Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

My question is to the Minister for Climate Change, Energy Efficiency and Water, Senator Wong. It has been reported that pensioners who have installed solar panels or other forms of renewable energy generators into their homes and who are returning power to the grid will have these amounts treated as income by Centrelink and have their pensions reduced accordingly. Given that the government is committing $652.5 million saved from the deferral of the CPRS to the new renewable energy fund, as outlined in yesterday’s budget, doesn’t this move act as a disincentive for pensioners in particular to use renewable forms of energy and contradict the government’s ethos on reducing greenhouse gases?

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

I thank Senator Xenophon for his question. I start by reminding him and the chamber that this government has invested more in renewable energy than any government in Australia’s history and we have now added to that with the budget announcement of the renewable energy fund. In relation to the specific question that Senator Xenophon asked—and I have made this public previously when I have been asked this in the media—I want to first make clear that Commonwealth assistance for solar panels is not classed as income for the purpose of social security assessments. We provide assistance through our solar credits regime under the renewable energy target that will not affect people’s pensions and is not required to be reported to Centrelink.

Opposition Senators:

Opposition senators interjecting—

John Hogg (President) Share this | Link to this | Hansard source

Order! When the interjections cease on my left, we will continue.

Honourable Senators:

Honourable senators interjecting—

John Hogg (President) Share this | Link to this | Hansard source

Order! When there is silence we will proceed. Senator Wong, continue.

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

As I was saying, the Solar Credits regime, which is the Commonwealth means for providing assistance to all Australians who are seeking it for solar panels, is not income for the purposes of social security and does not have to be reported to Centrelink. It may be the case with some state regimes where, for example, power is sold back into the grid, that in some circumstances income generated through that would be classed as income.

I want to make it very clear just how much a pensioner would need to receive, under current arrangements, before their pension would be affected. For example, a single pensioner would have to receive $142 a fortnight before it would affect their pension. That would be a very unusual situation, Senator, given that in New South Wales, for example, the gross feed-in tariff amounts to about $60 a fortnight. However, the government are aware of this issue, it has been raised with us, and we are looking to see if there is any finetuning required. (Time expired)

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. I thank the minister for her answer, but are there other circumstances where, for instance, other Centrelink recipients would have a lower threshold in terms of being affected by any income they receive pursuant to power going back into the grid? The Australian Taxation Office has made a recent ruling that it is not to be treated as income for the purpose of income tax, but it appears Centrelink is taking a different view.

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

Probably that is not really my portfolio area, Senator, but I think I can assist. I think what you are referring to is the difference between how income is classed under our social security system and how income is classed and assessed under the taxation system. They are different definitions. For that reason, people can get a deduction of their income for net losses—for example, in the context of negative gearing—that they could not utilise in relation to their social security entitlements. That is a longstanding differentiation within the Australian tax and social security systems. I again say: how the Commonwealth delivers assistance for solar panels would not be classed as income. There are some circumstances where state policies might be classed as income, but a significant amount would need to be earned before a pensioner would have their pension affected. (Time expired)

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. Given that the government has deferred introducing an emissions trading scheme for at least two years, does the minister agree that a well-designed ETS is the most effective way to reduce greenhouse gases? As such, will the government take a fresh look at alternative schemes, including the one proposed by Frontier Economics?

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

Yes, Senator, this government believes that a well-designed emissions trading scheme is the most effective way to reduce our carbon pollution. Regrettably, despite presenting it three times in this chamber, we were not able to get the majority of the chamber to support this—

Honourable Senators:

Honourable senators interjecting—

John Hogg (President) Share this | Link to this | Hansard source

Senator Wong, resume your seat. It is Senator Xenophon’s question. He is entitled to hear the answer to the question. If you want to debate the issue, debate it at the end of question time. Others get their question and they get their answer. Whether they like it or not, they can interject. But I do not think it is fair on Senator Xenophon, when he gets a limited number of questions in the week, that his answer should be drowned out by some people for their own self-interest.

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

As I said, yes, we do agree with Senator Xenophon that a well-designed emissions trading scheme is the most effective way to reduce Australia’s carbon pollution. We did attempt to get it through the Senate some three times, and we all know the history of that and the political turmoil on the other side, and the assassination of Mr Turnbull as leader—although I notice he is back, most unfortunately to the disappointment of Senator Minchin and Senator Bernardi, no doubt. It is the case that many policy alternatives, Senator Xenophon, were examined over the years. It is very clear from those that the best way to reduce our emissions is through a cap-and-trade scheme, putting a limit on how much pollution can be produced. Even if the government thought that Senator Xenophon’s alternative was the way to go, it would fall short of a majority view of the Senate. (Time expired)