Page 2008 - Week 06 - Wednesday, 25 June 2008
pressure group warfare, then I believe this is it. I have no doubt that if this scheme is introduced, which I imagine it will be, the minister will have a battle on his hands refereeing the competing claims of distributors and occupiers under an entirely arbitrary subsidy scheme.
It is only a matter of time until some wag realises that he can make a killing from this scheme if he is careful or if he is able to curry the favour of the ruling minister of the day. Some clever person is going to realise that they can make substantial amounts not by attaching a couple of solar panels to their roof but by going larger scale in power generation activities and selling power back to the grid at exorbitant prices backed by legislative favouritism.
If this occurs, or if enough people take up the scheme such that the amount of electricity sold under the scheme is sufficiently large, there will inevitably be serious cost pressures and calls for the rate of return on energy to be reduced further. Since this rate is entirely arbitrary to begin with, there can be no rational economic guide for how to deal with this situation. Indeed, we have thrown economics right out the window if we adopt the scheme in the first place.
I think it was Mrs Dunne who made mention of the changes that went on federally as a result of the decision of the government. Somewhere here amongst my papers I have comments from the federal environment minister who, when talking about the solar panel rebate scheme, said that the program was oversubscribed and would have overheated and produced to the solar industry demand fluctuation such as would make it very difficult for this industry to be sustainable.
People were going along with one set of rules, and overnight we were told they were going to change, although Mr Hunt is putting up a valiant fight. The fact that the sudden decision of the Commonwealth government to limit the $8,000 rebate for households earning less than $100,000 has, in fact, caused a massive fall in demand. This is the problem when you come up with these artificial things that are at the mercy of ministers who can make overnight decisions which can cause economic ruination.
The only thing I should say is that the question will be determined more by political lobbying than by any serious analysis of financial and economic principles going forward. As cost pressures mount, there will be a lot of people with a lot of money invested who will be very keen to ensure that the minister does not reduce the legislated rate of return. Of course, there will be many other people in the ACT who are paying higher electricity prices who will be very keen for the minister to do what he can to reduce costs. It is that group of people that I am most swayed by in terms of the position I have come to here.
Yes, it is great to have environmental initiatives, but I have people coming up to me in my electorate constantly saying that they already cannot afford increased prices in electricity or water or rates and taxes and charges. I have to listen to those concerns, and my concerns are for those people, most of whom will not be beneficiaries under the scheme but ultimately will wear the additional prices in their electricity accounts. The result is the standard result that occurs when government interferes in the economy to privilege one group at the expense of another. It is a war of all against all in the war of political lobbying.