Labor rejects government’s RET proposal, but keeps door open for a deal

Industry Minister Ian Macfarlane offered Labor a compromise deal on the Renewable Energy Target. AAP/Lukas Coch

The opposition has rejected the government’s opening negotiating position for changing the renewable energy target – but said it wants to keep talking.

The government proposed the target be changed to represent a “real 20% of electricity production in Australia” saying this was the original bipartisan intent.

The legislated large scale RET is for 41,000 gigawatt-hours of renewable electricity generation by 2020, which it was originally estimated would be 20%. But because of declining electricity use this amount would represent a higher proportion of production.

The government’s “real 20%” would reduce the target to around 26,000-27,000 gigawatt hours.

Its proposal would also leave in place present support for household solar systems; exempt energy intensive trade exposed sectors including aluminium and copper smelting; and scrap the need for a review of the target every two years.

After Labor’s discussions with the government today, shadow treasurer Chris Bowen said Labor would not agree to what would be a 40% cut in the target.

But he said Labor did want to engage with the government constructively to see what could be done.

Environment spokesman Mark Butler said it was important to restore bipartisanship and therefore investor certainty to the RET. “We all know that if there is not agreement between the two major parties of government, there will be no more investment in large scale renewable energy.” This meant that billions of dollars in investment with the consequent thousands of jobs potentially in the pipeline in the next few years would disappear.

Butler said there was good faith on both sides. “Whether we can actually come to an agreement on all the elements of the policy remains to be seen, but we accept there is good faith on the part of [Industry Minister] Ian Macfarlane and [Environment Minister ] Greg Hunt.”

Clive Palmer has said his senators would not agree to change the target before the next election. But Butler said that even if the government could do a deal with the crossbench for a change, “that is simply not going to work”.

“We’ve all heard very clearly from the industry that global companies making investment decisions over many years will simply not make those billions and billions of dollars of investment based on the ability of the government, maybe, to get a 51% vote in the Senate that will only last, at best, a couple of years.

"We’ve heard a very clear message, [and] I expect Ian Macfarlane has heard it as well - the only way you’re going to continue to see investment flow into Australia in solar power, wind power and other areas of renewable energy is if there is a bipartisan agreed renewable energy target.”

Bowen said the opposition accepted that some industries, such as aluminium, needed special attention.