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House of Assembly - Fifty-Fifth Parliament, First Session (55-1)
2024-09-24 Daily Xml
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Bills

Climate Change and Greenhouse Emissions Reduction (Miscellaneous) Amendment Bill

Second Reading

Adjourned debate on second reading (resumed on motion).

Mr PATTERSON (Morphett) (15:49): As a quick summary of where we got up to prior to the break, I was talking about the timing of when this bill was tabled here in the House of Assembly in South Australia. It came at a time when we had newspaper reports around the massive electricity bill and power price increases being experienced by some very well known South Australian companies, including Nippy's. It also came the same week that ESCOSA released their market retail offer report around retail electricity prices which showed that household bills had risen in just 12 months by $411, up to a total average bill of $2,621 which is the highest recorded residential power bill for South Australians recorded by ESCOSA.

At the same time, it also detailed what small businesses are going through. It detailed that in the last 12 months they have seen a staggering $791 increase to their electricity bills, seeing the average small business electricity bill rising to $5,364. Again, this is the highest recorded retail offer for small businesses recorded by ESCOSA in its history of these reports. At a time when they were screaming out for a response and for government attention to power prices, what we saw was the government putting in their climate change and greenhouse gas emissions changes—worried about emissions, not focusing on the real struggle that people are going through.

That is not to say that emissions should not be taken into account, but it needs to form part of the energy trilemma that is often spoken about. We need to make sure that prices are looked after, that reliability of the grid is looked after so that when businesses and households go to switch on their power in winter the electricity is there and the system provides it on demand—I think that is something that people who are promoting a renewables-only approach do not talk about much: the system and what is involved in producing a system that we have come to rely on as a top 20 industrial country based on our energy systems—and then emissions. These need to work in unison.

Unfortunately, especially with the technologies we have at the moment, if you push too far in one direction and only concentrate on one thing there is an equal and opposite reaction. That is the lived experience here in South Australia in terms of price and reliability. I mention that the former Liberal government understood this. It is a matter of working with those three elements—price, reliability and emissions—together in a sensible manner. That is exactly what occurred, which I will touch on later on in my contribution.

But what is certainly apparent under this government is that they are failing at that. They are concentrating on only one thing, which is emissions. They are aggressively pursuing emissions targets—that is quite clear from this bill that we have before us—but with no concern for what the impact could be for South Australians and for the various industry sectors as well.

As I outlined initially, the bill sets targets. It sets a primary target of net zero by 2050—which, again, this side of the house has also supported—but it looks to set an interim target by December 2030 of a 60 per cent reduction in South Australia's emissions and also a renewable electricity target of net 100 per cent renewable electricity by December 2027. This is, as I said, in the midst of the highest power prices that households and small businesses have had on record here in South Australia.

Because of that, it leaves no option for the opposition to be moving amendments to this bill to make sure that not only is this bill concentrating on setting emissions targets and renewable electricity targets but that it also looks at setting a residential power price guarantee as a target, setting a small business power price guarantee as a target and also setting up a reliability guarantee as a target.

It is quite clear that these are implicit in the policy and should not be ignored in terms of the policies coming forward that this legislation will enact, if it is successful, and also the planning that goes on. While making sure that, yes, the aim is to reduce emissions, it also takes into account the pain that is being felt and makes sure it is an orderly transition. As I said before, it is a trilemma. It is not about having one and not the others; it is being able to work with all of them.

In terms of emissions, certainly we on this side the house acknowledge quite clearly that here in South Australia we need to work in partnership and be part of a global effort to help reduce emissions. Of course, it is in our interests. Climate is something at the forefront of most South Australians' minds, just by virtue of our geography. Here in South Australia we are the driest state in what is the world's driest inhabited continent, and so of course, perennially, since before European settlement, before the industrial age, climate and rainfall have been an ever-present challenge, but certainly in terms of European settlement and the industry and the built form that that brought with it, that has been an ever-present challenge around the growth of the state, whether that is the economic growth or the social growth of the state.

