John Madigan (Victoria, Democratic Labor Party) Share this | Link to this | Hansard source

My question is to the Minister representing the Minister for Climate Change and Energy Efficiency, Senator Wong. As the Renewable Energy Bonus Scheme has worked as an industry development scheme supporting the Australian manufacturing industry and jobs, as well as subsidising greenhouse gas abatement, what replacement industry assistance measures does the federal government intend to introduce to Australia's hot water manufacturing industry to soften the impact of closing the bonus scheme, to support a successful Australian manufacturing industry sector and to protect Australian jobs? Or, if there is no intention, why not?

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

The government is committed to a clean energy future and to supporting clean energy jobs here in Australia. The most significant long-term support for the solar hot water industry will come from a carbon price.

I would also note to the senator, through you Mr President, that when this program was first announced in 2007 by the member for Wentworth, it was stated that it would close in 2012. Accordingly, the government's decision announced this week should be seen as consistent with the program announce­ment made by the coalition.

The government has supported some 250,000 installations. This is some 25,000 more installations than were promised by the coalition government. We increased the budget for this rebate by $194 million, and we are still providing ongoing incentives for the installation of solar hot water systems. This support comes through the renewable energy target and the delivery of renewable energy certificates. I am advised that households installing a typical solar hot water system will still receive between $800 and $1,000 in renewable energy certificates.

The senator might be aware that the government introduced the changes to the Renewable Energy Target Scheme in 2009 to deliver on the government's commitment to achieve 20 per cent of Australia's electricity supply coming from renewable sources by 2020, expanding on the previous mandatory renewable energy target.

The government is continuing its support for the solar hot water industry. I am advised that the department has been in contact with solar hot water manufacturers, and I am also advised that the installation of solar hot water heaters, in addition to the renewable energy target certificate support, will be eligible for support under the Low Carbon Communities program, which is worth over $330 million. (Time expired)

John Madigan (Victoria, Democratic Labor Party) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. Why is the federal government oversubsidising photovoltaic technology from countries such as Germany and China when, per tonne of emissions abated, solar hot water heaters are more cost-effective in dollar and environmental terms, and the Australian solar hot water industry delivers good jobs, other economic benefits to Australia and cost-effective greenhouse gas abatement?

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

I would make the point again that the government's view, and it was Mr Turnbull's view, is that the best long-term support for clean energy technologies is a carbon price. The government no longer provides—

Opposition Senators:

Opposition senators interjecting—

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

Order! Senator Madigan is entitled to hear the answer.

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

For the information of Senator Madigan the government no longer provides rebates for solar PV installations for households. They receive the same type of support as solar hot water heaters do—that is, renewable energy certificates under the Renewable Energy Target. In terms of different technologies it is the case that solar PV unit prices have come down significantly. I think that has been the subject of some discussion in this chamber and in various committees, and the government has acted twice in the last 18 months to reflect that price reduction and has reduced the support provided to solar PV under the Renewable Energy Target on two occasions. (Time expired)

John Madigan (Victoria, Democratic Labor Party) Share this | Link to this | Hansard source

In light of the fact that the abrupt closure of the Renewable Energy Bonus Scheme is contrary to industry advice and is the latest in a growing list of poor energy policy decisions made by the federal government, is the federal government willing to rethink its formulation and delivery of energy policy, including the introduction of an energy hierarchy model to guide all its energy policy program and subsidy decision-making.

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

It is true that when considering energy policy across government you need to consider how different programs interact. That is one of the reasons the government believes in market mechanisms—that is, a carbon price—and why some of the subsidy programs would not be regarded as complementary to a carbon price. We do have additional programs that we think are appropriate, such as the Renewable Energy Target and the various aspects of the clean energy package, which the senator would be aware of, and that are designed to support jobs and competitiveness in Australia. I am also advised that the government has released a draft energy white paper, which is intended to bring together on a strategic basis the government's approach to energy policy, particularly in light of the commencement of a carbon price.