what I am saying—

John Faulkner (NSW, Australian Labor Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

I am listening to you.

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

Senator Faulkner, you have got a very senior position in cabinet. Just do not let them push this down your throat. It costs money and it is going to cost jobs. It will not create jobs. I said this to Ms Burrow when she was talking about jobs: ‘If there are jobs to be created in this, the Chinese might use our technology but these jobs will go to China. That is where the manufacturing will take place and there’s not a thing we can do about it.’

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

That is why we need to do this, so it doesn’t go to China.

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

It will go to China just as fast. They are the manufacturers; we are the suppliers. (Time expired).

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

In the few short minutes I have I simply want to say that Senator McEwen’s disappointing presentation, which was devoid of even-handedness and an informed position, was a poor reflection upon the government’s ability to take up the cogent arguments for a gross feed-in tariff which have led to its adoption not only in Germany but by France, China and potentially now Japan and all our competing nations in the world. At current rates, Australia will be the last left standing. One could wonder why it was that the National Party itself adopted at its recent national conference a motion in favour of a gross feed-in tariff for small solar and in favour of feed-in tariffs. It was a mystery to me. It is one of the recent great mysteries of Australian politics as to how the National Party could have adopted such a policy.

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

It is a mystery to me, too.

Michael Forshaw (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Order! Senator Boswell, it is disorderly to interject, particularly when you are standing on the way out.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

As Senator Boswell disappears from the Senate so does the mystery. I have just listened to him—mystery solved. His speech would certainly end up convincing any conference in Australia that a gross feed-in tariff was a good thing. It was a hotchpotch of tired sayings, unreasonableness and, indeed, downright confusion and stupidity, which one does not expect to hear in an important debate like this in this place. Nevertheless, the former Senate leader for the ‘coal before country’ party put forward the view that the coal industry expects from the National Party these days.

Forget the country, forget renewable energies and forget climate change, which is bedevilling people right across this nation from coast to coast and which is already leading to a massive loss of jobs. Senator Boswell made a vacuous and unsupported statement, which was devoid of any backup argument, about losing jobs. We are seeing jobs lost in industries right across the world at the moment. He did not mention that the industry which he supports at the expense of rural jobs in this country—that is, the coal industry itself—has shed more than 10,000 jobs due to the recession in Australia.

He mentioned the Catholic Church and said that this gross feed-in tariff could cost $3 million by 2020. Of course, there was no supporting argument at all. Let me put a contrary argument. If the Catholic Church were to have a $3 million investment in the option that Senator Milne has put forward then maybe it will make $12 million by 2020 and, therefore, Senator Boswell is stopping the Catholic Church making $9 million. He wants the Catholic Church to be $9 million worse off by 2020. That is an argument that you could not substantiate unless you took Senator Boswell’s confused and silly point of view.

This is a serious matter. Senator Milne is to be congratulated for not only leading the discussion on this matter but having legislation which backs up a gross feed-in tariff for Australia. It is a way that will create many more jobs than the coal industry will ever do. It is a way forward with much less subsidy than the multibillion dollar per annum subsidy that the fossil fuel industries get at the moment. I cannot credit that we are having this debate on this matter with the Rudd government, which appears to have been voted in for, amongst other things, its policies on climate change. Yet it is a climate change denier when it comes to this gross feed-in tariff legislation, which would create jobs, promote industry and promote small business and would take us out of having to import everything in the renewable energy field, as we do at the moment. Congratulations to Senator Milne for leading the debate on this matter.

David Feeney (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

I am pleased to make a contribution to this MPI debate on a gross national feed-in tariff. I certainly acknowledge the good intentions of Senator Milne in leading the debate in the parliament today. The fact is that Australia is a federation and feed-in tariffs are not a matter on which the Commonwealth can or should be riding roughshod over the states or, for that matter, the territories. That is why it is the government’s view that the correct way to approach the issue of feed-in tariffs is through the COAG process.

It is important to note that COAG decided in November 2008 not to implement a national feed-in tariff but agreed to principles for jurisdictions that implement feed-in tariff schemes of their own volition, on their own initiative, including whether these feed-in tariff schemes would be funded on budget. I think it is worth noting that the principles developed by COAG include actions to ensure small renewable energy generators, including households using solar photovoltaic technologies, are fairly treated under the National Energy Customer Framework.

