❓ Question on Notice regarding cost blow-out of the residential solar feed-in tariff scheme. The Treasurer defends the government's handling of the scheme, highlighting cost control measures and criticising the opposition's stance.
AnsweredQoN 839Legislative Assembly
QuestionView source ↗
ENERGY — RESIDENTIAL FEED-IN TARIFF SCHEME
I refer to the latest blow-out in the solar feed-in tariff scheme announced by the Premier yesterday. (1) Has the Treasurer received, and what is, the preliminary advice in relation to the cost of the blow-out? (2) Was the Premier correct when he said the blow-out was “nothing like $500 million”? (3) When did the Minister for Energy first advise the Treasurer of this emerging problem? (4) What responsibility does the government take for these failures? Mr C.C. PORTER
I refer to the latest blow-out in the solar feed-in tariff scheme announced by the Premier yesterday. (1) Has the Treasurer received, and what is, the preliminary advice in relation to the cost of the blow-out? (2) Was the Premier correct when he said the blow-out was “nothing like $500 million”? (3) When did the Minister for Energy first advise the Treasurer of this emerging problem? (4) What responsibility does the government take for these failures? Mr C.C. PORTER
AnswerView source ↗
(1)–(4) The first part of the member’s question was whether I confirm the Premier’s assessment of the blow-out. I remember what the Premier said yesterday. The second part of the member’s question was right. The Premier said that a blow-out or a cost increase for the feed-in tariff will be nothing like $500 million. That is absolutely correct; it will be nothing like that figure. Mr M. McGowan interjected. Mr C.C. PORTER : Perhaps if I just answer the member’s question. It is a complicated area. I will give members some background, and I will give a fair answer to the member’s question. I think we should start with the mechanics of the feed-in tariff. The feed-in tariff revolves around applicants making certain undertakings and the government making certain undertakings. The cost of that can be measured over the budget out years, the four years, but also over the period that those undertakings are made for, which heads out to 10 years. People undertake to have the photovoltaics installed, have the inverter capacity, and the government undertakes to buy from them the electricity they generate over what they use. That amount of money is obviously subsidised by the taxpayer. The total quantum of that subsidy over four years is one cost measure; over 10 years, it is another cost measure. The history of it, as the member would know, is that both parties made election promises that they would fund that subsidy to the tune of $23 million, which was the four-year figure. Originally, I think that was an election promise from Labor at a 40c gross feed-in tariff. When we came to government and had information from the Office of Energy, we changed that subsidy to a 40c-a-kilowatt-hour net feed-in tariff, and then we made another change. The reason we made that secondary change, which occurred around about 21 May, was that the uptake to the scheme had been very, very strong. Without some form of cap, the cost above what was budgeted for would have been very, very large. Indeed, as it was, with the conscious decision that cabinet made to cap that system at 150 megawatts, the cost of doing that, which is to say increasing the capacity and setting a cap at 150 megawatts, around the four-year period was about $100 million. That was government policy: in excess, a conscious decision was made to increase it to $100 million. Mr E.S. Ripper : What was the 10-year cost of government policy? Mr C.C. PORTER : I will get to that in a moment. What is interesting to observe is that we as a government came under immense criticism from the opposition for putting that cap on the system. The opposition’s position seemed to be that there was not a cap. What I can absolutely guarantee is that, as the subsidy was so generous, without a cap the applications would never have stopped and the costs would have been basically exponential. The opposition’s criticism of us at that time was that there should not have been a cap. Indeed, I think the shadow minister in charge in the other place put in a petition stating that the cap should be gotten rid of—which of course would have increased the cost. Over four years, at a mixture of 40c net kilowatt hour and 20c net kilowatt hour, we said the cost would be about $100 million—that is, give or take a few million, but, for brevity’s sake, let us say $100 million. Not only did we put a cap on the total quantum of 150 megawatts, we also had some other timing conditions; namely, people had to complete a correct and full application form by 30 June 2011 and prove that the energy system would be installed and connected to the grid by 30 September 2011 to get the 40c-a-kilowatt rate. Everyone else could apply after 1 July to 2011 for the 20c-a-kilowatt rate, but that the cap would be at 150 megawatts. The next part of the member’s question was: when did I become aware that there may have been a breach of that 150-megawatt cap? I became aware shortly before the last Economic and Expenditure Reform Committee meeting, which from recollection was early November, but I would have to check that date. The advice that came from the Office of Energy in preparation for that last EERC meeting struck the Premier, our respective officers and me as likely being inaccurate; that is to say that the 150-megawatt cap and the number of applications received did not appear to us to be well counted. It may well have been that there was a breach of the 150-megawatt cap. Mr M. McGowan : Whose responsibility is that? Mr C.C. PORTER : Immediately, it is the responsibility of the Office of Energy, which administers the scheme. But the member’s question is this: over four years the scheme — Mr M. McGowan interjected. Mr C.C. PORTER : I am answering the member’s question. Over four years this scheme was budgeted at about $100 million. Over four years, will there be a cost increase of that $100 million to $600 million—that is, a $500 million increase? Absolutely not. Over the 10-year period, the cost is roughly a $300 million program, based on the 150-megawatt cap and the mixed 40c and 20c feed-in tariff. The member’s question is: will that $300 million turn into $800 million? The answer is—absolutely not. Mr E.S. Ripper : Will it turn into $500 million? Come on—answer that. The SPEAKER : The Leader of the Opposition! Mr C.C. PORTER : The final figure will depend upon an application-by-application audit by Treasury that is underway at the moment and that, frankly, will take some time. My view would be, based on my very preliminary observations, and the Treasury’s preliminary look at this, is that the cap of 150 megawatts was likely breached. How substantial was that breach? It was nothing like $500 million; it was nothing of that order. It is likely to be a moderate breach, but that will require a full audit. The information that the member has been receiving that either the four or the 10-year cost will be $500 million greater than what was budgeted — Mr E.S. Ripper : It is $500 million in total. Mr C.C. PORTER : That information is absolutely incorrect. The reason I know that is that we have had a very preliminary look at it. It will be nothing like that. We have gone through this audit process because I do not have faith in the preliminary information that we have been given.
(1) Has the Treasurer received, and what is, the preliminary advice in relation to the cost of the blow-out? (2) Was the Premier correct when he said the blow-out was “nothing like $500 million”? (3) When did the Minister for Energy first advise the Treasurer of this emerging problem? (4) What responsibility does the government take for these failures? Mr C.C. PORTER replied: (1)–(4) The first part of the member’s question was whether I confirm the Premier’s assessment of the blow-out. I remember what the Premier said yesterday. The second part of the member’s question was right. The Premier said that a blow-out or a cost increase for the feed-in tariff will be nothing like $500 million. That is absolutely correct; it will be nothing like that figure. Mr M. McGowan interjected. Mr C.C. PORTER : Perhaps if I just answer the member’s question. It is a complicated area. I will give members some background, and I will give a fair answer to the member’s question. I think we should start with the mechanics of the feed-in tariff. The feed-in tariff revolves around applicants making certain undertakings and the government making certain undertakings. The cost of that can be measured over the budget out years, the four years, but also over the period that those undertakings are made for, which heads out to 10 years. People undertake to have the photovoltaics installed, have the inverter capacity, and the government undertakes to buy from them the electricity they generate over what they use. That amount of money is obviously subsidised by the taxpayer. The total quantum of that subsidy over four years is one cost measure; over 10 years, it is another cost measure. The history of it, as the member would know, is that both parties made election promises that they would fund that subsidy to the tune of $23 million, which was the four-year figure. Originally, I think that was an election promise from Labor at a 40c gross feed-in tariff. When we came to government and had information from the Office of Energy, we changed that subsidy to a 40c-a-kilowatt-hour net feed-in tariff, and then we made another change. The reason we made that secondary change, which occurred around about 21 May, was that the uptake to the scheme had been very, very strong. Without some form of cap, the cost above what was budgeted for would have been very, very large. Indeed, as it was, with the conscious decision that cabinet made to cap that system at 150 megawatts, the cost of doing that, which is to say increasing the capacity and setting a cap at 150 megawatts, around the four-year period was about $100 million. That was government policy: in excess, a conscious decision was made to increase it to $100 million. Mr E.S. Ripper : What was the 10-year cost of government policy? Mr C.C. PORTER : I will get to that in a moment. What is interesting to observe is that we as a government came under immense criticism from the opposition for putting that cap on the system. The opposition’s position seemed to be that there was not a cap. What I can absolutely guarantee is that, as the subsidy was so generous, without a cap the applications would never have stopped and the costs would have been basically exponential. The opposition’s criticism of us at that time was that there should not have been a cap. Indeed, I think the shadow minister in charge in the other place put in a petition stating that the cap should be gotten rid of—which of course would have increased the cost. Over four years, at a mixture of 40c net kilowatt hour and 20c net kilowatt hour, we said the cost would be about $100 million—that is, give or take a few million, but, for brevity’s sake, let us say $100 million. Not only did we put a cap on the total quantum of 150 megawatts, we also had some other timing conditions; namely, people had to complete a correct and full application form by 30 June 2011 and prove that the energy system would be installed and connected to the grid by 30 September 2011 to get the 40c-a-kilowatt rate. Everyone else could apply after 1 July to 2011 for the 20c-a-kilowatt rate, but that the cap would be at 150 megawatts. The next part of the member’s question was: when did I become aware that there may have been a breach of that 150-megawatt cap? I became aware shortly before the last Economic and Expenditure Reform Committee meeting, which from recollection was early November, but I would have to check that date. The advice that came from the Office of Energy in preparation for that last EERC meeting struck the Premier, our respective officers and me as likely being inaccurate; that is to say that the 150-megawatt cap and the number of applications received did not appear to us to be well counted. It may well have been that there was a breach of the 150-megawatt cap. Mr M. McGowan : Whose responsibility is that? Mr C.C. PORTER : Immediately, it is the responsibility of the Office of Energy, which administers the scheme. But the member’s question is this: over four years the scheme — Mr M. McGowan interjected. Mr C.C. PORTER : I am answering the member’s question. Over four years this scheme was budgeted at about $100 million. Over four years, will there be a cost increase of that $100 million to $600 million—that is, a $500 million increase? Absolutely not. Over the 10-year period, the cost is roughly a $300 million program, based on the 150-megawatt cap and the mixed 40c and 20c feed-in tariff. The member’s question is: will that $300 million turn into $800 million? The answer is—absolutely not. Mr E.S. Ripper : Will it turn into $500 million? Come on—answer that. The SPEAKER : The Leader of the Opposition! Mr C.C. PORTER : The final figure will depend upon an application-by-application audit by Treasury that is underway at the moment and that, frankly, will take some time. My view would be, based on my very preliminary observations, and the Treasury’s preliminary look at this, is that the cap of 150 megawatts was likely breached. How substantial was that breach? It was nothing like $500 million; it was nothing of that order. It is likely to be a moderate breach, but that will require a full audit. The information that the member has been receiving that either the four or the 10-year cost will be $500 million greater than what was budgeted — Mr E.S. Ripper : It is $500 million in total. Mr C.C. PORTER : That information is absolutely incorrect. The reason I know that is that we have had a very preliminary look at it. It will be nothing like that. We have gone through this audit process because I do not have faith in the preliminary information that we have been given.
