Adjournment debate – carbon farming and electricity

Sunday, 23 November 2014

Mr PITT (Hinkler) (21:15): I rise to express my disappointment at the House’s acceptance earlier today of amendments to the Carbon Farming Initiative, which were put forward from the Senate at the last sittings. My key concerns relate to the safeguard mechanism and the structure of what I believe to be, in essence, an emissions trading scheme.

The bill’s passage through the House this morning was lighting fast, limiting the opportunity to properly debate the amended bill here in this place and other forums. As an MP, I take responsibility for missing that opportunity. I thank Minister Hunt and his staff for their quick response to my questions in the week following the Senate debate. However, given I was unable to express my views on the matter during a parliamentary debate, I will place them on the record now.

Despite the absence of a market, make no mistake that this so-called Direct Action Plan is a scheme that enables carbon credits to be traded between large emitters and carbon farming initiatives. It also places green tape on business at a time when the economy needs all the help it can get. The definition of a large emitter is set by regulation and, in my opinion, this will enable future governments to easily set up a market to include an enormous number of businesses in the scheme.

I cannot support legislation which may result in even more limitations on our employers, particularly when unemployment in my region is at almost 10 per cent. We promised to be a government that makes it easier, not harder, to do business in Australia. We have made a lot of progress to release the handbrake that Labor put on the Australian economy. But in my mind, this legislation is a step backwards.

Businesses and farmers in my electorate are struggling and the single biggest issue hurting them is electricity. Ergon Energy has released three years of actual data and two years of estimates, showing that over five years green schemes will have cost regional Queenslanders and businesses $1.88 billion. Electricity users in Queensland are being disconnected at record rates for the non-payment of bills. It is a chicken and egg scenario: green schemes have resulted in a significant oversupply of energy in the market and those who do not have solar power are subsidising those who do. People are using less energy because it is too expensive. The networks and generators still have to be maintained to operate when green energy is not available, which is at night and when the wind is not blowing.

Bundaberg Walkers Engineering has been operating in my electorate for 126 years. This is a business that has survived the test of time: the great depression, two world wars and numerous floods. Yet, it may not survive changes to energy costs. Potential tariff changes at the state level could add up to $1 million in annual operating costs. The foundry has no choice other than to pay the growing bill or shut its doors. Renewable energy is not capable of supplying their operation; they have checked. Bundaberg Walkers Engineering has three furnaces requiring 6.4 MVA of energy in order to operate. That energy must be supplied consistently and for a long period of time.

The National Irrigators’ Council is in Canberra this week to discuss electricity pricing. They call their predicament a death spiral and I tend to agree. Irrigators play a vital role in feeding and clothing our nation, yet we have backed them into a corner where they cannot afford to pump water. They are seeking a specific food and fibre tariff that reflects irrigation demands on the network in terms of base load and off-peak use.

Repealing Labor’s carbon tax provided some relief to farmers, business and households but not nearly enough. Ken and Genevieve Wills of Hervey Bay are just two in a long line of Hinkler constituents who have contacted my office about the carbon tax. While federal charges were reduced as a result, state charges were increased. They say the ACCC was of no help to them and so they have referred their complaint to the Queensland ombudsman. The question is whether the carbon tax savings were passed on by electricity providers or whether it a case of careful accounting. For residential customers on tariff 11, the Queensland Competition Authority increased their bills by 13.6 per cent. With the removal of the carbon tax, that price hike was reduced to a net increase of 5.1 per cent. For businesses on tariff 20, the increase would have been 11.5 per cent. After removal of the carbon tax, the increase was still 3.3 per cent.

I agree that significant changes need to be made at a federal level with regards to the Australian Energy Regulator, but clearly the Queensland government has a larger role to play than what they have been willing to publicly admit. Reports suggest that in 2013-14 Ergon paid a dividend of $392 million to the state government, while Energex paid $406 million. The state then paid $519 million to meet its community service obligation, giving the government a net gain of $279 million. We must not let the cost of energy be the millstone around the neck of the Australian economy. Real electricity reform will take courage.

But let me be clear: I am not opposed to renewable energy. I support green power where it makes sense and is financially viable. I am an electrical engineer, I have been a farmer and I have owned a small business. At the 2013 election, I promised to be a voice for common-sense in this place and I intend to deliver on that promise.

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