No-confidence Motion

Labor Government

Mr MARSHALL (Dunstan—Leader of the Opposition) (14:06): I move:

That this house has no confidence in the government because it has:

(a) imposed on all South Australian families and businesses the highest cost and most unreliable electricity system in the nation;

(b) ignored repeated warnings about the risks of forcing too much intermittent renewable energy into the electricity system too quickly;

(c) continually denied responsibility for the energy crisis it has caused; and

(d) compounded its maladministration by attempting to cover up a proposal from the owner to keep the Northern power station operating that would have maintained grid stability and avoided blackouts at less than one-twentieth the cost to taxpayers of the government's so-called energy plan.

The Premier, his energy minister and the rest of the cabinet can no longer hide. Because of the persistence of those on this side of the house, we have exposed the government for exactly what they are—guilty of incompetence, guilty of negligence and now guilty of a cover-up. Not since the State Bank collapse of 1991 has South Australia faced such an incredible crisis—a crisis in confidence—and all because of this grossly incompetent government.

This crisis has been caused by the chaotic energy policies that this government has put in place. The government's deliberate policy was to undermine the viability of base load power here in South Australia to drive that affordable, reliable power out of South Australia. Why did they do it? All because they were zealots to their ideologies, zealots to the cause for intermittent renewable energy and zealots to their cause over and above the interests of every single South Australian family, business and jobseeker. We now have the highest priced, least reliable grid in the entire nation, and this is something for which this government should hang its head in shame.

What has it delivered? What has this energy policy delivered for the people of South Australia? I will tell you—

There being a disturbance in the gallery:

The SPEAKER: Can we please have no flash photography.

Mr MARSHALL: —the highest unemployment rate in the entire nation and a crisis of confidence right across this entire state. This Premier and this energy minister have made South Australia the laughing stock of the entire nation with their failed experiment that has plunged South Australia into a competitive disadvantage with every single other state in the nation—highest price and least reliable energy, highest unemployment and an exodus of young people and capital across our borders. This has all happened despite the repeated warnings to this government repeated warnings which were all ignored by this government. Let's take a look at just some of them.

Back in 2003, when South Australia had just 1 per cent intermittent renewable energy penetration, the then minister for energy, the Hon. Patrick Conlon (former member for Elder), warned the government not to set its own targets because it would ensure that we had higher prices in South Australia. Were his warnings heeded? No. The government had better ideas than that. Again, in 2009 the government was warned by two separate independent reports that made it very clear that going beyond 20 per cent penetration of intermittent renewable energy risked stability of the grid. But just three weeks after this the state government increased its renewable energy target to a dangerous 33 per cent.

In 2014, AEMO and ElectraNet raised concerns, when they did an investigation into intermittent renewable energy here in South Australia, that this could lead to statewide power outages because of reduced systems security. Again, just a few weeks later where was the Premier? I will tell you where he was: he was burning fossil fuels and flying over to Paris to have his moment in the sun, with 57 Films in tow, to announce that South Australia was going to have a 50 per cent renewable energy target. There were numerous warnings, but this government ignored each and every one of them. This Premier and this Minister for Energy put their ideology ahead of the interests of every South Australian, and now this state is paying the price.

On 15 March this year, the Premier was asked at a press conference to explain the offer that was put to the people of South Australia, via the government, to keep the Northern power plant in Port Augusta open. He said there was no such deal. Two days later, in front of 650 witnesses he was asked the question: what was the offer that was put on the table from Alinta to keep affordable reliable base load power here in South Australia to manage the transition to renewable energy? He said there was no offer. The moderator said, 'Are you sure there was no offer?' His answer was, 'No offer, no offer.' This Premier was completely and utterly caught with his pants down, and 650 witnesses can attest that that was the response of this Premier.

This was the most serious of all cover-ups because now, of course, we have full visibility as to what that offer was. That was an offer to keep the lights on in South Australia. That was an offer to keep 450 people employed in Port Augusta and Leigh Creek. That was an offer, which was an affordable offer here in South Australia, of $8 million—$8 million to ensure that there was still payroll tax being paid in Port Augusta, still mining royalties being paid in Port Augusta—in fact, $4.5 million. The net cost of this offer was just $3.5 million per year, but no way, 'no way Jay'. He said he was not going to go near this offer: it was not in line with what he stood for.

This offer was going to ensure that we kept energy prices affordable here in South Australia. This offer was to ensure that we had stability of our grid here in South Australia, as we moved through to more intermittent renewable energy in South Australia in an orderly fashion, which did not make sure that South Australia could not remain viable on the national stage. Unfortunately, all the warnings were completely ignored. The government said that the offer that was put to the people of South Australia via the government was not a long-term offer.

Let me tell you that nobody said that it was a long-term solution. Alinta, in their offer, did not say this was a long-term solution. In fact, what they did was to give a guarantee for a three-year period to provide energy into our grid in South Australia to keep our prices low and to ensure the stability of our grid. But it was not to be for this Premier. He completely rejected it out of hand. We asked in parliament yesterday: what due diligence did the government actually do? I asked the Premier yesterday: did you do a cost-benefit analysis on the offer that was put forward? Not one shred of evidence was provided by the Premier.

