Energy – 16 August 2018

Senator REYNOLDS (Western Australia) (17:28): I too rise to speak on Senator Collins’s motion. It’s always quite enjoyable sitting down and listening to Senator Cameron’s speeches, which are full of overblown and overegged rhetoric and bear very little relationship to the truth. It is my pleasure to speak on this motion today, particularly as a senator from Western Australia, a state abundant in so many resources which could stand to power our nation cheaply and reliably for many generations to come.

Senator Cameron seems to have forgotten that this government is dealing with the mess that those opposite left us. Listening to him speak on Senator Collins’s motion, you would think that, in developing this policy to deal with unreliable, expensive power for Australian families and businesses, we just dreamt it all up, rather than it being a policy to deal with a problem they left us with. As to Senator Cameron’s rhetoric about troglodytes and this government being in crisis and all of the other rhetorical flourishes that he’s very well known for, he says he was quoting anonymous sources. Well, I am not an anonymous source. I was in the party room for the debate. I was proud to stand up and support the National Energy Guarantee as proposed by this government. I can assure Senator Cameron and all of those opposite that the debate was robust but it was also a very clear result. It was supported in both party rooms for very sound reasons. Those reasons are all about Australian families and Australian industries that employ millions of Australians.

What always amuses me somewhat, and sometimes saddens me, is that those opposite quite often—as we just heard from Senator Cameron—mistake robust and very healthy debate on significant national issues for disunity. If only those opposite were able to have such robust debate on serious national issues such as energy pricing, availability and reliability, then maybe, just maybe, they wouldn’t have left us with 100 per cent price increases in power after six years in government. Sadly, they very rarely have the opportunity to have the debates that we do in our party room.

What I would like to place on record is the record, so that we know where we’ve got to today and how we’ve got to the National Energy Guarantee, which I understand will be before the parliament in the next sitting week. As I said, during the six years of government under Labor, supported by the Greens, power prices doubled for Australian families. It didn’t just happen; it happened because of the poor policy decisions that were implemented by those opposite. I was incredulous listening to Senator Cameron saying that the only way to reduce energy prices and increase reliability was through renewable energy. He was part of the government that introduced these irresponsible policies that doubled prices. It is quite extraordinary that he now thinks, all of a sudden—after they screwed up our energy policy and prices for so many years, which we are now dealing with—that that is the way to decrease prices. It’s not only what Labor left us with after six years in government; the state Labor government policies have also continued to increase pressure on prices through job-destroying gas bans, moratoriums, unrealistic renewable energy targets and open hostility to reliable baseload power.

I was also reflecting when Senator Cameron was speaking—and it will be very interesting to hear from those opposite when they stand up to speak about this—that the greatest tactic that those opposite have is that, when they’re on the defensive, they go on the attack and come up with this emotional and sometimes quite interesting rhetoric that actually bears no resemblance to the truth. Why do they do that? Because we have not heard one thing from those opposite about what their alternative policy would be—about how they would continue to increase reliability while, at the same time, reducing prices. That is the thing for anybody listening or watching today: have a look, watch what they’re doing and hear what they’re saying. I can guarantee you now, like Senator Cameron, there will not be one solution or one credible policy alternative to the NEG. That’s the challenge I have for those opposite: tell us what else you would do to reduce prices for families and also increase reliability.

Unlike those opposite, the Turnbull government is taking action to fix this mess. What is the alternative, as I said? Let’s have a further look at this alternative that we’ve heard nothing of from those opposite in the chamber today or any other day. I certainly don’t think we’ll hear it from them when the National Energy Guarantee comes on for debate in this place. Let’s have a look at what their alternative, which they never talk about in this place, actually is. Bill Shorten wants a 50 per cent renewable target at a national level—

The ACTING DEPUTY PRESIDENT ( Senator Fawcett ): Order! Senator Reynolds, remember to address members in the other place by their correct titles.

