Kim Carr (Victoria, Australian Labor Party, Shadow Minister Assisting the Leader for Science) Share this | Link to this | Hansard source

I move:

To take note of the answers provided by Senator Brandis to questions asked by myself and Senator O'Neill.

In question time today Senator Brandis expressed some surprise that I would ask a question along the lines of:

Will the Turnbull government commit to using the Finkel review to end the policy uncertainty that is delivering higher bills, higher emissions and less secure power and deliver a coherent plan for Australia's energy sector?

I am surprised that he would express some surprise, because there could be at this time probably no more significant crisis in the Australian political system than the crisis in the Australian energy system, which highlights one of the great failures of our political system itself: the inability of our parliament to reach agreement around a policy framework has fundamentally undermined our capacity to generate the investment needed to renew our energy system. On top of that, we are seeing the gas providers adding further to the enormous strain that is being placed upon our enterprises, particularly in manufacturing, and, of course, households across this country.

Mr Matthew Warren, the CEO of the Australian Energy Council, says:

Right now, we couldn't do it worse if we tried. We're making everything worse. We're making prices higher, reliability more unreliable, and we're not delivering the emissions we're required to deliver.

We have a circumstance here where the Chief Scientist has brought down a review in response to the Prime Minister's somewhat hysterical outburst against the South Australian government. For context: on 6 February this year, Treasury officials were telling the estimates committee that no work had been undertaken by Treasury into the domestic energy system, yet the Prime Minister was prepared to launch this quite extraordinary assault upon the Labor governments in South Australia and Victoria about the question of renewable energy. We saw, of course, circumstances where extraordinary weather events had caused widespread disruptions to the reliability of the system.

The Prime Minister sought to take short-term political advantage where he had undertaken no serious policy work, which of course reflects the approach that this government has taken for quite some time. It is a Prime Minister that had, of course, lost the leadership of his own party on this issue and said he would never actually lead a party which would not have a serious approach to climate change. Of course, now the circumstance is he is a captive of the hard right of his own party, a captive of the most vicious opponents of dealing with modernity. The great knuckle-draggers of the Liberal Party now dominate that party. We have a Prime Minister that stands for nothing and is not prepared to actually defend what he has historically defended. Now he has the view, of course, that he needs to get himself out of a political problem. Of course, the Chief Scientist has provided him with a way forward, and his proposition in regard to the reliability, security and governance arrangements do provide us with an opportunity to break the impasse on electricity prices and energy prices in this country.

It is important for us not to lose this opportunity. While it may well be that there are better approaches available, this is the approach that is on the table at the moment. That is why the Labor Party and the leader of the Labor Party, Bill Shorten, have made it very clear that we are open to discussions about the capacity for this country to move forward on the issue of a clean energy target. We are open to the proposition that a properly worked out arrangement can be made across this parliament to introduce, by legislation, a new clean energy target. This would ensure that we are able to secure the future of our heavy manufacturing in terms of our capacity for steel and for aluminium, and to ensure that we have the capacity for baseload power so that plastics, chemicals, cement and other industries will not be forced out of this country because of the policy failure of our political system.

The government also has a responsibility in meeting our international obligations, so we want to know what the precise details of the Chief Scientist's initiatives are. We are prepared to discuss those details to ensure we meet our energy needs, the security of our energy needs— (Time expired)

James Paterson (Victoria, Liberal Party) Share this | Link to this | Hansard source

I welcome the opportunity to contribute to this very important debate on a vital issue for Australia's future. The problem the Finkel report is trying to solve is a problem of regulatory uncertainty. Dr Finkel has been very polite when discussing the concept of regulatory uncertainty, as have many of my colleagues in government when discussing this report in the media—particularly the minister, Josh Frydenberg.

I want to be a little bit more direct: the only regulatory uncertainty that exists in this market is the risk of a future Labor government. That is the risk that is weighing over the energy market. There is no-one contemplating an investment in the energy market today who is worried that, in the absence of some kind of incentive, there is no way for them to recoup their investment in the energy sector. Of course there is—they can charge a market price and get a market return for their investment. What they are worried about is that a Labor government will be elected in the future and they will smash them with a tax, and that will totally undermine any calculations they make today about investment in the energy market.

