1 September 2017
Adam Searle’s questions to the Resources & Energy Panel:
- The Hon. DON HARWIN – Minister for Resources, Minister for Energy and Utilities.
- CAROLYN MCNALLY , Secretary, Department of Planning and Environment.
- LIZ DEVELIN , Deputy Secretary, Energy, Water, Regulation and Portfolio Strategy, Department of Planning and Environment.
- KYLIE HARGREAVES , Deputy Secretary, Resources and Mining, Department of Planning and Environment.
- LEE SHEARER , Chief Compliance Officer, NSW Resources Regulator, Department of Industry
The Hon. ADAM SEARLE: To be clear, what exactly are you buying back for $262 million relating to exploration licence [EL] 7223? You are not buying any land?
The Hon. DON HARWIN: The Government has agreed to buy back 51.4 per cent of Shenhua Watermark’s mining exploration licence. It is the part of the licence being relinquished that covers the flat fertile agricultural area on the Liverpool Plains, commonly referred to as the black soil plains.
The Hon. ADAM SEARLE: That licence expired in February 2016, did it not?
The Hon. DON HARWIN: I will let the deputy secretary give you the exact date.
Ms HARGREAVES: The exploration licence was due to expire in February. However, the company submitted a legal and appropriate application for renewal prior to its expiration date. Therefore, it remains on hop.
The Hon. ADAM SEARLE: Can you tell us the date you received the application? You can take it on notice. To be clear, you are spending $262 million to buy back half, or 51.4 per cent, of a licence that has in fact expired. That is what you are doing. Is that correct?
The Hon. DON HARWIN: I think the deputy secretary responded directly to that point. I am advised that the deputy sectary can clarify the dates and address that part of your question.
Ms HARGREAVES: Yes, EL 7223 was due to expire on 22 February 2016 and a renewal application for the full 100 per cent retention of the area was lodged on 5 February 2016.
The Hon. ADAM SEARLE: Again, to be clear, you are spending more than $250 million to buy back just over half of something that has expired? You are not getting any land for this price.
Ms HARGREAVES: Nothing has expired if a legitimate renewal has been submitted to the Government. In fact, that licence remains on foot until a determination on that renewal is made.
The Hon. DON HARWIN: That is clear, is it not? The Hon. ADAM SEARLE: Pretty clear.
The Hon. DON HARWIN: Good.
The Hon. ADAM SEARLE: To be clear, the company has had the benefit of that exploration licence now for the better part of a decade, has it not? It has had it for more than eight years.
The Hon. DON HARWIN: Yes, indeed it has. Since it was approved under Minister Macdonald in 2008.
The Hon. ADAM SEARLE: Indeed, and renewed by Minister Hartcher, your close friend, in 2012. Correct?
The Hon. DON HARWIN: Yes, there was a renewal.
The Hon. ADAM SEARLE: Yes, by that Minister.
The Hon. DON HARWIN: There was a renewal, yes.
The Hon. ADAM SEARLE: You do not like Chris Hartcher’s name being mentioned. Are you a bit embarrassed?
The Hon. BEN FRANKLIN: Point of order—
The Hon. ADAM SEARLE: You say there is an application for the whole licence. Does that mean you are still deliberating on what to do with the other 48.6 per cent of the exploration licence?
The Hon. DON HARWIN: Shenhua has not yet been issued a mining licence, of course; only an exploration licence.
The Hon. ADAM SEARLE: Sure. It has not applied for a mining licence yet, has it?
The Hon. DON HARWIN: It has not applied for a mining licence yet, that is correct.
The Hon. ADAM SEARLE: It applied for a renewal of the whole of the exploration lease. Your Government—
The Hon. DON HARWIN: Excuse me one moment, I want to take some instructions. Sorry, would you repeat your question?
The Hon. ADAM SEARLE: It has applied to renew the whole of the EL and the Government has decided not to renew 51.4 per cent but to buy it back.
The Hon. DON HARWIN: Correct.
The Hon. ADAM SEARLE: In relation to the other 48.6 per cent, is it the case that you have not yet made a final decision about whether or not to renew that part of the EL?
The Hon. DON HARWIN: That is correct. It is still being assessed.
The Hon. ADAM SEARLE: If someone was to say an agreement was reached with the New South Wales Government to partially extend the lease, would that be true or false?
