Senator the Hon Mathias Cormann
Minister for Finance
Date: Monday, 13 July 2015
ASHLEY HALL: The Finance Minister Mathias Cormann along with the Treasurer issued the directive to the Clean Energy Finance Corporation. The Finance Minister joins me now, Mathias Cormann what exactly is in this directive?
MATHIAS CORMANN: This is firstly a draft directive, which is now subject to consultation with the Clean Energy Finance Corporation. What it seeks to do, is to go back to the original policy intent, which is for the Clean Energy Finance Corporation to invest in new and emerging technologies and not in established, mature technologies which have already got access to mainstream finance.
ASHLEY HALL: Will you release that directive, that draft?
MATHIAS CORMANN: There is a process in the legislation, which was legislation put in place by the previous government. We are currently engaged in step one of that process, which is consultation with the Clean Energy Finance Corporation Board. At the right time this directive if it comes into force, will be tabled in the Parliament.
ASHLEY HALL: There seems to be some disagreement over what was the original purpose of the Clean Energy Finance Corporation. The Shadow Environment Minister Mark Butler says it was originally set up to plug holes in the market, where there wasn’t a mature market for these technologies not for immature technologies themselves. How has that disagreement come about?
MATHIAS CORMANN: From our point of view the intention was very clear. It is articulated in the Hansard of Parliamentary debates from the time. That is that the policy intent of the Clean Energy Finance Corporation was to invest in new, innovative and emerging technologies. Our policy which we took to the last election, is that we want to abolish the Clean Energy Finance Corporation because in our judgement if a project stacks up, if the economics of a project stack up, then it will be able to attract finance from commercial lenders in the usual way. But in the meantime, if the Clean Energy Finance Corporation continues to be in place, then rather than to compete with the private sector in relation to mature technologies, wind for example, investing in existing wind farm projects is not what the Clean Energy Finance Corporation was originally set up for.
ASHLEY HALL: So what would this directive mean for people who have rooftop solar, or who want to buy rooftop solar? Will it mean they will pay more?
MATHIAS CORMANN: Not at all. Again, there are established programs at the State and Federal levels supporting rooftop solar. More than a million households have got rooftop solar across Australia. The Renewable Energy Target and there is now bipartisan agreement around the Renewable Energy Target to 2020, the Renewable Energy Target will continue to drive increased investment across all of the relevant renewable energy technologies.
ASHLEY HALL: Investors say this directive is making a difficult investment environment even harder and that Australia will lose out to other countries which have already strong growth in this sector, how do you respond to those concerns?
MATHIAS CORMANN: I completely disagree. What supports certainty and stability to this sector is the bipartisan agreement on the Renewable Energy Target. There will be significant growth in this sector in the years ahead. The Clean Energy Finance Corporation is one small tool in the context of a broader policy framework. What we are saying here is, that while the Clean Energy Finance Corporation continues to exist it should focus on the next opportunities. For example, the opportunities from large scale solar and better energy storage capabilities linked to it. We want to really push this to the next level rather than to continue to put borrowed money from taxpayers into well established technologies.
ASHLEY HALL: It’s $10 billion though, it’s barely a small player in this field is it?
MATHIAS CORMANN: This is $10 billion of money that the previous government decided to borrow on behalf of the taxpayer so that it could be lent. So here is the whole point, the whole purpose of this particular initiative was for the Clean Energy Finance Corporation to invest in those areas where the private sector doesn’t spontaneously invest. Nobody can credibly argue that the private sector has not invested in wind projects or in rooftop solar.
ASHLEY HALL: You’ve also asked the Clean Energy Finance Corporation to make more money essentially and to increase its risk profile now. Aren’t you setting it up for failure?
MATHIAS CORMANN: We have not said at all to the Clean Energy Finance Corporation that we want it to increase its risk profile. The whole ... interrupted
ASHLEY HALL: Well by investing in these less mature technologies it will by definition won’t it?
MATHIAS CORMANN: I don’t accept that at all. What we have actually said to the Clean Energy Finance Corporation is that we don’t want them to increase their risk profile, but that we want them to focus on what the original intent always was, we want them to focus on new and emerging technologies not on established, mature technologies.
ASHLEY HALL: Alright, thanks very much to the Finance Minister, Mathias Cormann. Thanks for talking to AM.
MATHIAS CORMANN: Always good to talk to you.