That is why, in the last 10 years, we have not seen any coal-fired power stations built—not even a modern, high-efficiency, low-emissions coal-fired power station. That is why, in the last seven years, we have seen no gas-fired power stations built. And that is why, in the last five years, 10 coal-fired power stations in the National Electricity Market have closed. They have closed because they all know that there is a very great risk that, at some point in the next 40 to 50 years—the kind of horizon that is necessary in the energy market to make an investment—that there will be a Labor government, and that that Labor government will bring in a tax. Whether that tax is in the form of an ETS as Labor once proposed, or a carbon tax as it proposed at a different time, or an emissions intensity scheme as it now proposes, a tax will be brought in and that will totally ruin energy market investment and totally ruin any return on that investment. That is why investors have been sitting on their hands; that is why investors have been sitting out of the market; that is why the only thing that has been built in the energy market in recent years has been in the renewable energy space. And as well and as good as that is, it has failed to provide the reliable baseload power that we need, as South Australia has most powerfully demonstrated in recent years.

We need regulatory certainty, and the only way we are going to get it is not just if the Labor Party willingly embrace the Finkel report, as they seem to be tentatively doing; not just if they ultimately back the government's response to the Finkel report—which I hope they do, but I will not hold my breath; but if they also promise, and promise convincingly, that they will never reverse from that position. That is, if they are elected to government, they will not turn around and go back to the tax approach that we know they have favoured in this space for such a long time. If investors are worried that Labor may change its spots when in government—perhaps even under the influence of the Greens, as we saw very memorably during the period of minority government in the 2010 parliament, that it will again go back to this tax approach to climate change—then, ultimately, it will ruin the investment certainty that is needed over a 40- to 50-year investment horizon.

My view is that the Finkel report is a very welcome contribution to this debate that has the potential to help to resolve this uncertainty. I put great hope and great faith in it. The settings that we choose as policy makers, though, to put into the system that Finkel has proposed to us are just as important as the system itself. The exact level of the emissions intensity benchmark, for example, is a very important policy decision that this government will soon have to make and that we hope in time the opposition will support. If that level is set too low and it excludes too many potential technologies, then we will ensure that we will continue to have the price rises that we have seen in recent years and that will continue to hurt household and family budgets and will continue to put pressure on our businesses.

Reliable cheap energy used to be, and from many years was, a source of competitive advantage for Australia as a country. It is becoming less and less the case because of the failure to provide certainty for investors in this market. I hope that the Finkel review and the government's response to it will help resolve those issues. I hope that it will provide the certainty that is needed and I hope that the Labor Party will sensibly walk away from their approach of whacking a big tax—whether it is an EIS, an ETS or a carbon tax—on the energy sector. I hope that in doing so investors have confidence that for their 40-to-50-year investment horizon they can get a reasonable return on their investment. If we do not do this, then we will all be paying the consequences. The Australian people be paying the consequences in the form of higher prices; we are all politically will be paying the consequences, as they damn us for failing to act in this area.

Claire Moore (Queensland, Australian Labor Party, Shadow Minister for Women) Share this | Link to this | Hansard source

I am sharing some of that hope that I am feeling coming across from the other side. One of the things that occurred when Dr Finkel was asked by COAG—by the governments of all states and territories and the federal government—to go away and look at the incredibly important issues of energy security, energy efficiency and energy pricing into the future, there was hope at that time. Even though there was lots of concern and worry late last year, we used the Chief Scientist. That is a valuable way of using a resource—the actual Chief Scientist was asked to do an independent review of exactly what was going to be a process for the future so that we could work together. That seemed to be extraordinarily optimistic and a very positive frame on which to work into the future.

Since October last year there have been a number of interim reports which people have taken notice of. And only last week the final report came down. One of the really hopeful things about that report is that there has been a wide reaction from across the community—not single groups, but across business, unions, ACOSS, parliamentarians. They have been saying, 'Let's us read this report thoroughly'—and it is not a short report—'Let's read the report and consider the work that has been done.' Dr Finkel and his team undertook a large amount of research and conducted a number of community consultations and specialist visits. And the evidence they gathered looks at the projections into the future. By and large, it has been a very hopeful and optimistic response, except from key members of the government—the very government which was part of the request for Dr Finkel to go out and do this review. I hope they have read it, but the indications from people speaking so quickly to raise their concerns mean that they have had a very quick look at the report or have had people researching it for them. My personal favourite was the Magic Pudding comment; I am very fond of that book and I was pleased by the reference.