(2) Was the Premier correct when he said the blow-out was “nothing like $500 million”? (3) When did the Minister for Energy first advise the Treasurer of this emerging problem? (4) What responsibility does the government take for these failures? Mr C.C. PORTER replied: (1)–(4) The first part of the member’s question was whether I confirm the Premier’s assessment of the blow-out. I remember what the Premier said yesterday. The second part of the member’s question was right. The Premier said that a blow-out or a cost increase for the feed-in tariff will be nothing like $500 million. That is absolutely correct; it will be nothing like that figure. Mr M. McGowan interjected. Mr C.C. PORTER : Perhaps if I just answer the member’s question. It is a complicated area. I will give members some background, and I will give a fair answer to the member’s question. I think we should start with the mechanics of the feed-in tariff. The feed-in tariff revolves around applicants making certain undertakings and the government making certain undertakings. The cost of that can be measured over the budget out years, the four years, but also over the period that those undertakings are made for, which heads out to 10 years. People undertake to have the photovoltaics installed, have the inverter capacity, and the government undertakes to buy from them the electricity they generate over what they use. That amount of money is obviously subsidised by the taxpayer. The total quantum of that subsidy over four years is one cost measure; over 10 years, it is another cost measure. The history of it, as the member would know, is that both parties made election promises that they would fund that subsidy to the tune of $23 million, which was the four-year figure. Originally, I think that was an election promise from Labor at a 40c gross feed-in tariff. When we came to government and had information from the Office of Energy, we changed that subsidy to a 40c-a-kilowatt-hour net feed-in tariff, and then we made another change. The reason we made that secondary change, which occurred around about 21 May, was that the uptake to the scheme had been very, very strong. Without some form of cap, the cost above what was budgeted for would have been very, very large. Indeed, as it was, with the conscious decision that cabinet made to cap that system at 150 megawatts, the cost of doing that, which is to say increasing the capacity and setting a cap at 150 megawatts, around the four-year period was about $100 million. That was government policy: in excess, a conscious decision was made to increase it to $100 million. Mr E.S. Ripper : What was the 10-year cost of government policy? Mr C.C. PORTER : I will get to that in a moment. What is interesting to observe is that we as a government came under immense criticism from the opposition for putting that cap on the system. The opposition’s position seemed to be that there was not a cap. What I can absolutely guarantee is that, as the subsidy was so generous, without a cap the applications would never have stopped and the costs would have been basically exponential. The opposition’s criticism of us at that time was that there should not have been a cap. Indeed, I think the shadow minister in charge in the other place put in a petition stating that the cap should be gotten rid of—which of course would have increased the cost. Over four years, at a mixture of 40c net kilowatt hour and 20c net kilowatt hour, we said the cost would be about $100 million—that is, give or take a few million, but, for brevity’s sake, let us say $100 million. Not only did we put a cap on the total quantum of 150 megawatts, we also had some other timing conditions; namely, people had to complete a correct and full application form by 30 June 2011 and prove that the energy system would be installed and connected to the grid by 30 September 2011 to get the 40c-a-kilowatt rate. Everyone else could apply after 1 July to 2011 for the 20c-a-kilowatt rate, but that the cap would be at 150 megawatts. The next part of the member’s question was: when did I become aware that there may have been a breach of that 150-megawatt cap? I became aware shortly before the last Economic and Expenditure Reform Committee meeting, which from recollection was early November, but I would have to check that date. The advice that came from the Office of Energy in preparation for that last EERC meeting struck the Premier, our respective officers and me as likely being inaccurate; that is to say that the 150-megawatt cap and the number of applications received did not appear to us to be well counted. It may well have been that there was a breach of the 150-megawatt cap. Mr M. McGowan : Whose responsibility is that? Mr C.C. PORTER : Immediately, it is the responsibility of the Office of Energy, which administers the scheme. But the member’s question is this: over four years the scheme — Mr M. McGowan interjected. Mr C.C. PORTER : I am answering the member’s question. Over four years this scheme was budgeted at about $100 million. Over four years, will there be a cost increase of that $100 million to $600 million—that is, a $500 million increase? Absolutely not. Over the 10-year period, the cost is roughly a $300 million program, based on the 150-megawatt cap and the mixed 40c and 20c feed-in tariff. The member’s question is: will that $300 million turn into $800 million? The answer is—absolutely not. Mr E.S. Ripper : Will it turn into $500 million? Come on—answer that. The SPEAKER : The Leader of the Opposition! Mr C.C. PORTER : The final figure will depend upon an application-by-application audit by Treasury that is underway at the moment and that, frankly, will take some time. My view would be, based on my very preliminary observations, and the Treasury’s preliminary look at this, is that the cap of 150 megawatts was likely breached. How substantial was that breach? It was nothing like $500 million; it was nothing of that order. It is likely to be a moderate breach, but that will require a full audit. The information that the member has been receiving that either the four or the 10-year cost will be $500 million greater than what was budgeted — Mr E.S. Ripper : It is $500 million in total. Mr C.C. PORTER : That information is absolutely incorrect. The reason I know that is that we have had a very preliminary look at it. It will be nothing like that. We have gone through this audit process because I do not have faith in the preliminary information that we have been given.
(3) When did the Minister for Energy first advise the Treasurer of this emerging problem? (4) What responsibility does the government take for these failures? Mr C.C. PORTER replied: (1)–(4) The first part of the member’s question was whether I confirm the Premier’s assessment of the blow-out. I remember what the Premier said yesterday. The second part of the member’s question was right. The Premier said that a blow-out or a cost increase for the feed-in tariff will be nothing like $500 million. That is absolutely correct; it will be nothing like that figure. Mr M. McGowan interjected. Mr C.C. PORTER : Perhaps if I just answer the member’s question. It is a complicated area. I will give members some background, and I will give a fair answer to the member’s question. I think we should start with the mechanics of the feed-in tariff. The feed-in tariff revolves around applicants making certain undertakings and the government making certain undertakings. The cost of that can be measured over the budget out years, the four years, but also over the period that those undertakings are made for, which heads out to 10 years. People undertake to have the photovoltaics installed, have the inverter capacity, and the government undertakes to buy from them the electricity they generate over what they use. That amount of money is obviously subsidised by the taxpayer. The total quantum of that subsidy over four years is one cost measure; over 10 years, it is another cost measure. The history of it, as the member would know, is that both parties made election promises that they would fund that subsidy to the tune of $23 million, which was the four-year figure. Originally, I think that was an election promise from Labor at a 40c gross feed-in tariff. When we came to government and had information from the Office of Energy, we changed that subsidy to a 40c-a-kilowatt-hour net feed-in tariff, and then we made another change. The reason we made that secondary change, which occurred around about 21 May, was that the uptake to the scheme had been very, very strong. Without some form of cap, the cost above what was budgeted for would have been very, very large. Indeed, as it was, with the conscious decision that cabinet made to cap that system at 150 megawatts, the cost of doing that, which is to say increasing the capacity and setting a cap at 150 megawatts, around the four-year period was about $100 million. That was government policy: in excess, a conscious decision was made to increase it to $100 million. Mr E.S. Ripper : What was the 10-year cost of government policy? Mr C.C. PORTER : I will get to that in a moment. What is interesting to observe is that we as a government came under immense criticism from the opposition for putting that cap on the system. The opposition’s position seemed to be that there was not a cap. What I can absolutely guarantee is that, as the subsidy was so generous, without a cap the applications would never have stopped and the costs would have been basically exponential. The opposition’s criticism of us at that time was that there should not have been a cap. Indeed, I think the shadow minister in charge in the other place put in a petition stating that the cap should be gotten rid of—which of course would have increased the cost. Over four years, at a mixture of 40c net kilowatt hour and 20c net kilowatt hour, we said the cost would be about $100 million—that is, give or take a few million, but, for brevity’s sake, let us say $100 million. Not only did we put a cap on the total quantum of 150 megawatts, we also had some other timing conditions; namely, people had to complete a correct and full application form by 30 June 2011 and prove that the energy system would be installed and connected to the grid by 30 September 2011 to get the 40c-a-kilowatt rate. Everyone else could apply after 1 July to 2011 for the 20c-a-kilowatt rate, but that the cap would be at 150 megawatts. The next part of the member’s question was: when did I become aware that there may have been a breach of that 150-megawatt cap? I became aware shortly before the last Economic and Expenditure Reform Committee meeting, which from recollection was early November, but I would have to check that date. The advice that came from the Office of Energy in preparation for that last EERC meeting struck the Premier, our respective officers and me as likely being inaccurate; that is to say that the 150-megawatt cap and the number of applications received did not appear to us to be well counted. It may well have been that there was a breach of the 150-megawatt cap. Mr M. McGowan : Whose responsibility is that? Mr C.C. PORTER : Immediately, it is the responsibility of the Office of Energy, which administers the scheme. But the member’s question is this: over four years the scheme — Mr M. McGowan interjected. Mr C.C. PORTER : I am answering the member’s question. Over four years this scheme was budgeted at about $100 million. Over four years, will there be a cost increase of that $100 million to $600 million—that is, a $500 million increase? Absolutely not. Over the 10-year period, the cost is roughly a $300 million program, based on the 150-megawatt cap and the mixed 40c and 20c feed-in tariff. The member’s question is: will that $300 million turn into $800 million? The answer is—absolutely not. Mr E.S. Ripper : Will it turn into $500 million? Come on—answer that. The SPEAKER : The Leader of the Opposition! Mr C.C. PORTER : The final figure will depend upon an application-by-application audit by Treasury that is underway at the moment and that, frankly, will take some time. My view would be, based on my very preliminary observations, and the Treasury’s preliminary look at this, is that the cap of 150 megawatts was likely breached. How substantial was that breach? It was nothing like $500 million; it was nothing of that order. It is likely to be a moderate breach, but that will require a full audit. The information that the member has been receiving that either the four or the 10-year cost will be $500 million greater than what was budgeted — Mr E.S. Ripper : It is $500 million in total. Mr C.C. PORTER : That information is absolutely incorrect. The reason I know that is that we have had a very preliminary look at it. It will be nothing like that. We have gone through this audit process because I do not have faith in the preliminary information that we have been given.