The Hon. DON HARWIN: Perhaps you could rephrase that question, because that is not a concept under the—
The Hon. ADAM SEARLE: Is there an agreement with the State Government of New South Wales to agree to an extension of 48.6 per cent of the EL?
The Hon. DON HARWIN: No.
The Hon. ADAM SEARLE: Are you aware that Shenhua, the company you are dealing with, made a statement to the Hong Kong stock exchange on 12 July which states, “On 29 June 2017 Watermark Pty Limited reached an agreement with the New South Wales Government in relation to partial extension of the exploration licence.” Are you aware of that statement being made by Shenhua?
The Hon. DON HARWIN: No, I am not aware of that statement being made.
The Hon. ADAM SEARLE: Is that statement false?
The Hon. DON HARWIN: The statement is not correct as the exploration licence has not yet been renewed.
The Hon. ADAM SEARLE: Again, the statement is false; it is not factually correct?
The Hon. BEN FRANKLIN: The Minister did say that the statement was not correct. I do not know that he can be any more clear than that, Mr Searle.
Mr JEREMY BUCKINGHAM: Was that a point of order?
The Hon. BEN FRANKLIN: No, I was just assisting.
The Hon. DON HARWIN: The language used by Shenhua is a matter for it. I have given you a statement as to what the actual position is.
The Hon. ADAM SEARLE: How did your Government calculate the $262 million and from which budget line item does it come?
The Hon. DON HARWIN: In 2008, under the Labor Government, Shenhua purchased the exploration licence for $300 million. The Government is refunding 51.4 per cent of that amount plus an adjustment for the holding of the capital over the past nine years. That is how the total figure of $262 million is reached.
The Hon. ADAM SEARLE: You characterise it like the Caroona buyback as a refund, is that correct, not compensation?
The Hon. DON HARWIN: Correct.
The Hon. ADAM SEARLE: I again read to you from Shenhua’s statement to the Hong Kong stock exchange on 12 July, “Pursuant to the established policies of protection of agricultural activities on the black soil plains, the New South Wales Government withdrew the exploration licence of approximately 100 square kilometres within the Watermark exploration area and provided Watermark with economic compensation amounting to”—just under $262 million—”and accepted the application for the partial extension of the exploration licence.” That statement is also not true, is it?
The Hon. DON HARWIN: Mr Searle, you should understand that whatever statement Shenhua made to the stock exchange it was not shown to us or approved by us before it was made.
The Hon. ADAM SEARLE: I am not suggesting it was. I am exploring the truth of the matter. You have a major company with whom your Government is doing business saying one thing and your Government is saying something completely different. You say it is a refund; it says it is compensation. It says it has a deal with you about extending the EL; you say it is still being assessed. I am interested in knowing who is telling the truth.
The Hon. DON HARWIN: Yes, but the exploration licence remains on foot until the assessment.
The Hon. ADAM SEARLE: That was not the question.
The Hon. DON HARWIN: I was making sure that you were quite clear on the position.
The Hon. ADAM SEARLE: I am quite clear on that, but the company says it had a deal with you and you say it did not. Are you telling the truth or is the company?
The Hon. SHAYNE MALLARD: Point of order: The Minister has answered this question quite a few times now.
The CHAIR: As we know, the Minister can answer the question as he sees fit.
The Hon. DON HARWIN: We entered into a negotiation with Shenhua and, as a result, it gave up 51.4 per cent of the exploration licence it had. That was the area involving the prime agricultural land on the flat fertile plains commonly referred to as the black soils.
The Hon. ADAM SEARLE: Under the Mining Act, the decision-maker, which is you, is not bound to renew an authority over the area nominated by the applicant. Is that correct?
The Hon. DON HARWIN: Yes, that is correct.
The Hon. ADAM SEARLE: Can you review a smaller amount of the land, as long as it is not different land to the land originally covered?
The Hon. DON HARWIN: Yes, that is correct.
The Hon. ADAM SEARLE: Do you have the discretion?
The Hon. DON HARWIN: Yes.
The Hon. ADAM SEARLE: Is there anything in the Mining Act that says if you choose to renew a smaller part of an exploration licence (EL) the Government is bound to make compensatory payments or refunds?