So, we asked the energy minister: can you provide any evidence that the proper due diligence was done by this government to consider this offer to keep affordable base load power in South Australia to manage the transition? None—there was no due diligence done by this government. This government is completely and utterly negligent, and they put every household, every business and every jobseeker in a perilous situation here in South Australia. They have blamed everybody else. They have blamed every person in this state and in this country other than themselves.

Just let me take a quick look at some of the people they think are responsible for the crisis we now have. Of course, they blame the Liberals. They blame the National Electricity Market. They blamed AEMO. They blamed bad weather. They blame coal—of course, coal is the big culprit. They have refused to accept any responsibility. They have even refused to apologise to the people of South Australia. The Premier and the energy minister in South Australia are dangerous ideologues. They will see no facts. They will speak no facts. All they can do is cover up, mislead and lie to the people of South Australia.

Now the government is saying, 'We've got ourselves into a big hole over here and we need somebody to dig us out. Who is going to dig us out?' The taxpayers of South Australia. Again, we see this repeated position of this government. They create a mess and now the taxpayers in South Australia—already burdened with the highest taxes, the highest regulation, the highest water prices and the highest electricity prices—have to pay for this government's gross incompetence. How much is it going to cost them? It will cost $558 million to solve the crisis that Labor themselves have inflicted upon South Australia with the policy settings they have put in place.

As if it is not bad enough that businesses in South Australia have already had to foot a bill of more than half a billion dollars in lost business and cost of business because of the instability of our grid, as if it is not enough that businesses and households in South Australia have to wear the highest prices in the entire nation, now, given those two situations, the government says, 'That's not enough pain. That is not enough pain for you and you need to wear more of the pain in South Australia,' and that is going to come in the version of a $558 million hit to the taxpayers of South Australia.

What are they going to get for this? Are they going to get some nice, clean, green energy in South Australia? I will tell you what they are going to get. One of the central points of the government's plan is diesel generators dotted right across the state. We ask the question: is this some sort of new, clean diesel? I do not think so. This is the irony of the situation that Labor has inflicted on the people of South Australia: we are now going to have diesel generators to ensure the stability of the grid in South Australia. What a disgrace.

Batteries, we are going to have batteries, but again when we asked questions in the parliament: how long are these going to last for? Maybe five years. How are they going to be disposed of? No idea. How much is it going to cost for the disposal? We have not gone out to the market yet. Herein lies the problem: a two-week expression of interest because we are in crisis. Why are we in crisis? Because that man and that man refuse to accept an offer along ideological lines, and they have plunged the state into a serious position of disadvantage because of it.

We have a new $360 million emergency-only gas-fired generator in South Australia. We have no idea when it is going to be built. In fact, the Premier said that he thought it would be built by the end of this year. Of course, he has been back-pedalling at a rapid rate of knots. There is no possible way that this is going to be delivered by the end of this year. What we do know is that it is going to cost $360 million to put this in place, possibly because it has not gone out to market yet. Again, we asked in the parliament yesterday: what is going to be the operating expense? What is the loss inflicted upon the people of South Australia each and every year? What do they say? No idea. What is the interest going to be on this project? No idea. What is going to be the depreciation on this asset? No idea.

This is a government without any idea and with no interest in the people of South Australia whatsoever. The $360 million sounds like a marketing plan rather than a plan that is going to deliver energy security and lower prices for the people of South Australia and all because this government did not have a plan. They hated coal. They did not have a plan. They have never had a plan and nothing has actually changed here in South Australia.

Mr Speaker, remember when we last had a government as guilty and as gutless as this one? Remember the collapse of the State Bank that proved so costly to every single South Australian? Remember when Labor did that? Well, let me tell you that they are doing it again. They are doing it again because it is in their DNA. Despite many warnings, they denied that there was a problem until it was far too late. They condemn Liberals for asking the pertinent questions.

See the parallels between what happened with the State Bank and what happened here? They refused to accept responsibility and then they tried to cover up the government failures, all the while costing every single household and every single business in South Australia dearly. The Liberals dug South Australia out of that hole by being willing to take decisions necessary to restore the state's finances. Now we are in another hole because Labor will not change their ways.

The refusal to keep the Northern power station operating is the worst government policy decision since the State Bank collapse in 1991. We now have a situation where we are going to have a billion dollar clean-up by this government, despite also having this uncompetitive situation of the highest cost and least reliable grid in the nation. It should not have happened. It was completely and utterly avoidable.

This parliament has set a standard for public administration in an attempt to avoid the incompetence and the negligence that have riddled this government's energy policy. I refer to the maladministration as it is identified in the ICAC Act. All South Australians are paying for the incompetence and the negligence of this government. With no apology, no acceptance of responsibility, only the naked arrogance of denying, misleading and lying to the people of South Australia, this government is no longer worthy of the confidence of this house.

The SPEAKER: The government benches heard the opposition's lead speaker in silence. I will be applying the sessional order without warning. Premier.

The Hon. J.W. WEATHERILL (Cheltenham—Premier) (14:22): Thank you, Mr Speaker. The only reason that this motion is being brought to this house at this time is because of the growing confidence of the South Australian community in this government. I welcome the opportunity to invite this parliament to express their confidence in them through resolution today. The reason why there is this growing sense of confidence in the South Australian community in this government is because it has taken one of the most significant public policy issues confronting our state, something that affects the lives of every citizen, something that affects the basic safety of every citizen, the livelihood of every business, and has seen a threat to it and has responded assertively to remedy it.

