David Leyonhjelm (NSW, Liberal Democratic Party) Share this | Link to this | Hansard source

Australian households are hurting. Politicians are to blame, and politicians can relieve this pain right here, right now. Household electricity bills across the country have risen by around eight per cent each year over the past decade, and household electricity bills have risen by a further 20 per cent just over the last quarter. This is crippling. Charities have reported that thousands of low-income households have had to go without heating this winter because of unaffordable electricity—thousands of households, including our sick and elderly.

We will never know just how many deaths this winter can be attributed to unaffordable electricity, but the number would be substantial. And of course any number is unacceptable in a developed, resource-rich country like Australia. Thousands of households will go without cooling this summer, and more deaths will be the result. I challenge those who feel moral superiority when they cheer for policies that make electricity more expensive to acknowledge these deaths, and I challenge them to acknowledge their role in these deaths. You might say that this is the greatest moral challenge of our time.

Politicians are to blame for the pain of exorbitant electricity prices. Two decades ago, Australia enjoyed the lowest electricity prices in the world. Now Australians pay the highest electricity prices in the world. How is this possible? It is possible because, over the past two decades, no large-scale generators of reliable base-load power have been built in Australia. This is despite the fact that there has been considerable economic and population growth and the fact that the construction costs of power plants—along with their fuel, coal and gas—have gone down, although gas prices have currently gone up. This investment drought has been caused by politicians. They have implemented renewable energy targets that force coal-fired generators to pay small-scale, intermittent generators whatever it takes for their market share to grow. They have imposed carbon taxes with the specific purpose of driving out coal-fired base-load generators. Even now, with the carbon tax gone, they threaten carbon pricing that, depending on the carbon price involved, could drive the lowest-cost coal-fired power plant to bankruptcy. To top it off, the politicians have maintained an evidence-free ban on nuclear power.

Politicians can relieve the pain of exorbitant prices right here, right now. The building of new large-scale generators of dispatchable power will take years and will require either the suspension of the renewable energy target and a guarantee that there will be no carbon pricing or the legalisation of nuclear power. But we can relieve some of the pain of high electricity prices right now by making electricity GST free. My bill before the Senate makes electricity GST free. I propose that the Senate votes on this straightforward bill within the hour.

Electricity is an essential service like water and should be treated the same for tax purposes. I challenge any politician who plans to vote against making electricity GST free to declare that electricity is not an essential service; to explain how their constituents can live without electricity, which is more than likely what some of them will have to do this summer or, indeed, each summer until more generators are constructed; and to explain why water should be GST free but electricity should not.

Making electricity GST free will immediately save a typical household around $200 each year. For any politician planning to vote against it, please stop wringing your hands about the punishing electricity bills facing your constituents and admit that you just do not care. For those who use the excuse that the state governments would receive around $2 billion less in GST grants if we made electricity GST free, might I point out: each state budget other than Western Australia's is in surplus, and WA gets so little of its GST back that its deficit would be little changed. Together the state governments enjoy annual revenue of around $300 billion. So, if you plan on voting against making electricity GST free, please explain why you think it is that the state governments rather than the people should not struggle.

If you care about everyday Australians as they struggle with electricity prices created by politicians, I believe you must vote to make electricity GST free. I commend this bill to the Senate.

David Fawcett (SA, Liberal Party) Share this | Link to this | Hansard source

I thank Senator Leyonhjelm for his bill, which indicates a desire to address what is one of the most significant issues facing Australians—consumers not only in a residential sense but also in a small business sense. I note news announced today that Cafe Buongiorno at Modbury in South Australia, which is a cafe I have frequented a number of times over the years, has announced that this will be its last week of operation. It is looking to close down because of high electricity costs.

Don Farrell (SA, Australian Labor Party, Shadow Minister for the Centenary of ANZAC) Share this | Link to this | Hansard source

Yes, because you sold ENSA.