The Hon. DON HARWIN: It is not an unqualified discretion. There are a limited number of circumstances in which I can refuse it. It is not unqualified.
The Hon. ADAM SEARLE: As long as you adhere to the restrictions on the discretion and as long as you do not break the law there is not anything in the Mining Act that requires the Government to refund any part of the original purchase price of the EL. Is that correct?
The Hon. DON HARWIN: That is quite correct.
The Hon. ADAM SEARLE: But your Government decided to refund part of the $300 million?
The Hon. DON HARWIN: Yes, for a very good reason, which is—
The Hon. ADAM SEARLE: The company has had the benefit of the EL for eight years; the Government is buying back only half; and you are giving the company almost every penny it paid for the EL. It is like the Government is just financing the next stage of the mine.
The Hon. DON HARWIN: That is incorrect. The company will be given back an amount that reflects its original purchase price, discounted because we are purchasing only 51.4 per cent of it back, and with an adjustment that reflects the fact that we have held the capital over the past nine years.
The Hon. ADAM SEARLE: The company has purchased a licence and has had the benefit of it for eight years. There are not many products or things you can buy that you can then hand back a portion of and get such a handsome refund. On what legal basis are you doing this?
The Hon. DON HARWIN: I am happy to discuss that but I should make it quite clear that the company has spent at least $160 million on exploration. It is not a case of giving it back money for no effort expended on its part.
The Hon. ADAM SEARLE: When companies buy exploration licences they are buying them to establish whether there is a resource to explore. When a company purchases an EL it is for a limited period and it is a licence to look. It is not a licence to mine or anything else, is it?
The Hon. DON HARWIN: Correct.
The Hon. ADAM SEARLE: Is it correct that it does not come with a rolled-gold guarantee that the company will make money or that it will not lose money on the transaction?
The Hon. DON HARWIN: That is correct.
The Hon. ADAM SEARLE: Everything you have said makes it seem as though you are intent on doing special deals for mining companies to ensure that they do not lose any money or that they lose as little as possible. The company paid its money, it had the benefit, it took its chances and now you want to refund the company because it is getting potentially half a renewal.
The Hon. DON HARWIN: You are not mentioning the relevant fact that a development approval process has been undertaken for this mine, which has now reached a stage—although it is not complete and there are other matters to be dealt with—where it may well go ahead. What we have ensured by buying back 51.4 per cent of the exploration licence is that there can be no future mining on the fertile black soils of the Liverpool Plains. By buying back the area of the exploration licence that encroached onto the plains we have ensured that Shenhua, or any other company in the future, will not be able to apply for an expansion of the mine or a new development consent for a mine on the land.
The Hon. ADAM SEARLE: No-one has an unqualified right for an expansion of a mine, do they?
The Hon. DON HARWIN: No, there would obviously have to be a development consent for that.
The Hon. ADAM SEARLE: The point is that you are not taking something off the company that it currently enjoy. The company did not and does not have a right to mine; therefore, this idea that the company should be compensated because it will not be able, at some future point, to expand a mine that currently does not exist is ridiculous.
The Hon. DON HARWIN: The approval of a development consent for even the part of the exploration licence that the company retained gives it certain rights. You cannot just overlook that.
The Hon. ADAM SEARLE: Just returning to the Shenhua Watermark matter, your press release with the Hon. Niall Blair makes a big song and dance about how you are protecting the black soil but, in fact, when you look at the proposed site of the three mine pits and you look at the overburden dumps and you also look at the floodplain areas and also the land that I think Planning has mapped as being biological and strategic agricultural land, if you lay them all over each other you can see that the mine will still impact on those areas, particularly the BSAL lands. That is correct, is it not? Your measure does not protect all of the black soil at all.
Mr JEREMY BUCKINGHAM: He does not know what BSAL is.
The Hon. DON HARWIN: My advice is that it will not.
The Hon. ADAM SEARLE: At all? It does not touch on the floodplain areas at all?
The Hon. DON HARWIN: That is the advice. It might assist both myself and the deputy secretary if you supply a copy of that map.
The Hon. ADAM SEARLE: I am happy to table that.
The Hon. DON HARWIN: If you would like a response would you provide a copy to us?
The Hon. ADAM SEARLE: I am happy to provide a copy, and the other one I think was a submission to the PAC from Mr Duddy. I am happy for you to take it on notice.
