Wednesday, 19 June 2024

Energy policy

David DAVIS (Southern Metropolitan) (16:56): I move:

That this house notes that:

(1) the RedBridge EnergyShift tracking poll, conducted in May, shows 64 per cent of Victorians were supportive of the use of natural gas in the energy transition, significantly more than voters in any other state and compared with 56 and 54 per cent in Queensland and New South Wales respectively;

(2) the poll also shows that:

(a) 71 per cent of Victorians believed blackouts were very or somewhat likely, compared with 67 per cent nationally;

(b) Victorians overwhelmingly prioritise cost and reliability in the shift to lower emissions energy generation;

(3) Victorians know Labor’s energy policies are chaotic and ineffective and that Labor, by insufficiently firming inherently intermittent renewable energy generation with gas-fired generation capacity, has botched the transition to low-emissions energy;

(4) the supply of natural gas from Bass Strait is likely to reduce over the next few years, yet the Victorian Labor government has not issued a single conventional onshore natural gas exploration permit in its almost 10 years in office;

(5) the St Vincent de Paul and Alviss Consulting report titled ‘Observations from the Vinnies’ tariff-tracker project’ found the price of electricity to households had increased by 28 per cent in the year to January 2024 and the price of gas by 22 per cent;

and calls on the Premier, the Honourable Jacinta Allan MP, and the Minister for Energy and Resources, the Honourable Lily D’Ambrosio MP, to rethink their extreme ideological opposition to natural gas.

I want to begin by pointing to the hypocrisy of the state government’s gas position. It is clear from the tracking polling done by RedBridge and others that the state government is way away from the Victorian community on their attitude to gas, far from the Victorian community on their attitude to the energy transition and far from the Victorian community on the priorities that are put for reliability and security of supply but also, importantly, affordability. If we are going to move in a sensible transition, we need to have the community support that. The community will not support it if the costs jack up and jack up and jack up, and that is what has been happening under Labor. We have seen this year after year in recent years – up, up, up, up. A tiny little bit down on the default offer this year but still most Victorians are going to be paying far, far more than they were two years ago or four years ago. This government is a high-taxing government but it is also a very, very high energy cost government. The risk is that Victorian businesses are priced out and that Victorian households and consumers are absolutely clobbered and thumped by this government as they are unable to have the sort of energy supply that I think they all deserve.

Victorians deserve reliable energy. They deserve secure energy supplies. They deserve a fair and affordable price for energy. They do not deserve the high costs that this government is delivering. We know that the government’s plans are on renewable energy, and there is a very strong place for our renewable energy transition, but it has got to be done with community support and it has got to be done in a way that is going to deliver fair costs. We know that the state government is loading up cost after cost after cost into the energy that is transmitted. It already takes hundreds of millions of dollars a year in land tax.

Michael Galea interjected.

David DAVIS: You may not know that, Mr Galea, but hundreds of millions of dollars a year are scooped out of electricity bills and paid straight to the state government. They are not spent on energy in any form; they just go straight into the general consolidated revenue of the Treasury. The cost impositions by the Victorian state government on the energy sector are profound, and those costs are feeding all the way through the system.

But it is also, as I say, the reliability that is important. We saw an event earlier this year. It was a natural event, but it pointed to real failures in the system – failures of towers, failures of backup and failures of systems across the whole arrangement. The clear point here is that the state government has lost control of energy. It has lost control of the energy transition. I have to say nothing could highlight this further than the story in the Australian today, and this is by Rachel Baxendale:

The Victorian government is seeking tenders for gas supply to its own departments and agencies …

The value of the two contracts it is replacing is $85 million a year, but they are replacing those contracts. The likely cost is well in excess of $100 million. That is the fact. So you have got the state government with its energy substitution road map wagging the fingers and pointing at businesses, pointing at families and saying, ‘Families, we’re going to close down your options of gas under the gas substitution road map. No gas for you. You won’t get any gas.’

We have stopped gas already on new estates – banned from 1 January – and we have stopped gas rebates on new appliances, so if you go and get a new gas appliance now, you cannot get a rebate. You can get one on electricity, but you cannot get one on gas. That of course hits the poorer people, those in financial trouble, hardest. If you have got a house and you want to replace the gas appliance, ‘No rebate for you’ – the wagging finger of Labor, the wagging finger of Lily D’Ambrosio, thumping and hitting and hurting poorer people. Those who are less well off in this state are struggling, and they are the ones that are being made to pay the price of Lily D’Ambrosio’s wagging finger and choice to ban and stop you having access to gas and the choice that is required.

I have to say this is inconsistent with the federal government’s gas strategy. The federal government’s gas strategy makes it clear, and you can go and read it yourself. In principle 4 it lays out a requirement that choice remain for gas. That is what the federal Labor Party says but not what the Victorian Labor Party says. The Victorian Labor Party says, ‘No, you will not have gas. Gas will be banned.’ The state government is going through a regulatory impact statement now, and it is taking further steps to ban and crush the choice of Victorians to use gas for anything.

There is a little bit of a whisper that the minister might step back a bit from her hardline ideological position with respect to gas and the need for peaking power. We know that where there are intermittent renewables there will actually need to be some firming capacity, and gas is the obvious firming capacity that is going to be used. We still do not have clear statements from Minister D’Ambrosio about this, but we can detect that there is some movement. Certainly the word I hear inside Labor is she is toxic. Nobody wants to go near Lily D’Ambrosio because of the position she has adopted on gas.

