Government mixes up personal prejudices with public policy - AM Agenda




MONDAY, 13 JULY 2015

SUBJECT/S: Government gutting clean energy investment; Barnaby’s Law; Tony Abbott’s Royal Commission.

KIERAN GILBERT: This morning I’m joined by the Shadow Assistant Treasurer Andrew Leigh and Parliamentary Secretary for Foreign Affairs Steve Ciobo. Steve Ciobo first to you, you heard a bit about what Tim Flannery had to say. This debate about clean energy, you've copped a fair bit of flack – the Government – for excluding windfarms, and now the most popular form of alternative energy, rooftop solar. Is the Government trying to get rid of the Clean Energy Finance Corporation by stealth?

STEVEN CIOBO, PARLIAMENTARY SECRETARY TO THE MINISTER FOR FOREIGN AFFAIRS: Well, no, not by stealth. We have said all along, Kieran, that we are opposed to the CEFC. But let's be clear about what's taking place here because there seems to be, and I do intend the pun, a lot of hot air around this for no particular reason. What the CEFC is focused on doing, what its mandate to do, is to invest in new, emerging technologies. Solar and wind are not new, emerging technologies. These are commercial-level investments. We see massive increases predicted for both solar and wind over the next five years. Now, for anybody to suggest for one moment that because of the mandate that we have given, or the directive I should say, to the CEFC, that that is somehow going to jeopardise wind or jeopardise solar is absolute rubbish. I mean frankly, from an alarmist like Tim Flannery, I am not surprised to hear it. But the fact is there is absolutely no basis in fact at all, nor, more importantly, is there a financial basis for making that statement because it is completely false.

GILBERT: So you believe that these industries, these sectors, can stand on their own two feet, basically, Steve Ciobo?

CIOBO: We've got something like 1.4 million solar panels rolled out across Australia on rooftops. More importantly, the renewable energy target – the RET – will drive continued investment both in terms of wind and in solar. I think, frankly, some people need to calm down. Tim Flannery should calm down, some of the journalists should calm down because there is absolutely no way at all that the directive that has been given to the CEFC is going to have a detrimental or in fact a negative impact, in terms of both wind and solar, over the next five years. So, you know, people just need to be focused on what the reality is.

GILBERT: Ok, let's hear Andrew Leigh, your response to that? I guess the argument that the Government is making through Greg Hunt and Steve Ciobo this morning is that it's better to be investing taxpayer money in emerging technologies and in the large-scale solar projects which the Government is still committed to.

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Well Kieran, let's be clear about what the CEFC mandate is. It is not, as Steve has suggested, just to invest in new technologies. It is very clear that if you look at its act, if you look at the CEFC mandate published on its website, it has a mandate to deal with the market failure, that there is not sufficient investment for both proven technologies and for new technologies. So, you have seen the CEFC make a return that is three per cent over the bond rate, by investing in things such as wind farms in Victoria, solar in Alice Springs, energy efficiency in other contexts. The problem is this Government has never seen an expert panel it doesn't want to nobble – just ask the curriculum authority, just ask the Australia Council if you want evidence of that. They're trying to narrow down what the CEFC can invest in, and at the same time they want it to produce a higher return. 

GILBERT: What is the return you're talking about? You said three per cent above the bond rate, how does that compare to, say, other investors in this space as far as you're aware?

LEIGH: Well, it is doing two things. It is producing an important return for the Government, Kieran, but it is also making sure that we get more investment in renewables. The RET makes a difference, sure. We have seen the Coalition try to smash that over recent months and only as a result of Labor finally bringing them back to a sensible position have we got a RET going again, and we have seen a new wind farm in Western Australia off the back of that.

GILBERT: Ok, Steve Ciobo, if the CEFC is returning money to government coffers, making money for the Government as Andrew Leigh says there, at 3 per cent above the bond rate and it is investing in things of its own choosing like solar and wind now, why would you mess with that?

CIOBO: Kieran, let me give you a tip mate. Be very cautious about taking financial advice from an academic and a Labor party member. With all due respect to Andrew Leigh, mate, forgive me for not taking the Labor party too seriously with your arguments about how this is actually financially prudent for us to stay invested in the CEFC. We made it clear before the last election that if elected, we would abolish the CEFC. It is billions and billions of dollars of money Australia does not have, money that has been borrowed to fund this thing, and most importantly, when it comes to solar, when it comes to wind, there is already a very vibrant commercially-sustainable business model out there. We see investment from large multinationals from all around the world.

LEIGH: So, you want to kill it, and if you can't kill it you'll nobble it. Is that right Steve?

CIOBO: No, Andrew. The fact is, there is already a multi-billion dollar industry around wind and solar involving multinational corporations. Now surprise, surprise a Labor party member comes along and says they need government subsidized loans from taxpayers, this is the reason why your Government put us into a mountain of debt and these sorts of hard decisions are the reason why the Coalition will get us out of this mountain of debt.

GILBERT: Ok, Andrew let's hear your argument in response to this because if Steve Ciobo's line of attack is that essentially these industries can stand on their own two feet, they have viable business models already – and I guess the return that the CEFC is making shows that they're profitable – so why not focus on other areas? That is the point here, why would you have this entity if not to explore breakthrough technologies?

LEIGH: Well, it is doing breakthrough technologies but it's also doing innovative financing Kieran. So, in many cases the CEFC is partnering with the private sector making investments possible at a larger scale than they would otherwise. But what is extraordinary about what Steve is saying is that he has basically admitted the Government's agenda is to kill the CEFC.