The Hon. DON HARWIN: Could I just be clear on that? In terms of that question, you are happy for us to respond to you on notice?
The Hon. ADAM SEARLE: Yes, I am. Mr Buckingham pointed out that under a special condition of the EL, if there was no substantial commencement of a mine in the eight years—subject to reasonable excuses of course—the Government of New South Wales has the unrestricted ability to cancel this project. Given that between obtaining final State regulatory approval in January, February last year and last October they made no effort to commence a mine at all—did not even make an application for a mining licence—why did you not do what you did with Caroona and simply bring the whole matter to a close?
The Hon. DON HARWIN: I took advice from the department on that point. Let me make this clear: The condition only allows cancellation of the licence if there are no reasonable excuses for not substantially commencing the mine development within eight years of the granting of the original exploration licence or the failure was related to circumstances beyond its control. The company made reasonable efforts to comply with this provision but was prevented due to numerous legal and other regulatory interventions which were outside its control.
The Hon. ADAM SEARLE: But which were entirely expected when they signed up to the deal.
The Hon. DON HARWIN: Shenhua has been subject to unprecedented government review at both State and Commonwealth levels and a number of legal challenges. This prevented the usual development process being completed within the anticipated time frame.
The Hon. ADAM SEARLE: They are still eight months overdue with their water and biodiversity management plans required by the Commonwealth Scientific Expert Committee. There are regulatory non- compliances. They have not even made an application for a mining lease even as we stand here. If you really wanted to protect the land out there you would have just brought the whole matter to a conclusion.
The Hon. DON HARWIN: I think you have asked that question previously and I have answered it.
The Hon. ADAM SEARLE: Will you provide the legal advice so that we can all see the basis on which the Government has acted?
The Hon. DON HARWIN: Mr Searle, you were in legal practice before you came to this place.
The Hon. ADAM SEARLE: Yes.
The Hon. DON HARWIN: I think at one stage you worked for an Attorney General in the State Cabinet. You would be well aware that that legal advice is privileged and I am unable to do that.
The Hon. ADAM SEARLE: It is privileged, but the privilege rests with the Government. If you wanted to instil greater public confidence in this decision of yours you could release the advice if you chose. What are you hiding?
The Hon. DON HARWIN: We are not going to be releasing the advice.
The Hon. ADAM SEARLE: I expected that that would be your answer.
The Hon. DON HARWIN: Just as, in the same circumstances, governments will have made the same decision, responsibly and in the interests of the State.
The Hon. ADAM SEARLE: Under section 380A of the Mining Act, the fit and proper person test is a very important power the Minister has. Will you tell the Committee where your agency is up to with its long-running investigation into whether Wollongong Coal is fit and proper to hold a mining licence, given it has been nearly two years since complaints were handed to your agency?
The Hon. DON HARWIN: Yes, I am going to invite the Chief Compliance Officer of the Resource Regulator, Lee Shearer, who is handling that matter, to give you an advice.
The Hon. ADAM SEARLE: Excellent. I do not think Ms Shearer was available last year. Welcome.
Ms SHEARER: We commenced our formal investigation in July last year, really to determine whether Wollongong Coal was fit and proper under the Act. There are essentially two legs to this inquiry we have conducted. The first leg is around their financial capacity. That has been a concern for some time.
The Hon. ADAM SEARLE: In fact, you have taken legal action against them three or four times in the last year.
Ms SHEARER: We have and that demonstrates that, whilst we have the fit and proper person inquiry investigation under way, we are not taking our foot off the pedal in respect of other actions that we can take. So we commenced a prosecution recently for failure to pay, which is hinging around the financial capacity. Those matters are before the court so I will not progress that further. The other leg is important for us to consider, because the fit and proper person really, at its heart, is about probity issues and a matter was referred to us last year about the primary shareholder, Jindal Steel and Power, and the director, Mr Jindal, in India and his referral, along with a number of other people, for corruption in India. That matter is still outstanding. We cannot progress that until those issues have been resolved.
The Hon. ADAM SEARLE: That is not quite true. When one looks at 380A it makes the point that the Minister can exercise his discretion, whether or not there are criminal convictions in other jurisdictions.