It has done that in the face of a federal government that has offered no cooperation and, indeed, has been the architect of many of the challenges that we have sought to address. What it has decided to do is to take charge of its energy future. What this government mapped out on the day after the last completely avoidable blackout on 8 February was to announce that we are going to take charge of our energy future.

Dr McFetridge interjecting:

The SPEAKER: The member for Morphett will depart under the sessional orders for an hour.

The honourable member for Morphett having withdrawn from the chamber:

The Hon. J.W. WEATHERILL: We told the people of South Australia that we would take charge of our energy future. The people of South Australia want us to be self-reliant. They want us to stand on our own two feet and to actually have control of our energy future. We produced this plan, the plan that has been published and is receiving wide acclaim, not just from commentators, from people who understand the energy markets and how they operate, but also from ordinary everyday South Australians. There is not a place I can go in South Australia at the moment where I do not have someone coming up to me wanting to engage me on this energy plan and congratulating the government on the steps it has taken.

The reason we are here debating this motion is because those in opposition are in a panic. They realise they have offered no solution. The Leader of the Opposition also understands that his leadership is on the line, that questions are being asked of him. What we have seen over the course of the couple of months since that last event was the guffawing of the Leader of the Opposition, the national parliamentary Liberal Party's—

An honourable member interjecting:

The SPEAKER: The Heysen contralto will be quiet.

The Hon. J.W. WEATHERILL: —attempts to ridicule South Australia from across the border. Those smiles very quickly turned to grimaces on the next day as we saw load shedding in New South Wales, and as word filtered through to the manufacturing bases of New South Wales and Victoria and they saw the electricity contracts being offered, the forward contract prices, now rivalling and exceeding South Australia's prices. What was a South Australian problem very quickly became a National Electricity Market crisis.

Of course, spectacularly, when the energy minister came to town and once again wanted to wag his finger at us and ask us to quietly participate in a process that he had already nobbled, he received an assertive response from me, and every South Australian who had any sense of self-respect and pride stood up and cheered. That is what happened. The reason we are here debating this motion today is because the Leader of the Opposition feels his grasp on this issue being lost.

Mr Marshall interjecting:

The SPEAKER: The Leader of the Opposition will depart for the next hour for breach of the sessional orders.

The honourable member for Dunstan having withdrawn from the chamber:

The Hon. J.W. WEATHERILL: He is losing his grip on an issue that he was hoping would allow him to slide quietly into government in much the same way as he sought to do in the 2014 election—no policies, just hoping to point attention to some challenge or misfortune that might befall South Australia and try to shift blame, offering no positive solutions for the future, hoping to slide into government. But the people of South Australia are more intelligent. They are asking themselves the deeper questions.

I notice that the Leader of the Opposition could not even bring himself to actually assert one of the main points in this motion of no confidence. He said, 'When the state government plunged the state into.' He could not even get out the last words because he knows that that idea, that somehow the blackout was caused by renewable energy, was completely rebutted by AEMO in its final report concerning the blackout on 28 September. He could not even bring himself to use the words because this mess they have been peddling to the people of South Australia has never been—

Members interjecting:

The SPEAKER: The members for Adelaide and Hartley are warned. There will not be a further warning.

The Hon. J.W. WEATHERILL: The people of South Australia understand that they have been spun a story by those opposite about the way in which renewable energy—

Mr Pederick interjecting:

The SPEAKER: The member for Hammond will depart under the sessional orders for flagrant breach of the standing orders for the next hour.

The honourable member for Hammond having withdrawn from the chamber:

The Hon. J.W. WEATHERILL: I have spoken about the motivations for this motion, which are entirely about the Leader of the Opposition feeling as though he has lost control of this debate. If you just look at the terms of the motion, you can understand that this is a leader who simply does not even understand that what he is talking about here represents a gross act of hypocrisy.

The Leader of the Opposition seeks to advance the idea that we were warned about some event that we should have responded to. The only warning we received from the Leader of the Opposition in relation to this matter was in 2012, when he warned us that we were not going hard enough on renewable energy. This is the warning we received from the Leader of the Opposition. If you look at the much vaunted 2036 plan, something that was actually announced after the announced closure of Northern, there is no reference to the word 'electricity' in that plan, and 'energy' is mentioned only in passing in relation to mining and energy.

If this was the signal moment, if this was the warning that should have been ringing in our ears, why does it find no representation in the key policy document of the Liberal Party of South Australia? The Leader of the Opposition advances a hypocritical proposition on this question. If you go to the Warburton review, the very review which was set up by former prime minister Tony Abbott, it was not set up to be kind to renewable energy. The Warburton review itself finds, on the basis of AEMO advice that, while there are some technical challenges, there is no difficulty with integrating renewable energy into the National Electricity Market. This is as late as 2015.

These are the so-called warnings that have been provided by the authorities who are entrusted with the responsibility of managing this market. The one, though, that is most galling is this suggestion that we have continually denied responsibility for the energy crisis that somehow we have caused in circumstances where those opposite have consistently—

Mr Bell: Yes, you have caused it.

The SPEAKER: The member for Mount Gambier will withdraw under the sessional order for an hour for flagrant breach of the standing orders.