(4) What responsibility does the government take for these failures? Mr C.C. PORTER replied: (1)–(4) The first part of the member’s question was whether I confirm the Premier’s assessment of the blow-out. I remember what the Premier said yesterday. The second part of the member’s question was right. The Premier said that a blow-out or a cost increase for the feed-in tariff will be nothing like $500 million. That is absolutely correct; it will be nothing like that figure. Mr M. McGowan interjected. Mr C.C. PORTER : Perhaps if I just answer the member’s question. It is a complicated area. I will give members some background, and I will give a fair answer to the member’s question. I think we should start with the mechanics of the feed-in tariff. The feed-in tariff revolves around applicants making certain undertakings and the government making certain undertakings. The cost of that can be measured over the budget out years, the four years, but also over the period that those undertakings are made for, which heads out to 10 years. People undertake to have the photovoltaics installed, have the inverter capacity, and the government undertakes to buy from them the electricity they generate over what they use. That amount of money is obviously subsidised by the taxpayer. The total quantum of that subsidy over four years is one cost measure; over 10 years, it is another cost measure. The history of it, as the member would know, is that both parties made election promises that they would fund that subsidy to the tune of $23 million, which was the four-year figure. Originally, I think that was an election promise from Labor at a 40c gross feed-in tariff. When we came to government and had information from the Office of Energy, we changed that subsidy to a 40c-a-kilowatt-hour net feed-in tariff, and then we made another change. The reason we made that secondary change, which occurred around about 21 May, was that the uptake to the scheme had been very, very strong. Without some form of cap, the cost above what was budgeted for would have been very, very large. Indeed, as it was, with the conscious decision that cabinet made to cap that system at 150 megawatts, the cost of doing that, which is to say increasing the capacity and setting a cap at 150 megawatts, around the four-year period was about $100 million. That was government policy: in excess, a conscious decision was made to increase it to $100 million. Mr E.S. Ripper : What was the 10-year cost of government policy? Mr C.C. PORTER : I will get to that in a moment. What is interesting to observe is that we as a government came under immense criticism from the opposition for putting that cap on the system. The opposition’s position seemed to be that there was not a cap. What I can absolutely guarantee is that, as the subsidy was so generous, without a cap the applications would never have stopped and the costs would have been basically exponential. The opposition’s criticism of us at that time was that there should not have been a cap. Indeed, I think the shadow minister in charge in the other place put in a petition stating that the cap should be gotten rid of—which of course would have increased the cost. Over four years, at a mixture of 40c net kilowatt hour and 20c net kilowatt hour, we said the cost would be about $100 million—that is, give or take a few million, but, for brevity’s sake, let us say $100 million. Not only did we put a cap on the total quantum of 150 megawatts, we also had some other timing conditions; namely, people had to complete a correct and full application form by 30 June 2011 and prove that the energy system would be installed and connected to the grid by 30 September 2011 to get the 40c-a-kilowatt rate. Everyone else could apply after 1 July to 2011 for the 20c-a-kilowatt rate, but that the cap would be at 150 megawatts. The next part of the member’s question was: when did I become aware that there may have been a breach of that 150-megawatt cap? I became aware shortly before the last Economic and Expenditure Reform Committee meeting, which from recollection was early November, but I would have to check that date. The advice that came from the Office of Energy in preparation for that last EERC meeting struck the Premier, our respective officers and me as likely being inaccurate; that is to say that the 150-megawatt cap and the number of applications received did not appear to us to be well counted. It may well have been that there was a breach of the 150-megawatt cap. Mr M. McGowan : Whose responsibility is that? Mr C.C. PORTER : Immediately, it is the responsibility of the Office of Energy, which administers the scheme. But the member’s question is this: over four years the scheme — Mr M. McGowan interjected. Mr C.C. PORTER : I am answering the member’s question. Over four years this scheme was budgeted at about $100 million. Over four years, will there be a cost increase of that $100 million to $600 million—that is, a $500 million increase? Absolutely not. Over the 10-year period, the cost is roughly a $300 million program, based on the 150-megawatt cap and the mixed 40c and 20c feed-in tariff. The member’s question is: will that $300 million turn into $800 million? The answer is—absolutely not. Mr E.S. Ripper : Will it turn into $500 million? Come on—answer that. The SPEAKER : The Leader of the Opposition! Mr C.C. PORTER : The final figure will depend upon an application-by-application audit by Treasury that is underway at the moment and that, frankly, will take some time. My view would be, based on my very preliminary observations, and the Treasury’s preliminary look at this, is that the cap of 150 megawatts was likely breached. How substantial was that breach? It was nothing like $500 million; it was nothing of that order. It is likely to be a moderate breach, but that will require a full audit. The information that the member has been receiving that either the four or the 10-year cost will be $500 million greater than what was budgeted — Mr E.S. Ripper : It is $500 million in total. Mr C.C. PORTER : That information is absolutely incorrect. The reason I know that is that we have had a very preliminary look at it. It will be nothing like that. We have gone through this audit process because I do not have faith in the preliminary information that we have been given.
Mr C.C. PORTER replied: (1)–(4) The first part of the member’s question was whether I confirm the Premier’s assessment of the blow-out. I remember what the Premier said yesterday. The second part of the member’s question was right. The Premier said that a blow-out or a cost increase for the feed-in tariff will be nothing like $500 million. That is absolutely correct; it will be nothing like that figure. Mr M. McGowan interjected. Mr C.C. PORTER : Perhaps if I just answer the member’s question. It is a complicated area. I will give members some background, and I will give a fair answer to the member’s question. I think we should start with the mechanics of the feed-in tariff. The feed-in tariff revolves around applicants making certain undertakings and the government making certain undertakings. The cost of that can be measured over the budget out years, the four years, but also over the period that those undertakings are made for, which heads out to 10 years. People undertake to have the photovoltaics installed, have the inverter capacity, and the government undertakes to buy from them the electricity they generate over what they use. That amount of money is obviously subsidised by the taxpayer. The total quantum of that subsidy over four years is one cost measure; over 10 years, it is another cost measure. The history of it, as the member would know, is that both parties made election promises that they would fund that subsidy to the tune of $23 million, which was the four-year figure. Originally, I think that was an election promise from Labor at a 40c gross feed-in tariff. When we came to government and had information from the Office of Energy, we changed that subsidy to a 40c-a-kilowatt-hour net feed-in tariff, and then we made another change. The reason we made that secondary change, which occurred around about 21 May, was that the uptake to the scheme had been very, very strong. Without some form of cap, the cost above what was budgeted for would have been very, very large. Indeed, as it was, with the conscious decision that cabinet made to cap that system at 150 megawatts, the cost of doing that, which is to say increasing the capacity and setting a cap at 150 megawatts, around the four-year period was about $100 million. That was government policy: in excess, a conscious decision was made to increase it to $100 million. Mr E.S. Ripper : What was the 10-year cost of government policy? Mr C.C. PORTER : I will get to that in a moment. What is interesting to observe is that we as a government came under immense criticism from the opposition for putting that cap on the system. The opposition’s position seemed to be that there was not a cap. What I can absolutely guarantee is that, as the subsidy was so generous, without a cap the applications would never have stopped and the costs would have been basically exponential. The opposition’s criticism of us at that time was that there should not have been a cap. Indeed, I think the shadow minister in charge in the other place put in a petition stating that the cap should be gotten rid of—which of course would have increased the cost. Over four years, at a mixture of 40c net kilowatt hour and 20c net kilowatt hour, we said the cost would be about $100 million—that is, give or take a few million, but, for brevity’s sake, let us say $100 million. Not only did we put a cap on the total quantum of 150 megawatts, we also had some other timing conditions; namely, people had to complete a correct and full application form by 30 June 2011 and prove that the energy system would be installed and connected to the grid by 30 September 2011 to get the 40c-a-kilowatt rate. Everyone else could apply after 1 July to 2011 for the 20c-a-kilowatt rate, but that the cap would be at 150 megawatts. The next part of the member’s question was: when did I become aware that there may have been a breach of that 150-megawatt cap? I became aware shortly before the last Economic and Expenditure Reform Committee meeting, which from recollection was early November, but I would have to check that date. The advice that came from the Office of Energy in preparation for that last EERC meeting struck the Premier, our respective officers and me as likely being inaccurate; that is to say that the 150-megawatt cap and the number of applications received did not appear to us to be well counted. It may well have been that there was a breach of the 150-megawatt cap. Mr M. McGowan : Whose responsibility is that? Mr C.C. PORTER : Immediately, it is the responsibility of the Office of Energy, which administers the scheme. But the member’s question is this: over four years the scheme — Mr M. McGowan interjected. Mr C.C. PORTER : I am answering the member’s question. Over four years this scheme was budgeted at about $100 million. Over four years, will there be a cost increase of that $100 million to $600 million—that is, a $500 million increase? Absolutely not. Over the 10-year period, the cost is roughly a $300 million program, based on the 150-megawatt cap and the mixed 40c and 20c feed-in tariff. The member’s question is: will that $300 million turn into $800 million? The answer is—absolutely not. Mr E.S. Ripper : Will it turn into $500 million? Come on—answer that. The SPEAKER : The Leader of the Opposition! Mr C.C. PORTER : The final figure will depend upon an application-by-application audit by Treasury that is underway at the moment and that, frankly, will take some time. My view would be, based on my very preliminary observations, and the Treasury’s preliminary look at this, is that the cap of 150 megawatts was likely breached. How substantial was that breach? It was nothing like $500 million; it was nothing of that order. It is likely to be a moderate breach, but that will require a full audit. The information that the member has been receiving that either the four or the 10-year cost will be $500 million greater than what was budgeted — Mr E.S. Ripper : It is $500 million in total. Mr C.C. PORTER : That information is absolutely incorrect. The reason I know that is that we have had a very preliminary look at it. It will be nothing like that. We have gone through this audit process because I do not have faith in the preliminary information that we have been given.
(1)–(4) The first part of the member’s question was whether I confirm the Premier’s assessment of the blow-out. I remember what the Premier said yesterday. The second part of the member’s question was right. The Premier said that a blow-out or a cost increase for the feed-in tariff will be nothing like $500 million. That is absolutely correct; it will be nothing like that figure. Mr M. McGowan interjected. Mr C.C. PORTER : Perhaps if I just answer the member’s question. It is a complicated area. I will give members some background, and I will give a fair answer to the member’s question. I think we should start with the mechanics of the feed-in tariff. The feed-in tariff revolves around applicants making certain undertakings and the government making certain undertakings. The cost of that can be measured over the budget out years, the four years, but also over the period that those undertakings are made for, which heads out to 10 years. People undertake to have the photovoltaics installed, have the inverter capacity, and the government undertakes to buy from them the electricity they generate over what they use. That amount of money is obviously subsidised by the taxpayer. The total quantum of that subsidy over four years is one cost measure; over 10 years, it is another cost measure. The history of it, as the member would know, is that both parties made election promises that they would fund that subsidy to the tune of $23 million, which was the four-year figure. Originally, I think that was an election promise from Labor at a 40c gross feed-in tariff. When we came to government and had information from the Office of Energy, we changed that subsidy to a 40c-a-kilowatt-hour net feed-in tariff, and then we made another change. The reason we made that secondary change, which occurred around about 21 May, was that the uptake to the scheme had been very, very strong. Without some form of cap, the cost above what was budgeted for would have been very, very large. Indeed, as it was, with the conscious decision that cabinet made to cap that system at 150 megawatts, the cost of doing that, which is to say increasing the capacity and setting a cap at 150 megawatts, around the four-year period was about $100 million. That was government policy: in excess, a conscious decision was made to increase it to $100 million. Mr E.S. Ripper : What was the 10-year cost of government policy? Mr C.C. PORTER : I will get to that in a moment. What is interesting to observe is that we as a government came under immense criticism from the opposition for putting that cap on the system. The opposition’s position seemed to be that there was not a cap. What I can absolutely guarantee is that, as the subsidy was so generous, without a cap the applications would never have stopped and the costs would have been basically exponential. The opposition’s criticism of us at that time was that there should not have been a cap. Indeed, I think the shadow minister in charge in the other place put in a petition stating that the cap should be gotten rid of—which of course would have increased the cost. Over four years, at a mixture of 40c net kilowatt hour and 20c net kilowatt hour, we said the cost would be about $100 million—that is, give or take a few million, but, for brevity’s sake, let us say $100 million. Not only did we put a cap on the total quantum of 150 megawatts, we also had some other timing conditions; namely, people had to complete a correct and full application form by 30 June 2011 and prove that the energy system would be installed and connected to the grid by 30 September 2011 to get the 40c-a-kilowatt rate. Everyone else could apply after 1 July to 2011 for the 20c-a-kilowatt rate, but that the cap would be at 150 megawatts. The next part of the member’s question was: when did I become aware that there may have been a breach of that 150-megawatt cap? I became aware shortly before the last Economic and Expenditure Reform Committee meeting, which from recollection was early November, but I would have to check that date. The advice that came from the Office of Energy in preparation for that last EERC meeting struck the Premier, our respective officers and me as likely being inaccurate; that is to say that the 150-megawatt cap and the number of applications received did not appear to us to be well counted. It may well have been that there was a breach of the 150-megawatt cap. Mr M. McGowan : Whose responsibility is that? Mr C.C. PORTER : Immediately, it is the responsibility of the Office of Energy, which administers the scheme. But the member’s question is this: over four years the scheme — Mr M. McGowan interjected. Mr C.C. PORTER : I am answering the member’s question. Over four years this scheme was budgeted at about $100 million. Over four years, will there be a cost increase of that $100 million to $600 million—that is, a $500 million increase? Absolutely not. Over the 10-year period, the cost is roughly a $300 million program, based on the 150-megawatt cap and the mixed 40c and 20c feed-in tariff. The member’s question is: will that $300 million turn into $800 million? The answer is—absolutely not. Mr E.S. Ripper : Will it turn into $500 million? Come on—answer that. The SPEAKER : The Leader of the Opposition! Mr C.C. PORTER : The final figure will depend upon an application-by-application audit by Treasury that is underway at the moment and that, frankly, will take some time. My view would be, based on my very preliminary observations, and the Treasury’s preliminary look at this, is that the cap of 150 megawatts was likely breached. How substantial was that breach? It was nothing like $500 million; it was nothing of that order. It is likely to be a moderate breach, but that will require a full audit. The information that the member has been receiving that either the four or the 10-year cost will be $500 million greater than what was budgeted — Mr E.S. Ripper : It is $500 million in total. Mr C.C. PORTER : That information is absolutely incorrect. The reason I know that is that we have had a very preliminary look at it. It will be nothing like that. We have gone through this audit process because I do not have faith in the preliminary information that we have been given.