Ms SHEARER: Our investigation has to rely upon matters that I would suggest need to be underpinned by lawfully and legally obtained evidence. We do not have that. We have, essentially, a newspaper clipping that refers to matters about the corruption issues in India. It has not been progressed any further. Until that matter is resolved, that particular limb of the fit and proper inquiry cannot be progressed.
The Hon. ADAM SEARLE: Let us fast forward to what is happening here in New South Wales. In the last year Wollongong Coal, through the systematic withholding of moneys from its subcontractor, Delta SPD, tipped that company into administration. The creditors’ report of 10 August makes it quite clear that hundreds of jobs in the Illawarra have been put at risk and have, in fact, been lost because of the action of Wollongong Coal, disputing bills, delaying the payment of agreed bills and the like. Can you tell us whether that is part of your consideration as to whether or not that company is fit and proper to hold a mining licence?
Ms SHEARER: All of the matters around their financial capacity are being taken into account.
The Hon. ADAM SEARLE: It was not their capacity; it was their wilful withholding of money from their subcontractors, tipping them into administration and costing jobs.
The Hon. DON HARWIN: That sounds exactly like what Ms Shearer was talking about.
The Hon. ADAM SEARLE: That might be a problem if Wollongong Coal did not pay because they had a financial difficulty. But the creditors’ report suggests that there are other aspects to their behaviour as well. Have you read the creditors’ report?
Ms SHEARER: No, I have not.
The Hon. ADAM SEARLE: I would recommend you do. Would you be prepared to look into those matters?
Ms SHEARER: Absolutely.
The Hon. ADAM SEARLE: I will send them to you. Obviously making sure that those who do hold mining licences are fit and proper is an important matter for the integrity of the industry. You would accept that?
Ms SHEARER: Yes.
The Hon. ADAM SEARLE: Are you aware of complaints and allegations of criminality and corruption levelled at the Korea Electric Power Corporation [KEPCO] and their officials in Korea, including the forging of nuclear safety certificates and other matters? Ms SHEARER: I am aware there are some allegations around KEPCO.
The Hon. ADAM SEARLE: And, of course, KEPCO is the proponent of the Bylong mine here in New South Wales.
Ms SHEARER: Yes.
The Hon. ADAM SEARLE: Are you looking into whether or not there are outstanding probity issues involving the parent company, and if not, why not?
Ms SHEARER: If I could take that precisely on notice, but we have commenced an investigation into a number of mining title holders, KEPCO being one.
The Hon. ADAM SEARLE: Yes, because there was an issue about some photographs they were using. You were prosecuting but you decided not to prosecute them but to take an enforceable undertaking, is that correct?
Ms SHEARER: Absolutely correct, yes.
The Hon. ADAM SEARLE: So they have a bit of form here in New South Wales already for not necessarily playing by the rules, is that correct?
Mr JEREMY BUCKINGHAM: For lying.
The Hon. ADAM SEARLE: I acknowledge that interjection.
Ms SHEARER: That is correct but any regulatory framework is a framework in this State that is considered to be proportionate and Wollongong Coal is exactly an example of how we have scaled up properly, within a regulatory framework, and taken prosecution proceedings after having taken other steps to ensure compliance.
The Hon. ADAM SEARLE: Will you look at those other matters relating to KEPCO’s conduct overseas in Korea, including the issues for which I think the New York Securities Exchange was investigating them?
Ms SHEARER: We will absolutely look at that.
The Hon. ADAM SEARLE: Thank you. In relation to Wollongong Coal, do you have a time frame for completion of your investigation?
Ms SHEARER: No. We do not have a time frame because I am unable to ascertain when the matters within the Indian jurisdiction will be resolved. But what you can be confident about is, as with all title holders, but particularly Wollongong Coal, we are using other parts of the Act to ensure that any non-compliances that are occurring within this jurisdiction are dealt with under other parts of the Act, but within the framework. That is evident from the fact that we have taken prosecution proceedings. It is not like we have started an investigation and put it on hold, waiting for India. We are still assessing matters as and when they arise.
The Hon. ADAM SEARLE: Unlike you, I have been to the Liverpool Plains and I have met with local farmers, traditional owners and other affected members of the community. Will you commit to doing the same before you make a final decision on whether or not to renew the other part of the exploration lease that you say remains under consideration? It is not a trick question.
