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

I move:

That the Senate take note of the answers given by the Attorney-General (Senator Brandis) to questions asked by Senator Moore and myself today.

Today in question time, Senator Brandis was asked a question concerning the outgoing BlueScope CEO, Mr Paul O'Malley, who last week told his company's AGM that BlueScope's electricity costs would rise by 93 per cent between 2016 and 2018. And I further asked the minister could he confirm that, after four years of Liberal National government, power prices have never been higher. The minister indicated in response he could not confirm either proposition. Can I perhaps draw the minister's attention to page 13 of the ACCC report, which the government has provided to every newspaper in the country today, which clearly indicates that the electricity prices in this country are at their highest level ever this year.

I might also indicate that the outgoing CEO of BlueScope, Mr Paul O'Malley, in fact, did tell his AGM last week that the price for BlueScope's electricity costs are expected to rise by 93 per cent. And I also draw to the chamber's attention that the government's favourite newspaper, The Australian, has been provided with modelling which suggests that when gas prices are used the wholesale price of electricity spikes from $70 a megawatt upwards to $120 a megawatt, a cost that is ultimately passed on to consumers. So what we're seeing in this country is that Australia's largest energy users have been warning us that an estimated $9 billion in additional electricity and gas costs will feed through to the broader economy, threatening jobs and investments as business drives the pressures on Canberra to ease what has been a predicted power shortage.

Now, the major companies, including brickmakers, supermarkets, soft drink bottlers and poultry producers, have all indicated that they are feeling the great pressures of the rise in energy prices right now, and that over the next two years these pressures will only grow because of the government's failure to recognise its role in terms of developing a coherent energy policy. Now, the surge in energy prices has forced businesses to defer investment decisions, with some of them actually thinking that they might have to move abroad. So we see the Australian Chamber of Commerce and Industry—people who are not normally associated with supporting Labor—and Mr James Pearson making this point repeatedly. We see:

We risk a double effect with energy prices hitting investment decisions, affecting demand for labour while also putting pressure on margins impacting the affordability of wage rises.

Mr Pearson said that recently.

What we've got is the Prime Minister saying that he's prepared to meet with the gas companies. He has, of course, met with them on several occasions now—he's had a good cup of tea with them. Instead of relying upon taking action, he has relied upon their good intentions to actually produce more gas for the Australian economy. And rather than taking action, we find the situation now in the spot price market that gas remains cheaper in Tokyo than it does in Australia—despite the claims made by the gas producers.

What we do know is that the market domination by the energy generators is such now that we have 40 per cent price hikes—of course, doubling the increases that were announced in June. We see the situation in New South Wales—the Liberal state of New South Wales—with the Small Business Commissioner yesterday warning that power prices were rising far more than the expected 20 per cent surge. So what we've got is a government that has commissioned the Chief Scientist to come forward with a report to put a political fix in place. And this government has been offered the support across this parliament to put in place a national policy that will actually provide the investment certainty to secure downward price pressures. But it is a government that can't negotiate with itself, let alone negotiate across this parliament. What we've got is a government that is paralysed: paralysed by indecision and paralysed by fear—fear that this Prime Minister will be deposed by the knuckle draggers on the far right of the Liberal Party. They are now dominating the policy positions of this government rather than the national interest. Rather than a preoccupation with getting the national interest set into a policy framework, this is a government preoccupied with its own survival. (Time expired)

Zed Seselja (ACT, Liberal Party, Assistant Minister for Social Services and Multicultural Affairs) Share this | Link to this | Hansard source

It's always good to follow Senator Carr—

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

I'm sure you love it! You just love it!

Zed Seselja (ACT, Liberal Party, Assistant Minister for Social Services and Multicultural Affairs) Share this | Link to this | Hansard source

I do! I love it, because I love it when he fires up. The louder he is, often the less sense he makes.

Can I go to the substance of the issue? If we cast our minds back to last summer when we saw the statewide blackout in South Australia, I think that there was great shock around the nation that a whole Australian state could actually be blacked out. I was reminded, as I contemplated it, of the Greens politician who said, 'We don't want to take you back to the caves just yet,' because that is the type of policy that Labor under Bill Shorten—and certainly Labor under Jay Weatherill—have been implementing. It is a policy that is about taking our nation backwards. It is a policy that is about de-industrialising Australia due to an absolutely mindless energy policy—which is now the national Labor policy—where we see the mindless pursuit of a 50 per cent renewable energy target in South Australia. That is Bill Shorten's policy and I'll get to the—

Gavin Marshall (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

Senator Seselja, I remind you to refer to people by their—

Zed Seselja (ACT, Liberal Party, Assistant Minister for Social Services and Multicultural Affairs) Share this | Link to this | Hansard source

Thank you. That is Mr Shorten's policy—

Gavin Marshall (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

Senator Seselja, let me finish, please. I remind you to refer to people in the other place by their correct titles.