David Fawcett (SA, Liberal Party) Share this | Link to this | Hansard source

We are seeing a number of businesses impacted as they come off contract and get bill shocks as they go onto higher electricity costs. I note Senator Farrell interjecting from the other side. I highlight to Senator Farrell that one of the drivers of the high electricity costs that people are paying is because of our market design with the peaking gas plants that come in at the end of the bidding cycle and all of the other providers that get lifted up to that point. It's been acknowledged in the last couple of weeks that, when Senator Farrell's side were in government, they were warned that the approvals they gave for the export of LNG would drive up domestic prices if domestic supply was constrained and yet they did nothing about that. Senator Farrell is from the Labor Party in South Australia, where we've seen the Labor Premier embark upon what he called one of the greatest experiments in energy production and we've seen a reckless pursuit of renewable energy to the point where the excessive amount of wind power has undermined the market for thermal-based base load. So we've seen the state government refuse to keep open the Northern Power Station at Port Augusta, which would have been a cost that pales in comparison to what they now have to do, which is to commission a large fleet diesel generators in order to provide some kind of reliable power for South Australia in the approaching summer. The reckless ideology of the Labor Party in this regard, as evidenced in South Australia and as we see in the policies that have been enacted by Labor in the past and have been promised should they ever—heaven forbid!—return to power in Australia, will only worsen the kind of situation we currently see.

I've said in this place a number of times that one of the reasons these things occur is we have far too many lawyers in the parliament as opposed to engineers. If we had more engineers—people who understand systems engineering and the interface of mechanical, technical and systems-related things—instead of saying that you could push on with more renewables you would understand there is a cost to having renewables because of the interface with the electricity system and the requirement for frequency stability as well as being able to dispatch. AEMO came out with their report looking at a range of these issues. My report to Senator Leyonhjelm is that removing the GST from electricity, whilst there is a very short-term gain, does nothing to actually change the long-term structural issues causing the drive-up in price.

Let me come to a number of specific things in relation to his bill and what we need to be doing moving forward. Firstly, from a technical perspective, as Senator Leyonhjelm should know, section 53 of the Constitution requires that bills dealing with the appropriation of revenue or moneys, or imposing taxation, need to originate in the House of Representatives. From a purely technical perspective, whilst it's a good idea, this is actually the wrong chamber to introduce it. From a purely technical perspective, even if it were to pass, it would not necessarily have the desired outcome. Putting that aside though, he's indicated that this could result in a change of around $200 for an average household. The modelling shows that the actions the government has taken in a range of areas—such as specifically requiring that the retailers contact customers to make sure they are aware of the best deal available to them—could save the average household around $500 a year and in some cases up to $1,500 a year. Whilst I hear Senator Leyonhjelm's case that this is a simple fix, I would point out that, technically, it may not work and there are other measures that the government is putting in place that will provide savings of a far greater magnitude than what Senator Leyonhjelm is proposing.

Lastly, when it comes to the GST, it is not explicitly a federal issue. Changes to the GST actually require the agreement of all the states. The deal we are working on to get the providers to provide that incentive and information to consumers to save them $500 to $1,500 a year is something that is within the power of the federal government. What Senator Leyonhjelm is proposing is not explicitly within the federal government's power. It would require the agreement of the states. Therefore, even were something to pass here in the appropriate chamber, there is no guarantee that the states would agree. In the time it would take to get that agreement, there are other things we can be putting in place.

One of those is the issue of a limited merits review. In 2008 the then Labor government allowed the network providers to challenge decisions that were taken around pricing. I think some 32 out of 51 decisions of the Australian Energy Regulator have been challenged. A research note by a major broker said investors are getting this as a free option, with the upside being that it brings forward a dividend surprise. In other words, every time they are able to challenge a decision of the regulator, it actually brings forward more profit and more dividend to those network providers.

Given that one of the largest components of the price which is paid by residents and commercial users of electricity in Australia is the network cost, then one of the actions this Senate should be taking is on the limited merits review. In fact, we are dealing with an issue right now where we are seeking to have that limited merits review removed, which is in line with other things such as postal, water et cetera. We are seeking to do that now. We're seeking to do it quickly, and yet we will have a vote in this place later today as to how the Senate deals with the government's legislation to remove that limited merits review. I call on Senator Leyonhjelm and others on the crossbench, and the opposition: when that comes up for a vote today you should be supporting the government to bring that legislation forward as soon as possible, rather than referring it off to a committee. Bring it forward so that we can take action now to bring electricity supply, in terms of the networks, into line with things like water networks so that the people who are providing that can't make additional profit by using what brokers in the system call 'the free option to them', which increases their profits at the expense of the Australian public.

