$10b ‘slush fund’ is more unneeded govt waste

Clean Energy Finance Corporation Bill 2012, Clean Energy Legislation Amendment Bill 2012, Clean Energy (Customs Tariff Amendment) Bill 2012, Clean Energy (Excise Tariff Legislation Amendment) Bill


Tuesday May 29, 2012

I was interested to hear the last speaker mention the stymieing of debate, when you consider that we have a $10 billion fund for consideration in front of us that was actually only allowed two hours with the economics committee. If you want to talk about stymieing debate, that is certainly where we need to start.

Tonight we are here to debate the Labor Party’s bill to deliver its latest $10 billion slush fund. Of course, that is not what the government is describing this bill as, but then deceiving the Australian community has become business as usual for the Gillard government.

We have to look at what this government says and then compare it to what it actually does. We see that yet again with this bill before the House. The Clean Energy Finance Corporation Bill establishes another bureaucracy whose goal is to waste borrowed money that ultimately the taxpayer will be liable for.

How many more times is this going to happen in the term of this government? There is a litany of failed wasteful green schemes and failed wasteful green bureaucracy after green bureaucracy.

The great tragedy when you look at this fund is that the government does not actually know what to spend the money on, beyond such broad and nebulous directions as ‘the corporation is a mechanism to help mobilise investment in renewable energy, low-emissions and energy-efficiency projects and technologies in Australia’ and ‘the corporation will finance Australia’s clean energy sector using financial products and structures to address the barriers that are currently inhibiting investment’.

Yet Australia already have products and structures that make low emissions and renewable energy attractive options, don’t we? We have a bipartisan 20 per cent renewable energy target, which requires all energy suppliers to source one-fifth of their power from renewable sources by the year 2020.

Failure to do so will attract penalties of hundreds of millions of dollars, much of which would have to come from state energy utilities. The existing production of around 15,000 gigawatt hours of renewable energy produced nationally is expected to have to increase by an extra 45,000 gigawatt hours over the next eight years, a total fourfold increase. Every unit of renewable energy power that suppliers fall short will cost them money.

A penalty of $65 per megawatt hour would equate to $65,000 per gigawatt hour and $65 million per terawatt hour. At this price, if Australia only managed to double instead of quadruple its renewable energy production, our electricity suppliers would be facing annual fines of $1.95 billion. Now, that is an incentive.

It is also a coincidence, given that $2 billion is the expected government contribution to the Clean Energy Fund annually as it collects its capital base. Otherwise, I presume, this cost will simply have to be added on to the cost paid by consumers—our Australian families and businesses.

Surely the renewable energy target is a major structure designed to increase low-emission energy production. It appears, however, that some observers think Australia will struggle to quadruple its renewable energy production in the required time, despite the obvious financial incentive.

Getting three-quarters of the way to the target will still generate a billion dollars a year in penalties, which is, in effect, the government’s second hidden carbon tax. This will be one more cost we can assume will be passed on to Australian energy consumers—to every house, every business and every family. So there already exists a structure to quadruple renewable energy production, yet according to the Gillard government this structure will be either inadequate or incompetent.

On top of the costs of the renewable energy target I have already mentioned, the carbon tax itself is supposed to be another structure the government designed to drive up the price of fossil fuel energy or, by default, subsidise the competitiveness of renewables.

With a $23-a-tonne CO2 equivalent across the entire Australian economy, our nation has the most expensive carbon tax in the world. Australia’s electricity generators produce nearly 200 million tonnes of CO2equivalent, which is, annually, over a third of our total emissions.

At a cost of $23 a tonne, the impost they will have to pass on to consumers and industry is $4.6 billion, rising every year. Of course, free permits reduce the overall cost to some generators, but I note that no assistance is being offered to the Western Australian generators in my electorate, so many will pay the full cost.

Why do these two major pieces of Labor policy not create a sufficient environment for investment in renewable technologies? After all, they come with a billion-dollar revenue-raising capacity.

Is the carbon tax a piece of environmental legislation, or is it social welfare and wealth redistribution coming to us stealthily like a wolf in sheep’s clothing? I remind members of the explanatory memorandum for the clean energy future bill last year. It said:

A broad-based carbon price is the most environmentally effective and cheapest way to reduce pollution. A carbon price puts a price tag on carbon pollution. Under the mechanism, around 500 of the country’s biggest polluters will be required to pay for each tonne of pollution they release into the atmosphere. This will have two effects.

It creates a powerful incentive for all businesses to cut their pollution by investing in clean technology or finding more efficient ways of operating.