Senator REYNOLDS: Mr Shorten, the Leader of the Opposition, wants a 50 per cent renewable target at a national level, which will inevitably again mean more subsidies and, therefore, greater prices yet again and increasing unreliability yet again. But that’s not the only damaging thing that Labor want to do in their policies. They also want to go further ahead than any other country in the OECD, I understand, and cut carbon emissions by 45 per cent. This reckless policy would harm our economy and cost thousands of jobs. Over the past decade, Labor has adopted well over a dozen climate and energy policies. So, even if they did come out and say, ‘This is our energy policy; this is how we would improve the NEG,’ how could we even trust what they say today? Let’s have a look at all of their energy policies from over the last 10 years. Which one might they flip-flop back and forward to? Who remembers the CPRS, the carbon tax, the CET, the ETS, the EIS, pink batts, contracts for coal closure, cash for clunkers and the citizens’ assembly?—just to name a few of their flip-flopping policies.

Remember when the coalition repealed the carbon tax? It led to the largest fall of electricity prices on record. That’s not just me saying it; it is according to the Australian Bureau of Statistics. When we abolished the carbon tax it led to the largest fall of electricity prices on record. That is not Senator Cameron’s rhetorical flourish; that is fact. Labor is all for locking up our resources, subsidising expensive and unreliable sources of power and penalising Australian industries who create jobs for our workers. They’re risking Australian jobs. Alternative to that, we are getting on with the job of delivering a sustainable future for this country. We cannot do that without reliable and competitive international electricity prices.

When you have a look at it, there is absolutely no doubt in my mind, or in any Western Australian’s mind, that Australia should have some of the lowest electricity prices in the world. We have abundant reserves of high-quality coal, gas and uranium, which those with ideologically extremist points of view amongst those opposite have continued to fight. We are the fourth-largest coal producer in the world and we are growing because the world usage of coal-fired power plants is increasing, despite the rhetoric of those opposite. I believe, like so many on my side, that we should be developing our uranium deposits as a reliable and clean source of energy. Those opposite know that one of the most reliable and clean forms of energy that we have in abundance is nuclear power. It’s worth noting and reminding those in the chamber today that Tim Flannery himself argued we should be leading the world on uranium and nuclear power, given that we have half the world’s supply of uranium right under our feet.

In Western Australia, we are also doing wonderful things with solar, wind and wave power. They are important to keep developing, and nobody on this side is saying they are not important power sources that we should be developing, but they simply do not yet provide the baseload power resource that will be reliable enough and cheap enough, and probably won’t for many years. This government is focused on keeping the lights on and reducing household electricity bills and, in the process, bringing down the rising cost of living pressures on Australian families. Those opposite talk endlessly about working families, but what do they do when in power? They doubled families’ energy prices.

What will the National Energy Guarantee mean for Australian industry? It means they will have access to a reliable source of power at an affordable and competitive rate. Those on this side of the chamber know just how important that is for current industries and for new industries looking to start here in Australia. You have to have reliable, affordable and competitive power supplies. We on this side of the chamber are cutting electricity prices in Australia by ending subsidies for energy which are all passed on to the customers, which are, as we know, Australian businesses and Australian families. We’re also creating a level playing field that ensures all types of energy are part of Australia’s energy mix. We’re also providing certainty for investors, more supply and, in turn, lower prices. We’re also reducing volatility by ensuring reliable and affordable power when and as it’s needed.

The NEG will also ensure Australians will be at least $300 a year better off than they would have been under Labor’s proposals. In the 2020s, modelling demonstrates, this saving will rise to $550 a year for households. For businesses, wholesale electricity prices will fall, on average, by 20 per cent to 2030. What does that mean for Australian businesses? It means mum-and-dad businesses, small businesses, cafes will save hundreds of dollars a year. Medium businesses such as supermarkets could save over $400,000 a year in their energy costs. And large, energy-intensive manufacturers could save millions of dollars a year. This will allow Australian households to keep more money in their pockets. It will allow Australian businesses to grow and invest and, more importantly, employ more Australians.

These are not just claims we are making. This government’s action is already having demonstrable and positive effects. Wholesale electricity prices are down around 25 per cent compared to last year. I’ll say that again for those opposite: in the last 12 months, we have reduced energy prices by 25 per cent for families and for businesses that employ Australians. Compared to last year, retail power bills have been reduced in New South Wales, Queensland and South Australia. Power prices are also going down in Queensland by up to 8.5 per cent for small businesses and five per cent for households. South Australia had the most catastrophic failure of energy policy under the previous Labor government. Power prices there are going down by two per cent for small businesses and nearly two per cent for households.