Mr M. McGowan interjected. Mr C.C. PORTER : Perhaps if I just answer the member’s question. It is a complicated area. I will give members some background, and I will give a fair answer to the member’s question. I think we should start with the mechanics of the feed-in tariff. The feed-in tariff revolves around applicants making certain undertakings and the government making certain undertakings. The cost of that can be measured over the budget out years, the four years, but also over the period that those undertakings are made for, which heads out to 10 years. People undertake to have the photovoltaics installed, have the inverter capacity, and the government undertakes to buy from them the electricity they generate over what they use. That amount of money is obviously subsidised by the taxpayer. The total quantum of that subsidy over four years is one cost measure; over 10 years, it is another cost measure. The history of it, as the member would know, is that both parties made election promises that they would fund that subsidy to the tune of $23 million, which was the four-year figure. Originally, I think that was an election promise from Labor at a 40c gross feed-in tariff. When we came to government and had information from the Office of Energy, we changed that subsidy to a 40c-a-kilowatt-hour net feed-in tariff, and then we made another change. The reason we made that secondary change, which occurred around about 21 May, was that the uptake to the scheme had been very, very strong. Without some form of cap, the cost above what was budgeted for would have been very, very large. Indeed, as it was, with the conscious decision that cabinet made to cap that system at 150 megawatts, the cost of doing that, which is to say increasing the capacity and setting a cap at 150 megawatts, around the four-year period was about $100 million. That was government policy: in excess, a conscious decision was made to increase it to $100 million. Mr E.S. Ripper : What was the 10-year cost of government policy? Mr C.C. PORTER : I will get to that in a moment. What is interesting to observe is that we as a government came under immense criticism from the opposition for putting that cap on the system. The opposition’s position seemed to be that there was not a cap. What I can absolutely guarantee is that, as the subsidy was so generous, without a cap the applications would never have stopped and the costs would have been basically exponential. The opposition’s criticism of us at that time was that there should not have been a cap. Indeed, I think the shadow minister in charge in the other place put in a petition stating that the cap should be gotten rid of—which of course would have increased the cost. Over four years, at a mixture of 40c net kilowatt hour and 20c net kilowatt hour, we said the cost would be about $100 million—that is, give or take a few million, but, for brevity’s sake, let us say $100 million. Not only did we put a cap on the total quantum of 150 megawatts, we also had some other timing conditions; namely, people had to complete a correct and full application form by 30 June 2011 and prove that the energy system would be installed and connected to the grid by 30 September 2011 to get the 40c-a-kilowatt rate. Everyone else could apply after 1 July to 2011 for the 20c-a-kilowatt rate, but that the cap would be at 150 megawatts. The next part of the member’s question was: when did I become aware that there may have been a breach of that 150-megawatt cap? I became aware shortly before the last Economic and Expenditure Reform Committee meeting, which from recollection was early November, but I would have to check that date. The advice that came from the Office of Energy in preparation for that last EERC meeting struck the Premier, our respective officers and me as likely being inaccurate; that is to say that the 150-megawatt cap and the number of applications received did not appear to us to be well counted. It may well have been that there was a breach of the 150-megawatt cap. Mr M. McGowan : Whose responsibility is that? Mr C.C. PORTER : Immediately, it is the responsibility of the Office of Energy, which administers the scheme. But the member’s question is this: over four years the scheme — Mr M. McGowan interjected. Mr C.C. PORTER : I am answering the member’s question. Over four years this scheme was budgeted at about $100 million. Over four years, will there be a cost increase of that $100 million to $600 million—that is, a $500 million increase? Absolutely not. Over the 10-year period, the cost is roughly a $300 million program, based on the 150-megawatt cap and the mixed 40c and 20c feed-in tariff. The member’s question is: will that $300 million turn into $800 million? The answer is—absolutely not. Mr E.S. Ripper : Will it turn into $500 million? Come on—answer that. The SPEAKER : The Leader of the Opposition! Mr C.C. PORTER : The final figure will depend upon an application-by-application audit by Treasury that is underway at the moment and that, frankly, will take some time. My view would be, based on my very preliminary observations, and the Treasury’s preliminary look at this, is that the cap of 150 megawatts was likely breached. How substantial was that breach? It was nothing like $500 million; it was nothing of that order. It is likely to be a moderate breach, but that will require a full audit. The information that the member has been receiving that either the four or the 10-year cost will be $500 million greater than what was budgeted — Mr E.S. Ripper : It is $500 million in total. Mr C.C. PORTER : That information is absolutely incorrect. The reason I know that is that we have had a very preliminary look at it. It will be nothing like that. We have gone through this audit process because I do not have faith in the preliminary information that we have been given.
Mr C.C. PORTER : Perhaps if I just answer the member’s question. It is a complicated area. I will give members some background, and I will give a fair answer to the member’s question. I think we should start with the mechanics of the feed-in tariff. The feed-in tariff revolves around applicants making certain undertakings and the government making certain undertakings. The cost of that can be measured over the budget out years, the four years, but also over the period that those undertakings are made for, which heads out to 10 years. People undertake to have the photovoltaics installed, have the inverter capacity, and the government undertakes to buy from them the electricity they generate over what they use. That amount of money is obviously subsidised by the taxpayer. The total quantum of that subsidy over four years is one cost measure; over 10 years, it is another cost measure. The history of it, as the member would know, is that both parties made election promises that they would fund that subsidy to the tune of $23 million, which was the four-year figure. Originally, I think that was an election promise from Labor at a 40c gross feed-in tariff. When we came to government and had information from the Office of Energy, we changed that subsidy to a 40c-a-kilowatt-hour net feed-in tariff, and then we made another change. The reason we made that secondary change, which occurred around about 21 May, was that the uptake to the scheme had been very, very strong. Without some form of cap, the cost above what was budgeted for would have been very, very large. Indeed, as it was, with the conscious decision that cabinet made to cap that system at 150 megawatts, the cost of doing that, which is to say increasing the capacity and setting a cap at 150 megawatts, around the four-year period was about $100 million. That was government policy: in excess, a conscious decision was made to increase it to $100 million. Mr E.S. Ripper : What was the 10-year cost of government policy? Mr C.C. PORTER : I will get to that in a moment. What is interesting to observe is that we as a government came under immense criticism from the opposition for putting that cap on the system. The opposition’s position seemed to be that there was not a cap. What I can absolutely guarantee is that, as the subsidy was so generous, without a cap the applications would never have stopped and the costs would have been basically exponential. The opposition’s criticism of us at that time was that there should not have been a cap. Indeed, I think the shadow minister in charge in the other place put in a petition stating that the cap should be gotten rid of—which of course would have increased the cost. Over four years, at a mixture of 40c net kilowatt hour and 20c net kilowatt hour, we said the cost would be about $100 million—that is, give or take a few million, but, for brevity’s sake, let us say $100 million. Not only did we put a cap on the total quantum of 150 megawatts, we also had some other timing conditions; namely, people had to complete a correct and full application form by 30 June 2011 and prove that the energy system would be installed and connected to the grid by 30 September 2011 to get the 40c-a-kilowatt rate. Everyone else could apply after 1 July to 2011 for the 20c-a-kilowatt rate, but that the cap would be at 150 megawatts. The next part of the member’s question was: when did I become aware that there may have been a breach of that 150-megawatt cap? I became aware shortly before the last Economic and Expenditure Reform Committee meeting, which from recollection was early November, but I would have to check that date. The advice that came from the Office of Energy in preparation for that last EERC meeting struck the Premier, our respective officers and me as likely being inaccurate; that is to say that the 150-megawatt cap and the number of applications received did not appear to us to be well counted. It may well have been that there was a breach of the 150-megawatt cap. Mr M. McGowan : Whose responsibility is that? Mr C.C. PORTER : Immediately, it is the responsibility of the Office of Energy, which administers the scheme. But the member’s question is this: over four years the scheme — Mr M. McGowan interjected. Mr C.C. PORTER : I am answering the member’s question. Over four years this scheme was budgeted at about $100 million. Over four years, will there be a cost increase of that $100 million to $600 million—that is, a $500 million increase? Absolutely not. Over the 10-year period, the cost is roughly a $300 million program, based on the 150-megawatt cap and the mixed 40c and 20c feed-in tariff. The member’s question is: will that $300 million turn into $800 million? The answer is—absolutely not. Mr E.S. Ripper : Will it turn into $500 million? Come on—answer that. The SPEAKER : The Leader of the Opposition! Mr C.C. PORTER : The final figure will depend upon an application-by-application audit by Treasury that is underway at the moment and that, frankly, will take some time. My view would be, based on my very preliminary observations, and the Treasury’s preliminary look at this, is that the cap of 150 megawatts was likely breached. How substantial was that breach? It was nothing like $500 million; it was nothing of that order. It is likely to be a moderate breach, but that will require a full audit. The information that the member has been receiving that either the four or the 10-year cost will be $500 million greater than what was budgeted — Mr E.S. Ripper : It is $500 million in total. Mr C.C. PORTER : That information is absolutely incorrect. The reason I know that is that we have had a very preliminary look at it. It will be nothing like that. We have gone through this audit process because I do not have faith in the preliminary information that we have been given.
People undertake to have the photovoltaics installed, have the inverter capacity, and the government undertakes to buy from them the electricity they generate over what they use. That amount of money is obviously subsidised by the taxpayer. The total quantum of that subsidy over four years is one cost measure; over 10 years, it is another cost measure. The history of it, as the member would know, is that both parties made election promises that they would fund that subsidy to the tune of $23 million, which was the four-year figure. Originally, I think that was an election promise from Labor at a 40c gross feed-in tariff. When we came to government and had information from the Office of Energy, we changed that subsidy to a 40c-a-kilowatt-hour net feed-in tariff, and then we made another change. The reason we made that secondary change, which occurred around about 21 May, was that the uptake to the scheme had been very, very strong. Without some form of cap, the cost above what was budgeted for would have been very, very large. Indeed, as it was, with the conscious decision that cabinet made to cap that system at 150 megawatts, the cost of doing that, which is to say increasing the capacity and setting a cap at 150 megawatts, around the four-year period was about $100 million. That was government policy: in excess, a conscious decision was made to increase it to $100 million. Mr E.S. Ripper : What was the 10-year cost of government policy? Mr C.C. PORTER : I will get to that in a moment. What is interesting to observe is that we as a government came under immense criticism from the opposition for putting that cap on the system. The opposition’s position seemed to be that there was not a cap. What I can absolutely guarantee is that, as the subsidy was so generous, without a cap the applications would never have stopped and the costs would have been basically exponential. The opposition’s criticism of us at that time was that there should not have been a cap. Indeed, I think the shadow minister in charge in the other place put in a petition stating that the cap should be gotten rid of—which of course would have increased the cost. Over four years, at a mixture of 40c net kilowatt hour and 20c net kilowatt hour, we said the cost would be about $100 million—that is, give or take a few million, but, for brevity’s sake, let us say $100 million. Not only did we put a cap on the total quantum of 150 megawatts, we also had some other timing conditions; namely, people had to complete a correct and full application form by 30 June 2011 and prove that the energy system would be installed and connected to the grid by 30 September 2011 to get the 40c-a-kilowatt rate. Everyone else could apply after 1 July to 2011 for the 20c-a-kilowatt rate, but that the cap would be at 150 megawatts. The next part of the member’s question was: when did I become aware that there may have been a breach of that 150-megawatt cap? I became aware shortly before the last Economic and Expenditure Reform Committee meeting, which from recollection was early November, but I would have to check that date. The advice that came from the Office of Energy in preparation for that last EERC meeting struck the Premier, our respective officers and me as likely being inaccurate; that is to say that the 150-megawatt cap and the number of applications received did not appear to us to be well counted. It may well have been that there was a breach of the 150-megawatt cap. Mr M. McGowan : Whose responsibility is that? Mr C.C. PORTER : Immediately, it is the responsibility of the Office of Energy, which administers the scheme. But the member’s question is this: over four years the scheme — Mr M. McGowan interjected. Mr C.C. PORTER : I am answering the member’s question. Over four years this scheme was budgeted at about $100 million. Over four years, will there be a cost increase of that $100 million to $600 million—that is, a $500 million increase? Absolutely not. Over the 10-year period, the cost is roughly a $300 million program, based on the 150-megawatt cap and the mixed 40c and 20c feed-in tariff. The member’s question is: will that $300 million turn into $800 million? The answer is—absolutely not. Mr E.S. Ripper : Will it turn into $500 million? Come on—answer that. The SPEAKER : The Leader of the Opposition! Mr C.C. PORTER : The final figure will depend upon an application-by-application audit by Treasury that is underway at the moment and that, frankly, will take some time. My view would be, based on my very preliminary observations, and the Treasury’s preliminary look at this, is that the cap of 150 megawatts was likely breached. How substantial was that breach? It was nothing like $500 million; it was nothing of that order. It is likely to be a moderate breach, but that will require a full audit. The information that the member has been receiving that either the four or the 10-year cost will be $500 million greater than what was budgeted — Mr E.S. Ripper : It is $500 million in total. Mr C.C. PORTER : That information is absolutely incorrect. The reason I know that is that we have had a very preliminary look at it. It will be nothing like that. We have gone through this audit process because I do not have faith in the preliminary information that we have been given.