Of course, it is important. Still to this day a significant amount of our water comes from the River Murray for our drinking water supply. Going through other states, it is dependent on other states, hence why we need to be part of a global effort and a domestic effort, not just trying to think that we are a standalone, segmented part of a country and segmented part of the world. It is also important for agricultural production here in South Australia, so we are ever-mindful of this. Some of the effects of climate change in the Australian context have been reduced rainfall and more frequent and severe heatwaves, which then makes us more susceptible to droughts and bushfires, so certainly they are challenges that are taken seriously as a result.

As I said, because of that, the climate is a global climate. You cannot say, 'South Australia has its own climate that can be cocooned off from the rest of the globe.' In fact, it is very integrated, and there is a lot of cause and effect on South Australia outside of South Australia's influence. The success of global efforts to avoid the worst effects of climate change are certainly in South Australia's interest.

It has been, and is, a priority of the opposition, because we acknowledge that there are risks and challenges that are posed by climate change. As an example—and it lends towards where this bill is going in terms of talking about plans and policies—in December 2020 the former Liberal government released its Climate Change Action Plan. It was developed with the input of renowned climate change expert Professor Ross Garnaut and covered the five-year period from 2021 to 2025. This bill is looking to have plans going forward, so that would move on from that 2025 end point, presumably.

The plan that was released back in 2020, the Climate Change Action Plan, focused on seven areas, with an aim of providing a pathway to achieving net zero emissions by 2050. Part of that report talked about where the state was tracking at the time. At the time, in December 2020, we were on track to reach 100 per cent of our renewable electricity demand by 2030. That was at that stage. Also, we were on target to have emissions overall reduced by 50 per cent by 2030. That was the frame at the time.

In terms of data that is provided, there is data helpfully provided and tracked each year to see how the state is progressing. Looking back at that time of the release of the report, the data showed that in 2005—comparing with 2005 levels, which is what this bill continues to do—the state's net greenhouse gas emissions were hovering at approximately 36 megatonnes. By the time it had got to 2019, it was sitting at around 24 megatonnes, about a 33 per cent reduction.

It is interesting how that is divided up. There are multiple contributors to those emissions overall. If I go through them in sequence: waste; land use, clearing and forestry; agriculture; industrial processes; fugitive emissions; other energy; transport; and energy industries. Looking at the progress of the state over those years from 2005 to 2019 and then moving forward to the latest data in 2022, the reduction in emissions for the state has predominantly come from the energy industries, talking to the renewable energy transition going on in the state. That was around five megatonnes of reduction. The other aspect was land use. Land use contributed about six to 6½ megatonnes overall. They were the primary drivers in 2019.

Fast-forwarding to the latest data in 2022, it is seen that overall the state's emissions reduced from 24 megatonnes down to roughly 16 megatonnes, which is around 55 per cent, off the top of my head. Again, most of the driving of that has come from those two segments I spoke of before. The energy industries have reduced a further roughly two megatonnes, so they are contributing three megatonnes to the emissions, then there is land use and land clearing. By having more land put over to forests, crop lands, wetlands, etc., that has seen a really significant reduction in terms of its impact on overall emissions because these are effectively sinks. They are used to offset emissions elsewhere in the economy. That is around 10 megatonnes.

Again, there are big increases there, and that is what is driving it. In fact, if you look at it overall, if you look at the reduction over that time from 36 megatonnes down to 16 megatonnes, more than 50 per cent of that has come from land use. It will certainly be relied on in the targets going forward that that is maintained, and that is not necessarily a given. When you look at the land use changes over time, they are quite sporadic, which you would expect. If there is clearing, then that would have a detrimental effect. If there are bushfires, then that would potentially have more of an effect. There is certainly an issue there around this.