The Hon. DON HARWIN: I apologise for the delay. I am trying to get a sense of where it is. Based on the advice I have received, I will use my best endeavours to try to do that, but I cannot give you an unequivocal guarantee that I will be able to.
The Hon. ADAM SEARLE: “Best endeavours to try”, I guess we will have to make do. I will come back to that.
The Hon. DON HARWIN: Best endeavours to do that. I will take “try” out just for you, Mr Searle.
The Hon. ADAM SEARLE: I am over-loved, Minister. Thank you. The Prime Minister says more than one million households are paying more than they need to for electricity. How many households in New South Wales are paying more than they need to for electricity?
The Hon. DON HARWIN: There is absolutely no doubt that if people shopped around that they could be paying less.
The Hon. ADAM SEARLE: It is okay to punish them for being loyal customers; is that what you are saying?
The Hon. DON HARWIN: That is not what I am saying.
The Hon. ADAM SEARLE: That is what I heard.
The Hon. DON HARWIN: I am saying that shopping around and looking for the best market offer can often save customers as much as 20 per cent on their bill, sometimes even more.
The Hon. ADAM SEARLE: You know as well as I do from the Grattan Institute and other sources that comparing different offers is very difficult and time consuming. Do you appreciate that?
The Hon. DON HARWIN: I do appreciate that, and I am very focused on finding ways to make it easier. I am a firm believer that having a competitive market is the best way of ensuring that we have downward pressure on prices.
The Hon. ADAM SEARLE: If we assume that of the Prime Minister’s nominated one million customers who are paying too much, about 300,000 of those are in New South Wales. How many of the 300,000 are receiving one or more of your Government energy assistance programs?
The Hon. DON HARWIN: I am happy to discuss how many people are receiving energy rebates if you like, but that information is available in the budget papers.
The Hon. ADAM SEARLE: I will ask a question that you should be able to answer. What steps have you taken to ensure that the electricity companies are providing the best market offers to customers who are receiving your Government’s assistance?
The Hon. DON HARWIN: We have done a number of things. I am quite focused on that particular issue right now. First of all, the energy retailer roundtable I have told you about in the House before is relevant. That roundtable emphasised the need for support for vulnerable customers, and there were a number of outcomes regarding electricity users from that. Secondly, I have written to the Independent Pricing and Regulatory Tribunal to request that it advises on the drivers on any price changes, to ensure that they represent effective costs in a particular market. I have also written to IPART to request that it reports on retailer strategies to deliver lower prices to hardship customers, and on retailer processes for managing the rollout of digital meters as well.
We referred to the rebates already, and we boosted the assistance that is available to vulnerable customers to pay their bills. Finally, the most important thing that we can do is continue to work to ensure that the broken national electricity market is addressed and is reformed. Implementing the recommendations of the Finkel review remains the best way of ensuring that that happens.
The Hon. ADAM SEARLE: The Grattan Institute report on this issue says that governments should actually require electricity companies that are receiving government subsidies to assist vulnerable customers to ensure that vulnerable customers are on the best possible plan for their pattern of usage. Will you embrace that particular solution, given it is not one of the ones you have outlined?
The Hon. DON HARWIN: I think the recommendation is a good one. I am focused on it and I am looking at whether it can be implemented in New South Wales.
The Hon. ADAM SEARLE: Do you agree that it is irrational to provide a $50 voucher to assist people with their electricity bills when it might save them $1,500 or more if they were on a better offer?
The Hon. DON HARWIN: I could not agree with you more. I am focused on that issue and on looking at how it is possible to do that in New South Wales.
The Hon. ADAM SEARLE: Carbon Market Economics estimates that, since your Government deregulated retail electricity prices in New South Wales, retailers increased their fees by 10 per cent to 15 per cent in the first year and that in the year after that retailers put up their prices by 8 per cent. From 1 July this year, three big retailers are increasing their prices by up to 20 per cent. That is a 30 per cent to 40 per cent increase in retail electricity prices over three years—
The Hon. DON HARWIN: I apologise to the honourable member. A text message just came in. I should not have looked at it but I did, and I lost the thread of his question.
The Hon. ADAM SEARLE: Essentially, retailers have put up their electricity prices by 30 per cent to 40 per cent over the past three years. You have not increased the rate of government assistance by the same amount over the past three years, have you?
