Climate Change Fund debate

Cate Faehrmann

NSW Greens MP

8 August 2019

The Hon. MARK LATHAM: I move:

That this House supports the abolition of the NSW Climate Change Fund, which will deliver lower electricity bills across the State, and put an end to wasteful spending that has nothing to do with climate change.

It is well overdue to axe the New South Wales electricity tax. It is a $300 million slush fund. The money is collected from electricity distributors and passed on to consumers in both the household and business sectors. That amounts to $70 to $80 per year per consumer in this State. While the fund claimed to have some usefulness early on when it was mainly used for converting household appliances to more energy-efficient uses, one needs to ask: How many times can people buy an energy-efficient toaster? That tends to happen once in a household—people convert to more energy-efficient appliances and get on with being more energy efficient. You cannot keep coming back with these subsidies again and again.

The Hon. Adam Searle: There are more households now, Mark.

The Hon. MARK LATHAM: Inevitably, a fund such as this logically loses its usefulness over time. The Leader of the Opposition interjects in defence of the fund. Surely he must be concerned that, whereas the fund used to record in its annual report its impact on emissions, that no longer happens. What sort of fund costing $300 million a year and driving up electricity prices around New South Wales does not report about the impact it might be having on emission levels? Furthermore, what sort of fund fails to provide any accounting on the reserves held for the money not spent? It has been suggested to me that the fund's reserves—there is nothing recorded in the annual reports—could run to $1.3 billion. That is an extraordinary amount in what we used to call a hollow log. I am sure the shadow Treasurer will examine that matter very closely.

There are many arguments that the fund has had its day in terms of accountability and usefulness. Every member speaks in the media about how their party will lower electricity prices. The immediate way of doing that in New South Wales is by axing the electricity tax in the form of the climate change slush fund.The Daily Telegraph—acting on my very able question on theNotice Paper that elicited the information—published the reality that the fund is now being spent on flood mitigation. What has that got to do with climate change?

Ms Cate Faehrmann: Oh!

The Hon. MARK LATHAM: Wasn't the dam drying up and wouldn't fill again? Ms Cate Faehrmann's mentor, Flannery, said the dam would not fill again. Why are the flood mitigation works in marginal seats? It is a slush fund. The fund is being used for koala protection. That is a noble cause, but should it be at the expense of higher electricity prices? The fund is being used for national parks access. I congratulate The Nationals on supporting at their recent Inverell conference an excellent resolution to abolish the Climate Change Fund. I know that the Parliamentary Secretary for Energy and the Arts takes a close interest in these matters. Given the immense power he wields inside The Nationals—and in the halls of their conference—it would have been impossible to pass a motion to abolish the Climate Change Fund unless the Hon. Ben Franklin agreed with it. Without his support, it could not have possibly passed the National Party conference.

Each of The Nationals members who are in the Chamber—the Hon. Wes Fang, the Hon. Ben Franklin and the Hon. Niall Blair—of course always act on the resolutions of their rank and file. They are men dedicated to being in touch with the views of National Party rank-and-file members and branches. When The Nationals support a resolution to get rid of the climate change slush fund and drive down electricity prices in New South Wales—saying that the fund has run its course, is not accountable, is not reporting its impact on emissions, is not reporting on its reserves and its day is done—of course The Nationals members in this place will vote in line with that conference resolution. I am pleased to be doing the work of those National Party MPs by putting this motion before the House. I welcome the fact that The Nationals will support the motion. There are six of them and there should be five of us, so we have 11 votes in the can and we are looking to build on that number.

I know that the shadow Treasurer is looking at the hollow log. Labor Party MPs are worried about high electricity prices impacting on working-class families in western Sydney and driving up the cost of living—it is a universal theme in today's politics. So the obvious thing to do with a fund that is not performing its original purpose is just to get rid of it, bring down electricity prices and give the long-suffering consumers some relief when it comes to power costs. This is a very fine motion that should do quite well in the Chamber.

The Hon. BEN FRANKLIN (21:35): I oppose the motion moved by the Hon. Mark Latham for two fundamental reasons. The first reasons is the fund contributes to programs that deliver energy savings and reduce emissions, programs that deliver reliable, clean and affordable energy, and programs that increase resilience to a changing climate. The Empowering Homes program is an example. It is a great program announced during the recent State election campaign that will enable the installation of more than 300,000 solar battery systems across the State over the next 10 years by giving home owner-occupiers access to interest-free loans for the purchase and installation of those systems.

