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Mr MIKE BAIRD (Manly) [8.37 p.m.]: The Opposition does not oppose the Electricity Supply Amendment (GGAS) Bill 2009, the effect of which is to amend the Electricity Supply Act 1995 with respect to abatement certificates and abatement certificate providers, and the liability of the State in connection to the Greenhouse Gas Abatement Scheme, also known as GGAS. The bill is similar to the Electricity Supply Amendment (GGAS Abatement Certificates) Bill 2009, which the Legislative Council compelled the Government to withdraw after it tried to ram it through this place. The changes that have been made to the bill are important, and they prove how absurd the Government's attempt to avoid scrutiny on this matter was.
The Electricity Supply Amendment (GGAS) Bill 2009 will reduce surplus certificates by stopping new applications for accreditation. It will also remove opportunities to create certificates from category A generation projects, which are projects that were commissioned prior to the start of the GGAS. The bill will also provide that compensation is not payable in regard to that part of the Act. The aim of the bill is to establish the architecture—the process and timeline—of a transition away from the GGAS. Opposition members have been strident critics of the GGAS, led particularly by the shadow Minister, and have shone a light on the many flaws of the scheme.
When the Electricity Supply Amendment (GGAS Abatement Certificates) Bill 2009 was in this place before it was unceremoniously pulled, the shadow Minister referred to the good work done by the Centre for Energy and Environmental Markets at the University of New South Wales. In the early years of the GGAS the centre exposed the problem of the inclusion of the category A projects. These projects meant the scheme operated not as an emissions reduction scheme but, rather, as a certificate creation scheme, with certificates often not relating to abatements. During the first debate on this bill's predecessor, the Government overstated its figures regarding the benefits of the GGAS by including category A programs. The savings from this category of certificates occurred before the GGAS scheme commenced, and the investment was never predicated upon the sale of certificates. The member for Shellharbour stated that category A programs had clearly been assessed as economically viable without the additional GGAS revenue that they were subsequently able to access.
These emissions reductions occurred independent of the GGAS, and hence the Government should never have claimed certificates derived from them as cuts to emissions. The reasons offered by the member for Shellharbour are insightful. She states they were included "on the basis that this would provide credit for early action", and would provide a "flow of certificates for compliance in the early years of GGAS". Hence, we consider it appropriate that of all certificates, category A certificates be wound up first. That said, they are an expensive source of certificates, so costs to retailers will increase. We acknowledge this impost, and note that it would not be happening if the Government had run the scheme properly on this principle in the first place. Due to this fact, the Government tried to ram the previous bill through the Parliament.
If the Government is to remove a group of certificates, category A programs should be on top of the list as they do not represent the abatements that other certificates represent. However, that does not mean the Government should trash democracy to do it. It was a pretty black day for this place, and certainly that was the strong feeling of the shadow Minister. The Opposition informed the affected stakeholders about the bill, which was introduced and rammed to the front of the queue immediately. More alarming was that stakeholders were informed by the Government that it would like dialogue about the bill moments before the Government decided it would be rammed through at the top of the list. That was a two-faced act by the Government, with little regard for the institution of the Parliament. When we were able to draw this to the attention of the House the crossbench joined with the Opposition to postpone debate to force the Government to deliver on promised consultation with industry.
The original bill was deficient in terms of timing for transition arrangements. First, it failed to give reasonable notice for implementing the new arrangements. The stakeholders pointed out the need to be practical in plans for a smooth transition. Secondly, the GGAS Scheme has been operation on a calendar year basis. To bring it into line with a new scheme anticipated in the outline of the bill, it is necessary to facilitate a change from calendar year to financial year. This practical consideration is the result of stakeholder consultation, and vindicates the decision of the House to force the Government to talk to stakeholders. These errors were simple things that ought not to have happened, and which would not have happened if the Government had gone through the normal processes as it did with the previous bill. Having said that, we do not oppose the passage of the bill.
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