The honourable member for Mount Gambier having withdrawn from the chamber:

The Hon. J.W. WEATHERILL: We have consistently advocated for a price on carbon in this place since 2007—for 10 years, a decade. Imagine the changes that could have occurred to the South Australian and the national energy market if we had had a price on carbon in place: the investment opportunities, the stabilisation of the grid, the cleanliness of the grid, the downward pressure on prices. Those opposite are seeking to advance the proposition that we are at fault for their vandalism of the National Electricity Market, and this is also from the people who privatised this very South Australian electricity market and made sure it had fewer connections with other states that could have provided some modicum of protection.

They seek to drive up the price of these assets but leave us vulnerable at the end of this network. Those opposite are seeking to advance the proposition that we have not accepted responsibility. Indeed, we have. We have stepped up with an energy plan which is an intelligent, competent and effective way of dealing with the system. The reason why we are seeing this motion being promoted now is because they can see this plan is working.

Yesterday, we had the announcement of the reopening of the Pelican Point power station—an absolutely crucial element, an additional 240 megawatts of power being brought into the system which will assist us both in driving down prices and increasing stability. What we know is that Pelican Point would not have opened if Northern had been operating. It is as simple as that. That is what the owners say, that is what every sensible commentator says. Look at the time it has taken for Pelican Point to open from the time of Northern closing.

The markets do not respond when governments involve themselves and sterilise these markets. Just imagine if somehow we had been able to keep Northern open, even for any period. The period during which they would have been open would have sterilised the investment opportunities of other people coming in, the long-term solutions which we are now seeing put in place. Let's go to this so-called Northern deal, the dud deal.

The Northern deal was no deal at all. What it involved was the suggestion that they would pull up stumps at any time. It is illusory to say they would stay here for five years or three years or for any period of time. They simply could not guarantee us they could stay for even one week. We were meant to hand over taxpayers' dollars, sterilise the market in terms of future investment, on the basis that they could not simply give us any commitment at all.

As for the question of due diligence, our prudential advisers advised us against accepting this deal. Imagine the scandal if we had not accepted their advice. Imagine the scandal if we had applied scarce taxpayers' dollars to somehow kick the can down the road for some unspecified period of time, offering no certainty for the people of Port Augusta, offering no certainty for the people of South Australia in terms of their energy security needs.

What we have seen demonstrated here today through the moving of this motion is a Leader of the Opposition who is beginning to understand that people are questioning his leadership. They are questioning the fact that we have an energy plan, one that he was demanding that we produce, and the moment we produced it he said we should wait for the Finkel report. This is a Leader of the Opposition who at the end of the day simply always bows down and pays homage to Canberra. This is the simple and only modus operandi for the Leader of the Opposition.

The reason that people cheered us when we stood up and asserted South Australia's interest is because they want somebody to stand up for South Australia. They do not want some dud deal that offers the illusion of coal as our future. They want an energy plan that secures their energy future.

Mr VAN HOLST PELLEKAAN (Stuart) (14:35): I stand here to support the Leader of the Opposition and the motion, as all members on this side of the house do. It is very clear that by any standard this government has failed with regard to energy policy and the delivery of electricity. We have the highest electricity prices in the nation. We have the least reliable electricity in the nation. By any definition, that is a failure. Unfortunately, what we have with that is the highest unemployment in the nation as well. It is not a coincidence because they go together. These things all come together after 15 years of this government in office. There is no-one else to blame. No other state has anything similar to this with regard to electricity.

This government has failed South Australians and failed the people of Port Augusta and Leigh Creek as well, people in my electorate. This government has failed South Australia in outcomes, failed South Australia in process and failed South Australia with secrecy and duplicity. Every household and every employer in South Australia has been failed by this government. If this government genuinely believed that what it was doing was right, it would not fight so hard to keep information secret from the public.

The public history that the government wants South Australians to know about is very simple. In June 2015, Alinta announced closure plans. In November 2015, Alinta clarified that closure would be in March 2016, and the power station and the mine actually closed in May 2016. The government would like it to be that simple. The government would like that to be all that anybody knows, apart from the fact that along with that went 438 direct jobs. You could probably double that number with regard to full-time jobs employed by other organisations where that employment is directly related to the existence of the mine and the power station.

This actual history is slowly becoming apparent. It takes FOIs, it takes the Ombudsman to step in and it takes all sorts of organisations and people to get information out, and there is more to come. We know that Alinta made offers to the government. Of course, now everybody in South Australia knows that Alinta offered that, if the government paid $25 million, it would keep its power station operating for another three years. We also know that, from the moment Alinta announced its closure plans, base future prices for electricity in South Australia skyrocketed. From the moment that the power station actually closed, the spot market skyrocketed and all households and all South Australian employers and employees have suffered with that ever since.

But the government provides many excuses, many rubbish excuses. They blame privatisation—absolute nonsense. Victoria and South Australia were both privatised at approximately the same time 19 years ago, yet Victoria does not have these problems. Victoria has had the cheapest electricity in the nation for many years now. They blame the federal government. If that were true, all states would be affected the same. They blame the national market operator, they blame the generators and they blame the retailers. They say the other states hate us. It just goes on and on.