It would not be without risk, certainly—I think that is a fair thing to say—for the government to rely on that land use staying at 10 megatonnes or more to see it over the line to achieve its 60 per cent reduction. The ancillary question coming out of that is there has been a lot of emphasis in the energy industries on renewable energy, but at some stage as we go forward, whether that is into 2030 or as we go to 2035, attention will be paid to some of those other sectors.

As to the agricultural sector, which the state relies on, there are questions from farmers around what the impact will be and how it is going to affect them, because they produce food here in South Australia at a very affordable price and they need to be assured that they will be able to continue to do that. You would expect that also from all South Australians who consume that high-quality food, and also milk and dairy, etc.

The point of going through that is to elaborate on where things are heading, and it shows that over that time of the former Liberal government emissions did come down and at the same time we were mindful of the other parts of the energy trilemma, price and reliability, which I will touch on a little later.

It is worth looking in the context of where South Australia sits compared to the rest of the world as well, because I think there is a lot of pressure, maybe a lot of misunderstanding around the fact that South Australia's trajectory is the same trajectory in every other place in the world. I think the lived experience is certainly not the case; in fact, as has been pointed out by some well-respected bodies, it is going the other way at an alarming rate.

One of those respected bodies is the Intergovernmental Panel on Climate Change. It releases assessment reports on an ongoing basis. The latest one was in 2022. They released their sixth iteration of assessment reports that give scientific and technical knowledge around what is going on in climate change, what the opportunities are, what the challenges are, but also the third of these IPCC assessment reports, Mitigation of Climate Change, demonstrates the growth in greenhouse gases over time.

If we look at starting in 1990, global emissions were 38 gigatonnes of CO2 equivalent. That is not just carbon dioxide; that is other gases that are greenhouse gases—methane and the like. By 2005, which is our baseline here in this legislation we are talking about, it was approximately 47 gigatonnes. That is 47,000 megatonnes, because I talked about megatonnes beforehand, so I might keep it in the same units. That was in 2005 global emissions. By 2019, these global emissions had increased to 59,000 megatonnes.

If you look at where a lot of that growth is coming from, that is a massive increase of 12,000 megatonnes in 14 to 15 years. If you look at where a lot of those emissions are coming from, it points to eastern Asia, so you have two massive population centres of a billion-plus in China and India as the bookends, and then between that the growth engine of Asia as well. Eastern Asia made up 27 per cent of those 59,000 megatonnes of emissions. North America actually was 12 per cent, which showed a reduction from 18 per cent. Europe was 8 per cent, going down from 16 per cent.

You can see in broad terms that you have the developed economies reducing their emissions but the developing countries around the world where they have massive populations are overwhelming those reductions. That is on a global scale.

If we look at Australia, I have tried to talk about the context of people saying: is Australia doing enough? Surely, other countries are moving quicker and Australia is lagging behind. When you look at what was said by the IPCC, in fact, you find that Australia's emissions in 2005 were 652 megatonnes and they decreased to 530 megatonnes by 2019. So Australia has reduced its emissions and, as I said before, South Australia's emissions reduced from 36 megatonnes in 2005 to 24 megatonnes in 2019.

To put that in perspective, I had just been watching the grand final at Adelaide Oval on the weekend. Adelaide Oval has a capacity of 50,000, so it is a massive stadium. If we look at the Optus Stadium in Perth, that has a capacity of 60,000, so that equates roughly to the 59,000 megatonnes. So looking at that, if the Adelaide Oval was full and then you crammed in another 10,000 people so that you had 60,000 people sitting there, overall, that represents the global emissions. Looking at South Australia's component of that, there would be 24 people there; 24 people in that whole massive stadium represents South Australia's component of those emissions.

It does help to put that into perspective, because there is, of course, pressure to act and act at different speeds as well. As I said before, we are really very reliant here in South Australia on global efforts and, at this stage, as I have said before, the IPCC indicates what the world is doing, which is of concern and talks to the challenges of trying to mitigate climate change. I think that there is the realisation that some of these effects and temperature rises that come from this, that really have occurred since pre-industrial times, may well become permanent just by the nature of the emissions increases going on worldwide.