CIOBO: It was an election promise. We took it to the election.

LEIGH: And if they can't do that they want to hack into what the CEFC can invest in, yet they still want it to produce a commercial return. But frankly, if all the CEFC can do is collect the methane from farting cows, it is not going to produce a return at three per cent above the government bond rate.

GILBERT: No, well, I think we can all agree on that. Steve Ciobo: let's look at the coal mine in New England. Should Barnaby Joyce quit now, given his very public criticism of Government policy?

CIOBO: Oh look, Barnaby's criticism is directed at the former state Labor Government in NSW. At the end of the day, it is the former Labor Government of NSW that took the decision around land use. Let's be clear about what Greg Hunt did, and let's be clear about the federal government's role. The federal government deals with stage 15 – only stage 15 – of a 17-stage approval process. It is the state government that makes determinations around land use. When it comes to water, Greg Hunt approved it on the basis of there being 1-to-1,000 parts being usable. So, in other words, with respect to this mine, it is 0.1% of water use, of the available water in the region. Also, it is not on the black soil planes, or there is one very small part of it on the black soil planes, something like six independent –

GILBERT: Barnaby is not happy though, is he?

CIOBO: Well, look, I mean as I said, Barnaby's grief is with the former NSW state Labor Government, who were the ones who actually pushed this through to begin with.

LEIGH: Barnaby Joyce has been pretty clear he wants to disassociate himself from a Cabinet decision and the Cabinet Handbook is categorical: the only circumstance in which you can do that is if you resign from Cabinet. What he wants is Barnaby's Law, a new rule that says you can only disassociate yourself with Cabinet decisions without resigning from Cabinet if you're Barnaby Joyce. But he should do the decent thing, the honourable thing, which ministers have done in the past when they have disagreed with a Cabinet decision: he should quit.

GILBERT: Ok, Steve Ciobo, let's finish now if we can on this report in the Financial Review about the double dissolution on unions. On the trade union issue, is this a prospect? Apparently the Government, according to Phil Coorey's report today in the AFR, is going to expedite consideration of the building and construction commission bill and have that heard on the first day back in August.

CIOBO:  Well, it's not about providing a trigger. What it's actually about is good policy. As a Government, we are very focused upon the fact that clearly there is something rotten in the state of Denmark when it comes to the trade union movement. The Royal Commissioner is highlighting that there are all sorts of deals being done which aren't advantageous to the workers of the union movement apparently it is there to represent. So, the Government is very focused upon cleaning up the trade union movement. We see allegations of links to all sorts of organised criminal activity, bikie links in WA for example, so I think the Government's focus on this is rightly about cleaning up union activity. You know, there will always be examples of there being double dissolution triggers, we've still got a long way to go, we've got a lot of work to do, a lot of repair work to do in terms of the nation’s finances, and that's what we're focused on.

GILBERT: Would Labor be up for fighting on this issue given it has been such an enormous headache for Bill Shorten recently? Having to front the commission, 900 questions over two days, it was hardly a great look. You really wouldn't want to seek election on the basis of defending the union movement would you?

LEIGH: Kieran, if we are fighting an election with the man who brought Australia WorkChoices, we will be very happy to do that. Bill Shorten has said he will debate Tony Abbott on industrial relations any place, any time, and I think I and my Labor colleagues would comfortably say the same to any of our opponents. Labor's record for standing up for good jobs and making sure that workplaces are productive and not confrontational is an extraordinarily strong one. We see unions as having a role to play in solving disputes. You see that in the move to enterprise bargaining in Australia, initiated by Labor in the early 1990s, associated with a big fall in industrial confrontation in Australia. Getting us away from that old-fashioned 1970s conflict model, towards a model in which people work things out in the workplace.

GILBERT: But is Bill Shorten damaged goods, in the wake of the commission hearing, and the claims made and the questions put to him?

LEIGH: Not at all. Bill handled himself with aplomb. Obviously this is what the Government's Royal Commission aimed to do; a Royal Commission that has cost more than four times as much as the Government has spent on family violence. It was designed to achieve a political end, not to focus on improving workplace productivity, not to focus on where the jobs of the future come from, or how we can turn around the slide in real wages that we have seen over recent years.

GILBERT: Steve Ciobo, finally to you: I know you say it's not about providing a trigger, but how would you see an early election fought on this issue? Do you think it would be enough to warrant going to the polls early?

CIOBO: Mate, I am not going to get involved in crystal ball gazing. The Government has got a job to do. Look, we just had, prior to the winter recess, one of the most productive and successful sitting fortnights we've had since we came into Government. We achieved something like $50 billion dollars’ worth of savings to the nation's budget. That is a big impact in terms of our nation's debt and the recovery position. So, we are very focused on what the nation has elected us to do. That is what I am focused on, that is what the Government is focused on. So I am not going to worry about discussions about what if, what if, what if. We got a job to do.

GILBERT: Alright, we are out of time, Steve Ciobo, Andrew Leigh – gents, have a good day.

LEIGH: Thanks Steve, thanks Kieran.



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Cnr Gungahlin Pl and Efkarpidis Street, Gungahlin ACT 2912 | 02 6247 4396 | [email protected] | Authorised by A. Leigh MP, Australian Labor Party (ACT Branch), Canberra.