They say that there was not going to be enough coal. Alinta was getting close to running out of the coal that it had exposed, but in early 2015 Alinta publicly presented a plan to invest to access enough coal for the Port Augusta power station to see the power station through until 2032. However, they were not able to pursue that realistic, researched plan because government policy forced the closure of the Port Augusta power station. As well as shamelessly blaming everyone else, they shamelessly take credit that is not due to them. In question time yesterday and just now, we heard the Premier trying to take credit for the fact that the Pelican Point power station has come back on.

Anybody who knows anything about this industry knows that Pelican Point and ENGIE have been working towards that reopening for many months. In fact, it has actually been the plan and their ambition for longer than that. Everybody knows that it has nothing to do with the government announcement that was made two weeks ago. They have been working on this for a long time, and it is nothing to do with the government, but the government will shamelessly try to take credit for it.

The government's $550 million taxpayer-funded—so, electricity consumer-funded—package that it wants to embark upon to fix the problem that it created is so popular with the market that the ASX announced that base future prices have actually gone up 8 per cent on average over the next three years. In fact, there are consumers willing to pay 17 per cent more for their electricity in three years' time than they would have had to pay on the market the day before the plan was announced. That is how confident the market is of the success of this plan.

AEMO has said, since the plan was released, that they predict that there will be 125 days in the next two years when South Australia will have a reserve shortfall. AEMO announced that since the government's plan was announced. AEMO do not have any faith in the plan either. We must have a sensible, well-planned, well managed transition away from fossil fuels towards renewable energy, but we cannot have the overnight, ideologically driven, politically driven pursuit of renewables that are without storage immediately, as the government has pursued for many years. This is not something we are dealing with only at the moment.

The government was warned in 2009 by consultants it paid to give it advice that it should not increase its renewable energy target from 20 per cent to 33 per cent but did it anyway. In fact, the economist the government uses to help sell its plan, Mr Danny Price from Frontier Economics, who is well regarded, said in January last year that the problems South Australia is facing are actually the fault of the government. He said very clearly that government policy has created these problems. Good on him for trying to help the government get out of these problems that it created, but that is proof that the government wants to spend $550 million of taxpayers' money to fix a problem that it created.

Keeping the Port Augusta power station open for a few more years would have and could have contributed to this transition. It would have meant that we would have had lower prices during the transition, we could have had fewer blackouts during the transition and we could have had fewer job losses during the transition. We also would have had an effective market with reasonable wholesale prices and reasonable retail prices, instead of the extreme volatility we are seeing.

I am sure that even ENGIE is looking at their situation at the moment, seeing the wildly low and high prices and thinking, 'Goodness, what have we done? Where are we going?' Everybody needs a degree of stability. I am not saying that they need certainty, but they need a degree of stability. We are seeing a range of extraordinary prices in South Australia due to government policy because we have too many wind farms installed. I never say that we should not have any, but there is a saturation point. Until that energy can be stored, there is a saturation point beyond which we cannot go.

We on this side of the house know that we have to move towards renewables. We actively promote the idea of trying to access pumped hydro, trying to access solar thermal at Port Augusta, trying to access biomass—a whole range of things that can contribute—but until we get there, we need stability and we need base load electricity in the market. This government had the opportunity to spend $25 million of taxpayers' money.

That would have avoided a significant share of the estimated $500 million that blackouts have cost our state, and that would have avoided a significant share of government investment to move forward towards a future with far more reliable renewables. We need renewable energy that can be stored, that can be dispatched on demand, not renewable energy that is only dispatchable when it is generated if it is windy, if it is sunny. That is the world we have to get to.

Taking the Alinta offer, paying $25 million—a lot of money but nothing compared with the $0.5 billion that has already been lost through blackouts, by independent assessment, and the $0.5 billion that the government wants to pay for its policy—would have made the transition far more sensible and far more successful. By not taking that transition, the government has damaged Arrium, the government has damaged Nyrstar, the government has damaged every household and every employer, large and small, in our state, and the government has damaged the people of my electorate.

Figures released today by the ABS show that Australia, from 30 June 2015 until 30 June 2016, has had a 1.4 per cent population growth. South Australia has only had a 0.5 per cent population growth, but Port Augusta, the Flinders Ranges and the outback have had a negative 1.1 per cent population growth. We are also suffering in Port Augusta with a 9.7 per cent unemployment rate.

These are the things that the government have done. They have hurt every single South Australian along the way, but they have hurt the people of Port Augusta, Leigh Creek and the north of the state more than they have hurt others. If this government had had the opportunity to spend $25 million to keep a significant employer and essential service provider going in Adelaide, they would have spent the money in a heartbeat. They refuse to do it in the north of the state.

The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy) (14:47): Those were moving words that would have had some credibility if he could have pointed to a policy to alleviate all the ails he was talking about in the Mid North if he only had a policy to incentivise more storage, if he only had a policy to talk about reinvesting in Port Augusta, or if he only had a policy to point to and say, 'Here is the Liberal Party's plan for 2036.' How about 2018?

If only we were less than a year away from the election and the shadow minister could stand up talking about what ails his community and point to the policy differences that he could say will solve these issues. Alas, all we have is talking about the past, bereft of any ideas—

Members interjecting:

The Hon. A. KOUTSANTONIS: —bereft of any policy—

The SPEAKER: Treasurer, just a minute. The member for Stuart was heard in silence, yet the member for Mitchell and the member for Adelaide are immediately heckling the next speaker for the government. I will not hesitate to act. Treasurer.