Since 2008, when it was established by the Labor government, it is calculated that those 32 out of 51 decisions taken against the Australian Energy Regulator have resulted in some $6.5 billion of additional costs being passed on to consumers in their electricity bills. We are looking to make sure that the Australian Energy Regulator can make informed and sensible decisions that can't be challenged as a free option. There's still a judicial review if the networks want to go to that extent—if they think there is inequity or unfairness in the decision. But the limited merits review has cost consumers some $6.5 billion since it was established by the Labor government in 2008. We wish to remove it. There is a vote coming before this chamber today which will provide a passage forward for the government to take that action, and I will be calling on Senator Leyonhjelm to help us to take those steps to address something that is a substantial component of the electricity price that goes to consumers.

More broadly, we also need to look at market design—the whole concept of how we retail electricity in Australia, or, in fact, how the providers put it into the National Electricity Market. If you look at other nations, other models and other ways of pricing that, there are different models that could put significant downward pressure on electricity. That's something that we need to be looking at, as well as the other levers that talk about how renewable energy is introduced into the system.

As I've looked at the Finkel report and the modelling that's been done out of that, I believe the government has been right to adopt the 49 recommendations there. But we also need to understand whether the optimum modelling has been done around that last recommendation and where we should be moving to. Finkel himself said it could take a number of months for the government to examine what was proposed there, to look at alternative modelling and to understand how best to move forward in that area. Personally, I believe that the market in Australia, without the extent of government interference that we've seen—particularly with the state governments pushing for the very high renewable targets—would have delivered more investment in base-load energy over the last couple of decades and would have been providing Australia with more reliable and affordable power than we currently have.

What are some of those policies? Well, the opposition has put forward that it wants a 45 per cent emissions reduction target by 2030 and a 50 per cent renewable energy target by 2030. It is talking about forcing the closure of coal-fired power plants. This is despite people, like AEMO, looking and saying that that rapid closure is actually going to ramp up costs as well as decrease reliability.

People who want those really high renewable targets have to look no further than South Australia to see that what Premier Weatherill called his great big experiment has in fact failed. Here we are in a First World country, with supplies of coal, gas and uranium—if we had the courage to move down that path—and yet we had state-wide blackouts in this nation. The cost to South Australian businesses was huge.

Don Farrell (SA, Australian Labor Party, Shadow Minister for the Centenary of ANZAC) Share this | Link to this | Hansard source

It was a catastrophic storm! Come on, be honest!

David Fawcett (SA, Liberal Party) Share this | Link to this | Hansard source

Senator Farrell interjects again with the normal claim that comes from South Australian Labor, which is that there was a storm. Well, Senator Farrell, you know that my background was as an experimental test pilot. I was dealing with the design of systems that had to be able to cope with a range of environmental factors. When you design an aircraft well, it can cope with turbulence and interruptions without failing either structurally or in terms of its systems. Those trigger events highlight good design or poor design.

And so the fact that there was a storm in South Australia merely points to the fact that the system was poorly designed; it had low redundancy; and it didn't take account of the failure modes. Basic systems engineering has a thing called failure mode criticality effects analysis. I would argue that nobody ever did the level of systems engineering to understand what the failure modes were in the South Australian system as a result of the rapid increase of renewable, unreliable, intermittent energy as opposed to reliable, frequency-stable, base-load energy. So don't come into this place and say that it was a storm. The storm was merely a trigger event. The storm was merely a trigger event that highlighted the poor system design that resulted because of the policies that have seen that incredible growth in renewable energy in South Australia.

