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

The Clean Energy Finance Corporation Bill 2012 is part of the Labor-Greens carbon tax—the carbon tax we were promised before the last election that we would not get; about which the Prime Minister said five days before the last election there would not be a carbon tax under the government she led. Of course, now we have a massive carbon tax which will push up the cost of everything—electricity, the cost of living and the cost of doing business in Australia—which will make us less competitive internationally, which will shift jobs and emissions overseas, which will lead to lower real wages and which will have a $1 trillion impact on our economy between now and 2050. On top of that, as a price the Prime Minister had to pay for the support of the Greens political party, we have a $10 billion slush fund. And, in order to give it a cloak of respectability, the government have dressed it up as the Clean Energy Finance Corporation. Labor may be in government, but it is very clear that the Greens are in power. We know that Senator Milne, the new Leader of the Australian Greens, very much enjoys the use of the word 'power'. She likes to talk about power-sharing arrangements and so on. But we know that it is the Greens who have really been the power behind all of these bad initiatives that have come out of the government around carbon pricing and the clean energy slush fund and the like.

This is effectively another $10 billion in expenditure from a government that have already delivered $174 billion worth of accumulated deficits and $145 billion worth of government net debts, and this is a government which in part because of this bill before the Senate today will have to seek the approval of the parliament to yet again lift the debt ceiling—on this occasion to $300 billion. This so-called Clean Energy Finance Corporation involves a commitment of $2 billion per annum over five years, with the first instalment due to be paid on 1 July 2012—$10 billion in total. Will we find that $10 billion reflected in the budget papers? No, we will not. Will that $10 billion hit the budget bottom line, the underlying cash balance of the government? No, it will not.

The government have taken into account $57.3 million in operating and set-up costs over the forward estimates and they have also taken into account $750 million or thereabouts in money that they think is not going to be recovered after it is invested, so-called, by the Clean Energy Finance Corporation. This is because this Clean Energy Finance Corporation will supposedly make investments but it will make investments in highly risky projects. It will make investments in projects that are unlikely to survive and thrive. If the projects that the Clean Energy Finance Corporation was putting taxpayers' dollars behind were sensible, commercially viable projects, they would of course be able to attract private investments and they would be able to attract investment from the markets. But no. The government are recklessly wasteful with taxpayers' money. They are setting up a slush fund to pick winners that are so risky and so speculative that no private investor will put their own money behind them, but the government are quite happy to put taxpayers' money behind them. That is why the government are in the fiscal mess that they are in.

The coalition have been very clear that we oppose the carbon tax. We are opposed to it because it is bad policy, it is bad for families, it is bad for business and it is bad for Australia. We are also opposed to this Clean Energy Finance Corporation because it is a complete waste of taxpayers' money. There are precedents around Australia, example after example around Australia, which demonstrate very clearly why this sort of approach of governments picking winners—putting billions and billions of dollars taxpayers' money on the line, pursuing ventures that essentially only have a very small likelihood of success—is a very bad idea. But the government have never come across a bad idea that they did not want to fully embrace. When the government come across a bad idea which is likely to cause the loss of taxpayers' dollars, they fully embrace it and try to make it law.

This Clean Energy Finance Corporation is bad policy which came out of a bad process. It eventually came out of a dodgy deal between the Labor Party and the Greens. It demonstrates yet again that Labor just cannot be trusted with money. If the investments, so-called, that the Clean Energy Finance Corporation will get involved in were sensible investments, they would attract private investment. We can only assume that the Clean Energy Finance Corporation will invest in inferior projects which are not good enough to attract private finance on commercial terms, where the risk-reward equation is properly balanced.

This is again about the government and the Greens picking winners at the expense of taxpayers. The mandate that the government is giving to the Clean Energy Finance Corporation explicitly is to invest in risky renewable energy projects. In all likelihood this will be a complete waste of $10 billion of taxpayers' money. If the projects were truly likely to be winners, as the government want us to believe, the government would not have to throw taxpayers' money at them. Given that they probably will not be, the government should not be throwing money at them.

Minister Combet and the Treasurer have been trying to make it look as if this is a commercial venture. They have been trying to give the Clean Energy Finance Corporation a cloak of commercial venture that is all pretence, asserting that the Clean Energy Finance Corporation will 'apply a commercial filter when making its investment decisions'. It will not do that. We need look no further than the government's own explanatory memorandum, which makes the point that this so-called filter will:

… not be as stringent as the private sector equivalent … and

…   …   …

… may accept a lower rate of financial return.

So the Clean Energy Finance Corporation will offer concessional loans and absorb additional risk. The government have already written off 7.5 per cent of the money that it is going to invest, and they hasten to add that the 7.5 per cent is a conservative estimate. So there is $750 million already out the door which we know is going down the drain. But, of course, there will be more. There is no way that that $10 billion will ever achieve a commercial return for taxpayers, because investments will be highly risky, highly speculative, and chances are that none of the $10 billion will ever be recovered. The accounting treatment, similar to what is happening with the NBN, hides the true impact on the budget of this reckless fiscal decision by the government. The reason they hide it is that the government do not want the Australian people to know the full extent of the debt burden that they are imposing on future generations of Australians. Future generations of Australians will have to pay the price for this fiscally reckless and wasteful era of government spending that we are currently going through. The period 2007 to 2013, when Labor and the Greens were running the show, will go down as one of the most reckless fiscal periods in our history.

There are a whole series of other very serious and significant concerns about this bill. The Clean Energy Finance Corporation will have distortionary impacts on the market and at the same time will not stimulate tangible results for progress in renewable energy projects. Nobody expects that the $10 billion that is to be provided to the Clean Energy Finance Corporation will be successfully invested. Even if it were—which, of course, is highly unlikely—there would be no new renewable energy generated, as the renewable energy target has already been set at 20 per cent, and this legislation does not change that. We have a renewable energy target which is currently driving investment in the renewable energy sector, and instead of letting it play out we have the government throwing $10 billion of taxpayers' dollars into the mix, distorting the market—making it harder for viable investments to thrive and survive. It is widely accepted in renewable energy markets that the introduction of the government's Clean Energy Finance Corporation will actually have an adverse impact on existing renewable energy projects and on new renewable energy projects into the future. It is widely accepted that the insertion of the government's Clean Energy Finance Corporation into the renewable energy market could effectively undercut finance on existing large-scale renewable energy projects that have sought and obtained commercial financing.

What that means is that newcomers to the sector who are lucky enough to be hand-picked by the government's so-called Clean Energy Finance Corporation will have the benefit of a direct subsidy through the government's slush fund, in turn compromising the viability of existing commercial investors. The Clean Energy Finance Corporation—or the Labor-Greens slush fund—is also not charged with investing in the lowest-cost technologies to produce the cheapest emissions reduction. Its remit is to find the technologies which the market considers to be unproven, too speculative or too risky for commercial financing. This has got bad news for the taxpayer written all over it. Why is the government pressing ahead with it? There would be some sensible people on the Labor side of the parliament, I am sure, when it comes to fiscal discipline and sensible fiscal policy. How can anyone in the Labor Party let the Greens get away with this? How can anyone in the Labor Party let the Greens set up a slush fund like this, which essentially is throwing $10 billion of taxpayers' money out the door?

It is very clear—and even the government concedes—that not all investments by the Clean Energy Finance Corporation will provide a commercial return. The explanatory memorandum notes:

The fiscal and underlying cash balance impacts include a prudent recognition that some investments will not be recovered, and interest revenue. The fiscal balance impact also includes the concessional component of loans.

All up, just under $1 billion out of $10 billion has already been written off. I ask: how is that a sensible use of taxpayers' money? And people across Australia are asking: how is that a sensible use of taxpayers' dollars?

Why do people have to pay more for their private health insurance? Why do people have to pay higher tax when they are trying to save to achieve self-funded retirement? Why do people have to pay more as they travel overseas, when the government has got so much money to burn? Why do we need to have 20 or so Labor Party increased taxes and charges when the government has got so much money to burn that it can throw $10 billion at this sort of waste? Why is the Australian Labor Party happy to impose additional cost-of-living pressures on the families of Australia, when it has $10 billion to throw out the window? Why do we have to have $174 billion worth of accumulated deficits and $145 billion worth of government net debt? Why do we need to increase the government's debt ceiling to $300 billion to fund something like this? I hope that the government has had a close look at the experiences in various state governments in the 1980s, when they sought to pick winners through government finance corporations. It all ended in tears.

This is an absolute recipe for disaster. This government has a very bad track record when it comes to investing in these sorts of energy projects. The government's $700 million Solar Flagships program in Moree and the Queensland Solar Dawn project struggled to gain industry support. Along with the Bligh government, this government presided over more than $100 million of losses in the ZeroGen project, despite clear warnings from both the opposition and experts. In fact, when our shadow minister, Mr Ian Macfarlane, the member for Groom, warned the government that the ZeroGen project was at serious risk of failure, the former Queensland Labor Premier, Mr Beattie, said that Mr Macfarlane was on drugs. It turns out that Mr Macfarlane was 100 per cent correct. The Clean Energy Finance Corporation has many of the hallmarks of Labor's Victorian Economic Development Corporation, which left Victoria in a disastrous state only two decades ago. Programs of this nature have similarly experienced massive failure and controversy in the United States. The failure of the $700 million Solyndra project, as well as those of Beacon Power and Enerl, occurred under a similar program to the Clean Energy Finance Corporation. These instances were recently joined by the collapse of Solar Trust of America, which had a $2.1 billion loan guarantee from the US energy department.