The Hon. A. KOUTSANTONIS: —bereft of any intelligent idea opposite to alleviate what they claim is ailing our state. It is one thing to point out a problem; it is another thing to fix it. It is another thing entirely to fix it. We will not be lectured by people who have no policy on energy about what our plan is until they come up with an alternative. Until then, it is intellectually dishonest for the opposition to be talking about electricity given, I believe, they are the guilty party here.

We have, of course, letters being released into the public against the wishes of the private companies that have come to the government seeking assistance. The Leader of the Opposition believes that this letter will make him Premier. I can advise him that he needs a bit more than a report in The Advertiser to make him Premier. This letter is dated 6 May 2015, and I will give you a snapshot of the National Electricity Market at that time on 6 May 2015.

In April 2012, Alinta notified the market that it would only operate in the summer months, between October and March. Investment and productivity improvements enabled Alinta to bring the Northern power station to normal service again in September 2014, and the company told the market that the Port Augusta council and the South Australian community had a long-term commercial future ahead of it. In June 2014, Pelican Point station advised the market that in the April of the following year, 2015, the power station would only operate one unit in the market and that the other unit would be mothballed. I am giving you a snapshot of where we were when we received these letters.

Subsequently, the Australian market operator in 2015 put out a statement of opportunity updates for South Australia confirming the withdrawal of the remaining 231 megawatts of capacity at the Pelican Point power station in the winter of 2016. Also, on 10 December 2014, AGL announced that it would be withdrawing from service 480 megawatts from the Torrens Island power station from its A units in 2017. So, let's be clear. At the time, the Northern power station was not the only generator looking at withdrawing from the Australian energy market. It was not the only one. There were lots.

Let's go through the details of the supposed deal that those opposite are so enamoured by. Initially, consider what the Alinta letter says about site restoration costs. The initial estimate of restoration costs is $126 million set independently by consultants Jacobs. Alinta then revised these costs down to $53 million thanks to a different consultant, McMahon Services, but admits that there were risks, and I quote: 'There will never be complete certainty until site restoration is undertaken.'

Secondly, how do we think every other business, in light of what I have just told you about withdrawing out of the market, would react to the government's subsidy for one of its competitors? This is not a game of draughts: this is a game of chess—you have to think more than one move ahead.

Members interjecting:

The Hon. A. KOUTSANTONIS: Stop. The first in the queue would have been AGL.

Members interjecting:

The Hon. A. KOUTSANTONIS: They can laugh all they like. That is exactly how they behaved when they were in office. First, especially AGL and ENGIE had already notified the market that they were withdrawing capacity from the market. Quite rightly, they would have come to the government and said, 'You're subsidising Alinta, therefore you will subsidise us.' That was perfectly reasonable. What would that have cost? Ten million? Fifty million? A hundred million? Hundreds of millions? Of course, there would be no limit to the demands it would put on the public purse once the government showed a weakness and a propensity to invest in a private market. For obvious reasons Alinta, in its correspondence, does not raise these prospects.

Secondly, let's look at the economic conditions of the company and the reason this all actually began. Another piece of correspondence that the opposition do not like talking about, also released to the media against the company's wishes, details the financial difficulty that Alinta was being faced with of $300 million in negative cash flow—$300 million. Even those opposite surely would be able to understand that Alinta was running at a loss and increasingly becoming an uneconomic business. One of those reasons was because the resource the company relied on so heavily was coal.

The Department of State Development website indicates that the economic recovery of coal from Leigh Creek was only 20 per cent of the estimated coal resource. It was only 20 per cent, but you do not hear that in the questions and the statements of the opposition. Even the thermal value of the coal was about 15 megajoules per kilogram, or half the average thermal value of the Latrobe Valley coal, which has the added advantage that it does not have to be travelling 250 kilometres from the mine to the nearest power station. What that means is that Alinta had to burn twice as much coal as their competitors for the same amount of power, and that is why they were losing money.

Jeff Dimery is one of the most astute and smartest business leaders in this country. Make no mistake about it, this man is a powerhouse. He is clever, he is astute, he is charming and, most of all, he understands this market better than most. He pointed out in a radio interview that they were running out of coal and that the quality of the coal Alinta was mining towards the end was substandard and required a sophisticated blending process to raise the quality sufficient enough to burn through the station.

Let's get to the real crux of the argument. One of the main reasons that we could not accept a deal with Alinta was the quality of their resource. Finally, during all the long, complex and often changing negotiations involved with this company, there remained at the very end one clause the government could not accept—that the company reserves the right to give a month's notice to close no matter what we paid them. Keeping the plant operating for three years was always going to be difficult under this prospect, and the government did not believe, and none of our advisers believed, it was viable.

Let's discuss the hypothetical for a second. Let's say that we did pay Alinta this money, that we forked out the money to prolong what was going to happen to Port Augusta anyway. Let's pay the $25 million and then on 1 December 2016, before summer, they say, 'We are issuing you a month's notice. We're closing in the peak of summer,' unless, of course, we revise the offer. There is no battery in place and no other plan in place. We had a deal for three years of operation. The member for Stuart is happy. We are prolonging what is going on in Port Augusta.