Several states have already legislated in the area of feed-in tariffs. In my own state of Victoria since we last discussed this subject in November 2008 the Brumby government has introduced the electricity industry feed-in tariff bill 2009. Under this bill, Victorians who put solar panels on their roofs will receive 60c credit per kilowatt hour for the energy they feed into the electricity grid. These amounts will be deducted from their electricity bill and will help make solar panels more affordable. I commend the Brumby government for taking this measure, a measure that will help many Victorians make a contribution to reducing our consumption of electricity derived from coal-fired power stations.

But the Victorian scheme does highlight the challenge that we have in this policy arena. The average retail price for electricity in Victoria is presently at 18c per kilowatt hour, so paying households 60c for every kilowatt hour of electricity that they generate with solar panels does involve a subsidy of around 42c per kilowatt hour. Victorian taxpayers will be paying for this electricity and they will be paying at more than three times the market rate. It is argued by Senator Milne and others that this is still worth doing because it helps reduce our overall CO2 emissions, and I accept that argument and obviously the Victorian government accepts it too.

At the very small scale currently contemplated, this is a sustainable scheme, but we cannot apply that principle across the whole of the economy and indeed the whole of the nation without sharply increasing the price of energy to all consumers. We must pursue technologies that will enable Victoria’s coal and electricity industries to reduce their emissions. This is realistic and achievable, and we are spending a lot of money to help the industry achieve this.

Senator Boswell said in his contribution that renewable energy ‘will not work unless it is heavily subsidised’. Frankly, having the government invest in new industries, in new research and development and in fostering and nurturing the environments for new industries to develop is not a proposition that appals me. I am astonished to hear that it is a proposition that appals Senator Boswell. The National Party are not known, generally speaking, as a political party that loathes subsidies. Of course, there is the old adage about the National Party: they are a party that likes to socialise their losses but privatise their profits.

This is why this debate is so important. I guess the views of Senator Boswell bring into sharp relief the fact that this really important public policy debate around feed-in tariffs is happening in the context of one of the major political parties in the debate, the Liberal-National Party coalition, not even coming to the baseline. They have not yet even accepted that climate change is real. They have not accepted that action on climate change is necessary. That is the great shame of the debate on feed-in tariffs: that Senator Milne, the Greens and ourselves are having this debate on our own while across the road there is a major political force in this country that has not yet got its head out of the sand. This is why it is so important that the Senate pass the Rudd government’s Carbon Pollution Reduction Scheme, and does so without delay. By placing a cap on carbon emissions it puts a price on carbon and provides the most critical economic incentive for carbon-intensive industries to invest in abatement technologies. Both the federal and Victorian governments understand this. I think Senator Milne understands this too, which is why I hope she and her colleagues will get behind the Rudd government and the CPRS bills. Those opposite do not understand this. But it is my firm view that actions such as feed-in tariffs being debated in isolation, without there being a CPRS scheme, is frankly missing the main game. As long as the CPRS bills are not passed there remain fewer incentives for carbon-intensive industries to reduce their emissions. That is why it is so important that the opposition get their act together on this issue. That is why we must continue to debate climate change. The fact is that we have those on the other side, such as Mr Robb, who continue to insist this is all a left-wing plot. We have Mr Turnbull, who, when he was environment minister used to think that climate change was real and that an ETS was warranted, but now appears to have changed his mind.

Coming back to the question of feed-in tariffs, we can see the problems inherent in this issue when we look at Germany, the country which has gone furthest down the road in terms of implementing feed-in tariffs and which is frequently pointed to by advocates of feed-in tariffs as their role model. Germany’s feed-in tariff has led to a grand total of one-half of one percent of its gross electricity consumption coming from domestic solar panels in 2007. Yet even that very modest contribution to the national electricity grid has to be so heavily subsidised that it is costing German consumers €1 billion a year in higher power bills to cover the cost. That is A$1.76 billion. Germany has about four times Australia’s population, so the equivalent cost here would be something in the vicinity of $440 million a year—and that’s for one-half of one percent of our electricity consumption coming from solar panels. Obviously, we have to aim for a much higher target than that. That is nonetheless an important contribution to the abatement of carbon and the kind of initiative that needs to be weighed in a considered public policy process when considering how we can foster a photovoltaic industry in this country. Equally obviously, it is small beer when we consider the size of the challenge and when we look at an instrument like the CPRS, which will do so very much to deal with climate change, to deal with this country’s responsibility to take action on climate change.