They are the 2019 figures. It is interesting to await the next lot of assessment reports, but in between time, while we wait for that from the IPCC, we can certainly get a bit of an inkling of where things are heading. If we break down the hydrocarbon use throughout the world into some of its core components, if we look at maybe gas and acknowledge how important it is as an energy source for Australia, South Australia and the world, we think of it quite often as electricity generation but also in terms of driving industry, helping with fertiliser in terms of agriculture, helping with construction in terms of steelmaking in some instances, and with cement as well.

In terms of the representation of gas in Australia, it is about a quarter of the country's energy mix. When I look through South Australia's emissions, in terms of other energy, it has remained quite constant over the journey as a consideration. When you look at what the international energy agents have to say, they have released their global energy outlook and they envisage through to 2050 gas continuing to play a large role in the international energy mix. They even broke it down into regions. They found that gas demand in Asia is forecast to grow by about 50 per cent between now and 2050. This again speaks to what I spoke about in terms of the emissions profile coming out of the Asia region. You have growth and populations trying to get out of poverty there.

It is worth reflecting that in this report it also assumed that by 2050 about 70 per cent of that global gas demand would be served with abated gas through carbon capture and storage. From a South Australian perspective there are opportunities in Moomba. There are disused gas wells there and the opportunity has been well investigated by Santos. They have gone through studies dating back to before the 2020s, such that they progressed to FID in November 2021 for stage 1 for their CCS project, and the first aspect of that is to capture 1.7 million tonnes of carbon dioxide equivalent per year, which talks to, to a large extent, the emissions within that Moomba gas production facility. When you are looking at South Australia's emissions, you have about two megatonnes of fugitive emissions, so certainly that would handle a large percentage of the state's fugitive emissions.

There is work being done from that perspective, as I said, begun during the term of the former Liberal government. Going forward, there are certainly opportunities to expand the amount of CO2equivalent captured there in those disused wells—a quite significant portion, upwards of 20 million tonnes of CO2 per year. That, again, talks to a comparison of the state's overall net emissions as well.

Getting back to talking about what is the trajectory for emissions around the world, when you look at the International Energy Agency talking about global coal consumption, coal reached an all-time high in 2022 and the world is heading towards a new record in 2023. Again, it is finding that advanced economies are reducing their dependence on coal, but there is massive growth in developing countries around coal consumption. Again, in the Asia region, China has a massive amount of coal capacity and is continuing to build new coal-fired stations. India is equally doing the same. There are real pressure points from that perspective in terms of coal use globally and where that might head, unfortunately, with global emissions.

Finally, oil as well. The US government's Energy Information Administration said that the world's use of oil was at a record high, higher than the peak before the COVID pandemic, at more than 100 million barrels a day. This is a sobering foresight of where things are heading. It speaks to the fact that, while we have had globally renewable energy increase in terms of build out of renewable energy throughout the world, unfortunately it has not necessarily replaced some of those hydrocarbons but has effectively been as an adjunct to them. That is because the world does want cheap energy, especially the developing economies, they want to get their populations out of poverty.

It is a challenge. It is really quite complex for the world to handle. What we really do need to realise when considering legislation such as this, and other aspects of it, is that South Australia alone is not going to restore a safe climate by itself, rather it needs to work in conjunction with a global effort. We cannot influence South Australia's climate, let alone Australia's, let alone the world's, just by ourselves. We need to be part of an international rules based order. Of course, we should work with the international community to reduce emissions.

As I said earlier in this discussion, in this debate, it really is misleading for people to think that the climate in South Australia can be totally controlled by what we do here in South Australia or, in fact, what Australia does. We are heavily dependent on the big massive emissions sources throughout the world, which I have discussed before, eastern Asia, North America and Europe to name a few.

I have said this before, and this was addressed as part of that Climate Change Action Plan, it is imperative that in South Australia we put in place adaptation measures to plan for these changes that may well occur because of climate change. There needs to be an emphasis on adaptation because no matter how much we would like to hold this back and think that we could directly influence what is going to happen to the South Australian climate we are going to have to deal with what is going on in the world as well.