It will unlock $3.2 billion in clean energy investment over the life of the program, adding up to 3,000 megawatt hours of storage into the New South Wales energy system when it is done. It will create jobs, reduce emissions, increase system security and reliability, place downward pressure on energy costs for all users, and it is being funded out of the Climate Change Fund—so too will the Smart Batteries For Key Government Buildings program, the Solar for Low Income Households program and the Regional Community Energy program. They are excellent programs. They are lowering emissions and lowering costs, and I am proud to support them.

But there is a second reason. The motion considers abolishing the Climate Change Fund but there is no consideration whatsoever of the unintended consequences and what it potentially could mean. What will the flow‑on effects be? What will the potential costs be from breaches of contract? What will be the budgetary impacts? We cannot in two or three lines in a motion simply slice something from the budget that could have tens of millions, if not hundreds of millions, of dollars worth of unintended consequences—who knows? Consideration of a motion like this involves proper assessment of its economic impact. What is the alternative? How will we fund the excellent initiatives such as the ones I have talked about already? As fond as I have become of the Hon. Mark Latham, this motion is reckless. It will have a range of negative consequences and it must not be supported.

The Hon. ADAM SEARLE (21:38): The Opposition joins with the Government in opposing this motion, but perhaps for different reasons. We do not share the Government's rosy appreciation of the successes of the fund over past years. This is a government that—to use the words of the Hon. Mark Latham—has treated the fund as a hollow log. It has underspent the resources placed in the fund over a number of years. Yes, there were problems—a lack of transparency around reporting and raiding the funds in the bank account for projects that, at best, had only a tangential connection with climate change. The matters cited were things such as resealing roads because somehow global warming had melted the asphalt. The Government was moving resources from the Climate Change Fund to fund bushfire mitigation measures that were originally funded from the budget.

The Government raided the fund in a manner that should not be allowed, but that is not a reason to abolish it. It is a reason to impose tighter conditions around what may be spent out of the fund and how the funds may be applied to ensure that they go to genuine climate change adaptation and mitigation measures, as occurred when the Climate Change Fund was established by the former Labor Government. The Opposition contends that the Climate Change Fund should be returned to its original purpose, not abolished. The Opposition urges all honourable members to join us in opposing the motion.

The Hon. NIALL BLAIR (21:40): My contribution to the debate will be brief. I could not fail to state for the record that some new initiatives exist for which I take credit. When I was the Minister for Primary Industries, I partnered with the NSW Farmers Association and we came up with a range of projects to help farmers consider new ways of farming and reduce energy costs on their farms. That was funded through the Climate Change Fund. I dismiss the generalisation that the fund was used as a way of addressing budget black holes or directing funds to a particular sector. The Government worked very carefully with the NSW Farmers Association to identify projects that would make a real difference on the ground for farmers, such as how farmers would adapt to new types of pastures, considering their energy use on the farm, and finding better ways of managing that energy use. All those projects met very clearly the criteria of the Climate Change Fund and they will make a big difference to the farming sector in this State. I needed to state that for the record during this debate.

Ms CATE FAEHRMANN (21:41): The mover of this motion, the Hon. Mark Latham, stated in his inaugural speech just a few months ago that he is not a climate denier and he also said that he respects the science. Yet in his speech tonight he signalled to the Government that One Nation would support upgrading our capacity to tap into Queensland's energy—which he described as "coal rich"—and that One Nation would support the State Government tendering for a supply contract exclusively for coal-fired power. He also stated that One Nation would support the abolition of all targets, subsidies and special deals for renewable energy supplies. He said that One Nation would support abolishing the New South Wales Climate Change Fund, which is the true purpose of this motion. He also expressed support for coal seam gas in Narrabri and Pilliga.

The New South Wales Climate Change Fund is very small compared with what the New South Wales Government should be spending to manage climate change, but it is important because it represents vital action by the New South Wales Government to support climate change management. The Government is not doing much at all. Why is it so important for the New South Wales Government to do anything about climate change? Unless Government members have been living under a rock, they will know that so much more needs to be done when it comes to climate change. According to the Intergovernmental Panel on Climate Change [IPCC], the reduction in global emissions needs to peak by 2020 if we are to have any hope of keeping global warning within 1½ degrees.