Having seen that there, why would we then impose that same kind of system instability and poor design on the whole nation? Yet that's what federal Labor's plans are for Australia. Labor said in its climate action plan that it would kickstart the closure of coal-fired power stations. It teamed up with the Greens to pass a motion that would encourage the closure of coal-fired power stations, saying:

The question is not if coal fired power stations will close, but how quickly …

This would lead, as we've seen in Victoria and other places, to the destruction of jobs in Australia's coal-fired plants and thousands of jobs elsewhere. The Australian Energy Market Commission has said that the forced closure policy could cost up to $24 billion around Australia. In Hazelwood, in Victoria, as a result of their closure, energy companies AGL and Energy Australia have increased bills by up to $135 in 2017. In South Australia, as a result of pushing out the Northern Power plant, at Port Augusta, contract prices for large industrial users jumped 50 per cent, and spot market prices tripled in the months following.

So there are a range of issues with taking the view that we can just push renewables without doing the engineering behind it and realising that there is a cost associated with the integration of renewables. Doing that systems engineering, understanding the failure modes and understanding the true costs of those inputs, is what we need to be considering as we look to see whether we would expand the RET. Consequently, we should also be considering what we can achieve in terms of optimising the three critical parameters that we're concerned about, which are energy price, keeping it low; energy reliability; and emissions. The whole concept of modern use of big data in modelling is to test those various parameters and variables and iterate your modelling until you come up with the optimal mix. I would lay odds that the answer would not be a 50 per cent renewable target, as is being pushed by the ideologues. As the Prime Minister has said, rather than engineering, it's ideology and in some cases idiocy that have brought us to this point.

I will come back to Senator Leyonhjelm's bill. As I said, this is not the chamber. If it's to do with appropriation and taxation it needs to come into the other place. You've quoted $200. Some of the interim steps that the government is seeking, around the dealing with retailers, could save families orders of magnitude more than that—$500 to $1,500.

Importantly, in terms of things that this chamber can do, today there will be a vote in this chamber about how we deal with the limited merits review. The indications are that those opposite want to push it off to a committee and kick it down the road, as opposed to dealing with it today. I would challenge them: if they are concerned about the of closure of businesses, like Buongiorno Cafe in Modbury, and if they are concerned about the impact of prices that are impacting families in South Australia then they will be voting with the government today to enable us to deal with the limited merits review, given that network costs are one of the most significant inputs to the costs paid by consumers and businesses in Australia. So I won't be supporting Senator Leyonhjelm's bill, not because I don't share his concern about electricity prices, but because technically this is not the chamber and because there are other measures that we could be dealing with today that could have a far greater impact on prices that go to Australian consumers.

Don Farrell (SA, Australian Labor Party, Shadow Minister for the Centenary of ANZAC) Share this | Link to this | Hansard source

I rise to speak on the A New Tax System (Goods and Services Tax) Amendment (Make Electricity GST Free) Bill 2017. I'll detail in a moment why Labor, regrettably, Senator Leyonhjelm, will oppose this bill.

However, before I get onto that, I think I do need to respond to some of the absolute misrepresentations made to the chamber by Senator Fawcett. I start by making this observation: I understand why Senator Brandis often attacks South Australia and its electricity system, but I don't understand why a South Australian Senator, even a Liberal Senator, would attack South Australia. He knows full well why we have problems with electricity in South Australia. We have problems with electricity in South Australia because his government—the Olsen government—after promising not to sell the electricity service in South Australia reversed that decision and sold the electricity system in South Australia. That was the start of all of South Australia's electricity problems.

James McGrath (Queensland, Liberal National Party, Assistant Minister to the Prime Minister) Share this | Link to this | Hansard source

It's all Playford's fault, isn't it!

Don Farrell (SA, Australian Labor Party, Shadow Minister for the Centenary of ANZAC) Share this | Link to this | Hansard source

No, it isn't. I will take that interjection. Tom Playford understood why, in a monopoly situation for electricity, we needed to have a government-controlled electricity system. So in 1946, with the support of the federal Chifley government, he nationalised the South Australian electricity system. That system provided the cheapest and most efficient electricity system in this country. All that went out the window when the Liberals in South Australia sold that monopoly. That's when our problems started with electricity. If that decision had not been made—if Senator Xenophon hadn't supported the second reading speech to allow that bill to proceed—then we would not have the problems that we have today.