The Hon. DON HARWIN: The value of the rebates certainly has not gone up by 40 per cent in the period you mentioned. But there has been an increase of around 50 per cent since 2010-11.
The Hon. ADAM SEARLE: On 21 June in Parliament you said the amount allocated for the life support rebate has been increased again, but the actual rates for the individual amounts have not been increased since 2015, have they?
The Hon. DON HARWIN: I would have to check what my remarks in Parliament were. I am happy to take that question on notice so I can give you a proper answer.
The Hon. ADAM SEARLE: In last year’s budget papers it said that you were going to provide $259 million worth of assistance to help 800,000 households. In this year’s budget papers it says you are going spend $257 million—which is $2 million less—to support 900,000 households. You also said that these are protected items in the budget, so no individual claimant would lose money. Can you tell us what the estimated percentage of uptake that informed the figures in the previous year’s budget was; what the actual percentage of uptake was; and what the assessed percentage of uptake is for the figures you have provided in this year’s budget?
The Hon. DON HARWIN: I have previously responded to the member in the House on a number of aspects of the question, including in a supplementary answer that I gave to the House on the issue. However, there are a number of aspects to his question that I will have to take on notice. I am sure the honourable member will understand why I am going to do that. I have been advised that my officials do not have all of those figures.
The Hon. ADAM SEARLE: That is fine. Going back to galloping electricity prices, BlueScope has recently stated in the newspaper that its electricity bills are going up by 93 per cent over the next two years. You would have read that in the Hunter Valley Mil-Tec is facing a 160 per cent increase in its electricity costs. And of course average households are facing up to 20 per cent increases from 1 July this year. You have talked about your Government wanting to put downward pressure on prices, but, as you would know, one of the ways to do that is to provide certainty about carbon in the economy. Will your Government embrace the Finkel review’s clean energy target?
The Hon. DON HARWIN: The New South Wales Government made it clear in its submission that its policy is that we should have an integration of climate and energy policy. The Finkel review has come back with a recommendation that it should be through a clean energy target. There are many aspects to such a target that are attractive: It is technology neutral and it provides a market mechanism. But the State Government has said that fixing the National Electricity Market and, just as importantly, providing investors with the certainty to invest, needs a sensible national plan. What will work best is if the Federal Government is on board and is supporting a mechanism.
In the case of Finkel the recommendation is a clean energy target. The recommendations from Finkel came in early June. I said prior to the COAG Energy Council meeting in July when some of the other State energy Ministers were saying that we should proceed with State-based schemes that the preference of the New South Wales Government is that the Federal Government be part of any scheme. I think it is also consistent with what Finkel recommended when he said that there should not be schemes of individual States or targets of individual States. My preference is that the Federal Government is part of whatever mechanism is put in place. That is why the New South Wales Government has said it will make its decision and form its view after the Federal Government announces what it is going to do. We would like them to do that as expeditiously as possible.
The Hon. ADAM SEARLE: I think we can all agree that a national scheme including the Federal Government would be a good thing but, as we saw in Canada, sometimes national governments opt out of this. For example, emerging from the COAG roundtable the Labor States asked the market operator to design a clean energy target scheme so that they could consider not separate State schemes but mirror schemes.
The Hon. DON HARWIN: Actually they asked the Australian Energy Market Commission [AEMC], not the market operator.
The Hon. ADAM SEARLE: I stand corrected. They asked the AEMC to look at not separate State schemes but the States acting collectively or at least all knowing what a scheme would look like. Would you support the market regulator designing something that the States and Commonwealth could look at in more detail?
The Hon. DON HARWIN: I can tell you that the AEMC is doing that work. It is having a look at what such a scheme would look like. We have not asked them to do that. As you said in your question and/or statement—
The Hon. ADAM SEARLE: It was interrogatory in nature.
The Hon. DON HARWIN: —the Labor States have asked the AEMC to do that work and it is doing it. When they have done the work will have a look at it with great interest.
The Hon. ADAM SEARLE: Just to make it clear, you favour something like the clean energy target yourself?
The Hon. DON HARWIN: The position of the New South Wales Government is we will wait to see what the Federal Government says because we believe that a sensible national plan is in the interests of Australia and most likely to secure a reliable source of power and put downward pressure on prices. We will make a decision after we see the Federal Government’s response.