Harriet Shing: On a point of order, President, Mr Davis has just used incendiary language about a minister from the other place. Perhaps something that is less personal and incendiary might be a way that he can rephrase.

The PRESIDENT: I will just call Mr Davis back to his motion.

David DAVIS: The truth of the matter is that the government’s gas substitution road map, which has been overseen by Lily D’Ambrosio, is a nasty attempt to hurt poorer people and make it difficult for those who are less well off. It is actually positioning the state very, very poorly. The truth is that the plan that Lily D’Ambrosio is oversighting has become toxic inside the Labor Party. Many inside Labor – and I hear it from your colleagues, I have to say, President –

Members interjecting.

David DAVIS: Well, no, some of them are, actually. You might find that interesting, but some of them are. That is the point. Let me just go further here to explain the tender that I started with today. $85 million is the replacement cost. Nobody believes the new government gas tender will be less than $100 million at the minimum. This tender has gone out for government gas, so the government wants gas for its facilities – its arrangements – and of course that should not surprise us, because obviously hospitals and government buildings often have gas brought to them, and that plays a significant role in some government activities. So we would not be surprised at that, but we would where the state government is banning gas for others. We have got this hypocrisy that is operating here. I noticed, when I read down the article today:

The government effectively outsources this to Victorians through their power bills, with the Victorian Renewable Energy Target scheme requiring retailers to purchase energy efficiency certificates to offset their emissions, and the cost of those certificates passed on to consumers.

Again, another clobber on customers, another clobber on price, another hit on affordability and another hit that strikes most sharply at the poorest people in our community, the ones who can least afford to pay. The ones who are getting the bonus for the electric cooktop – the snappy induction cooktop – are getting the rebate on that, but the rebate is being paid largely by poorer people who are less well off who are not able to get the rebate because they cannot afford that.

Gas Appliance Manufacturers’ Association of Australia CEO Ross Jamieson said the government tender for gas supply was a “clear acknowledgment that gas will play a crucial role in Victoria’s transition to clean energy, particularly in buildings where retrofitting is very expensive”.

“However, it is rather peculiar this liberty is not being extended to small businesses, renters and home buyers in Victoria,” Mr Jamieson said. “The government continues to roll out measures to force households and small businesses off mains gas and, in so doing, removing choice and competition, and potentially imposing high conversion costs on to those that can least afford them, while the government refuses to bear those high costs themselves.

“This hypocritical policy position is not surprising –

he said –

coming from a government that has refused to compromise when GAMAA presented a modest request for an additional two years to prepare before the ban of new gas connections.

He said:

Their ideological stance against gas has already resulted in hardworking Victorians in the manufacturing industry losing their jobs, and has put small family businesses in the firing line. There is clearly one set of rules for the Victorian government and another for everyone else.

A rule for the Victorian government and a rule for everyone else. I do not think we should be surprised at what is going on here. This is a hypocritical government. They have got one rule here for their own facilities and another one over there for families and small businesses who are being thumped. As much as you might not like it, and as much as some of the Labor people may not like to hear this, that is the truth of what is happening.

Members interjecting.

The PRESIDENT: Order!

David DAVIS: Thank you, President. I am trying not to respond to the interjections. I am trying to resist the provocations. I am trying very hard to make sure that I stay on the points here.

What I want to say here is that RedBridge in its poll, and we all understand the RedBridge Group and the background of the people in the RedBridge Group, but –

Members interjecting.

David DAVIS: This is a RedBridge poll – that is right. Sixty-four per cent of Victorians were supportive of the use of natural gas in the energy transition – much higher than New South Wales and Queensland, as I have said. The poll also pointed to the view that 71 per cent of Victorians believe blackouts are very or somewhat likely, compared with a lower percentage nationally. Importantly, Victorians know Labor’s energy policies are chaotic and we need to see a proper input of gas.

This government has not bothered to support exploration for gas. There has not been a single permit granted since 2013 for exploration for gas onshore – conventional gas – in Victoria. Why on earth we would not have onshore conventional gas exploration to bring forward the gas that is needed is beyond me, but this government has kept that position. It says it removed the formal ban in 2020 – well, that is a very long time that it kept the formal ban in place – and it says it has not opposed the exploration and that no requests have come forward. For the long period that there was a ban in place, there was simply no point, and the vibes that this government has put out on gas have been so negative, so punishing, that nobody really wanted to go to the effort of putting in an application where they felt it was going to be pre-emptively or quickly rejected. The truth is this government has not searched for gas and has not allowed gas to be hunted for or explored for in this state in a constructive way, because the government has blocked the applications and sent out –

Tom McIntosh interjected.

David DAVIS: Your government kept the moratorium all the way through. Our government gave permits – our government gave three permits in 2013. Yours has not given a single exploration permit since 2013. It is a long, long time ago – 11 years ago. Your government has done the damage by blocking the exploration all of that time. Your government has done the damage and made it very difficult now to bring on the gas supply that is needed. The reason it has done it is because Labor hates gas – Victorian Labor hates gas. They hate gas in all its iterations and all its uses, and they are punishing those who think that gas has got a future and a role. Labor is determined to punish Victorians who want to use gas in a constructive way. Gas of course has got a role in houses, it has got a role in industry and it has got a role in helping the energy transition with peaking power. It is the only immediately available fuel that can do the work to provide that.

We are obviously going to need to bring more gas into Victoria. I know from the conference I attended in WA with the Australian Energy Producers association, which saw important presentations on some of the gas fields that are there around the country, the progress that can be made on different fields and the timeline in which that can be made.

Business interrupted pursuant to sessional orders.