Scott Ryan (Victoria, Liberal Party, Shadow Parliamentary Secretary for Small Business and Fair Competition) Share this | Link to this | Hansard source

My question is to the Minister representing the Minister for Climate Change and Energy Efficiency, Senator Wong. I refer the minister to reports that Standard & Poor's has lowered the credit rating for the largest electricity generator in my home state of Victoria, Loy Yang Power, due to concerns about the government's proposed carbon tax. Given that a government commissioned report by Deloittes warned earlier this year that some power stations would be 'at the mercy of the banks' when it came to refinancing and uncertainty over the carbon tax, what assurances will the government provide to the four major Victorian brown-coal power generators and Queensland's Millmerran power station, which will be affected by the carbon tax?

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

The government is extremely conscious of the importance of managing the transition in the energy sector. That is why, as part of the Clean Energy package the Prime Minister has announced, there is a very significant amount of money focused on ensuring that transformation in the energy sector.

I would make the point that the policy of those on the other side also involves a range of funding for the electricity generation sector. The difference, of course, is that that is not transparent and they have not been very clear at all with the industry what that would involve. The government announced assistance under the Energy Security package being provided to generators on the basis of emissions intensity. We believe that the package will ensure the sort of energy security that is expected, and we will continue to work with the regulators to ensure that that occurs.

I am asked to comment specifically in relation to particular energy assets. I want to make it very clear to the senator that I do not think it is appropriate for us to pick and choose in the context of Senate question time. What will occur? A fund has been funded and the principles around which assistance will be allocated have been outlined, but I do not think it is economically sensible to come into this chamber and make specific comments about specific assets, as the senator has invited me to do.

Scott Ryan (Victoria, Liberal Party, Shadow Parliamentary Secretary for Small Business and Fair Competition) Share this | Link to this | Hansard source

I think the workers at Loy Yang might disagree. Mr President, I ask a further supplementary question. Is the minister aware that Loy Yang executive general manager Ken Thompson told a Senate inquiry in Canberra last week that the government's carbon tax was indeed a threat to the company's creditworthiness. Given that there is expected to be a 30 per cent increase in these wholesale power prices—

Doug Cameron (NSW, Australian Labor Party) Share this | Link to this | Hansard source

He said he had not looked at Direct Action because it was not worth looking at.

Scott Ryan (Victoria, Liberal Party, Shadow Parliamentary Secretary for Small Business and Fair Competition) Share this | Link to this | Hansard source

Be quiet, 'Senator Doormat'. Given that there is expected to be a 30 per cent increase in these wholesale prices under the carbon tax, does the government expect these costs to be passed on as increased power prices?

Honourable senators interjecting—

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

Order! When there is silence on both sides we will proceed.

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

First, I am not going to and cannot comment on what may or may not have been said in a meeting at which I was not present. Second, I remind the senator that the Energy Security Fund to which—

Senator Brandis interjecting—

According to your leader they are precious, actually—Jamesian and precious.

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

Senator Wong, ignore the interjection and answer the question.

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

I would like to, Mr President, but they seem to be very excited today. The Energy Security Fund to which I referred includes an administrative allocation of free permits and cash payments worth about $5½ billion over six years to highly emissions-intensive coal-fired electricity generators.

In relation to Victoria, my recollection is that the member for North Sydney has also confirmed that the coalition's policy would be to shut down coal-fired power generators in the Latrobe Valley and replace them with gas, and of course you do not have the assistance that the government is proposing.

Scott Ryan (Victoria, Liberal Party, Shadow Parliamentary Secretary for Small Business and Fair Competition) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. Given that the government has admitted that its carbon tax will drive up electricity prices by 10 per cent in the first year alone, what impact will forcing generators, who have already been heavily impacted by the carbon price to pay for future permits, have on energy affordability?

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

First, in relation to the electricity price—and I acknowledge that that was one of the questions in the first supplementary—I make the point that, again, unlike the coalition, the government is in fact increasing assistance to Australians in its household compensation package, which does not exist under the coalition's policy. We will provide more money to Australian pensioners; you will take that back. We will provide more money to Australian families receiving Family Tax Benefit; you will take that back. We will cut taxes for Australians earning up to $80,000 a year; you will increase taxes. So it is very clear who has the policies to deal with increases in electricity prices, which would also occur under your policy given that you wish to switch to gas. You just will not have any assistance package. That is the primary difference between your policy and ours.