I happened to be in Adelaide on the night of the storm that Senator Fawcett was talking about. That was the worst storm in our history. Anybody who'd gone out to the north of Adelaide would understand the catastrophic effect of that storm that night. To connect that catastrophic storm with more serious problems in the electricity market is an absolute misrepresentation, and I suspect that even Senator Fawcett knows that because, if he had been in town that day, he'd recall just how bad the weather was. I was in Clare the day after the storm, and there was one street where you could not go in any direction because massive trees had been blown over. It was a catastrophic storm, and the fact that the Liberals continue to make reference to that in relation to electricity prices is an outrage. I'm sure Senator Bernardi would agree with me in respect of that.

But we are not here today to talk about the misrepresentations by the Liberal Party—I know Senator Bernardi knows a lot about that. As noted in the explanatory memorandum, A New Tax System (Goods and Services Tax) Amendment (Make Electricity GST Free) Bill 2017 would make the supply of electricity GST free. This would commence from the first day of the quarter following royal assent. There are two important points from the explanatory memorandum that I will address:

… this Bill will make electricity GST-free irrespective of the views of State and Territory Governments. The enactment of this Bill will override the commitment, previously legislated in the A New Tax System (Goods and Services Tax) Act 1999 and the A New Tax System (Managing the GST Rate and Base) Act 1999, to only vary the base of the GST with the unanimous support of the State and Territory Governments.

…   …   …

GST revenues granted to the State and Territory Governments would fall by around $2 billion each year …

The Senate dealt with the issue of GST modification only a few months ago. At that time, Labor noted that parliament should be the end of the process, not the start. It's a point we have been clear on in the past. At the time, Senator Gallagher said:

We think in all fairness, considering how important the GST is for states and territories, and indeed the agreement that exists between the Commonwealth and the states and territories on GST arrangements, that these discussions about how this should be done and when it should be done needs to happen with all of those parties but also needs to be done at the start of the process, not at the end of it here in this chamber.

This goes to the heart of the process for changing the GST. The GST may be levied by the Commonwealth, but the revenue from the GST is distributed to the states and territories. This arrangement is set out in the Intergovernmental Agreement—or IGA—on Federal Financial Relations. Clause A4(c)i provides that the standing Council on Federal Financial Relations, chaired by the Commonwealth Treasurer, must approve 'changes to the GST base and rate'. Clause A6 of that agreement requires that any such agreement be unanimous. Whilst it is true that it can be difficult to gain the unanimous support of the state, territory and Commonwealth governments, this is a matter of due process and good faith. If the process is not followed, it could potentially allow any government, present or future, to ride roughshod over revenue for states and territories.

Whether you like the GST or not, this bill will remove roughly $31 billion of revenue from the states and territories over the next 10 years, according to the Parliamentary Budget Office costings attached to the explanatory memorandum. It goes without saying that the premiers and chief ministers of those states and territories will be the first to let you know which schools, hospitals and services will be hit by the sudden collapse in revenue. Some legal commentary has suggested that the Commonwealth would be legally free to disregard the IGA and amend the GST legislation unilaterally. That is the presumption on which this bill is also based. Even if this happens to be the case, the inherent imposition and purpose of the goods and services tax is underpinned by good faith and intergovernmental cooperation.

We can spare ourselves the lengthy discussion about horizontal fiscal equalisation, but I take this opportunity to point out that Labor deeply understands the complexity and challenges of the GST. The Leader of the Opposition, Bill Shorten, recently outlined Labor's Fair Share for WA Fund. Labor would invest $1.6 billion in Western Australia in the first budget of a Shorten Labor government—which is looking closer and closer, and I'm sure Senator Sterle would be delighted to hear that news and for that to happen. That would bring Western Australia's funding up to the equivalent of 70c in the dollar, up from the current 33c.

I re-emphasise the importance of agreement. The job-creating infrastructure projects that would flow would be decided in agreement with the Western Australian government on the advice of local businesses and the community. On that basis alone, we cannot support the bill as a matter of due process. We would also add that this bill does not address the issues that underpin the Australian energy crisis under the present government. Wholesale electricity prices have doubled in the four years this government has been in power. This is particularly important for businesses for whom this bill has no impact, as GST-taxable businesses are able to claim input tax credits for the GST included in the price of the electricity they consume.