Zed Seselja (ACT, Liberal Party, Assistant Minister for Social Services and Multicultural Affairs) Share this | Link to this | Hansard source

Indeed. Referring to Mr Shorten by his correct title, unfortunately, does not improve his policies at all. It does not improve the fact that the 50 per cent Renewable Energy Target, the 45 per cent emissions reduction target and the policies for forced closures of coal-fired power plants will take us back as a nation to a place where we don't want to be. They will take the South Australian blackout model and put that on a national stage.

We were asked about electricity prices. Let's look at what they were under the Labor Party when they were last in government, because we know that if they come back it's going to be worse. But this is what happened when they were in coalition with the Greens last time. We saw national average residential electricity prices increasing by an average of 10.3 per cent a year between 2009-10 and 2013-14. We saw the average price increase from 19.4c to 28.6c per kilowatt hour. Then, of course, due to the repeal of the carbon tax, we saw residential electricity prices fall between 2013-14 and 2015-16. So, if you look at the policy decisions that have been taken by the coalition government, things like repealing the carbon tax, they lead to a reduction in price. As we see, the policy decisions that were taken by the former Labor government, including a carbon tax, saw massive increases in electricity prices across the board.

The alternative couldn't be clearer. The coalition policy is about gas reservation policy, abolishes limited merits review, has Snowy Hydro 2.0, and seeks to work with power companies to keep coal-fired power stations open longer so that we can get the kind of base load that we need, that our industries need, that workers in this country need and that householders need in order to keep prices down—or we could go to the alternative model that has been put forward by Mr Bill Shorten, the Leader of the Opposition, and the Australian Labor Party nationally. Their policy is the South Australian Labor policy, which has seen statewide blackouts and sees South Australia having the highest energy prices in the nation. Mr Bill Shorten wants to take that policy nationally with a 50 per cent renewable energy target. There is no modelling as to what that might cost. Fancy an alternative Prime Minister going to the Australian people and saying, 'Look, we've got this you-beaut new policy; it's been tried in South Australia, it's led to the highest energy prices in the country and it's led to statewide blackouts and South Australia becoming the butt of national jokes as a result of its energy policies'! Mr Bill Shorten is saying, without telling us how much it's going to cost, that he wants to make that policy national. Well, we can guarantee one thing: it's going to cost a lot. It's going to push prices up. It's going to see more blackouts. It's going to see less energy security. This is the policy platform being put forward by the ALP, and we will certainly not be matching it. (Time expired)

Alex Gallacher (SA, Australian Labor Party) Share this | Link to this | Hansard source

I too rise to take note of the answers by Senator Brandis to the questions from Senator Moore and Senator Carr during question time today. Senator Seselja has got on that familiar high horse and is attempting to kick South Australia, but people really need to understand the situation in South Australia. In 1997, it was the Liberal Premier John Olsen who went to an election promising not to privatise the Electricity Trust of South Australia. He promised. He got elected, and in 1998 he privatised it. Straight in, breaking his election promise to the South Australian people, he privatised the Electricity Trust of South Australia. With 20-20 hindsight, we know it was an incredibly dud deal. To get the highest price he possibly could, he rejected Riverlink, which would have connected South Australia with New South Wales. He rejected that for short-term financial gain for his Liberal government, and that has cost South Australians $1 billion to $2 billion in increased prices. That's the reality of the situation in South Australia. The South Australian Liberal government promised not to privatise and then privatised and sold us a dud into the future, guaranteeing that the new owners would roll in cash and that we weren't properly connected to the National Electricity Market. Those are the actual facts of the matter.

There was a one-in-50-years storm which knocked over kilometres of lines and pylons and caused a lot of blackouts in South Australia. But what happened? What happened is that the National Electricity Market encourages major operators to sit out of the market so the price goes from $30 or $50 a megawatt-hour to $10,000. I can prove this. Snowy Hydro, the only supplier in the nation that has been fined by the regulator for sitting out of the market or failing to follow the instruction of the regulator, was fined $400,000 for breaching the rules. And guess what? It's owned by the federal government, the New South Wales government and the Victorian government. And it's quite clear: in its original statement of claim, the regulator stated Snowy Hydro deliberately ignored dispatch instructions so it could take advantage of an unforeseen and unforecast increase in demand. That's the electricity market that we have.