The fact is that feed-in tariffs must be seen as part of a broader strategy, rather than being a strategy in their own right. This government has a comprehensive strategy for delivering renewable energy to consumers at the lowest possible price by allowing a wide range of renewable energy technologies to compete in the race to commercialise these technologies. That market based approach sits at the heart of the CPRS and sits at the heart of the government’s policy. And I think that is far superior to any prescriptive approach such as that contained in the motion we are debating today, which would in effect mean that the government would decide what the most effective renewable energy source is and then subsidise it, which in turn involves the taxpayers picking up a very heavy tab. It is one thing for the government to pick winners. It is another thing for the government to create opportunities for all of these various technologies, to try to be part of the solution.

An important part of the present government’s strategy is an expanded renewable energy target. This is something that Germany does not have. The renewable energy target will ensure the proportion of Australia’s energy coming from renewable energy sources is 20 per cent by 2020. This is more than four times the previous government’s target. The renewable energy target, together with the CPRS, is the key to accelerating the deployment of renewable energy in this country. This is a greatly preferable strategy to relying too heavily on feed-in tariffs, too heavily on a single technology, which will pass an unacceptably high burden to the taxpayers. Labor’s philosophy is to help the whole Australian community move towards more efficient energy use and not to allow the minority who can afford to have solar panels on their roofs to benefit while the rest of the community foots the bill. That is why the Rudd government has brought in a series of household assistance measures which will assist people in their homes and their communities to become more energy efficient and to have better access to affordable renewable energy sources. (Time expired)

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

I am pleased to speak on the matter of public importance raised by Senator Siewert and Senator Milne, and in particular to acknowledge Senator Milne’s continued advocacy in this area of feed-in tariffs. I have had the opportunity of serving on numerous Senate committees with her and other senators who have assisted with this and related matters, and I know of course that in addition to this motion she has previously introduced legislation into this chamber that has been discussed but not brought to a vote and still stands on the Notice Paper.

The issues we face with regard to this, some of which have been canvassed by a number of the previous speakers, are partly of the government’s own making. Senator Feeney spoke before me. He addressed some of the approaches of the government, not just to the renewable energy sector and the development of more carbon friendly technologies; he also spoke in particular about feed-in tariffs. It is worth looking back on the government’s approach to feed-in tariffs. Back on 30 October 2007 the then shadow minister for the environment, Mr Peter Garrett, said:

… Labor believes it is important that there is a consolidated and consistent approach across jurisdictions to renewable energy policy. A Rudd Labor government will work through the Council of Australian Governments to develop a consistent, national approach to feed-in tariffs.

That is, the type of national approach that Senator Milne is calling for through this MPI and through the other work that she has done.

Then, in the early days of government, Minister Garrett sounded like he was holding his ground on this. On 2 August 2008, he stated:

Through the next COAG meeting in October the Government plans to work towards a harmonised approach to renewable energy feed-in tariffs.

So we have a desire for a consistent national approach and a plan to work towards a harmonised approach. This all sounds very much like the type of national feed-in tariff that Senator Milne and others have aspired to. But we did not have to go too much beyond that October COAG meeting for Minister Garrett to admit, on 18 December last year:

… there will be guidelines, national guidelines, but there will not be a national feed-in tariff.

He also said on that day:

The fact is that there will be feed-in tariffs that operate in different ways in different states.

He is acknowledging that, whilst there would be national guidelines—and Senator Feeney mentioned that the COAG had agreed to principles around feed-in tariffs—such a system and such principles would operate in different ways in different states. There would be nothing national about it whatsoever. There go out the window those promises from October 2007 and from August 2008, that there would be a national, consistent, cohesive, coordinated, harmonised feed-in tariff. They were all thrown out the window for a system that operates in different ways in different states.