Wherever you look, whatever you read, whatever consideration you give to this proposal, this has got bad news written all over it. This is going to be the next pink batts; this is going to be the next overpriced school halls disaster; this is going to be the next hallmark of a terrible, incompetent, dysfunctional government yet again wasting taxpayers' money to such an extent that it has to call up all these new ad hoc taxes. If this legislation comes into effect and if this Clean Energy Finance Corporation is able to spend money on projects which are clearly inferior, projects which are by the government's intent not exactly where they would attract commercial investment, you wait—if Labor is to have the opportunity of providing another budget—for the next series of tax increases from this high-spending, high-taxing Labor government. This is a government which over the last 4½ years has spent too much, has taxed too much and has prosecuted and pursued and attacked Australians who are successful. It is anti success, it is anti those people who make commercial investments in order to achieve a commercial return, and now it is throwing money at ventures that are not commercially viable and that are competing with those projects that are trying to make a success of things. That is the reason this bad Labor government is in the fiscal mess it is in.

As I mentioned in my introduction, this bill is part of the government's carbon tax package. The coalition have not only committed to vote against the carbon tax in opposition; we have also made a clear commitment that we will rescind the carbon tax package in government. I would not be surprised if the Australian Labor Party voted with the coalition after the next election, whenever that is, to rescind the carbon tax and bad budget measures like this. After the next election—should we be successful, should the Australian people express the sort of judgment about the carbon tax and bills like this that we hope and expect they will—I would not be surprised if, rather than remaining attached to the Greens, the Labor Party finally see sense, finally start focusing on the national interest, finally start focusing on what is in the interests of families and businesses across Australia and vote with the coalition to rescind the carbon tax.

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

I support the Clean Energy Finance Corporation Bill 2012. We are living in an era of revolution in energy and, contrary to the remarks of Senator Cormann, those who get ahead of the game are the ones who will profit most. Those who try to lock their economy into the old fossil fuel sector will be the losers. In the Australian context, the Australian Greens have said clearly that global warming is a catastrophic circumstance that will lead to enormous costs to us as we proceed through this century. There will be costs in lives and costs in ecosystems, and we have already witnessed that with extreme weather events around Australia—whether it is the intensity of the fires in Victoria, the intensity of Cyclone Yasi or the intensity of rainfall events and flooding, we have seen extreme weather events costing lives and destroying infrastructure. The cost has been enormous already. Take the flood levy, for example. We never hear anything from the coalition about the documented cost of extreme weather events and drought caused by global warming. When we lived through the extremity of the drought in the Murray-Darling system, everybody was aware of the long-term cost of global warming.

The opportunity is to transform the economy as quickly as possible to sever the link between economic growth and adverse environmental impact and resource depletion. It is time now to look at a future based on an investment in education and training and innovation, at a future which is transformative, that transforms Australia so that we power ourselves with renewable energy. We are one of the luckiest countries on earth when it comes to our ability to power ourselves with renewable energy. We had a German administrator here recently who pointed out that the west coast of Tasmania would probably be the lowest solar opportunity in the nation, and yet it is better than most of Germany, where they have managed to back in an incredible transformation in renewable energy, where they have done a massive U-turn recently on getting a phase-out of nuclear. The German government has invested so heavily in energy transformation that renewables have pushed down the wholesale price of energy to the extent that they now have to subsidise traditional generation in order to provide balance and security in the system until they get to 100 percent renewables. Our aim in Australia ought to be to address the failures of the Howard government administration. They failed to invest in education and training and allowed the manufacturing sector to be hollowed out. They transferred dependence of the economy disproportionately to resource extraction. Now we are suffering the consequences. Now is the opportunity to invest heavily in the brains base in Australia and that is in our universities. Overwhelmingly, there is the huge potential to transform this country as quickly as possible to a country powered by 100 per cent renewables, whether in our homes, our offices, in tourism complexes or in our transport systems.

To do that, we need to roll out renewables not just at residential scale but at utility scale. What we are seeing is a pushback from the vested interests of the old economy. Senator Cormann talked about a so-called slush fund and about billions thrown out of the door. There is $7.2 billion thrown out of the door every year in Australia and Senator Cormann is a big supporter of that. They are fossil fuel subsidies: $7.2 billion a year thrown out the door in order to keep the coal-fired generators and the gas industry and so on operating. There are massive subsidies for oil and gas exploration. Here we have a $10 billion fund to support the establishment of clean energy in Australia, with half of it to go to renewables and the other half to low emissions technologies. Those operating in the renewable energy field can bid for that funding.

Senator Cormann completely misrepresented the authority. This authority will depoliticise it. The Greens are tired of political interference in energy decisions in this country all designed to continue to prop up the old fossil fuel sector, with poor decisions continuing to be made about investments in the grid, for example. We want to depoliticise the provision of commercialisation support for new renewable energy and clean energy technology.

That is why the Clean Energy Finance Corporation will be a statutory authority. It will be independent of government. It will not be directed by any political party. As it clearly says in the legislation, while the Clean Energy Finance Corporation will apply a commercial filter when making its investment decisions, it will also have a public policy objective and will seek to value positive externalities arising from the project. Compared to an ordinary bank, for a given financial return the corporation may take on higher risk and for a given level of risk may accept a lower financial return. The positive externalities include achieving policy objectives like a reduction in greenhouse gas emissions by 80 per cent or more by 2050. The Greens would like to see us get to zero net carbon by 2050. That is the objective.

This is also a massive jobs driver in the Australian economy, especially where those jobs are needed, which is in rural and regional Australia. This massive investment in renewable energy will see the rollout of jobs in the construction phase but also in maintaining the new power stations. This will bring to rural communities a level of dynamism that they desperately need.

As to the suggestion that the coalition were critical of ZeroGen, that may well be the case now, Senator Cormann, but I remind you that it was John Howard, the former Prime Minister, who stood up with George Bush and enthusiastically welcomed FutureGen in the United States. FutureGen was going to lead the way in carbon capture and storage; it was going to be marvellous. John Howard stood there and made a fool of himself in relation to FutureGen. I totally agree on ZeroGen. The Greens were out there saying that ZeroGen would be equally as stupid as FutureGen was and it has been.

The fact of the matter is that, if the coal industry was so confident about carbon capture and storage, it would be investing its own money in that. As it is, we have a flagship with $500 million sitting there for carbon capture and storage while the industry is not matching any dollars because it knows that it is a technology that has not rolled out to date and renewables are running over the top of it. The fact is that it is going to come down to what is economically viable into the future and the renewables are getting cheaper by the day as carbon capture and storage makes no progress. Treasury modelling demonstrates that carbon capture and storage is very unlikely ever to be commercially viable. People will give up on it as they see appropriate investment in clean energy technology, distributed system and demand side management winning out. We will see an abandonment of those technologies because they are too expensive.

Let me get to why we need to have a Clean Energy Finance Corporation. The Greens would have liked to have seen a nationally consistent feed-in tariff regime where you have a number of different feed-in tariffs for different technologies with the most generous being for those technologies that are the furthest away. We would have done that for solar thermal, for example. However, neither the government nor the coalition want to back the most effective financial mechanism in the world for rolling out renewables. Everywhere you go in Europe where the roll out of renewables has been successful, that has happened on the basis of feed-in tariffs. We see from the German experience that, as you get to critical mass, the feed-in tariff gets scaled back and there are tremendous benefits to the economy.

However, in the absence of a nationally consistent feed-in tariff, we have had all sorts of poor public policy initiatives that have been badly implemented, such as by being changed along the way. These initiatives have caused a level of distress across the renewable energy industry such that we want to do the exact opposite of what Senator Cormann was suggesting. We want an independent statutory authority to depoliticise the industry to stop governments interfering by, for example, changing rebates overnight, changing programs, ending them at different times and so on. The wind industry is booming globally but it has now stalled in Australia. The PV industry has been through countless utterly unnecessary and damaging boom and bust cycles. It is now growing in confidence because it is reaching the point where its reliance on government support is coming to an end. All it needs is a fair price for the electricity it produces, and the Commonwealth refuses to grapple even with that. As yet we have no utility scale PV in Australia, despite being the sunniest industrialised nation on Earth. Yes, it is coming, but there is only one major project, and the design of the Solar Flagships Program was fundamentally flawed and delayed the rollout.

So we desperately need to show in Australia that we can do solar thermal at scale. We now have the ability to store heat and continue to generate electricity into the evening with the molten salt. I look forward to seeing the day when the Clean Energy Finance Corporation will, I hope, get behind solar thermal. We also have geothermal and ocean energy in Australia. Technology is brilliant; technology is the area in which people are still looking at going overseas because they cannot get support at home. When you do go overseas and look at renewable energy facilities around the world you see that they are headed up by graduates from Australian universities. The questions people always ask are: 'Why are they leaving the country? Why aren't they at home?' The reason is that we have not had consistent support for innovation and for this transformation in Australia that would make us one of the leading nations on the planet in the case of renewables, instead of constantly throwing money at fossil fuel subsidies. You only have to look at Zhengrong Shi, for example, who is now a billionaire several times over. He was a graduate of the University of New South Wales and went to China to make that investment because of the lack of support here in Australia.