Mr E.S. Ripper : What was the 10-year cost of government policy? Mr C.C. PORTER : I will get to that in a moment. What is interesting to observe is that we as a government came under immense criticism from the opposition for putting that cap on the system. The opposition’s position seemed to be that there was not a cap. What I can absolutely guarantee is that, as the subsidy was so generous, without a cap the applications would never have stopped and the costs would have been basically exponential. The opposition’s criticism of us at that time was that there should not have been a cap. Indeed, I think the shadow minister in charge in the other place put in a petition stating that the cap should be gotten rid of—which of course would have increased the cost. Over four years, at a mixture of 40c net kilowatt hour and 20c net kilowatt hour, we said the cost would be about $100 million—that is, give or take a few million, but, for brevity’s sake, let us say $100 million. Not only did we put a cap on the total quantum of 150 megawatts, we also had some other timing conditions; namely, people had to complete a correct and full application form by 30 June 2011 and prove that the energy system would be installed and connected to the grid by 30 September 2011 to get the 40c-a-kilowatt rate. Everyone else could apply after 1 July to 2011 for the 20c-a-kilowatt rate, but that the cap would be at 150 megawatts. The next part of the member’s question was: when did I become aware that there may have been a breach of that 150-megawatt cap? I became aware shortly before the last Economic and Expenditure Reform Committee meeting, which from recollection was early November, but I would have to check that date. The advice that came from the Office of Energy in preparation for that last EERC meeting struck the Premier, our respective officers and me as likely being inaccurate; that is to say that the 150-megawatt cap and the number of applications received did not appear to us to be well counted. It may well have been that there was a breach of the 150-megawatt cap. Mr M. McGowan : Whose responsibility is that? Mr C.C. PORTER : Immediately, it is the responsibility of the Office of Energy, which administers the scheme. But the member’s question is this: over four years the scheme — Mr M. McGowan interjected. Mr C.C. PORTER : I am answering the member’s question. Over four years this scheme was budgeted at about $100 million. Over four years, will there be a cost increase of that $100 million to $600 million—that is, a $500 million increase? Absolutely not. Over the 10-year period, the cost is roughly a $300 million program, based on the 150-megawatt cap and the mixed 40c and 20c feed-in tariff. The member’s question is: will that $300 million turn into $800 million? The answer is—absolutely not. Mr E.S. Ripper : Will it turn into $500 million? Come on—answer that. The SPEAKER : The Leader of the Opposition! Mr C.C. PORTER : The final figure will depend upon an application-by-application audit by Treasury that is underway at the moment and that, frankly, will take some time. My view would be, based on my very preliminary observations, and the Treasury’s preliminary look at this, is that the cap of 150 megawatts was likely breached. How substantial was that breach? It was nothing like $500 million; it was nothing of that order. It is likely to be a moderate breach, but that will require a full audit. The information that the member has been receiving that either the four or the 10-year cost will be $500 million greater than what was budgeted — Mr E.S. Ripper : It is $500 million in total. Mr C.C. PORTER : That information is absolutely incorrect. The reason I know that is that we have had a very preliminary look at it. It will be nothing like that. We have gone through this audit process because I do not have faith in the preliminary information that we have been given.
Mr C.C. PORTER : I will get to that in a moment. What is interesting to observe is that we as a government came under immense criticism from the opposition for putting that cap on the system. The opposition’s position seemed to be that there was not a cap. What I can absolutely guarantee is that, as the subsidy was so generous, without a cap the applications would never have stopped and the costs would have been basically exponential. The opposition’s criticism of us at that time was that there should not have been a cap. Indeed, I think the shadow minister in charge in the other place put in a petition stating that the cap should be gotten rid of—which of course would have increased the cost. Over four years, at a mixture of 40c net kilowatt hour and 20c net kilowatt hour, we said the cost would be about $100 million—that is, give or take a few million, but, for brevity’s sake, let us say $100 million. Not only did we put a cap on the total quantum of 150 megawatts, we also had some other timing conditions; namely, people had to complete a correct and full application form by 30 June 2011 and prove that the energy system would be installed and connected to the grid by 30 September 2011 to get the 40c-a-kilowatt rate. Everyone else could apply after 1 July to 2011 for the 20c-a-kilowatt rate, but that the cap would be at 150 megawatts. The next part of the member’s question was: when did I become aware that there may have been a breach of that 150-megawatt cap? I became aware shortly before the last Economic and Expenditure Reform Committee meeting, which from recollection was early November, but I would have to check that date. The advice that came from the Office of Energy in preparation for that last EERC meeting struck the Premier, our respective officers and me as likely being inaccurate; that is to say that the 150-megawatt cap and the number of applications received did not appear to us to be well counted. It may well have been that there was a breach of the 150-megawatt cap. Mr M. McGowan : Whose responsibility is that? Mr C.C. PORTER : Immediately, it is the responsibility of the Office of Energy, which administers the scheme. But the member’s question is this: over four years the scheme — Mr M. McGowan interjected. Mr C.C. PORTER : I am answering the member’s question. Over four years this scheme was budgeted at about $100 million. Over four years, will there be a cost increase of that $100 million to $600 million—that is, a $500 million increase? Absolutely not. Over the 10-year period, the cost is roughly a $300 million program, based on the 150-megawatt cap and the mixed 40c and 20c feed-in tariff. The member’s question is: will that $300 million turn into $800 million? The answer is—absolutely not. Mr E.S. Ripper : Will it turn into $500 million? Come on—answer that. The SPEAKER : The Leader of the Opposition! Mr C.C. PORTER : The final figure will depend upon an application-by-application audit by Treasury that is underway at the moment and that, frankly, will take some time. My view would be, based on my very preliminary observations, and the Treasury’s preliminary look at this, is that the cap of 150 megawatts was likely breached. How substantial was that breach? It was nothing like $500 million; it was nothing of that order. It is likely to be a moderate breach, but that will require a full audit. The information that the member has been receiving that either the four or the 10-year cost will be $500 million greater than what was budgeted — Mr E.S. Ripper : It is $500 million in total. Mr C.C. PORTER : That information is absolutely incorrect. The reason I know that is that we have had a very preliminary look at it. It will be nothing like that. We have gone through this audit process because I do not have faith in the preliminary information that we have been given.
Over four years, at a mixture of 40c net kilowatt hour and 20c net kilowatt hour, we said the cost would be about $100 million—that is, give or take a few million, but, for brevity’s sake, let us say $100 million. Not only did we put a cap on the total quantum of 150 megawatts, we also had some other timing conditions; namely, people had to complete a correct and full application form by 30 June 2011 and prove that the energy system would be installed and connected to the grid by 30 September 2011 to get the 40c-a-kilowatt rate. Everyone else could apply after 1 July to 2011 for the 20c-a-kilowatt rate, but that the cap would be at 150 megawatts. The next part of the member’s question was: when did I become aware that there may have been a breach of that 150-megawatt cap? I became aware shortly before the last Economic and Expenditure Reform Committee meeting, which from recollection was early November, but I would have to check that date. The advice that came from the Office of Energy in preparation for that last EERC meeting struck the Premier, our respective officers and me as likely being inaccurate; that is to say that the 150-megawatt cap and the number of applications received did not appear to us to be well counted. It may well have been that there was a breach of the 150-megawatt cap. Mr M. McGowan : Whose responsibility is that? Mr C.C. PORTER : Immediately, it is the responsibility of the Office of Energy, which administers the scheme. But the member’s question is this: over four years the scheme — Mr M. McGowan interjected. Mr C.C. PORTER : I am answering the member’s question. Over four years this scheme was budgeted at about $100 million. Over four years, will there be a cost increase of that $100 million to $600 million—that is, a $500 million increase? Absolutely not. Over the 10-year period, the cost is roughly a $300 million program, based on the 150-megawatt cap and the mixed 40c and 20c feed-in tariff. The member’s question is: will that $300 million turn into $800 million? The answer is—absolutely not. Mr E.S. Ripper : Will it turn into $500 million? Come on—answer that. The SPEAKER : The Leader of the Opposition! Mr C.C. PORTER : The final figure will depend upon an application-by-application audit by Treasury that is underway at the moment and that, frankly, will take some time. My view would be, based on my very preliminary observations, and the Treasury’s preliminary look at this, is that the cap of 150 megawatts was likely breached. How substantial was that breach? It was nothing like $500 million; it was nothing of that order. It is likely to be a moderate breach, but that will require a full audit. The information that the member has been receiving that either the four or the 10-year cost will be $500 million greater than what was budgeted — Mr E.S. Ripper : It is $500 million in total. Mr C.C. PORTER : That information is absolutely incorrect. The reason I know that is that we have had a very preliminary look at it. It will be nothing like that. We have gone through this audit process because I do not have faith in the preliminary information that we have been given.
The next part of the member’s question was: when did I become aware that there may have been a breach of that 150-megawatt cap? I became aware shortly before the last Economic and Expenditure Reform Committee meeting, which from recollection was early November, but I would have to check that date. The advice that came from the Office of Energy in preparation for that last EERC meeting struck the Premier, our respective officers and me as likely being inaccurate; that is to say that the 150-megawatt cap and the number of applications received did not appear to us to be well counted. It may well have been that there was a breach of the 150-megawatt cap. Mr M. McGowan : Whose responsibility is that? Mr C.C. PORTER : Immediately, it is the responsibility of the Office of Energy, which administers the scheme. But the member’s question is this: over four years the scheme — Mr M. McGowan interjected. Mr C.C. PORTER : I am answering the member’s question. Over four years this scheme was budgeted at about $100 million. Over four years, will there be a cost increase of that $100 million to $600 million—that is, a $500 million increase? Absolutely not. Over the 10-year period, the cost is roughly a $300 million program, based on the 150-megawatt cap and the mixed 40c and 20c feed-in tariff. The member’s question is: will that $300 million turn into $800 million? The answer is—absolutely not. Mr E.S. Ripper : Will it turn into $500 million? Come on—answer that. The SPEAKER : The Leader of the Opposition! Mr C.C. PORTER : The final figure will depend upon an application-by-application audit by Treasury that is underway at the moment and that, frankly, will take some time. My view would be, based on my very preliminary observations, and the Treasury’s preliminary look at this, is that the cap of 150 megawatts was likely breached. How substantial was that breach? It was nothing like $500 million; it was nothing of that order. It is likely to be a moderate breach, but that will require a full audit. The information that the member has been receiving that either the four or the 10-year cost will be $500 million greater than what was budgeted — Mr E.S. Ripper : It is $500 million in total. Mr C.C. PORTER : That information is absolutely incorrect. The reason I know that is that we have had a very preliminary look at it. It will be nothing like that. We have gone through this audit process because I do not have faith in the preliminary information that we have been given.