That is not to say that a national feed-in tariff is entirely the way to go. Others in this place have already, in this debate, canvassed the cost of such a policy and canvassed the impact that it will have on Australian consumers. I want to look, equally, at the impact it has on climate change policy overall. Right now Australia, like other countries around the world, is developing a raft of climate change policies and, in doing so, risks sending a whole lot of mixed and conflicting messages, within the marketplace and elsewhere, by clutching on to every single idea.

We have the proposal for an emissions trading scheme which has been debated in this place once. I am confident it will be debated again. It is a scheme which clearly needs fixing. The government has brought it forward, but brought it forward with numerous holes, such as the way it treats agriculture and the potential for carbon leakage to other markets and other environments offshore from Australia. These could cost Australia jobs and be of little or no practical environmental benefit.

The coalition firmly believes that we need to get an ETS right and that, in getting one right, we can hopefully deliver for Australia the type of outcome which will reduce emissions without costing Australia jobs. The best way to get it right to start with would be to wait until after Copenhagen and design something that meets the requirements of the rest of the world—that actually works in with what the United States and other major emitting countries agree to and commit to, that does not jump ahead of the game as the government seems intent on doing.

We have the ETS as one option. We then have the renewable energy targets, the renewable energy targets that were increased from the level introduced by the Howard government to the now 20 per cent by 2020 which passed through this Senate only a few weeks ago. That is the second bow. Again, it was regrettable that efforts by the coalition, the Greens and others to try to ensure that, within those targets, there was some recognition of the importance of the development of renewable baseload technologies were not successful. The opportunity was there for Australia to try to start making the transition to a renewable baseload future—and not just putting in place further incentives for some of the very good renewable technologies which are currently well developed but which lack baseload potential, such as wind and others. We would have hoped to see changes there; however those changes were blocked by the government. In the interests of seeing the RET passed and providing incentive for the renewable energy sector, the coalition allowed that legislation to pass.

So we have an ETS proposed by the government; we have a mandatory renewable energy target in place; we have a raft of other encouragements and technologies that exist—for example, the replacements to the solar rebate scheme which provide higher incentives for the types of small home-constructed or home-installed solar units that Senator Milne has been talking about in this model—and, across a number of states, we have different programs operating, including gross feed-in tariffs. So there are numerous different things that are in place at present or that are planned, which are all trying to encourage, and provide extra incentive for, the development of renewable technologies.

The problem is that they are not all consistent. They do not all send the same overall message to the marketplace. In sending different messages, you will actually be imposing additional costs on consumers and businesses. They potentially work against each other, rather than being part of the design for the type of correct, integrated system which needs to be in place.

If there is one thing going for Senator Milne’s approach, it is the call for a national system. Then, at least, this Senate, the House of Representatives and the government overall could consider how a feed-in tariff would work as part of an emissions trading scheme, how it would fit in with mandatory renewable energy targets and how it would fit in with all of the other different smaller programs and incentives that are in place. The problem is that we have so many of these proposals at present that there are serious risks of them falling over one another.

I want to turn, for a little bit, to some of the wording in the motion on the matter of public importance that is before us. It talks about:

The overwhelming benefits of a gross national feed-in tariff for renewable energy for creating jobs, revitalising regional communities and reducing greenhouse emissions.

We hear a lot about job creation when it comes to the renewable energy sector. Job creation is absolutely, fundamentally important, but it is also important, when talking about the energy industry, to note that we should not be looking at, as a country, encouraging job creation in the energy industry in and of itself. It is not about direct jobs in the energy industry.

The energy industry should be, for Australia’s long-term benefit, supporting indirect jobs. It should be supporting them by ensuring that Australia continues to enjoy, wherever possible, comparative advantage in the supply of the lowest cost power possible but noting that it needs, over time, to be shifted to the lowest emissions base as well. What is fundamentally critical when debating how we transform Australia’s energy industry to a low-emission economy is not the number of jobs that that creates within any one energy sector but the number of jobs that supports by providing low-emission and low-cost energy to the rest of the economy. For these reasons we urge the government not to rush in adopting the Greens’ proposal but to apply consistency across its environmental objectives and energy policies so as to give Australia the opportunity for a low-emission but low-cost framework into the future.

Michael Forshaw (NSW, Australian Labor Party) Share this | Link to this | Hansard source

The time for this debate has now expired.