So why do we need a Clean Energy Finance Corporation? It will address several financial barriers related to both the availability and the cost of finance, including constraints due to the lingering impacts of the global financial crisis; constraints on the availability of debt capital, heightened by the withdrawal of many foreign banks from the Australian market; the fact that commercial banks facing look-through, or aggregation exposure, to some counter parties to power purchase agreements with renewable energy generators; and a general lack of demand within commercial banks for clean energy projects that have resource risks or technology risks. There are also scale constraints, whereby many projects may be too small or too large to secure funding on suitable terms and may have forecast return outcomes on investment projects that are not considered by equity and debt investors to provide adequate compensation for the risks inherent in these projects.

We think the Clean Energy Finance Corporation will address some of those barriers, but it will also address non-financial barriers that are constraining the development of a low-carbon industry in Australia, including things like the technology risks, grid constraints and challenges associated with deploying new transmission lines, particularly across state borders and into remote areas. It will also address the lack of availability of long-term power purchase agreements—and this is an issue I raised with the ACCC. Again, it is this issue of the old vested interests not wanting to sign power purchase agreements with the renewables because many of those vested interests have the majority of their investments in old fossil fuel generation, particularly gas, and they are not prepared to bring on the technologies that will undermine the current asset value of their particular investments. Scale is also an issue, as I mentioned before. When we have talked to people about why the Solar Flagships Program did not roll out as we would have liked it to, the problem was that the scale they were being asked to build at was such that they were not able to persuade investors that they could go from a pilot stage right up to a large scale without having demonstrated an ability to scale up anywhere in between.

The Clean Energy Finance Corporation is going to provide the ability to leverage private sector finance and to make a substantial contribution. One area I am concerned about is the connection with the renewable energy target. I am concerned—but rather pleased—to hear that Senator Cormann is also concerned about that. Clearly, if he is committed to reducing greenhouse gas emissions, if he is committed to new jobs in Australia, then he would support us in increasing the renewable energy target and overcoming the problem. We have argued, and I still argue, that it should be a matter of choice between the Clean Energy Finance Corporation and receiving renewable energy certificates. One of the problems is the possibility that these large projects will achieve renewable energy certificates and that will crowd out the renewable energy target. The best way of fixing that is to increase the ambition of the renewable energy target. What a perfect outcome. Now that I have heard that the coalition is concerned about that, I am looking forward to the review of the RET in the second half of this year, when I would fully expect that the coalition will support a massive increase in the renewable energy target so that we will see a much more efficient interaction, if you like, between the Clean Energy Finance Corporation projects and the renewable energy target.

The Australian Greens have worked very hard to deliver a comprehensive package in Australia: the Clean Energy Finance Corporation, the carbon farming initiative, the Biodiversity Fund and an emission trading scheme. This is the most comprehensive package we have ever put before the parliament to address greenhouse gas reduction in Australia. It is something the nation can build on. Every aspect of the package is a platform that lends itself to greater levels of ambition. The overwhelming imperative is to reach net zero carbon emissions as quickly as possible, to reach 100 per cent renewables as quickly as possible, because we are facing a catastrophic future with accelerating global warming if we fail to do so. In addressing the challenge in front of us we can either pretend it is not happening and condemn our future generations to shocking dislocation, both economic and personal, and to shocking loss, or we can do the best we can to put them on a footing that will grow new jobs, new innovation and a new economy in Australia. That is clearly the path the Greens want to take.

This Clean Energy Finance Corporation is a major achievement of the Greens through the Clean Energy package. Of course, it is going to go out there and talk to project providers—and you would expect it to do so—to work out the best way to support each individual project, and in every case it is likely to be different. But the exciting thing, from my point of view, is that it will be an independent statutory authority, with the finance available to finally bring to fruition in Australia some large-scale renewable energy projects which demonstrate to Australians the kind of future we can expect in this country.

This energy revolution is going to be disruptive. The worst thing that could happen in Australia is that we lock in support for the old economy, spend massively on carbon capture and storage, maintain $7.2 billion in fossil fuel subsidies and pretend we can somehow stay stuck in the past in order to protect the investment in the old economy. The fact of the matter is that the old economy is losing every day to the new renewable powered economy, the low-carbon economy, and we need to get onto it—we need to get behind it; we need to grow the jobs; we need to keep our best and brightest at home; and we need to invest in education, training, innovation and excitement. That is what will provide confidence in Australia. That is what will make us proud as a nation about the contribution we can make, regionally and globally, to addressing global warming. That can be a major contribution of ours; it ought to be one that a sunny nation like Australia, with so many renewable energy sources can make. We have been constrained in Australia by the lack of imagination and by being stuck in the past, particularly by the coalition, and I would like to think that we will now get the recognition around the world that we ought to be getting for this investment. (Time expired)

Louise Pratt (WA, Australian Labor Party) Share this | Link to this | Hansard source

I am delighted to speak today on the Clean Energy Finance Corporation Bill 2012, because I believe that in time it will be looked back on as a key Labor reform and one that is part of an overall transformation of the Australian economy towards a clean-energy future. We know that it is vital, because all credible economic analyses say that, if you believe climate change is real—and I certainly do—and therefore that economies around the world must adapt, put themselves on a low-carbon footing and de-link their economic growth from their carbon intensiveness, then these are the kinds of steps that we must take in order to reach that goal.

This package of reform, which I recognise has been worked on by many groupings across the parliament, includes, of course, a price on carbon and the Clean Energy Finance Corporation. These are very important steps for our nation to take, not just to stay ahead of the game but, frankly, to catch up—because many countries around the globe have made far more substantive steps than us already to transform their economies. So I think that the Clean Energy Finance Corporation, in conjunction with a price on carbon, and the renewable energy target, are absolutely fundamental to our nation's economic future. But, more to the point, they are also important in our global effort to address climate change and to encourage other nations to do the same.

We know that the renewable energy target and the price on carbon will not actually be enough to get the job done. Because, we know what we face in this nation—and, indeed, globally—is a market failure when it comes to getting renewable and low-emission technologies off the ground. Those crucial reforms, expanding our renewable energy sector, will require a significant level of capital investment in our nation, so there are some barriers we need to overcome in order to do that. These barriers include Australia's access to low-cost fossil fuels, new technology risks and the costs to early movers. These are things that we need to adjust for.

As confirmed in the report of the expert panel into the Clean Energy Finance Corporation, Australia's large reserves of low-cost fossil fuels, like coal, have made Australia slow to move on clean energy. That leaves our economy in grave danger, because if you accept that climate change is real, and that we need to de-intensify the carbon in our economy, then you accept that at some point we need to work out how to transition the carbon intensity that is there in our cheap fuel. These are the kinds of steps that we can take in order to do that: pricing carbon, our Clean Energy Finance Corporation and renewable energy targets.

Expanding our renewable energy sector will require significant capital, and renewable energy companies are competing with large, well-established carbon-intensive energy producers. So we now want to make these transitions in a way that will protect and create Australian jobs. We know that we will have compulsory industry participation plans for all CEFC funded projects. That means that, as we transition to a low-carbon economy, Australian companies and Australian jobs will be considered front and centre as part of those plans—and that means the sourcing of materials, parts and equipment for these clean-energy projects.

So while we have an opposition that is crying foul over a carbon price, which they claim will cost Australian jobs, the truth is that the green economy, de-intensifying carbon in our economy, is actually about the creation of jobs—and new green jobs that will be embedded right throughout the economy. Participation plans will make sure that Australia not only 'greens' its economy but that our workforce is also developing these skills in well-paid jobs—greens skills in jobs right throughout the economy. It means that our workers will develop the skills to construct green buildings and to retrofit existing building, and we know that that is the way of the future for our nation.

We know what we confront as a nation in relation to investment in clean energy infrastructure is a significant capital market barrier that has, thus far in our nation's history, really hindered the financing, commercialisation and deployment of renewable energy, energy efficient and low-emissions technologies. So we have here a smart Clean Energy Finance Corporation, which will be brought together to do that properly.

The CEFC will not provide grants. It is intended to be commercially oriented and make a positive return on its investments. We know that it will invest in firms and projects, as well as manufacturing businesses, utilising technologies that focus on producing the inputs required. It will not invest in carbon capture and storage technologies. The CEFC is not intended to compete directly with the private sector in the provision of financing to these businesses. The CEFC will act as the catalyst to private investment which is currently not available and therefore contributing to reducing carbon emissions and cleaner energy.

I would like to note that the provisions in this bill stand in stark contrast to the coalition's policy. Their alternative is simply to set up a $1 billion fund, without the rigorous commercial guidelines that we think should be there. They would set up a $1 billion fund to provide grants, presumably to those people who can convince the coalition that their proposals are worthy of support. If ever there were an example of anyone trying to get in there and pick winners, that is the coalition's policy in their $1 billion fund. Labor has a market price mechanism, renewable energy targets and a robust process within the Clean Energy Finance Corporation, so that we can transition our economy in a responsible way. As we know, the coalition is quite divided, in many instances, on their belief in climate change. It makes a mess in relation to their policies on how to responsibly go forward on this question, because they have turned their back on market based mechanisms. Their billion-dollar energy fund does not meet the kinds of thresholds that would give us any confidence that we are going to be able to transition our economy into a low-carbon future. Absent from their policy, I believe, are commercial principles that would even require you to examine your return on investment.

This legislation has come before us after significant and important work done by the expert committee. I would like to commend the work done by Ms Jillian Broadbent. She is an eminent Australian who has 30 years of experience in banking and business. She is also linked with universities. I believe she is the Vice-Chancellor of the University of Wollongong. I think she is very well placed to lead the expert panel and to consider their submissions. I am pleased with the landing point that this legislation has arrived at.