Mr M. McGowan : Whose responsibility is that? Mr C.C. PORTER : Immediately, it is the responsibility of the Office of Energy, which administers the scheme. But the member’s question is this: over four years the scheme — Mr M. McGowan interjected. Mr C.C. PORTER : I am answering the member’s question. Over four years this scheme was budgeted at about $100 million. Over four years, will there be a cost increase of that $100 million to $600 million—that is, a $500 million increase? Absolutely not. Over the 10-year period, the cost is roughly a $300 million program, based on the 150-megawatt cap and the mixed 40c and 20c feed-in tariff. The member’s question is: will that $300 million turn into $800 million? The answer is—absolutely not. Mr E.S. Ripper : Will it turn into $500 million? Come on—answer that. The SPEAKER : The Leader of the Opposition! Mr C.C. PORTER : The final figure will depend upon an application-by-application audit by Treasury that is underway at the moment and that, frankly, will take some time. My view would be, based on my very preliminary observations, and the Treasury’s preliminary look at this, is that the cap of 150 megawatts was likely breached. How substantial was that breach? It was nothing like $500 million; it was nothing of that order. It is likely to be a moderate breach, but that will require a full audit. The information that the member has been receiving that either the four or the 10-year cost will be $500 million greater than what was budgeted — Mr E.S. Ripper : It is $500 million in total. Mr C.C. PORTER : That information is absolutely incorrect. The reason I know that is that we have had a very preliminary look at it. It will be nothing like that. We have gone through this audit process because I do not have faith in the preliminary information that we have been given.
Mr C.C. PORTER : Immediately, it is the responsibility of the Office of Energy, which administers the scheme. But the member’s question is this: over four years the scheme — Mr M. McGowan interjected. Mr C.C. PORTER : I am answering the member’s question. Over four years this scheme was budgeted at about $100 million. Over four years, will there be a cost increase of that $100 million to $600 million—that is, a $500 million increase? Absolutely not. Over the 10-year period, the cost is roughly a $300 million program, based on the 150-megawatt cap and the mixed 40c and 20c feed-in tariff. The member’s question is: will that $300 million turn into $800 million? The answer is—absolutely not. Mr E.S. Ripper : Will it turn into $500 million? Come on—answer that. The SPEAKER : The Leader of the Opposition! Mr C.C. PORTER : The final figure will depend upon an application-by-application audit by Treasury that is underway at the moment and that, frankly, will take some time. My view would be, based on my very preliminary observations, and the Treasury’s preliminary look at this, is that the cap of 150 megawatts was likely breached. How substantial was that breach? It was nothing like $500 million; it was nothing of that order. It is likely to be a moderate breach, but that will require a full audit. The information that the member has been receiving that either the four or the 10-year cost will be $500 million greater than what was budgeted — Mr E.S. Ripper : It is $500 million in total. Mr C.C. PORTER : That information is absolutely incorrect. The reason I know that is that we have had a very preliminary look at it. It will be nothing like that. We have gone through this audit process because I do not have faith in the preliminary information that we have been given.
Mr M. McGowan interjected. Mr C.C. PORTER : I am answering the member’s question. Over four years this scheme was budgeted at about $100 million. Over four years, will there be a cost increase of that $100 million to $600 million—that is, a $500 million increase? Absolutely not. Over the 10-year period, the cost is roughly a $300 million program, based on the 150-megawatt cap and the mixed 40c and 20c feed-in tariff. The member’s question is: will that $300 million turn into $800 million? The answer is—absolutely not. Mr E.S. Ripper : Will it turn into $500 million? Come on—answer that. The SPEAKER : The Leader of the Opposition! Mr C.C. PORTER : The final figure will depend upon an application-by-application audit by Treasury that is underway at the moment and that, frankly, will take some time. My view would be, based on my very preliminary observations, and the Treasury’s preliminary look at this, is that the cap of 150 megawatts was likely breached. How substantial was that breach? It was nothing like $500 million; it was nothing of that order. It is likely to be a moderate breach, but that will require a full audit. The information that the member has been receiving that either the four or the 10-year cost will be $500 million greater than what was budgeted — Mr E.S. Ripper : It is $500 million in total. Mr C.C. PORTER : That information is absolutely incorrect. The reason I know that is that we have had a very preliminary look at it. It will be nothing like that. We have gone through this audit process because I do not have faith in the preliminary information that we have been given.
Mr C.C. PORTER : I am answering the member’s question. Over four years this scheme was budgeted at about $100 million. Over four years, will there be a cost increase of that $100 million to $600 million—that is, a $500 million increase? Absolutely not. Over the 10-year period, the cost is roughly a $300 million program, based on the 150-megawatt cap and the mixed 40c and 20c feed-in tariff. The member’s question is: will that $300 million turn into $800 million? The answer is—absolutely not. Mr E.S. Ripper : Will it turn into $500 million? Come on—answer that. The SPEAKER : The Leader of the Opposition! Mr C.C. PORTER : The final figure will depend upon an application-by-application audit by Treasury that is underway at the moment and that, frankly, will take some time. My view would be, based on my very preliminary observations, and the Treasury’s preliminary look at this, is that the cap of 150 megawatts was likely breached. How substantial was that breach? It was nothing like $500 million; it was nothing of that order. It is likely to be a moderate breach, but that will require a full audit. The information that the member has been receiving that either the four or the 10-year cost will be $500 million greater than what was budgeted — Mr E.S. Ripper : It is $500 million in total. Mr C.C. PORTER : That information is absolutely incorrect. The reason I know that is that we have had a very preliminary look at it. It will be nothing like that. We have gone through this audit process because I do not have faith in the preliminary information that we have been given.
Mr E.S. Ripper : Will it turn into $500 million? Come on—answer that. The SPEAKER : The Leader of the Opposition! Mr C.C. PORTER : The final figure will depend upon an application-by-application audit by Treasury that is underway at the moment and that, frankly, will take some time. My view would be, based on my very preliminary observations, and the Treasury’s preliminary look at this, is that the cap of 150 megawatts was likely breached. How substantial was that breach? It was nothing like $500 million; it was nothing of that order. It is likely to be a moderate breach, but that will require a full audit. The information that the member has been receiving that either the four or the 10-year cost will be $500 million greater than what was budgeted — Mr E.S. Ripper : It is $500 million in total. Mr C.C. PORTER : That information is absolutely incorrect. The reason I know that is that we have had a very preliminary look at it. It will be nothing like that. We have gone through this audit process because I do not have faith in the preliminary information that we have been given.
The SPEAKER : The Leader of the Opposition! Mr C.C. PORTER : The final figure will depend upon an application-by-application audit by Treasury that is underway at the moment and that, frankly, will take some time. My view would be, based on my very preliminary observations, and the Treasury’s preliminary look at this, is that the cap of 150 megawatts was likely breached. How substantial was that breach? It was nothing like $500 million; it was nothing of that order. It is likely to be a moderate breach, but that will require a full audit. The information that the member has been receiving that either the four or the 10-year cost will be $500 million greater than what was budgeted — Mr E.S. Ripper : It is $500 million in total. Mr C.C. PORTER : That information is absolutely incorrect. The reason I know that is that we have had a very preliminary look at it. It will be nothing like that. We have gone through this audit process because I do not have faith in the preliminary information that we have been given.
Mr C.C. PORTER : The final figure will depend upon an application-by-application audit by Treasury that is underway at the moment and that, frankly, will take some time. My view would be, based on my very preliminary observations, and the Treasury’s preliminary look at this, is that the cap of 150 megawatts was likely breached. How substantial was that breach? It was nothing like $500 million; it was nothing of that order. It is likely to be a moderate breach, but that will require a full audit. The information that the member has been receiving that either the four or the 10-year cost will be $500 million greater than what was budgeted — Mr E.S. Ripper : It is $500 million in total. Mr C.C. PORTER : That information is absolutely incorrect. The reason I know that is that we have had a very preliminary look at it. It will be nothing like that. We have gone through this audit process because I do not have faith in the preliminary information that we have been given.
Mr E.S. Ripper : It is $500 million in total. Mr C.C. PORTER : That information is absolutely incorrect. The reason I know that is that we have had a very preliminary look at it. It will be nothing like that. We have gone through this audit process because I do not have faith in the preliminary information that we have been given.
Mr C.C. PORTER : That information is absolutely incorrect. The reason I know that is that we have had a very preliminary look at it. It will be nothing like that. We have gone through this audit process because I do not have faith in the preliminary information that we have been given.
(1) Has the Treasurer received, and what is, the preliminary advice in relation to the cost of the blow-out? (2) Was the Premier correct when he said the blow-out was “nothing like $500 million”? (3) When did the Minister for Energy first advise the Treasurer of this emerging problem? (4) What responsibility does the government take for these failures? Mr C.C. PORTER replied: (1)–(4) The first part of the member’s question was whether I confirm the Premier’s assessment of the blow-out. I remember what the Premier said yesterday. The second part of the member’s question was right. The Premier said that a blow-out or a cost increase for the feed-in tariff will be nothing like $500 million. That is absolutely correct; it will be nothing like that figure. Mr M. McGowan interjected. Mr C.C. PORTER : Perhaps if I just answer the member’s question. It is a complicated area. I will give members some background, and I will give a fair answer to the member’s question. I think we should start with the mechanics of the feed-in tariff. The feed-in tariff revolves around applicants making certain undertakings and the government making certain undertakings. The cost of that can be measured over the budget out years, the four years, but also over the period that those undertakings are made for, which heads out to 10 years. People undertake to have the photovoltaics installed, have the inverter capacity, and the government undertakes to buy from them the electricity they generate over what they use. That amount of money is obviously subsidised by the taxpayer. The total quantum of that subsidy over four years is one cost measure; over 10 years, it is another cost measure. The history of it, as the member would know, is that both parties made election promises that they would fund that subsidy to the tune of $23 million, which was the four-year figure. Originally, I think that was an election promise from Labor at a 40c gross feed-in tariff. When we came to government and had information from the Office of Energy, we changed that subsidy to a 40c-a-kilowatt-hour net feed-in tariff, and then we made another change. The reason we made that secondary change, which occurred around about 21 May, was that the uptake to the scheme had been very, very strong. Without some form of cap, the cost above what was budgeted for would have been very, very large. Indeed, as it was, with the conscious decision that cabinet made to cap that system at 150 megawatts, the cost of doing that, which is to say increasing the capacity and setting a cap at 150 megawatts, around the four-year period was about $100 million. That was government policy: in excess, a conscious decision was made to increase it to $100 million. Mr E.S. Ripper : What was the 10-year cost of government policy? Mr C.C. PORTER : I will get to that in a moment. What is interesting to observe is that we as a government came under immense criticism from the opposition for putting that cap on the system. The opposition’s position seemed to be that there was not a cap. What I can absolutely guarantee is that, as the subsidy was so generous, without a cap the applications would never have stopped and the costs would have been basically exponential. The opposition’s criticism of us at that time was that there should not have been a cap. Indeed, I think the shadow minister in charge in the other place put in a petition stating that the cap should be gotten rid of—which of course would have increased the cost. Over four years, at a mixture of 40c net kilowatt hour and 20c net kilowatt hour, we said the cost would be about $100 million—that is, give or take a few million, but, for brevity’s sake, let us say $100 million. Not only did we put a cap on the total quantum of 150 megawatts, we also had some other timing conditions; namely, people had to complete a correct and full application form by 30 June 2011 and prove that the energy system would be installed and connected to the grid by 30 September 2011 to get the 40c-a-kilowatt rate. Everyone else could apply after 1 July to 2011 for the 20c-a-kilowatt rate, but that the cap would be at 150 megawatts. The next part of the member’s question was: when did I become aware that there may have been a breach of that 150-megawatt cap? I became aware shortly before the last Economic and Expenditure Reform Committee meeting, which from recollection was early November, but I would have to check that date. The advice that came from the Office of Energy in preparation for that last EERC meeting struck the Premier, our respective officers and me as likely being inaccurate; that is to say that the 150-megawatt cap and the number of applications received did not appear to us to be well counted. It may well have been that there was a breach of the 150-megawatt cap. Mr M. McGowan : Whose responsibility is that? Mr C.C. PORTER : Immediately, it is the responsibility of the Office of Energy, which administers the scheme. But the member’s question is this: over four years the scheme — Mr M. McGowan interjected. Mr C.C. PORTER : I am answering the member’s question. Over four years this scheme was budgeted at about $100 million. Over four years, will there be a cost increase of that $100 million to $600 million—that is, a $500 million increase? Absolutely not. Over the 10-year period, the cost is roughly a $300 million program, based on the 150-megawatt cap and the mixed 40c and 20c feed-in tariff. The member’s question is: will that $300 million turn into $800 million? The answer is—absolutely not. Mr E.S. Ripper : Will it turn into $500 million? Come on—answer that. The SPEAKER : The Leader of the Opposition! Mr C.C. PORTER : The final figure will depend upon an application-by-application audit by Treasury that is underway at the moment and that, frankly, will take some time. My view would be, based on my very preliminary observations, and the Treasury’s preliminary look at this, is that the cap of 150 megawatts was likely breached. How substantial was that breach? It was nothing like $500 million; it was nothing of that order. It is likely to be a moderate breach, but that will require a full audit. The information that the member has been receiving that either the four or the 10-year cost will be $500 million greater than what was budgeted — Mr E.S. Ripper : It is $500 million in total. Mr C.C. PORTER : That information is absolutely incorrect. The reason I know that is that we have had a very preliminary look at it. It will be nothing like that. We have gone through this audit process because I do not have faith in the preliminary information that we have been given.