That is a pertinent point. It certainly was one at the front of mind of the opposition here. Certainly, the approach of the former Liberal government when in government was to make sure that practical measures were put in place, making sure that we drove action on the ground to make sure that people and their communities can see what is going on.

So of course there was effort around emissions, there was effort around adaptation, which I think is going to become more and more critical as we go forward. But the opposition is still very mindful of the energy trilemma and making sure we are putting in place plans to make sure that energy prices are affordable for South Australians, visitors and households and also that the system that is built out is reliable as well.

In summary, the former Liberal government focused on some key areas, helping households with the Home Battery Scheme and helping industry in the overall system with demand management and grid-scale storage. The other aspect was really trying to push through and get the second interconnector between South Australia and New South Wales in place, being built and worked on, which is the case at this point. We are very much looking forward to when that comes online, because when the state does produce excess renewable energy it can be exported through this second interconnector. It can basically provide 800 megawatts of export into New South Wales.

At the moment, we have the Heywood interconnector to Victoria, and that is the only one, so that really curtails what can be exported. We have seen stories, only last week, around the curtailment that is going on with solar farms. This will be a massive increase to the capacity of electricity that can be brought to market to help bring renewable electricity not only to South Australia but also to Victoria and to New South Wales.

Realistically, that is an overall capacity of about 1.4 gigawatts of renewable electricity that can be exported when conditions are right. That allows overall for there to be an achievement of 100 per cent net renewable energy without interconnectors. There is still the requirement, certainly in 2027, to run gas-fired generation and occasionally diesel generation and to import electricity at times from Victoria. Without these, we would not be able to reach this 2027 target. So, certainly, it is a key fundamental advantage to the South Australian electricity system that will help reliability.

Of course, we have had those issues when South Australia gets islanded, when the Heywood interconnector goes down, but also going forward it allows the state to reach this target. I think it certainly should be acknowledged that without it there would be no way that this December 2027 target that has been put in place by the government would be able to be reached. Having said that, those plans might have helped in terms of emissions, but what they certainly did do is help in terms of prices that households were having to pay.

What we found from these ESCOSA reports, which I talked about previously, is that under the former Liberal government we saw prices fall. From June 2018 through to December 2021, we saw the average household power bill reduce by $421. An average household electricity bill of $2,244 on 30 June 2018 went down to $1,823 by December 2021. That is where I mention the decrease of $421, so overall a reduction there.

At the same time, we also saw a similar reduction for small business, where they had their bills reduced by about 17 per cent. On 30 June 2018, small businesses' average bills were $4,446, and by December 2021, they fell down to $3,679, so a fall of $767. So we saw this energy trilemma working in unison where prices were coming down and reliability was also very satisfactory. There were zero customer hours lost to unscheduled outages over that period, compared with the former Labor government where there were seven million hours lost and, of course, the statewide blackout, so there are reliability issues as well.

Another proof point around what was going on is the Australian Energy Regulator. Their default market offer is another indicator of household electricity bills. Between July 2019 and July 2021 we saw the default market offer for households reduce by as much as $343, so prices were coming down.

The government, faced with this reduction in prices, just thought, 'We won't have to put much focus on that; that will just keep going along as is and we will just concentrate on emissions and really push hard into that area.' What we see as a result, though, is massive increases in energy bills. Again, I spoke at the outset around what has been going on.

In their latest report, released the same week as this amendment bill came into the house, ESCOSA showed that between June 2023 and June 2024 household bills went up by $411. The average household electricity bill has now risen to $2,621, the highest recorded by ESCOSA. This is a record. The government is good at records; they also have record ramping. For the things that touch people day to day, this government is creating records—but the wrong type of records.