The government refuses to give full and fair consideration to the Finkel review, including the clean energy target. Business groups, environmental groups, unions, industry and stakeholders all believe that the worst outcome for energy consumers and suppliers alike would be the absence of any credible and enduring energy and climate policy in Australia. This bill will not achieve the cheaper, reliable and cleaner energy that households and businesses need. Without reform, Australia will endure higher prices, reduced security, lost investment opportunities and stubbornly high emissions. The Turnbull government stumbles from one energy crisis to another—in fact, they seem to stumble from one crisis to another on a whole range of things. Yes, I know you are agreeing with me there, Acting Deputy President Bernardi. I know that you know that what I'm saying is absolutely true. The Prime Minister may have accomplished his plan to get energy retailers to write letters to customers—what a terrific thing to do—but he is yet to start talking about any real action on implementing a clean energy target to bring electricity prices down for all Australians. Labor has extended the offer to work, in good faith, on an energy policy that is clean and provides certainty for businesses and households.

The Prime Minister spends the majority of his press conferences attacking Labor for the energy crisis his government has presided over, and he refuses to take any serious action on it. Experts, industry and even his own Finkel review have said clearly that it is government policy inaction that is driving up electricity prices and that a CET is the solution to crippling policy paralysis. Even the CEO of Snowy Hydro, a proponent of the Prime Minister's favourite pet project, has called for the government to adopt a CET. Why doesn't the Prime Minister listen to him? I think that's the question.

I respectfully note that Senator Leyonhjelm is not proposing this bill to be a panacea to the electricity crisis, and also has a different view to the circumstances precipitating the crisis. In summary, Labor will not be supporting the bill, but I take the opportunity to note that Labor is willing to work constructively in the parliament on delivering cleaner, cheaper and more reliable energy.

Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I rise to speak on behalf of the Australian Greens today in relation to Senator Leyonhjelm's private members' bill, A New Tax System (Goods and Services Tax) Amendment (Make Electricity GST Free) Bill 2017.

I will start by indicating that we will be supporting this bill. The Greens have been very clear for over a decade now that we don't support a broad-based, blanket, untargeted goods and services tax on the Australian people, especially on low-income Australian people, so we're happy to support Senator Leyonhjelm. Had we had more time or had this gone to committee, we may have talked to Senator Leyonhjelm about how we could target this more specifically—for example, to low-income households or renters. We do feel that there should be some price incentives in place in the electricity market to reflect the externalities of climate change and, for example, the burning of dirty fossil fuels. So, while we would support the removal of a broad-based, untargeted, progressive tax—it just makes life harder for low-income Australians—we do as a party have a very strong view on supporting a price on pollution. We feel that the revenue raised through a price on pollution—such as we saw in this country before it was cynically and ruthlessly removed by Mr Tony Abbott and his Liberal government—is a better way to accurately reflect the prices in the electricity market. So we support a targeted tax like a carbon price and would see the revenue raised from that potentially substituting for the loss of revenues to the Commonwealth for removing a goods and services tax.

Let's be frank about this. We're talking about giving relief, especially to low-income Australians, by removing the GST on power. Let's call it that. Let's just say on electricity bills. Why is it needed? Electricity prices under this Liberal government, as we heard in this chamber yesterday, have nearly doubled. So much for the sky falling in when the carbon price was introduced in this place. In fact, since it was removed, the little daisy ring that was run in the other place with Mr Greg Hunt and others celebrating the loss of the carbon price because we suddenly were going to relieve Australian households of this burden of their higher electricity bills has proven to be hollow and laughable. So we have this situation now in our energy market where energy prices are going through the roof. We're having political spats over the distribution mix of power with base loads.

Ironically, we've had a debate in this place in recent days about the government and its messaging about the Labor Party and their pre-1989 eastern European economic and industrial policies—their socialist and communist policies. It's actually the Liberal Party that's looking to interfere in the capitalist energy market by talking about buying coal-fired power stations or coalmines or by giving low-interest loans, which the Productivity Commission said in estimates to me was effectively a subsidy to foreign coal barons who want to build new coalmines. So here we have the government looking to implement their own eastern European policies and interfering in the energy market. And for what purpose? Is it really, as the Prime Minister says or Senator Birmingham said in here yesterday, to give us reliability in our energy market here in Australia? There are so many other ways we could have reliability in our energy market, especially in base-load power. Or is it more a cynical political tactic: short-term, self-interested politics for the Liberal government to make sure they don't lose votes in marginal seats in Queensland and New South Wales to One Nation? That's what this is. The climate policy and energy policy in this country at the moment are being dictated by the survival of Mr Malcolm Turnbull and the LNP going into a federal election.