When there is a demand like was occasioned by this storm in South Australia, does the regulator come in and put everybody on the board? There are allegations that a gas power station in South Australia deliberately waited until there was a blackout so it could make more money. This is the market we have got. It's not about wind. It's not about solar. It's about a broken electricity market which encourages major operators to sit out of the market until there's an unforeseen event or an unforeseen demand and the price goes from $30 a megawatt-hour or $50 a megawatt-hour to $10,000. That great icon of Australia, the Snowy Mountains Scheme, sitting up there paid for by generations of taxpayers, works at 14 per cent of capacity. It has turbines that can connect to the grid in 90 seconds. Are they doing that on a regular basis? No, they're sitting there waiting for a spike in demand caused by an unfortunate event like a weather outage or a seasonal demand of electricity for air conditioning. They're not contributing in an even flow. Fourteen per cent of capacity—check their annual report. To add insult to injury, an entity owned by the federal government, New South Wales government and the Victorian government has been fined for not following the regulator's requirements.

So it's not fair for Senator Brandis to come in here and say: 'The South Australian government made wrong decisions about wind and solar. The South Australian government has made the wrong decisions about clean energy.' Have a look at the real problem: there is generating capacity in Australia that is not contributing on an even basis. You sit out of the market until there's an event and you profit as much as you can. And the Liberals brought it in. (Time expired)

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

Senator Gallacher was quite amazing! What happened to Port Augusta? The renewable energy target was taken to 20 per cent and some 44,000 gigs by the Rudd Labor government, Senator Gallacher. One turbine at Jamestown, where I grew up, gets a $700,000-a-year subsidy for renewable energy certificates. At $82, it spins for eight hours a day at three megawatt-hours. That is $700,000 for a wind turbine before they sell one watt of electricity, so it allows them to sell it cheaply. Yes, the national market is crazy, but why did the Port Augusta coal-fired power station go broke? It was because of the wind turbines and the huge subsidies that everyone is paying for when they pay their power bill.

What amazes me is that the Labor Party and the Greens are on about the clean energy target. I refer to Dr Finkel's recommendation of 42 per cent. You see, the reason the Labor Party and the Greens want a clean energy target that's high is that it means they can drop their carbon tax come the next election. That's what it's all about. If there's not a large clean energy target—and I hope there's not because the cost is too outrageous for business and will shift businesses overseas—the Labor Party will go to the next election saying, 'We'll fix energy; we'll fix the environment; we'll bring in a carbon tax.' It's quite amazing. The whole story of how the Greens are going to block the Adani mine is amazing. There are 621 units of coal-fired power generation being constructed around the world, as I speak now. A unit is one generator. There are 299 units of coal-fired generation being constructed in China now to add to their 2,107 units already operating. Those 299 units of coal-fired generation being constructed in China now will produce 670 million tonnes of CO2. All emissions in Australia total about 550 million tonnes, but let's not sell them clean Australian coal—oh, no, block the coalmines!

The Greens and the Labor Party must realise these coal-fired generators being constructed are going to burn—what? Believe it or not, they're going to burn coal. They're trying to block Australia from providing that coal, so China will use their dirty brown coal, which they're actually a net exporter of, and then buy dirty brown coal off Indonesia. If the Labor Party and the Greens have their way, China won't buy Australia's clean coal from Adani. They won't buy black coal, which is more effective, produces more heat and, hence, produces more electricity. No, we should shut all the mines down here. It's beyond me why the CFMEU donate to the Labor Party—and they've donated to the Greens before as well, by the way. Why have they donated to a party that does not support mining, construction, forestry or energy? Apparently, we're going to change the planet. While everyone's building these coal-fired power generators, we're not going to supply them coal. Of course they're going to get coal from elsewhere. Are we going to change the 1.4 per cent of the world's CO2 that Australia emits? No. It is a green religion that will lead us to the land of poverty. That's what it'll do. The costs are already going up.