This is the third report that has been released by ESCOSA during this government's term, and each of those reports has shown power bills increasing from the previous report. The latest report from December 2021 of $1,823, under the former Liberal government, had increased by June 2022 to $2,041. This trend continued. By June 2023 the household bill had increased to $2,210, and now with the latest report it is, as I said, at $2,621. All that work of bringing prices down for households has been undone in 2½ short years.

I have read a lot of figures there. We have seen The Advertiser reporting around the effect on businesses, but there is also the effect on households and pensioners as well. The Advertiser reported on pensioner Rick Wahlheim, explaining that his power bill has been getting tougher and tougher, rising from $900 to $1,400. We have seen massive jumps in household power bills. As I said, the average bill for households jumped by $798, a 44 per cent increase—massive increases there.

We have seen a similar trend with the default market offer of the Australian Energy Regulator, as I spoke about. Between July 2021 and July 2024 the default market offer for households skyrocketed by as much as $669, which is a 32 per cent increase—mind you, there was a slight reduction of as little as 1½ per cent in the latest one because prices have skyrocketed even more.

It is hard for South Australians. The default market offer shows that household electricity bills are more in South Australia than in Sydney, more than in Melbourne and more than in Brisbane. But, as I said at the outset, it is not surprising because the government's focus has been elsewhere. They did not bring a plan to the 2022 election to make sure electricity is affordable and reliable, and now households are paying a massive price for this.

Reading through this ESCOSA report, small businesses are also facing massive increases. They have seen their bills rise between June 2023 and June 2024 by a staggering $791, such that the average small business electricity bill has now risen to $5,364. That is the highest recorded small business bill in ESCOSA's reporting history, so a massive jump overall. We have seen power bills for small businesses jump by $1,685, an increase of 45 per cent. So these are big jumps—44 per cent for households and 45 per cent for businesses—and it is having an effect; it is impacting the cost of doing business here in South Australia. We have prices going through the roof.

At the same time, AEMO—another energy market body; they release reports also—have released their latest Electricity Statement of Opportunities. It shows that South Australia is at risk of a potential lack of electricity generation this summer. Again, there is the threat of blackouts hanging over the heads of South Australians. The way this will be resolved, though, is that AEMO will 'go out, seek and procure', in their words, extra electricity from generators in the market who can then pass this cost on to consumers through their power bills.

This is another kick in the guts for South Australians who are already struggling with high power bills and are now seeing the impact of unreliability flow through to their electricity bills to the point where they are paying some of the highest electricity prices in the nation—having some of the highest electricity price rises—and then having an unreliable grid to go with that. That is again looking at reports but then breaking them down into actual tangible businesses, so we need to put this into focus as well.

I talked about the onset around Nippy's, that family favourite, and how they had their electricity bills double and the impact of that. There is a huge concern around that. We have had other South Australian businesses as well come out publicly talking through the massive challenge they have. Recently, we had South Australian icon Vilis: they employ 350 people and have a 56-year heritage of making pies, pasties and sausage rolls that we all love. They are the latest company to see their power bills increase by 18 per cent compared to last year. The result is they have said reluctantly they have no alternative but to increase their prices.

We were talking through the agricultural sector previously, and the dairy farmers had similar increases. We had the Dairyfarmers' Association president, former upper house MP Robert Brokenshire, saying the dairy industry is suffering big electricity price rises of about 38 per cent on average. He said his bill had increased from $70,000 last year to almost $100,000 in 2024, so again more pain being felt there. It is not just dairies, it is orchardists as well. Century Orchards said that their power bills have surged by up to 60 per cent in the past three years. They are in an industry where they cannot pass on these costs, so they have no option but to absorb it. That has impacts on the running of the business, employment opportunities and reinvesting in properties as well.

Another favourite, Golden North, have said that they have seen their electricity bills increase by a massive 48.6 per cent. In 2023, the average monthly bill was $34,000 and this year it comes in at around $50,000 a month. They have not passed on prices yet in their ice-cream products but, if it does continue, the unfortunate reality as stated by their managing director is that they will not be able to absorb it; they will have to have price increases.