There are indeed some alternative proposals to the legislation before us today. For example, one would involve us doing nothing. But what are the consequences of doing nothing? It would mean that our economy would fall behind. As was highlighted in Senator Milne's remarks, we are facing an energy revolution globally. We know there will be massive changes in the global economy pushing us towards investments in renewable and low-emissions technologies. We already have seen many of our great technologies go offshore without the investment being made in that technology here in Australia. If we miss the boat on this, it would be like missing the IT revolution. It would be like being left behind on all of the enormously important economic investments and changes that have already happened in our world. We simply cannot afford to be left behind on that front. So it is perfectly reasonable that we should have a clear strategy, through a clean energy finance corporation such as this, to work through which companies have a lot to offer in the renewable energy space and to work out which of those companies deserve our investment so that we can catch up on the game and then get ahead of it and not leave the Australian economy behind.

The alternative could be to do nothing, but the consequence of that would be to leave behind Australian inventions, research and jobs. It also would mean leaving behind the Australian economy, because we would be stuck in a dead-end economy that is highly dependent on dirty energy. In the long term, when the globe finally decides it must act on climate change—and many are already acting—that would leave all of those industries at a complete dead-end because they would not have the money or the investment there to suddenly move from one to another. They would be locked into the old way of doing things while the rest of the world has changed. I do not want to see Australian jobs left behind, so it is high time that the coalition caught up on this front. I do not want to see this massive dislocation in the future. I believe the nation will hold the coalition to account.

In closing, I want to say that I am very proud of this package of reforms. I believe that clean energy will be the way of the future for our nation. It is about the supply chain that feeds into all of the clean energy projects around our nation. At the moment, there are too many risks associated with investing in these technologies on a commercial basis. But we know that there is a commercial basis for these investments, and it will be in the best interests of our economy.

Simon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | Link to this | Hansard source

I rise to speak on the Clean Energy Finance Corporation Bill 2012. I have been listening to Senator Pratt's comments and I listened to Senator Milne's contribution prior to that. The chamber just received a lecture from Senator Pratt about how this bill was going to support projects that were too risky to be supported by private or commercial finance. If they are too risky to be supported by private or commercial finance, it begs the question of why should they be not too risky to support with taxpayers' hard-earned dollars. Why is it that this government is willing to risk and gamble and be reckless with taxpayer dollars when the finance market demonstrates that the types of projects that are being discussed are too risky for anybody else to invest in?

Senator Pratt also gave a lecture railing against the coalition's direct action policy and proclaiming the government's deep belief in market mechanisms and market based mechanisms. I am a little confused there, because I am not sure whether Senator Pratt realised what she was talking about here in terms of the legislation before us. The Clean Energy Finance Corporation Bill is in fact something that you could describe, if you wanted to, as direct action. There is nothing about this that remotely resembles a market based mechanism, nothing that comes close to being part of a market based mechanism. It is simply $10 billion of taxpayers' money put out there for people to spend on so-called investments that hopefully, for the taxpayer, might pay off but, as we have heard, are too risky for anybody else to invest in. So this is very clearly about direct action, this whole 'green bank', this CEFC proposal. The difference, however, between it and the coalition's direct action policy is that the coalition's policy is based on the premise that it will fund activities, via market tender, that deliver the lowest cost abatement. It is a pretty clear proposal. It is the same way that water is bought back and the same way that many tender based activities operate. In this case, it will be funded and operate by the government going out to tender to purchase X amount of abatement and funding the lowest cost abatement. There is no requirement for that, no guarantee of that, with this CEFC, this green bank—and indeed it is far more likely to be the opposite: it will not be funding lowest-cost abatement; it will be funding far more expensive abatement. So it will be risking taxpayers' dollars and it will be funding abatement that comes at a higher cost than could otherwise be achieved. It is a failure on numerous fronts.

The CEFC comes into effect as a result of this legislation, and the bill seeks to give it powers to invest in financial assets for the development of Australian based renewable energy technologies, to invest in low-emission technologies and energy efficiency projects. It gives it the power to enter into investment agreements itself and make investments through subsidiaries. It gives it a duty to ensure that, as of 1 July 2018, half the funds invested at that time for the purposes of its investment functions are invested in renewable energy technologies. That is the mandate. It has some $10 billion of taxpayer funds going into it, at least half of it to be invested by 2018 in renewable energy technologies. This of course is part of the government's and the Greens' overall carbon tax package. There was nothing like this in Mr Rudd's emissions trading scheme that was proposed in the previous parliament. This is simply a case of the government having to buy off the Greens. This is Senator Milne's baby, and I extend my congratulations to Senator Milne. It is not every day that a member of a minor party can manage to get the government to spend $10 billion of taxpayers' money in this kind of reckless way. So to Senator Milne and the Greens I extend my congratulations that you have managed to achieve what is obviously to your constituency something you think is beneficial. But in this place we should be looking beyond the rather narrow constituency of the Greens to be looking at what is in the Australian national interest. This clearly is not, nor is the broader carbon tax that is being considered.

The carbon tax has been described by some as being like a giant money-go-round. The government goes out there with its carbon tax, it raises about $9 billion a year and then it spins it and churns it around government and dishes most of it back out again afterwards through all types of different mechanisms and means. This happens to be one of those means. If you look at the money-go-round that is the carbon tax, this Clean Energy Finance Corporation or green bank is in many ways like the big dipper of the money-go-round, because we are taking a big gamble and a big punt with where this $10 billion will be spent and how it will be spent.

You need no further evidence of the money-go-round nature of the government's climate change policies and carbon tax policies than the situation of the Alcoa plant just outside Geelong at present. We have seen the miraculous situation in the last couple of days where Alcoa has been granted some $40 million from the government. The government professes that this has nothing to do with the carbon tax that Alcoa will have to pay. If that is the case, it is a remarkable coincidence that it is receiving this $40 million in grants just before the carbon tax will make that same Alcoa plant pay approximately $40 million in carbon tax. It is a remarkable coincidence from the government that, unrelated to the fact that they have imposed a new $40 million cost on Alcoa's operations, they have decided that they need to give them $40 million to keep those doors open. A simple person might suggest that Alcoa could have managed to keep its doors open in the first place were it not having to pay a $40 million carbon tax. Also, it would not have needed a $40 million grant from the government—which will no doubt come with all manner of bureaucratic conditions attached to it and which of course will be churned through the public sector, chewing up a few dollars along the way.

This bill also sets out that the Clean Energy Finance Corporation special account be created. This special account will have appropriated to it some $2 billion per annum for five years, with the first instalment due to be paid on 1 July 2013, up to the total investment of $10 billion. Now $10 billion is a remarkable sum of money, and under this legislation not just this government and this parliament but potentially future governments and future parliaments will be tied to it. Such is the contempt that those opposite have for the views of the Australian people that it is not enough for Ms Gillard to have gone to the last election promising that there would be no carbon tax under the government she leads; it is also the desire of her government, having broken that promise, to go to the next election after having locked in, under this legislation, billions of dollars of funding to come out of that carbon tax. It is a desire to tie the hands of future parliaments and future governments to maintain a type of funding which would normally be provided without direct legislation appropriating the money so far in advance.

Normally, you would expect these types of appropriations to come through in a more timely manner, where the appropriation legislation is tied to the timing of when the grant is made. But we are appropriating, in 2012, funds to be provided right the way through to 2018. But there you have the attitude of this government. Although the Australian people may choose at the next election to reject these types of policies, it is trying—no doubt because of the pressure applied by Senator Milne and the Greens—to lock people in, to lock future governments in, to this spending and to make it as hard as possible for them to back out of it. This will not deter the opposition. Where we see bad spending, we will do what is necessary to make sure that we reject that bad spending in future.

It is notable that the government's own bill, this bill, already envisages a loss to the taxpayer from this investment—and not just through its operating costs. It certainly has significant operating costs, as there are in the entire suite of carbon tax bills. Across the board, these carbon tax bills establish numerous new bureaucracies that will see over the forward estimates period the expenditure of some $400 million plus. We already have the new Clean Energy Regulator or 'carbon cop' operating with more than 300 staff in place to manage the carbon tax. That is no reflection on those hardworking public servants, because I have no doubt that they are working hard. It is a reflection on the complexity of policy and the administrative incompetence of this government that it puts in place policies that see such a ballooning and burgeoning of the bureaucracy that we end up with several new entities established out of the carbon tax package, hundreds of extra public servants employed and hundreds of millions of dollars of taxpayers' money spent purely on the administration of these policies. The Clean Energy Finance Corporation will be one of the new entities that will see millions of dollars spent on its administration as well.

But the loss does not just occur through operating costs; it also occurs as a result of the write-downs that have been set out. Write-downs are, of course, a nice way of talking about failed projects. We will no doubt see taxpayers' money invested in failed projects as a result of this legislation. The legislation tries to give the perception of having a very independent statutory board making all of the decisions. That is the perception it tries to give, but when you dig down into the detail you find that there is an awful lot of ministerial discretion for this new green bank. The bill requires the shareholder minister to issue an investment mandate for the corporation. The bill's explanatory memorandum stipulates:

The investment mandate may include, but not be limited to, directions on matters of risk and return, eligibility criteria of investments in renewable energy technologies, low-emission technologies and energy efficiency projects, allocation of investment, limits on concessional investments, types of financial instruments in which the Corporation may invest and broad operational matters.

I particularly like those last four words—'and broad operational matters'—where the bill refers to the capacity for the minister to give investment mandate descriptions to the corporation. It seems as though the relevant minister is able to give instructions to the CEFC board on just about anything they so please—just about anything they want.

