Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

Mr President, my question is to the Minister representing the Minister for Climate Change and Energy Efficiency, Senator Wong. Is the government aware that Western Australia is not part of the National Electricity Market? If so, why is the govern­ment limiting transitional assistance for coal fired power stations under its carbon tax legislation to coal fired power stations in the National Electricity Market while not providing any transitional assistance to any of the black coal fired generators in Western Australia?

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

As a former minister for climate change I am aware of the situation in Western Australia and—

Senator Abetz interjecting—

I was asked 'is the minister aware?' and I answered that first part of the question. Senator Abetz just does not like it when we actually answer the question. The government understands the importance of energy security and reliability as a carbon price is introduced. I would remind the good senator from Western Australia of the very substantial increases in power prices which have occurred under his friend and colleague the Premier of Western Australia.

In relation to the assistance that is provided under the Clean Energy Future package, the senator should know, if he has looked at the detail of that announcement, that the government consulted with the energy market agencies, including the Western Australian independent market operator, during the process of developing the energy security measures which were spelt out in the Clean Energy Future package. In relation to energy security risks, obviously the reality is that such risks would be concentrated amongst the most emissions-intensive coal fired generators. That is self-evident in terms of the economics because it is those emissions-intensive generators which would bear the most impost as a result of a carbon price. The government support to generators is targeted at the most emissions-intensive generators and that is because we are serious about ensuring energy security and stability in the electricity market.

As I described yesterday, the Energy Security Fund, which the government has announced in the context of its package, includes an estimated $5½ billion in transi­tional assistance over six years to strongly affected electricity generators. The govern­ment is also creating an Energy Security Council to provide advice on systemic risks to energy security.

Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. Can the minister confirm that Griffin Energy, which is responsible for about 18 per cent of Western Australian power supplies through its Bluewaters 1 and 2 power stations, has told the government this week that, on passage of its carbon tax legislation, those power stations will effectively be the first in Australia to fail under the carbon tax legislation as currently proposed?

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

Obviously, I am not going to respond to assertions about what is being put to government by individual companies. What I can say is that energy security has been the priority in the government's design of its assistance package for this sector for the reasons I have outlined. That is why the support is targeted at the most emissions-intensive generators. The government will also create an Energy Security Council to provide advice on systemic risk to energy security across the nation, which obviously would include Western Australia. The Energy Security Council will be able to advise the government on loans to generators for things, such as the refinancing of debt if market finance is not available on reasonable terms. Those sorts of assistance would be available, on advice of the council, to generators in Western Australia, as they will be in any other state.

Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. Is the minister aware that Bluewaters 1 and 2 are the newest and, as such, the cleanest coal fired power stations in the country and replaced ageing plants which will have to be restarted to maintain energy security in Western Australia, which will lead to higher carbon emissions as a direct result of the carbon tax? Is the government's idea of effective action on climate change to force the closure of new state-of-the-art power stations?

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

The senator cannot have it both ways. On the one hand, he cannot say, 'We need to ensure more money goes to these generators in WA,' but, on the other hand, then say, 'But they are among the most efficient generators in the country.' It is inconsistent to suggest that government assistance should be provided to the most efficient generators in the country. They are your words, Senator, not mine. What I would say is this: if you were serious about energy security, then you would support the carbon price and provide the certainty that the energy sector itself has said is lacking.

What is driving uncertainty and what is preventing and stymieing investment in generation capacity here in this country is the irresponsible economic behaviour of those opposite who have, on the one hand, supported a carbon price, then opposed it, and now are bent on maximising the destruction of confidence in the economy.