Danny O’BRIEN (Gippsland South) (18:57): I have got a couple of minutes to speak on this bill. I was not actually going to speak, but I have just been listening to some of the diatribes coming from the other side about what a wonderful job this government is doing on energy. It is really disappointing that the Minister for Energy and Resources and Minister for the State Electricity Commission is going out the door as we speak, because I have actually been listening to what has been said over there and what government members are saying: ‘It’s such wonderful stuff, the policy that this government is producing. The SEC, it’s going to save us all, it’s going to drive down prices, it’s going to deliver renewables.’ I cannot remember which one said it, but I think it was the member for Bentleigh who said that, thanks to the SEC, we will be able to deliver renewables, because apparently the SEC invented renewables and that is the only way we are going to get any. Well, that will be news to all the developers around the world that have been delivering renewables without the assistance of the SEC for some time, in particular the Star of the South.
I heard the member for Ringwood and the member for Bentleigh and the member for Point Cook talking about offshore wind – ‘our offshore wind plans’, the Labor government members say. Star of the South first came and saw me about an offshore wind project off the Gippsland coast in 2017. When was the first time this government mentioned it? In 2021 – four years later, after the private sector had already started developing an offshore wind farm. Now this government is trying to claim credit for it.
We heard the member for Ringwood say, ‘We’re great here in Victoria. We’ve got Bass Strait, we’ve got great wind, we’ve got close connections to the Latrobe Valley.’ There was no mention of the people in between those connections in Bass Strait and the Latrobe Valley who are going to have 80-metre-high pylons marching across their landscape to connect all of this. We have got this great offshore wind farm that is going to be fantastic for Gippsland. The government says there will be lots of jobs and we going to have the port in Hastings. We are going to build a brand new port in Hastings and completely ignore the Gippsland ports. I think there could be great opportunities for us in offshore wind, but Gippsland runs the risk of seeing this government have giant offshore wind development going off our coast and absolutely nothing coming to Gippsland in terms of the jobs because they are choosing Hastings and ignoring the opportunities for Gippsland in somewhere like Barry Beach.
We have heard from the Public Accounts and Estimates Committee hearings –
The DEPUTY SPEAKER: Order! I am required under sessional orders to interrupt business now. The member may continue next time we revisit the bill.
Business interrupted under sessional orders.
Danny O’BRIEN (Gippsland South) (18:06): I have the call from last night, and I was in the midst of talking about the government’s SEC policy, which has attracted a lot of support from those on that side who do not really seem to understand it. I took great pleasure in asking some questions about this in the Public Accounts and Estimates Committee hearings only a couple of weeks ago and trying to marry up what is actually happening with the SEC with what the government promised. One of the things that came to my attention was I asked interim CEO of the SEC Mr Miller about the investments that the SEC would be making and would it be solely Australian co-investments. He said the details had not yet been worked out, and I said, ‘Is the government precluding foreign investors from bidding for work with the SEC?’, and the answer was no, there is no preclusion.
I was reminded that the Premier said repeatedly through the election campaign that the Labor government was about offshore wind, not offshore profits. Now, post election, we get a different story, which is pretty similar to what we have been hearing about a lot of things. The Commonwealth Games is one that comes to mind. Logging is another one that comes to mind. Rail projects are another one that comes to mind. There are a lot of things. We were told ‘offshore wind, not offshore profits’ yet now we hear from the SEC there is no prohibition on them taking investment from foreign corporations. In fact it may well be that the new state government entity will be investing in renewable energy projects with foreign companies, which would be a complete breach of the Premier’s repeated promise in the election campaign.
Probably more fundamentally, while that was the spin of the government during the election campaign, my concern with the SEC and what this government is doing is it is putting in public capital at a time when private capital is very anxious to invest in renewable energy. We heard the member for Bentleigh say that the SEC will allow us to deliver renewable energy. Well, the renewable energy is being delivered anyway. This is my concern that I have always had with this SEC policy: there is absolutely no reason for taxpayer capital to be put at risk in these projects. I asked the question, ‘What will the government invest in?’ Mr Miller indicated – in fact I could probably read the actual sections – that basically they are looking for a project that is already very well advanced using a mature technology and something that they can get happening very quickly. Indeed the Minister for Energy and Resources herself said it. When I asked about it she said:
This is absolutely no doubt about bringing forward projects that may otherwise be later in their delivery or indeed not happen at all.
Which begs the question: why is taxpayers money being spent on projects just to (a) speed them up when they were going to happen anyway or (b) if they were not going to happen at all? Presumably that would be because they were not commercial projects. How is the government going to give some satisfaction to the taxpayer that their resources are not going to be risked or frittered away or wasted on projects that were going to happen anyway or that were not commercial and did not stack up? Of course I asked a bit further about that. I asked Mr Miller if the SEC or the Treasury had set a rate of return that they were expecting from investments, and the answer was ‘not yet’ even though the government is expecting to invest probably by the end of the year in a project. That was the estimate, and indeed the budget process actually has $600 million in the budget for 2023–24 for investing in projects. I think I would have to say it is a heroic assumption that any of that money will be out the door before the end of 2023–24 given where we are at with this. But again, if it is, it just highlights that that is a project that was going to go ahead anyway and does not need taxpayers funds.
The other issue I want to touch on with respect to the government’s spin on the SEC is that this was sold as somehow going back to the old SEC: going back to a state government owned corporation that runs the entire electricity system – the generation, the poles and wires, the retail arm and everything. Well, we had the minister rule out the poles and wires. She said straight out, no, we are not going into transmission or distribution. They have not ruled out going into retail, which horrifies me enough as it is. But more particularly, in terms of generation, the notion that the government investment in the SEC will bring down prices is such an economic and political fallacy, because it will be a tiny player in the future energy market. Do not take my word for it – I asked the minister herself. I said, ‘What proportion do you think we’ll be by 2035?’ So by 2035 the government’s policy is 95 per cent renewables, and of those renewables the minister says the new build will need to be 25 gigawatts of new generation by 2035. And I said, ‘What will the SEC be of that?’ Well, the SEC will be 4.5 gigawatts. So less than 20 per cent of new generation will be not only the SEC, because this will be co-investment with others, so the taxpayer component will be even less than 20 per cent. And yet somehow we are supposed to believe that these investments – which are going to be in projects that are going ahead anyway or are not commercial enough for the private sector to push them, and then they are going to be less than 20 per cent of the total market – are going to bring down the price of electricity for Victorians. I just find this to be a massive, massive con.
Steve Dimopoulos: Sometimes the private sector needs its hand held.
Danny O’BRIEN: Well, the private sector is doing it all very well on its own, Minister. You know, I have been talking about the offshore wind in my electorate, where they are lining up to invest in the offshore wind industry, which the government itself, as I said last night, is trying to claim as its own project when in fact it is not. It is investing in Hastings instead of Barry Beach – closer to the offshore wind – which is only going to increase the cost for the offshore wind in my opinion. But this is all part of the spin that this government is putting together with respect to the SEC and energy prices, and it will fall flat on its face.