A 50 per cent clean energy target is being pursued in Victoria and South Australia, where I grew up—how embarrassing it is. A new battery is going to be built at Jamestown, where I grew up and where my great-great-grandfather settled in the 1800s. The battery will run the state for about 4½ minutes. When things shut down there will be no coal-fired generation—the Hazelwood power station is gone—and South Australia will, once again, become the darkened state. The amazing cost of electricity down there is outrageous. What will we do then? We'll close businesses down in Australia and shift manufacturing businesses overseas, just like we've done in the motor vehicle industry. There are clean energy targets, renewable energy targets, carbon taxes, costs et cetera. You have General Motors America shutting Holden down, Ford America shutting Ford Australia down and Toyota Japan shutting Toyota down and you wonder why.

In this country we wallow in energy, whether it is nuclear, coal or gas, yet we're paying some of the most expensive energy prices of all the OECD countries. What's Labor's solution? It is a 50 per cent clean energy target, a carbon tax and more of the South Australian treatment. It's more of what you've done to the state of South Australia. You've put the costs through the roof and kept the subsidies going. Renewable energy is a good thing and it goes on for a long time, but if renewables want to grow in Australia they must compete on a level playing field, not be paid $700,000 for one wind tower a year. Pensioners and businesses are paying—everyone's paying. This can't go on and we need to change the whole attitude. A 42 per cent clean energy target would also be hugely expensive. Dr Finkel had it wrong about the forecast of energy— (Time expired)

Jenny McAllister (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Back on 1 February, the Prime Minister stood up in the National Press Club and he said that energy would be the defining debate in this parliament. Well, it has been the defining debate, although, probably not quite in the way that Mr Turnbull might have hoped because it is, in fact, the debate around energy that has completely and, I suspect, fatally defined Mr Turnbull. It's defined him as a leader who has completely lost control of his party and is unable to act on rational policy advice, whether it is received from academics, from our professional scientists or from the business community. Mr Turnbull is paralysed in relation to the energy debate because he is beholden to the people in his party who are determined to act against all rationality. They are determined to continue to insist that the future of energy in this country lies in coal, when, in fact, what everybody tells us is that all that is required is a certain investment framework and industry will do the rest. But a policy that will do that, like the clean energy target that was proposed by Mr Finkel and that was until very recently endorsed by the Minister for Energy, can't stand up because in the coalition party room people have the gravity-defying belief that our future lies in new coal-fired power generation.

There hasn't been much action this year—no action on energy, despite the fact that this is a crisis that's engulfing business and it's engulfing households. What we have had are a lot of reports. We've had reports from the AEMC, we've had reports from AEMO and we've had a report from Mr Finkel. And today, of course, we had a report from the ACCC. Well, I've looked carefully at that report today and I'll tell you what it does contain: it contains a lot of stories about the impact that rising prices are having on businesses. Today, we asked the minister about BlueScope. The report says that BlueScope has achieved $300 million in cost savings across their Australian steel operations in the last couple of years, and that's an extraordinary result. But, despite that, they are faced with a near doubling of their electricity costs since 2016.

Now, all of the bluster in the world can't sheet that home to Labor. Last time I looked, in 2016 the coalition was in power. Companies like BlueScope are faced with a genuine crisis in the cost inputs to their businesses. What you also won't find in that report is the assertion made again and again by Senator Brandis that the drivers of these cost increases are environmental costs, because that's not what the report says at all. The report says that the drivers of these costs are network costs. It actually found that in terms of the entire cost of electricity, environmental related costs make up only seven per cent of the cost that people are paying. And, in that context, this argument that if we could only get rid of our environmental commitments we'd have cheap electricity is ludicrous. The key components of the cost increases have not been associated with environmental schemes.

We'd do much better, in fact, to rely on Mr Frydenberg, the Minister for the Environment and Energy—plagued of course by being constantly undermined by the hardliners in the coalition. Fairly recently, Mr Frydenberg made a presentation to the coalition party room and he indicated that he endorsed the Finkel review's conclusions that there would be a 10 per cent saving for households against business as usual if we implemented a clean energy target. He provided the other conclusion that Finkel came up with through his modelling, which was that there would be a 16 per cent reduction in costs against business as usual for business if we implemented a clean energy target.

The truth is that everybody in industry knows this to be true. All that is required is some policy certainty, a policy that links together our objectives around energy, our objectives around environment and our objectives around competition in that market. But we have been waiting for four years. This government is in its fifth year; there has been no action and it is principally because the Prime Minister has his hands tied behind his back. (Time expired)

Question agreed to.