In New South Wales last summer there were record-breaking temperatures. Noona in New South Wales recorded a new minimum overnight temperature of 35.9 degrees and Broken Hill recorded unprecedented temperatures of 45 degrees over four consecutive days. White Cliffs, Wilcannia and Albury recorded their hottest days since records began. Europe has endured the hottest summer ever. France experienced its hottest ever temperature of 45.9 degrees. The Artic is burning, for goodness sake! Peatlands, which are the second largest carbon stores on earth—second only to the ocean—are on fire. Temperatures in the Artic are increasing at a much faster rate than the global average. We know that climate change is well and truly upon us, yet we have the Hon. Mark Latham from One Nation sounding like Tony Abbott. The Hon. Mark Latham talked about electricity taxes and tried to be the Tony Abbott of One Nation—and he will probably go the same way as Tony Abbott in his political career.

Mr JUSTIN FIELD (21:44): My contribution to this debate will be brief. It probably does not surprise many to learn that I oppose the motion. However, I share concerns expressed about the Climate Change Fund. I have been most vocal about the underspend of the Climate Change Fund and critical of the Government for not doing more with the financial resources it has. It is an absolute disgrace for the Government to have money in its coffers when now is the time to be spending it on mitigation and reducing carbon emissions. I was not surprised to read the article in today's edition ofThe Daily Telegraph, but I checked the source of the information through the questions upon notice process. I was interested to see this question:

How much would the average New South Wales electricity consumer save per annum if the Climate Change Fund was abolished?

The answer states:

The average NSW household would not save money if the CCF were abolished. Between 2017-2022, the average household will pay around $22 to the fund each year. During the same time, CCF funded programs will save the average household approximately $61 in energy costs each year.

I wonder whether that answer was given toThe Daily Telegraph—I am not sure whether the newspaper would publish it. However, the premise of the argument—that abolition of the fund will save people money—is a lie. It is not true. We have the Minister's answer on paper, but of course we have known the answer for many years. The first big international reports on climate change were economic ones. The Stern report and the Garnaut report were about the cost of inaction being much greater than the cost of taking action. It is a real shame that the money in the Climate Change Fund is not being spent on things that will make a difference.

Tonight we should be debating why we have not set out a legislative pathway for the Government to meet its own targets. Without putting a pathway on the record of this House, there is no way the Government will reach its net zero emissions target by 2050. That target is the bare minimum that must be achieved simply to survive on this planet. We need to do more. I appreciate the full-throated support of the Government for the Climate Change Fund in this debate tonight, but I plead with the Government to spend the fund's money on things that will make a real difference.

At the time of the Snowy Hydro sale, I advocated that all proceeds of the sale should be directed to the Climate Change Fund and to regional communities for projects that will reduce emissions and help those communities to cope with the challenges that climate change is bringing to the bush. What a missed opportunity it was when the Snowy Hydro money was not used to make a real difference, especially in the lead-up to the drought. I hope we do not have another drought that results in the very same situation for regional communities that right now are feeling the brunt of the impacts of climate change. I thank the Hon. Mark Latham for moving the motion and for giving members an opportunity to discuss this issue in the House.

Mr DAVID SHOEBRIDGE (21:47): As a Greens MP, I too oppose the preposterous motion that has come from One Nation seeking the abolition of the New South Wales Climate Change Fund. It is notable that the Government opposes the motion, which is good. But the idea put forward by One Nation that the Climate Change Fund and addressing climate change are pushing up electricity prices is plainly laughable. One Nation members have been drinking too much ofThe Daily Telegraph Kool-Aid and have failed to recognise some of the most significant developments delivered to retailers and households in the past few months as a result of renewable energy.

Last month, as a result of the vast increase in wind and solar renewable energy delivery in South Australia the wholesale price of electricity in the South Australian market fell to zero dollars. That occurred because so much renewable energy was being pumped into the grid. Renewable energy done well drives prices down. The reason the cost decreased to zero dollars is that, once renewable is installed, it has a next to nothing delivery cost.