The National Energy Guarantee is made up of two critically important obligations. The first is a reliability obligation, which will be set to deliver dispatchable energy from ready-to-use sources such as coal, gas, pumped hydro and batteries in each state as required. The second guarantee is an emissions obligation, which will be set to contribute to Australia’s international commitments. The level of the guarantee will be determined by the Commonwealth and enforced by the Australian Energy Regulator. But when it comes to reliability, no longer will intermittent power such as wind and solar enter the grid without providing backup, whether it’s pumped hydro or batteries.

Modelling shows that renewables that do have a falling cost curve would make up between 32 to 36 per cent, up from around 17 per cent today. Despite the myths those opposite are peddling, under this plan, renewables will grow significantly but in a way that is responsible and reliable while still delivering lower costs for consumers. At the same time, there will be more than 3,600 megawatts in dispatchable generation capability over the next decade, which will firm up the intermittent renewables because, as we know, the sun does not always shine and the wind does not always blow and we need to make sure that we have enough dispatchable generation capacity to deal with that.

Under this plan, for the first time a premium will be put on the power that adds to the reliability of the national energy grid. Critically, the guarantee also ends the subsidy mentality—there is no carbon tax, no carbon price, no emissions trading scheme and no subsidies, which, in the past, were converted. It’s consumers and businesses that pay the cost for these subsidies.

What do industry groups say about this process and about the National Energy Guarantee? Industry groups, including the Business Council of Australia, the Australian Industry Group, the Australian Chamber of Commerce and Industry and Manufacturers Australia, represent some of the largest energy consumers in Australia and the largest employers in Australia. Many of these organisations’ members contribute significantly to our exports and to our economy. All of those industries and those businesses need to have internationally competitive energy prices and reliability. Australia’s largest employers, including BHP, BlueScope, Santos and JBS Australia meat processors, have also welcomed this policy. In fact, the CEO of the Business Council of Australia, Jennifer Westacott, in representing more than one million Australian jobs, said it ‘is the most practical, workable thing we’ve seen in business for quite some time’. The CEO of BlueScope, our biggest manufacturer, said the NEG ‘turns the game around—where now, the effective functioning of homes, businesses, schools and hospitals is the priority’ of government.

As a senator for Western Australia, I particularly welcome the Prime Minister’s focus on gas. The Turnbull government will always make sure there is enough gas for Australians first before it is shipped offshore. That is now already having significant benefits for the Australian market in the east.

The Australian Competition and Consumer Commission and the AEMO had projected shortfalls of up to 108 petajoules in 2018 and 2019. Just to give you an idea, one petajoule is enough for a large industrial user or Penrith, Bunbury or Geraldton for a whole year. It was this coalition government, this Prime Minister and our energy minister who secured a deal with gas producers so that they will cover projected shortfalls in domestic gas supply over the next two years. We didn’t need to pull the trigger of the Australian Domestic Gas Security Mechanism, which would have allowed us to impose export restrictions, should there have been a need. This deal is delivering results, with 73 petajoules of gas already committed to our domestic Australian market. This is a positive outcome and will bring relief to Australian houses and businesses who have been struggling, in the eastern states, with a lack of supply and high prices.

However, the long-term solution still rests with states and territories to remove their damaging bans and moratoriums on gas exploration, development and production. For example, if Victoria lifted the moratorium, they would have 40 years worth of domestic gas supply in known reserves already. I also acknowledge the Northern Territory’s recent decision to lift its moratorium, which has the potential to unlock up to 200 years worth of domestic supply. We’ve also taken significant action for gas in many other areas, which, unfortunately, time does not allow me to go through this evening.

In conclusion, these measures that the government has announced in this policy package are just the tip of the iceberg when it comes to what the Turnbull government is doing through the National Energy Guarantee. Those opposite and their state Labor counterparts are pursuing a dangerous mix of policies that will hit both energy security and affordability once again. In this debate and when the bill comes to this chamber, what you will not hear from those opposite is their policy. There is a 45 per cent emission reduction target by 2030, a 50 per cent renewable energy target by 2030, an emissions intensity scheme and the forced closure of coal-fired power plants, and they still have not got a single word to say on a credible energy security plan. Together, these policies, without question, will once again wreak havoc on Australian households and businesses. These days, it is very unclear what Labor’s energy policy is. The Leader of the Opposition and his frontbench have refused to explain how they will receive the targets, but we know, from experience, what the impact will be on Australians. (Time expired)

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