(2) Was the Premier correct when he said the blow-out was “nothing like $500 million”? (3) When did the Minister for Energy first advise the Treasurer of this emerging problem? (4) What responsibility does the government take for these failures? Mr C.C. PORTER replied: (1)–(4) The first part of the member’s question was whether I confirm the Premier’s assessment of the blow-out. I remember what the Premier said yesterday. The second part of the member’s question was right. The Premier said that a blow-out or a cost increase for the feed-in tariff will be nothing like $500 million. That is absolutely correct; it will be nothing like that figure. Mr M. McGowan interjected. Mr C.C. PORTER : Perhaps if I just answer the member’s question. It is a complicated area. I will give members some background, and I will give a fair answer to the member’s question. I think we should start with the mechanics of the feed-in tariff. The feed-in tariff revolves around applicants making certain undertakings and the government making certain undertakings. The cost of that can be measured over the budget out years, the four years, but also over the period that those undertakings are made for, which heads out to 10 years. People undertake to have the photovoltaics installed, have the inverter capacity, and the government undertakes to buy from them the electricity they generate over what they use. That amount of money is obviously subsidised by the taxpayer. The total quantum of that subsidy over four years is one cost measure; over 10 years, it is another cost measure. The history of it, as the member would know, is that both parties made election promises that they would fund that subsidy to the tune of $23 million, which was the four-year figure. Originally, I think that was an election promise from Labor at a 40c gross feed-in tariff. When we came to government and had information from the Office of Energy, we changed that subsidy to a 40c-a-kilowatt-hour net feed-in tariff, and then we made another change. The reason we made that secondary change, which occurred around about 21 May, was that the uptake to the scheme had been very, very strong. Without some form of cap, the cost above what was budgeted for would have been very, very large. Indeed, as it was, with the conscious decision that cabinet made to cap that system at 150 megawatts, the cost of doing that, which is to say increasing the capacity and setting a cap at 150 megawatts, around the four-year period was about $100 million. That was government policy: in excess, a conscious decision was made to increase it to $100 million. Mr E.S. Ripper : What was the 10-year cost of government policy? Mr C.C. PORTER : I will get to that in a moment. What is interesting to observe is that we as a government came under immense criticism from the opposition for putting that cap on the system. The opposition’s position seemed to be that there was not a cap. What I can absolutely guarantee is that, as the subsidy was so generous, without a cap the applications would never have stopped and the costs would have been basically exponential. The opposition’s criticism of us at that time was that there should not have been a cap. Indeed, I think the shadow minister in charge in the other place put in a petition stating that the cap should be gotten rid of—which of course would have increased the cost. Over four years, at a mixture of 40c net kilowatt hour and 20c net kilowatt hour, we said the cost would be about $100 million—that is, give or take a few million, but, for brevity’s sake, let us say $100 million. Not only did we put a cap on the total quantum of 150 megawatts, we also had some other timing conditions; namely, people had to complete a correct and full application form by 30 June 2011 and prove that the energy system would be installed and connected to the grid by 30 September 2011 to get the 40c-a-kilowatt rate. Everyone else could apply after 1 July to 2011 for the 20c-a-kilowatt rate, but that the cap would be at 150 megawatts. The next part of the member’s question was: when did I become aware that there may have been a breach of that 150-megawatt cap? I became aware shortly before the last Economic and Expenditure Reform Committee meeting, which from recollection was early November, but I would have to check that date. The advice that came from the Office of Energy in preparation for that last EERC meeting struck the Premier, our respective officers and me as likely being inaccurate; that is to say that the 150-megawatt cap and the number of applications received did not appear to us to be well counted. It may well have been that there was a breach of the 150-megawatt cap. Mr M. McGowan : Whose responsibility is that? Mr C.C. PORTER : Immediately, it is the responsibility of the Office of Energy, which administers the scheme. But the member’s question is this: over four years the scheme — Mr M. McGowan interjected. Mr C.C. PORTER : I am answering the member’s question. Over four years this scheme was budgeted at about $100 million. Over four years, will there be a cost increase of that $100 million to $600 million—that is, a $500 million increase? Absolutely not. Over the 10-year period, the cost is roughly a $300 million program, based on the 150-megawatt cap and the mixed 40c and 20c feed-in tariff. The member’s question is: will that $300 million turn into $800 million? The answer is—absolutely not. Mr E.S. Ripper : Will it turn into $500 million? Come on—answer that. The SPEAKER : The Leader of the Opposition! Mr C.C. PORTER : The final figure will depend upon an application-by-application audit by Treasury that is underway at the moment and that, frankly, will take some time. My view would be, based on my very preliminary observations, and the Treasury’s preliminary look at this, is that the cap of 150 megawatts was likely breached. How substantial was that breach? It was nothing like $500 million; it was nothing of that order. It is likely to be a moderate breach, but that will require a full audit. The information that the member has been receiving that either the four or the 10-year cost will be $500 million greater than what was budgeted — Mr E.S. Ripper : It is $500 million in total. Mr C.C. PORTER : That information is absolutely incorrect. The reason I know that is that we have had a very preliminary look at it. It will be nothing like that. We have gone through this audit process because I do not have faith in the preliminary information that we have been given.
(3) When did the Minister for Energy first advise the Treasurer of this emerging problem? (4) What responsibility does the government take for these failures? Mr C.C. PORTER replied: (1)–(4) The first part of the member’s question was whether I confirm the Premier’s assessment of the blow-out. I remember what the Premier said yesterday. The second part of the member’s question was right. The Premier said that a blow-out or a cost increase for the feed-in tariff will be nothing like $500 million. That is absolutely correct; it will be nothing like that figure. Mr M. McGowan interjected. Mr C.C. PORTER : Perhaps if I just answer the member’s question. It is a complicated area. I will give members some background, and I will give a fair answer to the member’s question. I think we should start with the mechanics of the feed-in tariff. The feed-in tariff revolves around applicants making certain undertakings and the government making certain undertakings. The cost of that can be measured over the budget out years, the four years, but also over the period that those undertakings are made for, which heads out to 10 years. People undertake to have the photovoltaics installed, have the inverter capacity, and the government undertakes to buy from them the electricity they generate over what they use. That amount of money is obviously subsidised by the taxpayer. The total quantum of that subsidy over four years is one cost measure; over 10 years, it is another cost measure. The history of it, as the member would know, is that both parties made election promises that they would fund that subsidy to the tune of $23 million, which was the four-year figure. Originally, I think that was an election promise from Labor at a 40c gross feed-in tariff. When we came to government and had information from the Office of Energy, we changed that subsidy to a 40c-a-kilowatt-hour net feed-in tariff, and then we made another change. The reason we made that secondary change, which occurred around about 21 May, was that the uptake to the scheme had been very, very strong. Without some form of cap, the cost above what was budgeted for would have been very, very large. Indeed, as it was, with the conscious decision that cabinet made to cap that system at 150 megawatts, the cost of doing that, which is to say increasing the capacity and setting a cap at 150 megawatts, around the four-year period was about $100 million. That was government policy: in excess, a conscious decision was made to increase it to $100 million. Mr E.S. Ripper : What was the 10-year cost of government policy? Mr C.C. PORTER : I will get to that in a moment. What is interesting to observe is that we as a government came under immense criticism from the opposition for putting that cap on the system. The opposition’s position seemed to be that there was not a cap. What I can absolutely guarantee is that, as the subsidy was so generous, without a cap the applications would never have stopped and the costs would have been basically exponential. The opposition’s criticism of us at that time was that there should not have been a cap. Indeed, I think the shadow minister in charge in the other place put in a petition stating that the cap should be gotten rid of—which of course would have increased the cost. Over four years, at a mixture of 40c net kilowatt hour and 20c net kilowatt hour, we said the cost would be about $100 million—that is, give or take a few million, but, for brevity’s sake, let us say $100 million. Not only did we put a cap on the total quantum of 150 megawatts, we also had some other timing conditions; namely, people had to complete a correct and full application form by 30 June 2011 and prove that the energy system would be installed and connected to the grid by 30 September 2011 to get the 40c-a-kilowatt rate. Everyone else could apply after 1 July to 2011 for the 20c-a-kilowatt rate, but that the cap would be at 150 megawatts. The next part of the member’s question was: when did I become aware that there may have been a breach of that 150-megawatt cap? I became aware shortly before the last Economic and Expenditure Reform Committee meeting, which from recollection was early November, but I would have to check that date. The advice that came from the Office of Energy in preparation for that last EERC meeting struck the Premier, our respective officers and me as likely being inaccurate; that is to say that the 150-megawatt cap and the number of applications received did not appear to us to be well counted. It may well have been that there was a breach of the 150-megawatt cap. Mr M. McGowan : Whose responsibility is that? Mr C.C. PORTER : Immediately, it is the responsibility of the Office of Energy, which administers the scheme. But the member’s question is this: over four years the scheme — Mr M. McGowan interjected. Mr C.C. PORTER : I am answering the member’s question. Over four years this scheme was budgeted at about $100 million. Over four years, will there be a cost increase of that $100 million to $600 million—that is, a $500 million increase? Absolutely not. Over the 10-year period, the cost is roughly a $300 million program, based on the 150-megawatt cap and the mixed 40c and 20c feed-in tariff. The member’s question is: will that $300 million turn into $800 million? The answer is—absolutely not. Mr E.S. Ripper : Will it turn into $500 million? Come on—answer that. The SPEAKER : The Leader of the Opposition! Mr C.C. PORTER : The final figure will depend upon an application-by-application audit by Treasury that is underway at the moment and that, frankly, will take some time. My view would be, based on my very preliminary observations, and the Treasury’s preliminary look at this, is that the cap of 150 megawatts was likely breached. How substantial was that breach? It was nothing like $500 million; it was nothing of that order. It is likely to be a moderate breach, but that will require a full audit. The information that the member has been receiving that either the four or the 10-year cost will be $500 million greater than what was budgeted — Mr E.S. Ripper : It is $500 million in total. Mr C.C. PORTER : That information is absolutely incorrect. The reason I know that is that we have had a very preliminary look at it. It will be nothing like that. We have gone through this audit process because I do not have faith in the preliminary information that we have been given.