Another manufacturer, Seeley International, which produces air conditioning and gas heaters, saw an almost 60 per cent increase in their power bills. Again, the company had to increase their prices to make up for growing power costs. They are a company that are internationally successful, having to compete internationally. So those pressures will be keenly felt in terms of the exports.

We talked through winemakers as well, another important agricultural industry. Angove Family Winemakers have seen their bills increase by about 45 per cent. The point being made by their managing director, Richard Angove, was that energy prices were an economy-wide problem leading to inflationary pressures for business across the board. I mention them because when I talk through the different sectors in terms of what makes up the state's emissions, each of those businesses touches one of those sectors, whether it is agriculture, industrial processing or energy industries, so there are real pressures there.

Another one which really hits home for everyday South Australians, because they have interactions with supermarkets every day, is Drakes Supermarkets. They employ 6,000 people. They have seen their energy costs rocket from $10 million in 2023 to an estimated $14.5 million this year—again, a massive increase of, I think, 45 per cent. Drakes needs to maintain competition against competitors, and Mr Drake has listed supermarket giants Coles and Woolworths, of course, as the ones that spring to mind.

It makes it really difficult in terms of the competitive environment, increasing the cost of goods, but you can be assured that Coles and Woolworths are suffering similar experiences and the pressure on them at some stage would cause costs to flow through to what is on the supermarket shelf. It is a huge concern, not only for these businesses but for agriculture and food producers. Supermarkets are where we buy our food so, ultimately, it comes through into our everyday life. Mr Drake has stated he believes:

…part of the reason for spiralling bills is Australia's rush to shift to renewables. I think this is the reason we are paying so much more for electricity, because we are trying to go all to renewables…

This talks to the energy trilemma and the word 'rush'. Things need to be done in a sensible manner, making sure that emissions reductions are also very mindful and actually look to have focus and attention on all aspects of it, including price and reliability.

Hence you will see that I am introducing some amendments to this bill to help improve it and to really put a focus and help policymakers with planning for not only the minister's department but the entire public sector, because this bill touches on the public sector. It touches on all sectors as well because it talks about sector plans and making sure that when industry talks to government, it can say, 'This is going to be the effect on our business if you increase our costs because, certainly, we don't want to see those costs.'

I will go through the amendments and round them out. One of the amendments is to put in place additional targets. When we look at the targets that are trying to be introduced in this bill, in clause 2 in the objects of the act it states:

(ii) by setting the following related targets:

(A) the 2030 target;

(B) the renewable electricity target; and

These amendments propose to also insert some additional targets, the first of which is the residential power price guarantee target. This looks to legislate a target of reducing power prices for the average household by 31 December 2027 to line up with the renewable electricity target.

What is that target? It has been nearly three years since the ESCOSA report in December 2021. By the time this bill goes through the houses we will have three years on the other side before we reach December 2027, so it gives sufficient time but also puts a focus and sets a target for the residential power price guarantee to be the average household bill as specified in the ESCOSA retail prices report as at December 2021. That figure, as I enunciated before, was $1,823 for the average bill. At the moment, it is $2,621 under Labor. That is a $798 increase.

The government, if it is true to its ambition around reducing emissions, should also be true to its ambition with a target of reducing electricity prices for South Australians who are suffering. Everyone is going to say, 'Can we have a lesser target?' but that at least provides some sense and looks to restore the situation that had arrived for South Australian households under the former Liberal government. It gives it three years, so roughly the same amount of time as it has taken Labor to put prices up by $798, for them to come down by $798.

Also, the amendments propose putting in a small business power prices guarantee target. Similar to the households target, it is looking to legislate a target to reducing power prices for the average small business by 31 December 2027, the target being the average small business bill as specified in the ESCOSA retail prices report as at December 2021. That figure itself is $3,679. Presently, for small businesses the average bill is $5,364 under this Labor government, a $1,685 increase, so the government would have three years to reach this target to go in line with its target for renewable electricity generation.