Then this very astute businessman says, 'You are about to be short if I turn my power station off. How about we revise the offer? Instead of $25 million, let's make it $100 million because we're friends, because we're close, because it's so important to the local community. You pay us $100 million or I'm turning my 500 megawatts off, and if you don't like it the lights go out.' What would we do then? Could we get generators in time? Could Pelican Point source gas in time? Could we have other generation come in place? Would Torrens Island have mothballed their other 480 megawatts? What would Pelican Point have done?

Mr Knoll interjecting:

The SPEAKER: The member for Schubert will depart under the sessional order for the next hour.

The honourable member for Schubert having withdrawn from the chamber:

The Hon. A. KOUTSANTONIS: Let's get to the real point. They were not offering us a solution at all: they were seeking to clear the decks. I will quote Mr Dimery again. He told The West Australian last year, 'Not being exposed to coal is a massive bonus for Alinta…we're unshackled and we have a growth platform.' Ultimately, this businessman confirmed that Flinders Power would be closing its operations on 31 March 2016, and Alinta was sold just last month, I think, for a price tag of $4 billion.

They wanted out, they wanted another company to run this, they wanted us to pay for it so they could sell their assets, and they have convinced members opposite that it was nirvana. God help us if these people ever sit on this side. Talk about knocking on their door for a great deal—I have a bridge for sale, do you want one? It is unbelievable. They would have paid up, no questions asked. I have to say that the idea that we are going to pin South Australia's hope on a failing coalmine and an old power station is appalling.

What has happened since that second unit has come online at Pelican Point? We are a net exporter of energy. We are becoming more self-reliant. We have a plan to become more self-reliant, while members opposite reminisce about the glory days of coal. What a joke. If it was so important to you, why did you sell it?

Ms CHAPMAN (Bragg—Deputy Leader of the Opposition) (14:58): As the rap sheet of this dysfunctional and deceitful pair is rolled out, it becomes abundantly clear why the people of South Australia have no confidence in this government. But it gets worse. By late 2014, as the future of the Northern power station was starting to crumble and the hopeless mismanagement of transfer to any alternative reliable and affordable power supply was rolled out by this government, like a tsunami the whole of the northern area was facing massive job losses and a fractured energy supply and market.

So, what does this government do? What does this dysfunctional duo do on your behalf? They batten down the hatches, they hide in the bunkers and they certainly try to hide the evidence. They implement a strategy which is to block and delay and obfuscate every opportunity for the people of South Australia to know what is really going on. In terms of the freedom of information applications lodged in May 2015, as we approach the announcement by the Northern power station that it will be closing, the government indicate that they will not be, via the Freedom of Information Act—

The Hon. T.R. Kenyon interjecting:

The SPEAKER: The member for Newland will depart for the next hour under the sessional order.

The honourable member for Newland having withdrawn from the chamber:

Ms CHAPMAN: The correspondence for the preceding 12 months is sought. The government do not produce that material. An application is made to the Ombudsman to consider the matter as to whether there is any just reason or exemption opportunity to have that material released.

Finally, after a number of processes, on 19 September 2016—that is, nearly a year and half later—the Ombudsman directs the government to produce the documents. A month later, they do not appeal and they still do not produce them. We have to write to remind them that they have to give us the documents. Eventually, we get the documents. That is the letter of January 2015. You have all read it. South Australia has read it, I can tell you. Then we come to the 6 May 2015 letter—again, a hard-fought and kept secret. I want to tell South Australians, via you, that there are another 30 documents sitting there admitted to exist but refused to be released. They are being kept secret.

What has been going on over in the Rau ranch while all this has been going on? This is the Attorney-General, the most senior officer in this state. While the government is being sued in the Supreme Court by an aggrieved party in the Gillman deal, there is a Supreme Court order out there requiring the government to disclose documents. It is all familiar, isn't it? Renewal SA is refusing to release documents. Again, they had to be released under freedom of information application. The Auditor-General by this stage is crawling all over this action.

By October 2014, the government has said, 'It's all good. We are now going to publish some new guidelines in respect of the unsolicited bid guidelines'. It gets worse, I am sorry to say. By January 2015, about the time these letters are being written, the Attorney-General is dealing with, firstly, the Auditor-General's Report, which comes down criticising the process on Gillman, explaining the significance of what has to be done and what should be done in that regard, and also that month ICAC confirms that they are conducting an investigation into Gillman. By 13 January, the Supreme Court decision of Justice Malcolm Blue is released and handed down in respect of that particular activity—another damning indictment. All this is going on.

It must have been a shocking Christmas for the Attorney-General to have to read all this material. Nevertheless, it is all there. By 10 February 2015, he walks into this parliament, his government having been ordered by the Supreme Court to release documents, having been smashed by the decision of the Supreme Court, having been held up to ridicule, clearly by the processes operated by the Auditor-General and, ultimately, a few months later Mr Lander QC gives a complete smashing of his government, including two counts of maladministration. He walks into the parliament and dumps two folders of documents on his table in the disclosure of those documents. He is caught out, ordered by the courts to release them, and only under those circumstances does he listen to it and action it.

The SPEAKER: Alas, the member's time has expired.

The Hon. M.L.J. HAMILTON-SMITH (Waite—Minister for Investment and Trade, Minister for Small Business, Minister for Defence Industries, Minister for Veterans' Affairs) (15:03): The Premier and the Treasurer have exposed the absolute naiveté of the leader's thinking on this matter. The lack of business acumen, the lack of an alternative plan and the poor understanding of the energy market and the business of government foreshadow the mistakes those opposite would make if in government. Theatrical accusation of lies and deceit under privilege does not help South Australia to face up to the challenges we now look at in the eye.