So, far from it being an independent statutory board, we instead seem to have a situation where a so-called independent statutory board has been established but the minister has the most sweeping of capacities to provide criteria and stipulations to that board. Ultimately, they may be able to independently select the investments, but the criteria for that investment selection, its suitability and all of the other operational matters have the potential to be heavily influenced by the relevant minister and government of the day—almost to the point where the CEFC will be under effective government or ministerial control. This investment mandate does not take the form of a disallowable instrument; it is, instead, a written non-disallowable legislative instrument. Once this bill has passed through the parliament, under the sweeping powers of the bill ministers of the day will be able to give investment mandates sweeping direction to the CEFC, regardless of what the parliament may think. That is not appropriate; it is not appropriate for this parliament to grant a blank cheque to future ministers for the expenditure of such vast sums of public money. When it comes to blank cheques, we see yet again—as we did last week and as we will through this week—the government constantly guillotining bills. In all cases it seems to be quite unnecessary, had they managed the legislative program in a sensible way. The pending establishment of the CEFC was made clear in July last year, yet it is only now that the Senate, under serious time management, is allowed a few hours of debate on this legislation, when we are talking about the expenditure of such vast sums of public money.

In kicking off the debate, my colleague Senator Cormann highlighted some particular concerns that we have about how this $10 billion policy interacts with the bipartisan Renewable Energy Target, which seeks to achieve 20 per cent renewable energy by 2020. Of course that target is already mandated; that target is already in place. The expectation is that by 2020 Australia will have 20 per cent renewable energy. The Renewable Energy Target does far more to transform Australia's energy supplies, far more to transform our energy market and far more to reduce greenhouse gas emissions than does the government's carbon tax in the same period, to 2020. We do actually know that the RET is making a difference. It is not without costs, and some of those are concerns; nonetheless, it is making a difference. But we are now moving along, and this legislation will allow $10 billion to be spent in the exact same space as the RET. That means that where the commercial case for projects out there today has been built up, where people have found the money to invest and are going through the final approvals, people will suddenly find themselves competing against other projects that are going to be subsidised by government loans. Suddenly, under the RET the fair playing field which is meant to encourage development of the lowest cost renewable energies to a 20 per cent target for Australia by 2020 will be thrown out the window and instead we will have competing against those RET projects companies that have not been able to get a commercial case to stack up and that are too risky to get commercial finance. They will now, suddenly, get government finance instead to get them there. What will that mean for the RET? The 20 per cent will still be met; it is just that it will be met by businesses that have received government subsidy rather than private investment. It will mean that that 20 per cent will probably be met from less efficient energy sources rather than from the most efficient energy sources. That seems to fly in the face of all the rhetoric we hear from the government about the way these market mechanisms should work.

I have to say I am baffled by this legislation and why the government is doing this. I noted that Senator Milne's answer earlier to the problems with the RET was that it has dramatically increased the 20 per cent target. Of course we all know that that will come with even more dramatic increases to electricity prices right around the country. At its heart, this is just a $10 billion expenditure by the government on risky projects—projects that are too risky for anyone else anywhere else to want to invest in—which means that this government once again is putting the funds of the Australian taxpayer on the line and, in doing so, risking the hard earned dollars of the Australia taxpayer, which are so hard to come by. That is why we still have such massive debt in this country.

Matt Thistlethwaite (NSW, Australian Labor Party) Share this | Link to this | Hansard source

I am pleased to rise in support of the Clean Energy Finance Corporation Bill 2012. The establishment of the Clean Energy Finance Corporation will be an important aspect of building Australia's future economy. It is part of the suite of reforms that make up the Labor government's clean energy future package and is an important body which will support the transition our economy will make over future decades from a heavy-polluting industrial based economy into a clean energy future. This bill establishing the corporation will ensure that into the future Australia has a viable clean energy industry and an attractive destination for investment in research and development, manufacturing and clean energy production. With that will come growth in jobs and rising incomes for members of our economy, which are things that should be supported. It pleases me that the government is enacting this legislation. The Clean Energy Finance Corporation is an institution that will play a vital role in our nation's successful journey to becoming a more prosperous and environmentally responsible country.

The bill gives effect to the government's commitments made in respect of the clean energy future package to establish this corporation. The corporation will assist and commercialise clean energy projects in this country. The fund will be a $10 billion fund dedicated to an investment in a future in clean energy in Australia. On 17 April 2012 the Gillard government released the expert review panel's report on the design of the corporation. The government has accepted the recommendations of that report and is implementing them through this bill. Clean energy technologies unfortunately face a range of obstacles in attracting financing in Australia at the moment. Current global financial market conditions, the complex nature of Australia's electricity markets, the costs of renewable energy and the preference of investing institutions for liquid assets inhibit the financing of the clean energy sector. This bill will ensure that Australia has a corporation dedicated to the support of investment and the commercialisation of clean energy projects in this country. The corporation will invest in financial assets for the development of Australian based renewable energy technologies, low-emission technologies, energy efficiency projects, and businesses that supply the required inputs.

The bill requires the corporation to have at least half of the corporation's investments in renewable energy technologies by 30 June 2018 and then on an ongoing basis. It is expected that the corporation will apply a commercial filter when making its investment decisions, focusing on projects and technologies that are in the later stages of development. The filter will not be as stringent as some private-sector equivalent, as the corporation does have a public policy purpose and values any positive externalities that are generated through this process, but, by using a commercial filter, it is expected that the corporation will invest responsibly and manage risk so that it is financially self-sufficient and achieves a targeted rate of return. The responsible minister will issue an investment mandate to the board, setting out the government's broad expectations of how the corporation invests and is managed by the board, but the corporation's investment decisions will be made independent of the government.

The corporation will be a central pillar of this country's successful clean energy future and play a major role in the development of the renewables sector. It will ensure that Australia, with its abundant natural resources, is a viable country for investment in clean energy projects and technology into the future. The bill and the suite of reforms in the clean energy future package are conscious of the fact that the world is moving to a regime of limiting carbon emissions in not only our economy but other developed economies throughout the world. In doing so, the world is moving to a renewable energy future. But at the moment, unfortunately, in Australia, a lot of these projects are not commercially viable.

That is the purpose of the carbon-pricing legislation. Under our regime, a price will be established for the externality that is created by corporations and individuals that pump carbon pollution into our economy. Initially under the scheme it will be $23 per tonne, before it moves to a market based price, pricing that externality in our economy. That will send a price signal to the market and over time will change behaviour because, in market based economies, the price allocates the capital. So gradually, as dirty, coal fired pollution becomes more expensive, the capital will move into more economically viable renewable energy projects, which will of course ensure that Australia has a cleaner environment and, importantly, is able to meet its international commitments to reduce carbon emissions in its economy. In doing so, we will ensure that we have a viable clean energy sector in this economy.

I have often said that the change that our economy is undergoing at the moment is the equivalent of the change that the economy undertook 100 years ago when we moved from an agricultural basis into an industrial era. During that change, capital was reallocated from farmlands and farming projects into an industrial economy, and we saw the benefits that flowed to our economy from that change that occurred over the last 100 years. Similarly, the next phase of our economic development is in a clean energy future. If we make that transition, then, over the course of the following decades, investment will follow—investment in research and development and investment in manufacturing and ultimately the production of cleaner energy in this country. With the investment will flow jobs growth and incomes growth for our economy and those who live within it.

Unfortunately, this seems to be an argument that the conservative side of politics in this country have not yet grasped. Despite the fact that they are advocates for free-market economics, they fail to grasp this important distinction and characteristic of the government's clean energy future package: the fact that the price will allocate the capital as we move forward into the future on this issue. You need look no further than the opposition's direct action policy on reducing emissions to see that they fail to grasp the notion of the market setting the price for carbon emissions, the capital flowing and the jobs, the investment and the growth in our economy over the future. Unfortunately, the direct action policy is akin to the opposition throwing money in the air and hoping that Mother Nature takes the bribe.

Australia's clean energy market is, of course, at an early stage of development categorised by incomplete knowledge and limited experience of risk. This means that there are barriers inhibiting the effective allocation of capital. The expert review chaired by Jillian Broadbent identified a number of common barriers that inhibit financing in the clean energy sector. The key issues are availability, cost and tenor of finance.

This corporation will leverage private-sector financing for renewable energy, low-emissions and energy efficiency technologies, investments critical to the transformation of the Australian economy. The corporation will act as a catalyst to private investment which is currently not available and thereby contribute to carbon reduction and cleaner energy. It is not the intention that the corporation will directly compete with the private sector but rather that it will seek to leverage more private-sector investment through more support for the development of cleaner energy in this country. The corporation is just one of a raft of this government's initiatives designed to take us on what will be the next stage of our nation's economic development. Whilst those opposite continue their irresponsible campaign to drive fear and to scare Australians away from doing what is right, the Gillard government will continue to strive to achieve these reforms. Not only does this bill mean jobs for Australians; it also means a promising future in which Australia will take its place in the new economy, in an economy where in 20 to 30 years time investment and capital will flow to those countries that have made the transition to a clean energy future, that have a viable research and development capacity for clean energy and that have a domestic manufacturing base for clean energy.

We have all heard the figures in the international market at the moment and the massive investment that is occurring in China in wind power, in solar power and in the electrification of cars. Economies that invest in these areas, that support the establishment of a domestic renewable energy sector, will be the ones in the future that benefit, where investment and jobs will flow, where incomes will flow.

Australia must act now. The suite of reforms in this bill will ensure that we are on our path to a clean energy future with the commensurate benefits for our economy. I commend this bill to the Senate.