'Too much renewable energy', 'flip it on its head', 'coal is good', 'we need more coal'—as Senator McGrath said in here yesterday, 'coal is good for you'—what is all this nonsense about? What is this messaging, like the Treasurer holding up a piece of coal as a prop in the other place, all about? Call me cynical, but I do live on planet politics, especially while I'm here in Canberra. This is all about a short-term political strategy to not lose votes to One Nation. Since they have been in this place, One Nation have been totally out of the closet about supporting the coal industry. They're climate deniers; they're unafraid. Senator Roberts is out and proud about believing that man-made climate change is rubbish. And he's a big supporter of the coal industry, as are his colleagues. That resonates in parts of Australia, and I understand why that would resonate in towns that rely on employment from coalmines and coal-fired power stations. I totally get that.

I chaired the environment committee that went around the country and took evidence on this. I said at the time that, as politicians, we have a duty to show leadership on transitioning this country away from dirty coal-fired power stations to base loads that we know can be filled with renewable energy. We need a plan to transition those workers, to retrain them. We know that renewable energy is jobs rich, especially when we start looking at the disruption that's coming to the grid around battery storage and household solar, which I have no doubt at all will make the grid virtually redundant in many ways in our lifetimes, possibly even in the next five to 10 years. We are seeing big changes coming to the electricity markets, whether we want them or not.

Let me tell you: it's not about coal; it's actually about people wanting to have energy independence, to not be dependent on the AGLs and the other big companies of the world. As a Greens senator, I get asked about this all the time by people who meet me—it might be a taxi driver or whoever—because it's something we've got in common, and they say: 'Senator, I've got a new household solar system. I looked at it yesterday and I'm generating all this power. Every day, I can't wait to have a look at how much I've been generating.' It's something they have in common with me, as a Green. But often when I get to the bottom of it, what I find really interesting is their motivation for getting the rooftop solar and putting in place new battery storage systems. The motivation is not necessarily that they want to save the planet and reduce emissions; the motivation is they want to be independent of the grid or power companies. It's almost a Tea Party attitude, which I find quite interesting as a Green. They're supporting us, but really what they want is to be independent and to give the big power companies the bird, to say: 'I generate my own power. I can store it. I'm not reliant on you. I don't want to pay your bloody fees, and this and that.' Good. If it's good for the planet, then I support that.

These changes are coming and I reckon they're unstoppable. We're already seeing millions of household solar power systems operating around this country, and there are more to come. Why are we having this debate about the federal government interfering in the market by buying coal-fired power stations? Why are we having this debate about governments supporting some of the biggest coal mines in the world, like those being proposed for the Galilee Basin in Queensland? It's politics. It's cynical, short-term politics.

But if you walk down the street in any town in this country and you ask people what they really care about, and what they want politicians to do, they want us to help solve their problems. They want new ideas. They want us to actually be constructive, and they will tell you that electricity prices are too high. Of course, it's a very complex debate as to why that's the case, but we support the intention of this bill, which is to remove GST and give some relief to households. To give relief to renters, who rely on landlords to put in place energy efficiency systems or renewable energy systems, which won't necessarily happen if those costs are being covered by their renters, and to give relief to low-income Australians, who may not necessarily be able to afford their own home. Even those Australians who can afford to buy their own home and who are suffering from mortgage stress, and we know there are way too many of those for our liking, are struggling with power prices.

The flipside of that is that we, as the Greens party, want to balance incentives that allow people to put in place their own renewable energy generation systems, or move the generation mix in this country towards clean renewable energy. There have to be some pricing signals to make that happen. If you own your own home and you're wealthy, or you're an investor who owns up to eight homes, as can be the case in this country—we would have liked to have seen GST relief on power prices being targeted to those who directly need it, but we haven't got the time to go into that. If we truly want to make an impact on global warming, then we need to do a lot more than we already are. So while we support removing GST, we would also support very strong action on curbing the emissions that are leading to global warming.

