Saved by Senate? CEFC defended by Greens, others less predictable

Senators Madigan and Xenophon ride to rescue of CEFC, while Greens Senator Ludlam makes a speech that should have been made by a conservative.

The future of the $10 billion Clean Energy Finance Corporation is looking more secure, at least until the end of this financial year, after Independent MP Nick Xenophon and DLP Senator John Madigan indicated their support for the green energy development bank.

It’s a slightly ironic turn of events, given both are on the record as being anti wind energy, but perhaps a sign that some politicians can look past their bugbears to see the bigger clean energy picture. Or perhaps they are attracted by the CEFC’s promise to invest in new technologies that can compete with wind.

In a speech to the Senate on Wednesday, Senator Madigan urged the government to retain the CEFC, and suggested the move to abolish it was ideologically driven.

“(The CEFC) is not providing grants to fund projects,” he said. “It is not giving away taxpayers’ money. It is a pro-industry development bank that is helping drive private and public investment in lower emission and cleaner energy technologies.

“It is helping our farmers and our manufacturers to reduce their costs and to use energy-efficient equipment. It requires borrowers to be responsible, to deliver on their project commitments and to repay their borrowings. It leverages private capital to invest in areas they might otherwise ignore, like energy generation using methane emissions from farms and industrial processes.”

Madigan also credited the CEFC with “contributing to sane, sustainable, measured investment in the short, medium and long term,” and fostering local industry development on a responsible basis. He said this compared to the “idiocy” of investing $65 billion in infrastructure to support gas exports.

But the prize for best and most impassioned Senate speech in defence of the CEFC would have to go to WA Greens Senator Scott Ludlam, who repeatedly pointed out the lack of Coalition Senate representatives to argue their side of the debate.

Here are some highlights from Ludlam’s speech:

“What kind of government takes stock of the collective years of experience of the public sector, bolstered with the kind of private sector expertise that we see within the Clean Energy Finance Corporation, and immediately embarks on a process of mass sackings and redundancies?

We know who has set the template: people like Colin Barnett and Campbell Newman, a yawning vacuum of imagination, yesterday’s men who have somehow deluded themselves into thinking that something as powerful and dangerous as the global climate system can be subordinated for momentary political advantage.

So this is your big moment. This is the moment where you propose to dismantle the Clean Energy Finance Corporation, which will cost the budget something in the order of $200 million a year and crash the renewable energy sector in Australia just as it is finding its strength.

What I do not understand is why all of you on that side of the chamber are suddenly looking so shaky. All the bluster has gone out of you. The Liberals put up one speaker yesterday, Senator Abetz, who quickly ran through the same tired talking points that he has been reciting for three years and then sat down.

The rest of the Liberal Party have stayed in their offices and the Nationals have not showed up at all at your moment of triumph, and that is what I am struggling to understand.

In one year, the Clean Energy Finance Corporation has already achieved nearly four million tonnes of carbon emissions abatement—more than half of our annual target. For all of the strange financial illiteracy on display on the other side—people calling it a hedge fund or Bob Brown’s bank—this is not a grants organisation and this is not writing out cheques that the Commonwealth does not get back. It is making money for the taxpayer of approximately $2.40 for every tonne of carbon abated.

Who knew that you could actually make a financial return to the taxpayer at the same time as eliminating greenhouse gas emissions and creating jobs in the sunrise industries of the 21st century? It is generating a 7.3 per cent return on investment, which is nearly four per cent above the standard government bond rate. It is an entity that is filling the budget vacuum that has been left by your proposals to abolish the carbon price and the mining tax and it attracts just under $3 from the private sector for every dollar that it invests.

How awkward for you to discover in a committee hearing that this entity that you propose to wreck is actually making a financial return to the taxpayer. How exactly does that square with your budget emergency and your desperation to attack the Public Service, cut education spending, cut health spending and abolish public transport funding because you are in such a desperate budget emergency? Yet, at the same time, you line up to kick apart an entity that is making, and intends to make, a $200 million return on the taxpayers’ investment.

The CEFC, as others have noted, is one of 14 co-financing institutions around the world that are catalysing and creating huge investment in renewable energy. Bloomberg New Energy Finance believe the investment in one year is upwards of $58 billion in renewable energy and $109 billion in energy efficiency globally. At last we have the Australian parliament and the Australian government doing its bit. As the empty government benches show, maybe you are not quite as proud of this as you might have displayed during the people’s revolt.

I have had a bit to do with the Clean Energy Finance Corporation in Western Australia. They briefed a meeting, ironically enough, of your stakeholders—the mining industry—in Kalgoorlie earlier this year to explain how the mechanism would work. They said: ‘We are not a grants organisation. We are not here to write out cheques that we won’t see again. We are here to get the industry on its feet.’ And the first people at the front of the queue will be the gold and nickel producers in the goldfields who are looking for some kind of hedge against skyrocketing gas and diesel prices. They are the ones who will build the first iteration of this technology in Western Australia. Not because they are driven by the climate imperative—they are driven by commercial imperatives and they are looking to get technology into the ground that can protect them from rising energy costs.”

 

We have just one question: Why wasn’t such a speech made by a Conservative?