Barnaby Joyce (Queensland, National Party, Leader of The Nationals in the Senate) Share this | Link to this | Hansard source

The electric car was first recommended as the car of the future in 1901. It was going to overtake all other cars. From 1901 until now, we have been waiting a little while for the electric car to turn up. What we hear in this debate on the Clean Energy Finance Corporation Bill 2012 is that, in the marriage between the Australian Labor Party and the Greens, there was a dowry to be paid. It is being paid by the Australian taxpayer. That dowry cost $10 billion and is being paid off in instalments of $2 billion a year. It is the most absurd piece of theoretical rubbish that has been foisted on the Australian people.

Every country has its time of social engineering. The most extreme examples were China's cultural revolution and Pol Pot. Now we have Australia financing its own little cultural revolution. Absurd ideas which do not stand up have become part of our debt. Where do you think the first instalment of $2 billion will come from? Where on earth is this money? I will tell you: we are going to borrow it. You will borrow it like you borrow every other piece of money. The country is currently $233.4 billion in debt. There is no money sitting around—it is borrowed money that you have to pay interest rates on.

We know that this scheme will go out the back door; it is going to lose. Even in their own area they are estimating a loss of about 7½ per cent. If you look at what has happened in the United States with their clean energy corporation where they are about to write off $10 billion, that would mean a loss in their instance of about 23 per cent. It is one of these mad ideas. The Labor Party talks of the sunny economic uplands, the so-called 'spring in your step'. Everybody has a spring in their step—no doubt one like there is in Fairfax or News at the moment. They have a real spring in their step at the moment. The economic conditions that are before us are more like a fettered gait.

In this nation we have to get away from these whacky theoretical, nirvana-like monkey ideas. Instead, now we are putting $10 billion towards them. One thing I can assure you of is that we are about to invest in not the cheapest but the most expensive forms of energy. There are people in the world who are love renewable power—they are probably the 400 million in India who do not have a light bulb. They like renewable power. Cow dung is renewable, and straw—there is lots of renewable power around, generally in the Third World. We have this thing called civilisation. I am a bit old fashioned and I kind of enjoy it. Here we are talking about renewable power. Look at this joint. It is almost luminescent. But we all sit here, and people have their threads, their nylon, made of oil based substances, but we live in an absolutely whoopee nirvana-like world. It would all be interesting reading except that it will just send us out the back door. This crowd is sending us out the back door.

Robert Bryce in his book Power Hungry: The Myths of 'Green' Energy and the Real Fuels of the Future wrote that countries that can provide cheap and reliable electric power to their citizens can grow their economies and create wealth. Those that can't, can't. That is basically it. You have a choice in the end: cheap power or cheap wages. If you want dear power, you better have cheap wages or no jobs. We see that in the aluminium sector at the moment. There is no alternative. Where are these green jobs? They keep telling about these green jobs but where are they? Why do we now believe that it is better for a fitter and turner to become a maintenance man at the park? What are they going to do? We have $10 billion to try to assist further people out of jobs. There are 1.6 billion people in the world who live without electricity. Is this a noble outcome? Are we intending to join them?

Even the head of the IPCC, Rajendra Pachauri, talks of the 400 million people who live without a light bulb in India. What is the purpose of what we are trying to do? Everything they talk about, even when they say we will have photovoltaic cells—they are imported—and wind turbines—they are imported—means we are shutting down our own capacity to get a highly subsidised or vastly more expensive order on us to buy an imported product to make us all poorer. It is this new world plan to turn Australian into a nation of CDEP workers, where we can all have environmental jobs but no-one actually ever does anything and no-one actually ever creates anything.

The average wage in the mining sector at the moment is $118,000 per year. The average in the electricity and utilities industry, the second highest, is $85,000 a year. What are the jobs that they want to get rid of? Those jobs are the jobs that they are hoping to get rid of. Replace them with what? They would replace them with these fantastic jobs they talk about—a fantasia that they can never actually point to it. We always hear about it but we can never find it. There is this amorphous concept of the green job. I have never found someone who has a green job. I do not know where these people live. Maybe it is the politicians. Maybe we have the green jobs. Maybe we are the green people.

In Spain we know that, rather than creating a job, every green subsidy costs 2.2 jobs. For every so-called green job you create, you will take out almost 2½ jobs. In the United Kingdom the figure is 3.7 jobs. In Italy the figure is almost five jobs. But apparently this is where we want to go. This is the new world under the Labor Party and the Greens. This is what they are creating for us. Theoretically it works well—wonderful theories. We hear of how we can no longer have an aluminium industry because it is not worth it anymore. We have to tell these people to evolve. They have to evolve with the Labor Party. They have to move on and realise that Victoria does not need an industrial sector anymore. They do not believe in blue-collar workers anymore. They have to evolve into green workers. They have to understand enlightenment, that shining orb of light that can be found at Nimbin. Who needs an industrial heartland? Who needs metalworkers these days? It is just so old-fashioned.

Of course we can run an aluminium plant on wind power. We can run an aluminium plant on photovoltaic power. It all makes so much sense! They are going hand in glove with the same people who want to shut down the timber industry, who want to shut down the fishing industry, who want to shut down the live cattle industry, who want to shut down the poultry industry, who want to shut down the irrigation industry and who want to bring back death duties and who believe in a top rate of tax of 50c in the dollar. What do they get for this wisdom? They get $10 billion in $2 billion-a-year instalments. From there, we can instruct the destruction of Australia, paid for by the Australia taxpayer. It is so absurd.

If you want to become the richest person in the world, invent the photovoltaic cell with an efficiency of 50 to 60 per cent. People will do that because they want to become wealthy. They do not need a subsidy. I have heard we are going to bring forth the electric car. They have been bringing that forth since 1901. It has arrived; it is called a golf buggy. We used to have some of the cheapest power in the world. Now it is disgusting where we see ourselves. A country that is like ours and has a vast area like ours—but in fact which has to deal with more stringent environmental circumstances—is Canada. Their power price is about half of ours. Greece's power price is now cheaper than ours. We are up there with the price of power of Switzerland, Poland and New Zealand. We are putting ourselves out of work because of these mad policies of this mad, mad government as it grinds us into the dirt, destroys what we are and takes us down this path to oblivion.

We are getting the carbon tax and we are paying $10 billion to the Greens for their green bank, where they will invest in completely dippy ideas. We are promised green jobs but we never actually find them. We do this on the back on a massive debt—$233.4 billion. Queensland's credit rating has been downgraded and they are going to $100 billion in debt. South Australia has lost its credit rating and is going out the backdoor; New South Wales too. They are all racking up with these massive debts. It does not matter because the lemmings are running the show. They have closed their eyes and it is over the cliff we go together.

What exactly does this nation do when we shut down everything that they want shut down, when this madness finishes? They do not believe in aluminium—aluminium is evil because it uses power. They do not believe in steel. They do not believe in most of the agricultural industries. They do believe in this sort of new bank—I do not know what to call it; come up with a crazy idea and they will give you money as long as it loses money. This green power collects an amazing coterie of acolytes. Probably one of the best ones is Heidi Fleiss, the Hollywood 'businesswoman', let's put it that way. She thought there was such a future in the green industry that she decided to give up her plans for a stud farm—and we can understand what that stud farm was all about! She said that green energy was where it was, that that was the way of the future. There are such pre-eminent brains that sit at the front of this. Then there is wind power. If you want to go down the path of wind power, what you cannot do with this green fund is to go into something serious. If you want to reduce emissions, and you are in the Greens, there are certain things you are not allowed to talk about. You cannot talk about things that actually bring about zero emissions. They do not believe in nuclear energy; they cannot believe in that; it is evil. They do not believe in thorium; they cannot do that. They do believe in geothermal, but they have not quite twigged that the reason the rocks are hot is not that they are near the centre of the earth—which is what one of them said in a Senate estimates—but that there is a slow degradation of grenetic material, which has a latent radioactivity about it. That heats the water. We have our own nuclear reactor, but we are not allowed to call it that—we have to call it geothermal.

Wind turbines have been such a huge success. That is what the Labor Party believes. People just love wind turbines. There are so many people who want so many more wind turbines. They are the most expensive form of power, and people hate them. Wind turbines, whose name shall not be mentioned by the Greens but they are going to support fields and fields of wind turbines. In fact, if you really look at it, wind turbines are also one of the greatest absorbers of land space. A power station is a nice compact thing, and even a coal mine is a nice compact thing, but we just cover the land with wind turbines. If you jump in a plane to Sydney you see wind turbines everywhere. As fly along, you see them all there, out the starboard side, turning along. That is what you want—subsidised power. Wind power requires almost four times the amount of land that natural gas does and about seven times as much as coal. For each megawatt of wind power that is generated, 870 cubic metres of concrete and 460 tonnes of steel are required. By comparison, each megawatt of natural gas requires 27 cubic metres of concrete and 3.3 tonnes of steel. Whereas wind turbines, even if we go into the green credentials—I know you are probably not interested in this over there—

Trish Crossin (NT, Australian Labor Party) Share this | Link to this | Hansard source

I cannot understand what you're talking about. You are talking such rubbish.