I have not read the whole report but I have read most of it. Any document that starts by saying it is going to have a pillar-based approach gives me concerns—I am over pillars, Madam Deputy President. Every report we get seems to have a pillar approach to a process. Nonetheless, I have looked at where it is going and it is throwing up considerations for everybody—not just for parliaments. The issues are the very issues that are concerning members of the community. I doubt whether everybody out in my electorate who is concerned about electricity prices and ongoing job opportunities or their futures and their wages will sit down and read the whole Finkel report. I do hope that they will be given the opportunity now through interactions with parliament at the community level to really see how this could operate and what governments are going to do to ensure that there is an optimistic future. Realistically, in this place for the last 10 years there has not been that. There has been conflict at every level on these issues. Amidst that, I think there has been a loss of trust and a loss of optimism from the community.

The Finkel report has now been received. I think the least we can do is as a parliament look at this in a considered way and give some hope back to the community that no matter where we sit in this place we are prepared to give a full consideration of what the Finkel review has put forward. Obviously, there are core things where there are differences. In fact, we have heard them focused on in some of the contributions so far. But what I have heard from Mr Shorten and Mr Butler, who actually lead this debate for us in this process, is that they are committed to giving this real consideration. They have expressed some concerns about things that they might have thought could have been done differently, but they have committed to stay within the process. If we can achieve that and if we can have that same commitment from around the parliament, that could indeed build on the hope we have heard from previous senators, build on a positive outlook and give some confidence to the community who are worried about their future, worried about their security and certainly worried about energy prices. Give them some true hope and some true consideration that their parliament is taking action and is prepared not to rush into a response but to sit down together to respond to the needs they have identified. (Time expired)

Jonathon Duniam (Tasmania, Liberal Party) Share this | Link to this | Hansard source

I welcome the opportunity to make a contribution to the motion to take note of answers on the specific issue of Dr Finkel's report to government. I also share and feel the hope that Senator Moore referred to, as well as Senator Paterson and others who have and will contribute to this debate. It is an opportunity for us to deal with an issue that has been hanging around for some time and has been a difficult one for both sides of politics to deal with.

The Attorney, in his answers today to questions from the opposition, talked about the complex nature of this issue and the trilemma—a term I had not heard before listening to the media coverage and answers today—in relation to this issue: the three issues of affordability, reliability and meeting our international obligations. I think they are important things to take account of. That being the case, I am acknowledging that this is a complex issue. Senator Moore, in her contribution, acknowledged that there are many different views right across the spectrum on this issue even on her own side of politics. She pointed out that there were some elements within her party that found it difficult to accept or were not quite comfortable with some of the issues raised and proposals put forward in the Finkel report.

That is why I am curious as to why the questions today were highlighting this unease with the fact that there are members of the party room I am a part of that have not just not asked questions; they want to know that certain things will be dealt with and that certain issues will be dealt with in a certain way. The party room I am a part of is a group of adults. We all have our own views, we all have our own experiences and we all come to this debate with different priorities. As Senator Brandis mentioned in his answers, we can have that debate—our party room debate—in a mature and sensible way. We are not a homogenous blob of mindless individuals who just all think the same way. I think it gives us strength to canvass all of the different views and all of the different concerns that are brought forward in relation to this specific issue and how best government can deal with it.

I honestly believe that is what we should be focusing on; rather than the questions being asked, looking at the answers and how we can work together to resolve them. That is, I understood, the call that is being put out there by the opposition leader and certainly something that has been welcomed by government. I did indeed read the letter of 7 June from the opposition leader, Bill Shorten, to the Prime Minister, which talks about the decade of toxic politics surrounding energy and climate policy and says that Australians are looking to both major parties to cooperate on a way forward.

I would have thought, on the back of that, that the internal workings of either party and the concerns that will be fleshed out in the debate in each of the party rooms are not relevant to the end agreement. Every party has to go through its processes. Everyone has to reach an agreement, and then we can do what has been called on by the opposition leader and welcomed by the government and find a way forward.

Again, that is why I was so surprised at the tone of the questions today. The focus was all about, 'Oh, a certain senator may have said something, or a member of the other place said something else.' Well, that is great. That is excellent, but if we are really going to look at a solution then let's be mature about it and accept that people do have different points of view.