I spoke previously also of the impact of grid unreliability and how that can play into the power bills of households and small businesses, so we are also looking at introducing a grid reliability guarantee target. That will be seeking to legislate a reliability standard to keep the lights on. It is based on AEMO's reliability standard of unserved energy in South Australia being no more than 0.0006 per cent of the energy demand in that financial year. That is a target that AEMO has that this government should assiduously look to work towards as well. So we are mindful, when making plans, when making policies around reducing emissions, that reliability is also front of mind to make sure that the electricity system on which we have developed our South Australian economy will be fit for purpose and will allow industry and small business to thrive as well.

The other amendment that is worth mentioning is in section 4—Interpretation, to give a bit of recognition and, I think, certainty for the agricultural sector. As I said, at present the agricultural sector contributes about six megatonnes of the state's overall net emissions of around 16 megatonnes. So a significant portion of the state's remaining emissions that are looking to be reduced sits at the feet of the agricultural sector, which we know is vitally important to feeding South Australians economically affordably and also to availability but also, from an export point of view, providing jobs and growing the state's economy.

The state's economy saw massive increases in gross state product thriving off the big grain harvests of the last three years. It is important that those farming practices, whether it is the fertiliser or the tractors, are able to continue in a competitive manner, because they are competing with the world on soils that are probably not as fertile as in most parts of the world. It is great science; we have fantastic scientific bodies that have helped in terms of increasing production volumes. It really is a credit to science here in Australia that we have very productive outputs from our grains, when you compare it to Ukraine and the grain basket of Europe, for want of an example.

Our amendment notes that 'recognition should be given to the importance of the agricultural industry to South Australia and it should be acknowledged that there is a fluctuation of greenhouse gas emissions in relation to the agricultural industry'. Of course, growing conditions vary. You would hate to see in a bumper year, when rain is favourable and conditions are favourable, that the agricultural sector is impinged because they are working under the yoke of an emission reduction that is being put on from up high in Victoria Square, when they are realistically doing fantastic work, putting more carbon into the soil with great landcare practices as well.

My colleagues from the regions will no doubt have things to say about that. Certainly, that is a concern. I think by putting this in as an amendment, again, the policy and planning should take that into account. Ultimately, as is happening in other parts of the world—as I have said, in the developing world—they are really concerned about how they can get cheap energy so that they can feed their population and so that they can have an industrial base to allow that but also to grow their economy.

I think there are some real positive additions proposed in these amendments. They really will help. Overall, in terms of going through and wrapping up my contribution here, the opposition acknowledge, and I think it should be acknowledged by many others, that action by South Australia cannot by itself restore a safe climate: it needs to be in conjunction with a global effort. But we can, in the process, commit to these targets to be part of the international efforts, the international rules-based order.

I think that serves us well as an encouragement mechanism but also to make sure we are doing our bit. The targets have been set here. By having these changes, we really need to focus. The opposition's focus is on the price of this transition and how it impacts households, how it impacts business, because the lived experience of having a massive push to renewables is that electricity prices have increased. The agricultural sector, if there were similar increases there, would be challenged, and the industrial sector as well.

What we do not want to see is industry leaving the state, because once it has left it does not come back, and effectively emissions just relocate overseas to other jurisdictions that are not as mindful of this energy trilemma; they are worried about other aspects as well. So we need to make sure that price and reliability are foremost and front of mind, which they are here on this side of the house. We need to make sure the policy and plans put in place are done in a sensible fashion, that we are not pursuing emissions targets with no concern about the impact on South Australians.

We do not want to see massive cost increases in the energy industry, and then, as I said, increases start occurring in the agricultural sector and the transport sector, in industrial processes and construction. If we are going to have targets to reduce emissions, then there also need to be targets to reduce power prices and targets to consider reliability, certainly from 2030 but then going forward as well for those other targets in 2035, 2040 and 2045.

Debate adjourned on motion of Mrs Pearce.

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