Barnaby Joyce (Queensland, National Party, Leader of The Nationals in the Senate) Share this | Link to this | Hansard source

She is interesting, isn't she? You might be interested to know that it is estimated in America that between 75,000 and 275,000 birds are killed each year by wind turbines. Renewable energy projects often do not even reduce emissions as they claim. Wind projects typically generate 10 to 20 per cent of their maximum capacity, because the wind blows intermittently and, when it does blow hard, it is often at times when electricity is not required. So, this bill will be completely ineffective at either encouraging more renewable energy or reducing carbon emissions. We will waste lots of money; the government has admitted that in this case Treasury has estimated that, on average, loans from the Clean Energy Finance Corporation will make a loss of around about 7½ per cent. Once this bill passes today we are set to waste $750 million at least, but this amount is likely to be a vast underestimate.

Senator Crossin interjecting.

Madam Acting President, I think she needs an ambulance. She is in some pain over there.

Trish Crossin (NT, Australian Labor Party) Share this | Link to this | Hansard source

I know, but the pain will be gone when you sit down.

Barnaby Joyce (Queensland, National Party, Leader of The Nationals in the Senate) Share this | Link to this | Hansard source

What will we do? I suggest we get her a new lily pad, because that one seems to be sinking. I am sure you will be interested to hear the views of Larry Summers, formerly Bill Clinton's Treasury secretary and President Obama's director of the National Economic Council: 'The government makes a crappy venture capitalist.' We are going to have such shining lights as Senator Crossin helping us out. Now there is a shining orb of economic light! Just look at her. You know she is right up the top there. She would be a great example of economic literacy. People like Senator Crossin are going to be such an asset to the investment profile of this nation. I cannot wait for people like Senator Crossin to be advising us on the direction this nation should go, because they are so clever.

Trish Crossin (NT, Australian Labor Party) Share this | Link to this | Hansard source

That is right. That is the best thing you have said.

Barnaby Joyce (Queensland, National Party, Leader of The Nationals in the Senate) Share this | Link to this | Hansard source

You can tell, because in between the intermittent grunts that emanate from the corner where she resides on her lily pad—

Louise Pratt (WA, Australian Labor Party) Share this | Link to this | Hansard source

Senator Joyce, please direct your remarks to the bills under discussion.

Barnaby Joyce (Queensland, National Party, Leader of The Nationals in the Senate) Share this | Link to this | Hansard source

If we want to know about green power, we can see the energy that it takes to eat flies and bring up tadpoles. Maybe we can have a caucus with Senator Crossin and some of the Greens—Senator Rhiannon—that would be good. We will be able to listen to them grunting along, talking about windmills and photovoltaic cells, as we blow $10 billion. You might think $10 billion is irrelevant, Senator Crossin, but there are a lot of people who think $10 billion is a lot of money. You do not really care about $10 billion anymore, because you do not care about money any more, as long as you bring the whole show down. What we are seeing now is basically the financial destruction of Australia, as you tear it down, as you bring it to its knees. It has all become so pathetic, so ridiculous. It goes on and on and on from one fiasco after another fiasco in an eternal rotating circus of fiascos and in the centre of that fiasco is the emanating light of Julia Gillard, Wayne Swan and Senator Trish Crossin.

Anne Urquhart (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak in favour of the Clean Energy Finance Corporation Bill 2012—a bill that will establish the Clean Energy Finance Corporation and the Clean Energy Finance Corporation Special Account and that appropriates funds to that account. The Clean Energy Finance Corporation will be a $10 billion fund that will provide a new source of finance for the development or commercialisation of Australian based clean energy technologies and projects. This includes renewable energy technologies, low-emission technologies and energy efficiency projects.

All we have heard from the opposition today is negativity, and all we ever hear from the opposition about transitioning to a low-carbon economy is negativity. After Senator Joyce's contribution, I would like to share with the Senate today the story of Chicken Little's adventure. Once upon a time there was a tiny, tiny chicken named Chicken Little. One day Chicken Little was scratching in the garden when something fell on her head. 'Oh,' cried Chicken Little, 'the sky is falling. I must go and tell the king.' So Chicken Little ran and ran, and she met Henny Penny. 'Where do you travel so fast, Chicken Little?' asked Henny Penny. 'Ah, Henny Penny,' said Chicken Little, 'the sky is falling, and I must go and tell the king.' 'How do you know that the sky is falling, Chicken Little?' asked Henny Penny. 'I saw it with my eyes, I heard it with my ears, and a bit of it fell on my head,' said Chicken Little. 'I will go with you to the king,' said Henny Penny. So they ran along together, and they met Ducky Daddles. 'Where do you travel so fast?' asked Ducky Daddles. 'Ah, Ducky Daddles,' said Chicken Little, 'the sky is falling, and Henny Penny and I go to tell the king.' 'How do you know that the sky is falling, Chicken Little?' asked Ducky Daddles. 'I saw it with my eyes, I heard it with my ears, and a bit of it fell on my head,' said Chicken Little. 'I will go with you to the king,' said Ducky Daddles. So they ran along together, and they met Goosey Loosey. 'Where do you travel so fast, Chicken Little?' asked Goosey Loosey. 'Ah, Goosey Loosey,' said Chicken Little, 'the sky is falling. Henny Penny and Ducky Daddles and I go to tell the king.' 'How do you know that the sky is falling, Chicken Little?' asked Goosey Loosey. 'I saw it with my eyes, I heard it with my ears, and a bit of it fell on my head,' said Chicken Little. 'I will go with you,' said Goosey Loosey. So they ran along together, and they met Turkey Lurkey. 'Where do you travel so fast, Chicken Little?' asked Turkey Lurkey. 'Ah, Turkey Lurkey,' said Chicken Little, 'the sky is falling, and Henny Penny and Ducky Daddles and Goosey Loosey and I go to tell the king.' 'How do you know that the sky is falling?' asked Turkey Lurkey. 'I saw it with my eyes, I heard it with my ears, and a bit of it fell on my head,' said Chicken Little. 'I will go with you to the king,' said Turkey Lurkey. So they ran along together, and they met Foxy Loxy. 'Where do you travel so fast, Chicken Little?' asked Foxy Loxy. 'Ah, Foxy Loxy,' said Chicken Little, 'the sky is falling, and we go to tell the king.' 'Do you know the way to the king's house?' asked Foxy Loxy. 'No,' said Chicken Little. 'No,' said Henny Penny. 'No,' said Ducky Daddles. 'No,' said Goosey Loosey. 'No,' said Turkey Lurkey. 'Then come with me and I will show you,' said Foxy Loxy. Just as he was about to lead them into his den to eat them, the sky fell on him. 'Oh dear,' said Chicken Little. 'We're too late,' said Henny Penny.

John Williams (NSW, National Party) Share this | Link to this | Hansard source

Madam Acting Deputy President, I rise on a point of order. Is this a chamber of fairytales or are we actually debating an issue? I draw your attention to the issue of relevance. This is not a preschool, although some on the other side seem to act like preschool students. Can you draw the issue of relevance to Senator Urquhart's attention?

Jan McLucas (Queensland, Australian Labor Party, Parliamentary Secretary for Disabilities and Carers) Share this | Link to this | Hansard source

On the point of order, Madam Acting Deputy President: we had a presentation from the Leader of The Nationals which we allowed to continue. People talk about fairytales, but there were a lot of fairytales told by him, too. I think that Senator Urquhart is making a debating point and I suggest that there is no point of order.

Louise Pratt (WA, Australian Labor Party) Share this | Link to this | Hansard source

Senator Urquhart, I am sure you will draw this story to a conclusion and come back to the bill.

Anne Urquhart (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

I will, Madam Acting President. Those listening can draw their own conclusions about the connection between Henny Penny's adventure and the opposition's rhetoric on pricing carbon. I thought that was a much easier story to follow than the story we heard from Senator Joyce in his presentation.

As we are all aware, manufacturing in Australia is under pressure from the resource-fuelled high Australian dollar and overseas competition as the manufacturing industries in our big Asian trading partners mature. But Australian manufacturers and manufacturing workers want to do their part for the environment and for the future, and they realise the opportunities that our changing world presents. Australia is a late starter in the transformation to clean technology due to its access to low-cost fossil fuels. Current global financial conditions, the complex nature of Australia's electricity markets, the cost of renewable energy and the preference of investing institutions for listed assets inhibit the financing of the clean energy sector.

Unfortunately, traditional avenues of finance can often be out of reach for companies looking to make sustainable capital investments in their operations and to commercialise innovative products. The corporation is a mechanism to help mobilise investment in renewable energy, low-emission and energy efficiency projects and technologies in Australia. The corporation will finance Australia's clean energy sector using financial products and structures to address the barriers currently inhibiting investment. Ultimately, Australian manufacturing will get ahead of the game because of the government's willingness to back them in making this important transition. Shell Global CEO Peter Voser rightly noted on ABC TV's 7.30 program last Thursday, '

... Shell as a company is actually very much advocating that we need a price for carbon on a worldwide basis ...we take a very long-term view that the carbon will be priced ...

Global carbon pricing will occur. Smarter, greener technologies and manufactured goods will emerge around the globe. Australia is uniquely placed to capitalise on first-mover advantage by making sure our manufacturers are equipped to produce and are capable of producing solar cells and windmills and the associated infrastructure, and it is necessary to assist producers get their products to market while meeting the demands of a low-carbon future and changing consumer patterns.

We cannot afford to miss this opportunity because our banks and other finance companies are not prepared or able to back Australian innovation and know-how. In terms of lifting our manufacturing industry's competitiveness and getting ahead of the game on a global scale, the Clean Energy Finance Corporation is an essential piece of the picture. This transformation will require substantial capital which the private sector alone may not be able to provide. I am a member of the Senate's Economics Legislation Committee, which held an inquiry into this bill. Submissions to the inquiry all supported the creation of the Clean Energy Finance Corporation. In its submission to this inquiry, the Clean Energy Council suggested that the challenge of developing new energy technologies is not unique to the clean energy sector. The council argues:

... other technologies such as coal and gas generation have enjoyed decades of public support to get to where they are today.