A price on carbon will also create economic incentives to reduce pollution in the cheapest possible ways, rather than relying on more costly approaches such as government regulation and—

wait for it—

direct subsidies.

This is what the government said in their own clean energy future bill last year, that that would provide the mechanism so that the government did not have to rely on costly approaches such as direct subsidies.

The explanatory memorandum to that legislation went on to say:

These incentives will flow through the economy. The carbon price will make lower-polluting technologies, especially clean energy technologies, more competitive and will boost investment in these technologies. In this way, introducing a price on carbon will trigger the transformation of the economy towards a clean energy future.

Well, what has happened? Why isn’t this sufficient? These words should really be viewed through the usual screen of Labor Party distortion. What we do see, again, is the government saying one thing and doing another.

That is not what they said in that clean energy futures bill and I hope those words will continue to be examined in the cross-examination of this bill before us now. Either the government misled the Australian people through the clean energy future bill or it is misleading the Australian people through this bill. It has to be one or the other.

The government stated that the carbon tax itself would drive renewable energy technologies.


These new Labor measures prove Carbon Tax won’t drive innovation

So is the bill before the House today, the Clean Energy Finance Corporation Bill 2012, an acknowledgment by the government that the carbon tax will actually fail to deliver renewable technology in its own right—so it is not going to do what the government said it would do?

Is this an admission of failure, or, should I say, just the latest admission of failure and wasted borrowed funds and bloated bureaucracy yet again? Or is it instead not related to another government failure but an attempt to develop a separate Labor-Greens slush fund?

The bill of course establishes the Clean Energy Finance Corporation, whose job it will be to oversee the expenditure and direct the outcomes the money will purchase.

I wonder whether it will be more successful and more efficient than Labor’s Fair Work Australia, that took four years to deliver a single report. Will there be better administrators than those who mismanaged Labor’s disastrous pink batts program? I am particularly interested in this line in the explanatory memorandum:

The Corporation will apply capital through a commercial filter to facilitate increased flows of finance into the clean energy sector thus preparing and positioning the Australian economy and industry for a cleaner energy future.

What exactly will this commercial filter look like?

Mr Chester: The green loans program.

Ms MARINO: The green loans program. Is it the same commercial filter through which the government gazed when it pretended to see world action on pricing carbon—even though the world has basically walked away from such moves?

Is it the same commercial filter that the government used when it told high-energy-using trade-exposed industries that their carbon tax would have no impact—even though we see job losses, cancelled projects and closures on a daily basis? We really need to know what commercial filter this corporation will apply.

There are already serious concerns that the CEFC may in fact have a distortionary impact on the market and not stimulate tangible, sustainable results for progress in renewable energy projects.

It may well undercut finance and investment in existing projects that have had to secure commercial financing—they have had to have a commercial case for large-scale renewable energy projects, and I have no doubt that the $10 billion will not be successfully invested.

Irrespective of this, the renewable energy generated will still be 20 per cent—20 per cent before; 20 per cent after—so where is the justification?

I am absolutely appalled at the projected $750 million of taxpayers’ money as losses attached to this bill. This is in the government’s own papers. The government is admitting upfront that it plans to lose taxpayers’ dollars through the Clean Energy Finance Corporation Bill.

I find that just appalling. Clearly, $750 million is chickenfeed to what the actual waste will be—$10 billion to pick Labor-Greens winners—and we will simply see questionable initiatives funded to support Labor and Greens ideologies.

It will be without any question a Labor left-wing slush fund, aided and abetted by a board that will be appointed by the government and one that must consult with Labor ministers, a direct hands-on process.


Slush fund created by more debt not listed in the budget

This is $10 billion being borrowed that Australian taxpayers will ultimately have to pay back. It is not in the government’s budget. It is not part of the Labor government’s $300 billion increase in the nation’s debt ceiling.

I have actually seen, as other members would have seen, some of the you-beaut schemes that will be pitching for these funds. I have seen some in newspapers and I have heard of some being hawked around the halls of this House. There are all sorts of opportunists rubbing their hands with glee. They know this is a gullible government.

They have been down this road before. We have seen billions and billions of borrowed taxpayers’ dollars wasted by this government. The opportunists know that the government cannot deliver programs without waste and mismanagement and they cannot wait to get their hands on these taxpayer funds.

But it comes at a cost to Australian taxpayers. This government is infamous for coming up with the wrong answers to the questions of the day facing this nation, and this is yet another example of Labor getting it wrong.