Dio Wang (WA, Palmer United Party) Share this | Link to this | Hansard source

My question is to the Minister representing the Minister for the Environment, Senator Birmingham. The Renewable Energy Act currently exempts 'self-generators' of electricity from liability under the RET Scheme, but the circumstances under which the exemption can be granted are very confined. In many remote communities, large-scale industry is the only source of power generation and provides 'incidental power' to important community services, such as local community radio stations, police and ambulance services and telecommunications. As a result of supplying incidental power, the generator may lose the exemption, significant liability can be triggered and the cost may be passed on to local community services. Does the minister agree that this is an unintended consequence of the act?

Simon Birmingham (SA, Liberal Party, Assistant Minister for Education and Training) Share this | Link to this | Hansard source

I thank Senator Dio Wang for his question and for some advance indication of the nature of the question. I do acknowledge that Senator Wang has made numerous representations on behalf of remote communities, including in some of the recent Senate debates in relation to the renewable energy target, where the government of course made amendments that provided for the sustainability of the RET and ensured that it will generate some 23½ per cent of renewable energy for Australia by 2020. As Senator Wang would know, the RET applies broadly to electricity supplied over the major electricity networks in Australia as well as self-generation of electricity above a certain threshold. This ensures that the costs of the scheme are shared and that perverse incentives are not created for businesses in terms of where they generate their electricity.

Exemptions from the RET have historically been restricted to businesses conducting emissions-intensive trade-exposed activities, which are exemptions that were further strengthened in the recent legislation the Senate passed, and for businesses self-generating electricity in specific circumstances. Entities that generate and use their own electricity can seek exemptions from RET liability but under strict eligibility conditions to target genuine self-generation. Redrawing the boundaries for the self-generator exemption is a matter that requires careful consideration, as we discussed in the recent Senate debate on this matter, because there is a real potential for unintended consequences in the way that the RET operates.

That said, the government is aware of the specific issues and concerns that Senator Wang has alluded to and has followed up on the issue since he raised these matters. It has been speaking with industry. I am advised that Minister Hunt is working to seek resolution to the specific circumstances that the senator raises.

Dio Wang (WA, Palmer United Party) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. In December 2012 the Climate Change Authority raised this particular issue and so did the recent Warburton review. Will the government commit to solving this problem for our rural communities, and how will it do so?

Simon Birmingham (SA, Liberal Party, Assistant Minister for Education and Training) Share this | Link to this | Hansard source

As I acknowledged before, the government recognise there are areas of concern and we are taking a proactive approach in trying to work with the energy industry, renewable energy generators and remote communities in discussing the specifics of these issues.

The changes to the renewable energy act that were passed by the parliament in June resulted in major improvements for the renewable energy industry, much of which benefit remote and regional communities. The first was placing the overall scheme on a sustainable basis, something that some in this place still fail to understand. The second change protected jobs, particularly jobs in regional and remote communities, by providing 100 per cent exemptions for many emissions-intensive trade-exposed industries. Many of those jobs are in remote and regional communities and this is of direct benefit to those communities. In relation to the specific issue, we continue to look at all appropriate issues to ensure the fair treatment of all remote communities as well.

Dio Wang (WA, Palmer United Party) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. Is the minister willing to commit to a deadline?

Simon Birmingham (SA, Liberal Party, Assistant Minister for Education and Training) Share this | Link to this | Hansard source

As I have stated, we are in the process of discussing solutions with the energy industry, renewable energy generators and remote communities. We are making sure that we take steps to not have any unintended consequences out of any changes that occur. We will have more to say on this matter in the future. Minister Hunt is always more than happy to talk through these matters with Senator Wang or his constituents.