But on that: I think that the most telling part for me was that as I was sitting in the airport lounge yesterday I saw a Facebook post from my Tasmanian colleague Senator Helen Polley. It belled the cat on the priorities of the opposition in coming up here this week. Everyone talks about trying to reach an agreement and trying to ensure that the best is done for the Australian people, but Senator Polley said in her Facebook post over the weekend:

Canberra here I come for another exciting week in the Senate. I love the front row for Libs infighting. I hope everyone's week will be as exciting as mine.

I thought that if Senator Polley were genuinely interested in good outcomes for the people of Tasmania then her tweet would be: 'Canberra, here I come. I look forward to working with all senators on an outcome that might actually resolve this issue.'

Instead, she tells us exactly what she is thinking and, I expect, what the Labor caucus was thinking too: 'Let's see if we can play politics here. Drive a wedge; try to highlight the instability,' that they think exists. That is what it is about for them, not about solutions and outcomes. (Time expired)

Anthony Chisholm (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

I think it is always illuminating when you have people like Senator Duniam happy to spend so long talking about the broad church within the Liberal-National party to justify their actions. I think that just gives us an illustration of how toxic this debate is within the LNP. I know they have to rush off soon to go to another party room meeting to try to resolve this issue.

When I saw the release of the Finkel report on Friday it gave me the opportunity to think about the last 10 years and the direction of climate policy and energy policy in this country over that time. I had the opportunity to reflect on the 2007 federal election year. During that time I was working in the office of the then Leader of the Opposition, Kevin Rudd. The interesting thing from that time, going back to that 2007 year, is how both parties took to that election a form of emissions trading scheme. I know that Senator Brandis was not that influential during the Howard prime ministership, but it is a fact that both the government and the opposition took an emissions trading scheme to that election campaign.

Sure, the Labor Party's scheme was more ambitious than the one of those opposite; but both did take a bipartisan scheme, in a sense. If you think about where we are now, where we are still arguing over reaching some sort of level of compromise on energy policy and the debilitating impact that has had on jobs, on prices, or communities and on investment—there are a whole range of things—it really is important that we do try to reach compromise with the government.

I also reflect on 2007, that I was with Kevin Rudd when he made that announcement. My recollection of it is that he actually made that announcement at the Townsville State High School, which, to the best of my knowledge, is about two kilometres from where the Adani headquarters will be in Townsville. But that is an issue that I will tackle on another day.

When we look at the politics of this, there is no doubt that what we have seen is the debilitating impact this has on those opposite. Senator Brandis did his best, as he always does, to paper over those cracks. But we know that they have had the discussion this morning and that they are going to have another discussion about this soon in their party room as they try to find common ground within their show about reaching compromise with regard to tackling these issues that we have seen having such a big impact here in Australia.

You know it is bad when you look at the commentary, for instance, from the CEO of the Australian Energy Council. This was used in question time today:

Right now, we couldn't do it worse if we tried. We're making everything worse. We're making prices higher, reliability more unreliable, and we're not delivering the emissions we're required to deliver.

This is the result of what we have seen from the actions of this government. The best example of the wrecking that they have done in regard to providing certainty to those who want to invest—and Senator Paterson talked about this—is when you look at the investment in renewable energies that we have seen under this government. That has completely crashed as a result of their policies and their going to war with renewable energy in this country. It has been absolutely disgraceful. We have also seen this dominating as a hot topic within the coalition, and we know that leads to leadership uncertainty. That is what is playing out in this debate, and unfortunately the people of Australia have been the losers in this regard.

Labor is committed to finding a solution to the energy crisis that has engulfed this country. As the Leader of the Opposition has pointed out, we are keen to work with the coalition where possible to find common ground. What we have seen is that, as a result of the investment strike in new generation, particularly in renewable energy, caused by policy from those opposite, wholesale power prices have doubled under the Turnbull government. This government has actually achieved rare outcomes: power prices are up, pollution is up and jobs are down. The closure of Hazelwood power station and the impact that that is going to have on that community are absolutely devastating. If I had one significant criticism of the Finkel report, it would be that it was not strong enough in recommending a just transition for those workers. That is something that I will have more to say about at the appropriate time. Clearly, Prime Minister Malcolm Turnbull needs to stare down Tony Abbott and the climate change deniers and back a plan for more renewables in this country.

Question agreed to.