I know some senators watch 24-hour news coverage—ABC News 24, or Sky if you're in the Liberal Party. If you go back to your offices, have a look at your screens. You're likely to see images of the biggest hurricane ever recorded in the Atlantic, Hurricane Irma, and tracking charts. This is just a week after Hurricane Harvey, which is now officially the biggest natural disaster in US history. What have those two events got in common? It's a bit more simple than most people think. Hurricane Harvey, before it made landfall, was expected to diminish in size and intensity, but it didn't do that—quite the opposite. Against all expectations and against all modelling, it increased in intensity just before it made landfall. Why did it do that? The answer is simple—because of warming oceans. The ocean temperatures were much higher than predicted.

Sadly, for those people in Haiti and Cuba and other countries that are getting battered, Irma is a storm that meteorologists never thought could happen. It has exceeded the maximum theoretical speeds in their models. Why? The same reason—ocean temperatures are higher than their models could have predicted. What is it about warming oceans and hurricanes? What is it about warming oceans and coral bleaching? What is it about warming oceans and floods and droughts? The oceans dictate our global weather systems, and warming oceans are directly correlated to rising global carbon emissions. While Irma is making its way to the US—very possibly to break another US record since climate records were begun, with two category 4 hurricanes hitting in the same year, let alone in back-to-back weeks, with unprecedented wind speeds and rainfall—another two storm systems are now forming behind Irma that look like they are also going to become hurricanes. This is literally off the charts.

As I found during the recent Senate committee visit to the Great Barrier Reef, there are unprecedented warming events in our oceans. I support our climate scientists and all the great work they do, even though this government has tried to sack the lot of them in the last couple of years, but their modelling predicted that these kinds of events couldn't happen till 2040 or 2050. They're happening now. This is global warming happening now. What are we doing about it? Even if we meet our Paris global emissions targets, or have even deeper cuts to global emissions leading into Paris—I suppose even the most optimistic of us don't necessarily believe that could happen—we're still going to get 15 years of warming oceans locked in from our current emissions trajectory. Think of what is happening around the world now, including in our own country. We have mortality to half the Barrier Reef, one of the biggest living organisms on the planet, because of warming oceans. You can stick your head in the sand, but I challenge every senator in here to go and stick their head under the water at the Great Barrier Reef and see what is happening. You can't avoid seeing the effects of global warming.

So, while we're talking about the need to put policies in place to provide relief to low-income Australians, we need to be very clear that we need legislation and the right incentives, the right price signals, to reflect the externality that is climate change and the horrific damage it's doing all around the world. We have heard a lot about Harvey in the US, and rightly so—the damage bill is in the hundreds of billions of dollars already. You can laugh about climate change and stick your head in the sand, but these events cause economic damage as well as social and environmental damage. We have seen in Bangladesh 1,200 people die from record floods. This is not just happening in Australia and in the Atlantic; this is happening all around the world. We need a system that correctly prices the externality of climate change if we're going to fix it.

I will now finish up—probably much to all senators' relief—and say we'll be supporting this bill. The Greens would still like to see a price on carbon that reflects the damage that climate change is doing to our environment, to our communities and to our economy.

Cory Bernardi (SA, Australian Conservatives) Share this | Link to this | Hansard source

I move:

That the question be now put.

Dean Smith (WA, Liberal Party) Share this | Link to this | Hansard source

Point of order, Mr Acting Deputy President. I didn't quite hear what Senator Bernardi had to say.

Cory Bernardi (SA, Australian Conservatives) Share this | Link to this | Hansard source

I moved that the question be put.

David Leyonhjelm (NSW, Liberal Democratic Party) Share this | Link to this | Hansard source

The question is that the question be put.

A division having been called and the bells being rung—

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

Mr Acting Deputy President, I seek leave to cancel this division.

Leave granted.

Question agreed to.

Cory Bernardi (SA, Australian Conservatives) Share this | Link to this | Hansard source

The question is that the bill be now read a second time.