After 20 years in politics, and after listening to this motion, I have come to the conclusion that politicians generally fall into three categories. First, there are the movers, those motivated by vision, policy agendas and the desire to change the world, people who look for solutions rather than dwelling on the problems, action people who get things done.

Then there are the groovers, those motivated by the power, the position and the personal excitement of politics. They grandstand about the problems, seeking to pass blame for effect and for a personal political benefit. Rather than getting things done, they rip things down. Then there are the passengers, who just go along for the ride in politics, making little difference. As the state government's energy plan shows, on this issue the Premier is the mover and, sadly, the Leader of the Opposition, the mover of this motion, is a groover.

Policy for a better future seems to be a no-go zone for the leader. This motion is retrospective, it ruminates about the past but it fails to deal with the future. It offers no solution. Under the leader, the opposition's position is a set of contradictions. They claim to support renewables but oppose an emissions trading scheme or a price on carbon. The leader is wedded to brown coal for the future of South Australia but his energy spokesperson has told parliament—and he said it again today—that he supports solar farms and a renewable future. The leader opposed the debate on a nuclear future, yet laid a claim that he would support nuclear energy for South Australia as part of his plan.

Under this leader, members opposite claim to support gas generation, yet they argue for coal. They claim to be financially prudent and good business managers, yet their support of an Alinta subsidy, as the Treasurer has eloquently exposed, would put the taxpayers of South Australia at an unlimited financial risk and fatal damage to the budget, with nothing to back up the assertions we have just heard that it would fix the problem. The leader wants a fossil fuel future, but he locks the gate on gas exploration. He demands that South Australia keep an old, brown coal power station open, yet his Prime Minister refuses the same course of action at Victoria's Hazelwood power station. It is messy.

South Australia's political history is marked by significant policy decisions on supply of electricity to underpin its industry and to meet its domestic needs. These decisions required political courage. In the mid-1940s, when then Liberal state premier Tom Playford moved to nationalise the Australian Electricity Supply Company, his own party, the Liberal and Country League, split, and the legislation to create the Electricity Trust of South Australia passed in 1946, and only passed with the support of the ALP and Independent members in parliament.

Some 50 years later, in the 1990s, there were more changes afoot in the energy sector. State-run electricity companies were becoming inefficient, and leading economic reformers such as then treasurer Paul Keating were advocating for a national market and some states considered the option of privatising their utilities. Generally, those initiatives were supported by the then federal Liberal opposition. Again, the intensity of the debate caused a political divide. It saw the creation of a new national market hinged on a set of regulatory arrangements and rules that enabled the electricity market to work effectively and efficiently in the best interest of all Australians.

Here we are in 2017, 90 years after the Adelaide Electric Supply Company opened for business, and we are at another watershed moment. The national system has failed and is broken. It is so broken that a failure by the automated software systems of the market operator, AEMO, to properly manage wind energy and extreme weather events resulted in a statewide blackout. It simply is not up to date. Further market operator failures in February this year resulted in unnecessary load shedding events. That system was designed 20 years ago, and the rules that set out how that market would operate are now 20 years old.

While we wait for the national parliament and the national market operators to catch up with the new era, to move into the 21^st century, South Australia has developed a plan to improve our position and to transform our market. Already that plan has resulted in new investment, with yesterday's announcement of a deal between Origin and ENGIE to make full use of the gas-fired generation from Pelican Point.

What is the alternative South Australian energy plan? The leader who has moved this motion has proposed paying money to an old coal-fired plant to maybe hang around for a few years, losing money every year and increasing the cost of remediation to South Australian taxpayers, with no guarantee it would have solved any of the issues we have faced. The Marshall option is the 1946 plan. He says his vision is that '2036' starts now. This week his vision looks more like '1946, let's go back there'; 1946 was a great time that was. It is the year that Tupperware was first sold in the USA. I am sure the deputy leader would have been there. That is the Marshall vision—brown coal and Tupperware containers to carry your lunch.

The voters of South Australia recognise that there is no going back to brown coal or black coal and that we need to move on to a new energy mix. Battery storage and renewable energy and a range of other prospects are included. That is all outlined in the government's sound and assertive policy, entitled 'It's time to take charge of our energy future'. The government has come up with a plan of action that will deal with them and this issue in the short term, the medium term and the long term.

I simply ask: what has happened to policy development on the other side? I have listened to the cabinet debates. I have listened to the evidence and the various options. I have seen the options considered and chosen, and I have seen the public testing of that information. I have seen the quality of the decision-making process, and I am also very aware of the quality of the decision-making process opposite.

An honourable member: No, you're not.

The Hon. M.L.J. HAMILTON-SMITH: Yes, I am. I can see it has gone downhill even further, should that be possible. We have a plan. What is yours? This motion is based on a backward looking vision based on brown coal and previous eras from a world that has simply moved on. You need to get with it. What we should have been dealing with today was the opposition's alternative plan, a battle of ideas. Instead, all we have is a muddle.

The house divided on the motion:

Ayes 20

Noes 24

Majority 4

Motion thus negatived.