What is preventing electricity prices going down is the Jurassic attitude coming from One Nation about climate change. If we want to address electricity prices, we invest in renewable energy. If we want to make that effective and cheap, we invest in the grid so that renewable energy can be supplied 24 hours a day. That is how we drive down energy prices. The nonsense that is coming from the likes of One Nation, supported by some rogue elements of the coalition that nuclear is somehow going to be the solution to energy prices, is utterly out of this planet in terms of economics. The cost of the two major nuclear reactors that are being built in the United States and Europe is something in the order of $30 billion to $40 billion each. That is $30 billion to $40 billion to build a nuclear reactor on a 20-year construction program. Even if nuclear power was—and it is not—a rational solution to climate change, the thought that that would drive down energy prices is like talking to an energy advocate from Mars. Their views should be kicked out of the Chamber. Their views on the Climate Change Fund are extraordinary and we oppose this motion. [Time expired.]

The Hon. MARK BUTTIGIEG (21:50): I oppose the motion. With due respect to the former leader of the Labor Party, he is barking up the wrong tree. By and large, the reason we have high electricity prices is because retailers are gouging the market because the Government lifted the cap on what retailers could charge. There is a monopoly on generation, combined with an oligopoly in retail. The generation and retail markets are colluding to push prices up. The network charges that contribute to consumers' electricity bills have been brought under control as a result of the Australian Energy Regulator driving down network costs. The problem is that retailers are gouging and generators are colluding to manipulate the market. The problem is not the Climate Change Fund. The fact that the Climate Change Fund might not be spending its money efficiently is a separate issue altogether which needs to be fixed, as my colleague the Hon. Adam Searle pointed out. That is the crux of the problem. I oppose the motion on that basis.

The Hon. MARK LATHAM (21:52): In reply: The great Peter Walsh once said, "The Greens get their economics from the fairies at the bottom of the garden." That fantastic notion was on display this evening—we can all pay $300 million to the State Government but we are better off as electricity consumers. This is a fantastic notion. Then there is the idea that in South Australia electricity is free. I suppose in the middle of a blackout it is free. If they are not supplying the resource, they cannot be charging for it. This Martian energy advocacy that we have heard from The Greens shows that at the bottom of the garden they are getting no better, no more rational and are of no more to anyone in this debate or consumers. We heard from The Greens but for all the usefulness they claim is in the climate change slush fund, they could not point to anything it has achieved. Can they identify the emission reduction? It is not in the report. Nobody knows.

How can The Greens support a $300 million impost on households and businesses in New South Wales when they cannot point to any improvement in carbon emissions? If this fund is unable to report on any improvement in carbon emissions, how could any person be supporting it? How could such a proposition be supported? It is fantastic to think we are all better off; the energy is for free. We pay the $300 million but nobody can say what the impact is of this saving the planet project. The truth is, The Greens have never seen a tax they did not like. Any tax at any time will do. It does not have to report, it does not have to be logical. As long as it is hurting working people, putting them out of work and driving up the cost of living, The Greens are happy with any tax, at any cost, at any time.

I welcome the comments by the Hon. Adam Searle that are critical of this fund, but those criticisms verify the need to close it down. Its usefulness has expired and the Government is clearly using it as a slush fund for flood mitigation in marginal seats, national park access and all things unrelated to climate change. Therefore, it should be closed down. If Labor comes up with an election policy about something that is better for the future, we will examine that in due course. On the Government side, I was immensely impressed, as I always am, by the energy and commitment of the Hon. Ben Franklin.

But I am sure all those good members of the National party who rocked into Inverell would be saying where was he at the conference? His speech would have been ultimately impressive and persuasive in Inverell, but in the absence of it one can only assume there is not much point being an Energiser bunny in Macquarie Street if you are as mute as a Trappist monk in Inverell. The Hon. Ben Franklin has got the commitment and the energy to put on a display on all occasions to persuade the rank and file members, but tonight I am with the rank and file members of the National party. They want this slush fund closed down; I am with them 100 per cent.

The DEPUTY PRESIDENT (The Hon. Shayne Mallard): The question is that the motion be agreed to.

The House divided.

Ayes: 5

Noes: 36

Majority: 31

Motion negatived.