Some level of government support is warranted when long-term investments requiring large amounts of capital are needed to kick-start promising first-of-kind technologies. In the clean energy sector specifically, the Clean Energy Council indicates:

To overcome current market constraints and accelerate commercialization and deployment of low carbon technologies, support is needed in the construction of financial transactions in a way that will enable use of conventional capital markets products such as debt financing, private equity, venture capital and capital from longer term equity investors (like superannuation funds) at an affordable cost.

While all the evidence received by the committee supported the concept of the Clean Energy Finance Corporation, there were a range of options shared to the House of Representatives Standing Committee on Economics. In its evidence to the committee, Treasury stated that it was not aware of concerns from either the finance sector or the green energy sector about how the framework for the Clean Energy Finance Corporation, as contained in the bill, has been designed. I quote:

There is a spectrum of views: 'We need to do it now and we need to do it quickly' to 'We should do more' to some sectors that question the need for the corporation. So there is a broad spectrum of views, but the bill ... reflects the findings of the expert review panel into the Clean Energy Finance Corporation, which was chaired by Jillian Broadbent. Also on that panel were Ian Moore and David Paradice. All three members have extensive experience within the financial sector and the corporate sector.

In its submission to the inquiry, Hydro Tasmania stated that the Clean Energy Finance Corporation offers significant opportunity to build on Hydro's established capabilities in the renewable energy sector. As they are the largest clean energy producer in Australia, I am inclined to listen to them rather than the negativity espoused by those opposite. As a well-established clean energy producer, Hydro Tasmania is continuing to invest in additional renewable energy as well as in the maintenance, upgrade and refurbishment of their existing hydro assets. Hydro concluded their submission calling for:

Expedient passage of the Clean Energy Finance Corporation Bill 2012—

which—

will provide certainty to industry and investors and allow the CEFC to begin assessing eligible clean energy proposals in a timely manner.

I turn to the submission provided by the Beyond Zero Emissions organisation. In particular, the Beyond Zero Emissions organisation is advocating the take-up of concentrating solar thermal power with storage technology to power our country. Concentrating solar thermal is a commercial technology able to provide reliable power 24 hours a day. However, as it is a less mature technology, it is currently not cost competitive with other fossil and renewable technologies. Given the large capital cost component of the cost of solar thermal energy electricity, Beyond Zero Emissions highlight that the Clean Energy Finance Corporation could help this technology be deployed in Australia. And, excitingly, we could build the infrastructure here in Australia using our existing manufacturing expertise.

As with most renewable energy technologies, the up-front capital cost of concentrating solar thermal power represents over 90 per cent of the levelised cost of energy. Consequently the cost of capital, or the effective interest rate on capital investment, has a substantial influence on the economic viability of a project. Using the government bond rate through finance from the Clean Energy Finance Corporation may be able to deliver investment in concentrating solar thermal power. However, to do this, Beyond Zero Emissions state that the Clean Energy Finance Corporation must be allowed to provide at least 75 per cent of the capital investment for concentrating solar thermal power plants. This represents as much as $500 million to $1 billion. At current commercial rates, the levelised cost of electricity for concentrating solar thermal power is over $250 per megawatt hour. If the Clean Energy Finance Corporation allowed 75 per cent of the capital cost to be financed at the government risk-free rate, with the remaining 25 per cent financed at the commercial rate, the levelised cost of electricity could approach $150 per megawatt hour. This composition of debt to equity is typical finance leverage for power infrastructure projects. And this leaves concentrating solar thermal power about $12 to $25 per megawatt hour more expensive than other renewable energies. To achieve investment in concentrating solar thermal power in Australia, we need the Clean Energy Finance Corporation to significantly consider a larger than traditional investment in concentrating solar thermal power.

I thank Hydro Tasmania, Beyond Zero Emissions and all organisations for their submissions to the Senate inquiry. I urge all senators to support this bill and not be spooked by those opposite and their attitude to this most serious issue.

Concetta Fierravanti-Wells (NSW, Liberal Party, Shadow Minister for Ageing) Share this | Link to this | Hansard source

I rise to also speak on the Clean Energy Finance Corporation Bill 2012 and what is really a complete and utter folly. The clean energy fund is absolute and utter folly and it simply will end up being another slush fund exposed as a complete waste of taxpayers' money. When you look at this fund you see all the hallmarks of the Victorian Economic Development Corporation, which left Victoria in such a disastrous state only two decades ago. I want to take the Senate through some observations that the shadow minister for climate action, environment and heritage, Mr Hunt, has made in relation to this fund. He has outlined that there are four basic things that we need to know about the structure of this fund which are very important. Firstly, this $10 billion fund will create absolutely no new renewable energy. Incredible—it may seem impossible—but this is the fundamental flaw which is at the very heart of this fund. Prior to the creation of the clean energy fund, the Renewable Energy Target was 20 per cent by 2020. And guess what? After the $10 billion will have been spent it is intended that the target will still be 20 per cent.

So then what is the nature and purpose of this fund? And is it, then, merely to displace existing technologies and go to much higher risk technologies that are more likely than not to fail? Therefore it is not surprising that there is some disquiet, even within green stakeholders, in relation to this operation, most importantly because of the distortions in the market that it will create. Here is the thing that surprises me most. What are the terms of reference that ultimately define for us today, before the creation of this fund, what actual benefit, if any, will result as a consequence of this fund?

Is the fund charged with investing in the lowest cost technologies to produce the cheapest emission reductions? No. It is basically there to fund technologies that are uneconomic, unproven and too speculative for the private sector to finance.

What will happen is that we will see $10 billion borrowed on behalf of the taxpayers of Australia so that that money can be given to speculative ventures with absolutely no prospect that they will deliver some environmental benefit at the end of the process. Let us not forget that these will be technologies that the market itself will not be financing because they are high risk. One can make all sorts of assertions about the board of this fund and all sorts of assertions about the skills that the board could have, but no amount of skills of the board is going to insulate the Australian public against what is likely to be a series of untested, untried and likely high-risk technologies, which have all the hallmarks of being complete and utter failures. Of course, all of this will be off-budget and inevitably it will be a lot of money lost.

Cynically, like many of the things this government does, the fund is due to start paying out public moneys only weeks before the next federal election is anticipated.

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

I wonder why that is.

Concetta Fierravanti-Wells (NSW, Liberal Party, Shadow Minister for Ageing) Share this | Link to this | Hansard source

I wonder why that is, Senator Cormann. Absolutely. One does not want to be too cynical, of course. Unfortunately for the taxpayers and unfortunately for the voters of Australia, who would really like an election today but will very likely have to wait until next year, the three-year mark for this very, very bad government will be 21 August next year. If there is an election then, the caretaker period starts in July. Therefore we will start seeing payments of moneys and potentially $2 billion rolling out in the weeks just before the election and during the caretaker period.

Of course, we have seen massive failures on this front before and I will point to a number of these. There was the government's $700 million Solar Flagships program in Moree and Queensland's Solar Dawn project's struggle to gain industry support. Along with the Bligh government, this government also presided over more than $100 million of losses in the ZeroGen project despite clear warnings from both the opposition and experts in the field. I remind the Senate of comments by former Premier Beattie when he described Mr Macfarlane as 'on drugs' for his warning that ZeroGen would fail. Clearly Mr Macfarlane has been proven to be very correct. As I indicated, this had all the bad hallmarks of the Victoria Economic Development Corporation, which left Victoria in a disastrous state. Programs of this nature have had massive failures and there has been considerable controversy in the United States. There were the failures of the $700 million Solyndra project as well as those of Beacon Power and Ener1, which occurred under a similar program as that proposed under this fund. These companies were recently joined by the collapse of Solar Trust of America, which had a $2.1 billion loan guarantee from the US energy department.

I now turn to some work which has been undertaken by the Centre for Independent Studies Research Fellow, Dr Oliver Marc Hartwich, who released a report entitled, A waste of energy: why the Clean Energy Finance Corporation is redundant, in relation to this fund. It has been exposed well and truly by Dr Hartwich as inherently wasteful, and will achieve precisely zero in terms of real CO2 savings under the carbon tax. These were the damning conclusions reached by Dr Hartwich in his report. He said:

The physical effect of energy subsidies is precisely zero in an environment where the total emissions are pre-determined by a trading scheme. Not a single gram of carbon dioxide is saved by pumping money into renewables.

Of course, all this is a futile waste of taxpayers' money. This is yet another example of this government bowing to the demands of its green alliance partners. In this case it is $10 billion to pump into what is nothing more than a giant slush fund.

I will now turn to some specific comments that were made by Dr Hartwich. He states in his report:

The establishment of the CEFC is a questionable political venture for a number of reasons. The very nature of the corporation is unclear: Is it a grant-giving institution or a commercially operating capital provider or both? This inconclusive dual nature, which is implicit in the government’s plans, will make it virtually impossible to evaluate the success or failure of the CEFC.

Further, Dr Hartwich comments:

… investment risks, which ought to be borne by private entrepreneurs, are relegated to taxpayers. Private capital providers are outcompeted by cheaper finance made available through the CEFC. The distortions for capital markets are plain to see.

…    …   …

The billions of dollars that are set to flow into this most dubious political entity ...

Debate interrupted.