Wednesday, 14 August 2024

Statements on tabled papers and petitions

Department of Treasury and Finance

Budget papers 2024–25

David DAVIS (Southern Metropolitan) (17:17): Today I want to draw attention to the budget papers and in specifics the energy output, and I want to talk about where this state is, the difficulties that we face, the challenges we face. I am particularly drawn to the Victorian Chamber of Commerce and Industry paper Securing Our Energy Future: Policy Paper – Part 1, June 2024. I pay tribute to the work that has been done by VCCI, the work in this paper and their advocacy for Victorian industry.

The uncertainty that we face is important for industry; it is also important for households. We need as a community to come together and to ensure that we have secure and affordable energy supplies. What we have seen under the current government is surging gas prices, surging electricity prices, insecurity and businesses being forced to flee the state because they cannot get energy at reasonable and reliable prices. This is a disaster waiting for Victoria. It is a disaster that is steadily unfolding, and it is a disaster that is going to hit our basic economics. We have for a long time of course relied on brown coal and the cheap energy that came from that and on gas, in particular from Bass Strait. The failure of this government to allow onshore conventional gas exploration has left us with a 10-year hiatus. The last exploration licences that were granted were granted in 2013 under the then Baillieu government, and then there was a period where no licences were granted and no licences were available. It was a mistake, and we are paying the price for that mistake now.

At the same time we have seen obviously an intention to move to renewables, which we all understand, with a commitment to net zero by 2050 and a need to move to lower emission technologies for the production of energy. But the reliability is not there at the moment, and we look into the future here and we see the state government understands that in 2028 Yallourn will close; it has signed a secret deal – a dirty secret deal – with the power station there. Nobody knows what is in that deal. We have been waiting since 6 December. That is when the documents motion said they were due. We have been waiting since 6 December for those documents and the truth about what has occurred. In New South Wales the Labor government under Mr Minns did a deal with the power station up there. The details of that are in the public domain, and that stands in stark contrast to the behaviour of the secretive Allan Labor government here and the secretive Minister for Energy and Resources Lily D’Ambrosio.

It is a clear problem though when we are not sure what is going to happen in 2028; it is a clear problem when the reliability of supply is at risk. We have seen the government lay a lot of eggs in one basket in the case of offshore wind, and yet we have seen the problems with offshore wind at Hastings, where the government has been unable to secure federal approvals for the assembly proposals there and for the industrial side of actually making offshore wind farms, which involve large industrial machinery that needs huge construction and assembly activity and needs a long-term plan to actually bring it to fruition. I think it is looking increasingly difficult for this government to get its offshore wind capacity in place in the time that it says. You then look and say, ‘Well, what’s going to happen if they don’t do that?’ There is going to be a hiatus in the period from now through until 2032 and possibly beyond to 2035 as well – a significant hiatus which will do huge damage to Victorian households and Victorian industry.

I think it is important, and I am just going to quote briefly from the VCCI paper:

Natural gas is the nexus between today and the net zero future. It is an enabler that ensures an orderly transition to net zero – both domestically and for our regional trading partners.

It goes on:

Studies have shown that transitioning from coal to gas can now reduce our carbon footprint –

and this is true in the United States, I might say –

at a more rapid rate. The International Energy Agency’s (IEA) report, The Role of Gas in Today’s Energy Transitions, exposes that, in the short term, switching from coal to natural gas reduces CO2 emissions.

Gas-fired peaking power plants are needed to support renewables, not replace them. They are the technical partners of renewables.

(Time expired)