(4) What responsibility does the government take for these failures? Mr C.C. PORTER replied: (1)–(4) The first part of the member’s question was whether I confirm the Premier’s assessment of the blow-out. I remember what the Premier said yesterday. The second part of the member’s question was right. The Premier said that a blow-out or a cost increase for the feed-in tariff will be nothing like $500 million. That is absolutely correct; it will be nothing like that figure. Mr M. McGowan interjected. Mr C.C. PORTER : Perhaps if I just answer the member’s question. It is a complicated area. I will give members some background, and I will give a fair answer to the member’s question. I think we should start with the mechanics of the feed-in tariff. The feed-in tariff revolves around applicants making certain undertakings and the government making certain undertakings. The cost of that can be measured over the budget out years, the four years, but also over the period that those undertakings are made for, which heads out to 10 years. People undertake to have the photovoltaics installed, have the inverter capacity, and the government undertakes to buy from them the electricity they generate over what they use. That amount of money is obviously subsidised by the taxpayer. The total quantum of that subsidy over four years is one cost measure; over 10 years, it is another cost measure. The history of it, as the member would know, is that both parties made election promises that they would fund that subsidy to the tune of $23 million, which was the four-year figure. Originally, I think that was an election promise from Labor at a 40c gross feed-in tariff. When we came to government and had information from the Office of Energy, we changed that subsidy to a 40c-a-kilowatt-hour net feed-in tariff, and then we made another change. The reason we made that secondary change, which occurred around about 21 May, was that the uptake to the scheme had been very, very strong. Without some form of cap, the cost above what was budgeted for would have been very, very large. Indeed, as it was, with the conscious decision that cabinet made to cap that system at 150 megawatts, the cost of doing that, which is to say increasing the capacity and setting a cap at 150 megawatts, around the four-year period was about $100 million. That was government policy: in excess, a conscious decision was made to increase it to $100 million. Mr E.S. Ripper : What was the 10-year cost of government policy? Mr C.C. PORTER : I will get to that in a moment. What is interesting to observe is that we as a government came under immense criticism from the opposition for putting that cap on the system. The opposition’s position seemed to be that there was not a cap. What I can absolutely guarantee is that, as the subsidy was so generous, without a cap the applications would never have stopped and the costs would have been basically exponential. The opposition’s criticism of us at that time was that there should not have been a cap. Indeed, I think the shadow minister in charge in the other place put in a petition stating that the cap should be gotten rid of—which of course would have increased the cost. Over four years, at a mixture of 40c net kilowatt hour and 20c net kilowatt hour, we said the cost would be about $100 million—that is, give or take a few million, but, for brevity’s sake, let us say $100 million. Not only did we put a cap on the total quantum of 150 megawatts, we also had some other timing conditions; namely, people had to complete a correct and full application form by 30 June 2011 and prove that the energy system would be installed and connected to the grid by 30 September 2011 to get the 40c-a-kilowatt rate. Everyone else could apply after 1 July to 2011 for the 20c-a-kilowatt rate, but that the cap would be at 150 megawatts. The next part of the member’s question was: when did I become aware that there may have been a breach of that 150-megawatt cap? I became aware shortly before the last Economic and Expenditure Reform Committee meeting, which from recollection was early November, but I would have to check that date. The advice that came from the Office of Energy in preparation for that last EERC meeting struck the Premier, our respective officers and me as likely being inaccurate; that is to say that the 150-megawatt cap and the number of applications received did not appear to us to be well counted. It may well have been that there was a breach of the 150-megawatt cap. Mr M. McGowan : Whose responsibility is that? Mr C.C. PORTER : Immediately, it is the responsibility of the Office of Energy, which administers the scheme. But the member’s question is this: over four years the scheme — Mr M. McGowan interjected. Mr C.C. PORTER : I am answering the member’s question. Over four years this scheme was budgeted at about $100 million. Over four years, will there be a cost increase of that $100 million to $600 million—that is, a $500 million increase? Absolutely not. Over the 10-year period, the cost is roughly a $300 million program, based on the 150-megawatt cap and the mixed 40c and 20c feed-in tariff. The member’s question is: will that $300 million turn into $800 million? The answer is—absolutely not. Mr E.S. Ripper : Will it turn into $500 million? Come on—answer that. The SPEAKER : The Leader of the Opposition! Mr C.C. PORTER : The final figure will depend upon an application-by-application audit by Treasury that is underway at the moment and that, frankly, will take some time. My view would be, based on my very preliminary observations, and the Treasury’s preliminary look at this, is that the cap of 150 megawatts was likely breached. How substantial was that breach? It was nothing like $500 million; it was nothing of that order. It is likely to be a moderate breach, but that will require a full audit. The information that the member has been receiving that either the four or the 10-year cost will be $500 million greater than what was budgeted — Mr E.S. Ripper : It is $500 million in total. Mr C.C. PORTER : That information is absolutely incorrect. The reason I know that is that we have had a very preliminary look at it. It will be nothing like that. We have gone through this audit process because I do not have faith in the preliminary information that we have been given.
Mr C.C. PORTER replied: (1)–(4) The first part of the member’s question was whether I confirm the Premier’s assessment of the blow-out. I remember what the Premier said yesterday. The second part of the member’s question was right. The Premier said that a blow-out or a cost increase for the feed-in tariff will be nothing like $500 million. That is absolutely correct; it will be nothing like that figure. Mr M. McGowan interjected. Mr C.C. PORTER : Perhaps if I just answer the member’s question. It is a complicated area. I will give members some background, and I will give a fair answer to the member’s question. I think we should start with the mechanics of the feed-in tariff. The feed-in tariff revolves around applicants making certain undertakings and the government making certain undertakings. The cost of that can be measured over the budget out years, the four years, but also over the period that those undertakings are made for, which heads out to 10 years. People undertake to have the photovoltaics installed, have the inverter capacity, and the government undertakes to buy from them the electricity they generate over what they use. That amount of money is obviously subsidised by the taxpayer. The total quantum of that subsidy over four years is one cost measure; over 10 years, it is another cost measure. The history of it, as the member would know, is that both parties made election promises that they would fund that subsidy to the tune of $23 million, which was the four-year figure. Originally, I think that was an election promise from Labor at a 40c gross feed-in tariff. When we came to government and had information from the Office of Energy, we changed that subsidy to a 40c-a-kilowatt-hour net feed-in tariff, and then we made another change. The reason we made that secondary change, which occurred around about 21 May, was that the uptake to the scheme had been very, very strong. Without some form of cap, the cost above what was budgeted for would have been very, very large. Indeed, as it was, with the conscious decision that cabinet made to cap that system at 150 megawatts, the cost of doing that, which is to say increasing the capacity and setting a cap at 150 megawatts, around the four-year period was about $100 million. That was government policy: in excess, a conscious decision was made to increase it to $100 million. Mr E.S. Ripper : What was the 10-year cost of government policy? Mr C.C. PORTER : I will get to that in a moment. What is interesting to observe is that we as a government came under immense criticism from the opposition for putting that cap on the system. The opposition’s position seemed to be that there was not a cap. What I can absolutely guarantee is that, as the subsidy was so generous, without a cap the applications would never have stopped and the costs would have been basically exponential. The opposition’s criticism of us at that time was that there should not have been a cap. Indeed, I think the shadow minister in charge in the other place put in a petition stating that the cap should be gotten rid of—which of course would have increased the cost. Over four years, at a mixture of 40c net kilowatt hour and 20c net kilowatt hour, we said the cost would be about $100 million—that is, give or take a few million, but, for brevity’s sake, let us say $100 million. Not only did we put a cap on the total quantum of 150 megawatts, we also had some other timing conditions; namely, people had to complete a correct and full application form by 30 June 2011 and prove that the energy system would be installed and connected to the grid by 30 September 2011 to get the 40c-a-kilowatt rate. Everyone else could apply after 1 July to 2011 for the 20c-a-kilowatt rate, but that the cap would be at 150 megawatts. The next part of the member’s question was: when did I become aware that there may have been a breach of that 150-megawatt cap? I became aware shortly before the last Economic and Expenditure Reform Committee meeting, which from recollection was early November, but I would have to check that date. The advice that came from the Office of Energy in preparation for that last EERC meeting struck the Premier, our respective officers and me as likely being inaccurate; that is to say that the 150-megawatt cap and the number of applications received did not appear to us to be well counted. It may well have been that there was a breach of the 150-megawatt cap. Mr M. McGowan : Whose responsibility is that? Mr C.C. PORTER : Immediately, it is the responsibility of the Office of Energy, which administers the scheme. But the member’s question is this: over four years the scheme — Mr M. McGowan interjected. Mr C.C. PORTER : I am answering the member’s question. Over four years this scheme was budgeted at about $100 million. Over four years, will there be a cost increase of that $100 million to $600 million—that is, a $500 million increase? Absolutely not. Over the 10-year period, the cost is roughly a $300 million program, based on the 150-megawatt cap and the mixed 40c and 20c feed-in tariff. The member’s question is: will that $300 million turn into $800 million? The answer is—absolutely not. Mr E.S. Ripper : Will it turn into $500 million? Come on—answer that. The SPEAKER : The Leader of the Opposition! Mr C.C. PORTER : The final figure will depend upon an application-by-application audit by Treasury that is underway at the moment and that, frankly, will take some time. My view would be, based on my very preliminary observations, and the Treasury’s preliminary look at this, is that the cap of 150 megawatts was likely breached. How substantial was that breach? It was nothing like $500 million; it was nothing of that order. It is likely to be a moderate breach, but that will require a full audit. The information that the member has been receiving that either the four or the 10-year cost will be $500 million greater than what was budgeted — Mr E.S. Ripper : It is $500 million in total. Mr C.C. PORTER : That information is absolutely incorrect. The reason I know that is that we have had a very preliminary look at it. It will be nothing like that. We have gone through this audit process because I do not have faith in the preliminary information that we have been given.
(1)–(4) The first part of the member’s question was whether I confirm the Premier’s assessment of the blow-out. I remember what the Premier said yesterday. The second part of the member’s question was right. The Premier said that a blow-out or a cost increase for the feed-in tariff will be nothing like $500 million. That is absolutely correct; it will be nothing like that figure. Mr M. McGowan interjected. Mr C.C. PORTER : Perhaps if I just answer the member’s question. It is a complicated area. I will give members some background, and I will give a fair answer to the member’s question. I think we should start with the mechanics of the feed-in tariff. The feed-in tariff revolves around applicants making certain undertakings and the government making certain undertakings. The cost of that can be measured over the budget out years, the four years, but also over the period that those undertakings are made for, which heads out to 10 years. People undertake to have the photovoltaics installed, have the inverter capacity, and the government undertakes to buy from them the electricity they generate over what they use. That amount of money is obviously subsidised by the taxpayer. The total quantum of that subsidy over four years is one cost measure; over 10 years, it is another cost measure. The history of it, as the member would know, is that both parties made election promises that they would fund that subsidy to the tune of $23 million, which was the four-year figure. Originally, I think that was an election promise from Labor at a 40c gross feed-in tariff. When we came to government and had information from the Office of Energy, we changed that subsidy to a 40c-a-kilowatt-hour net feed-in tariff, and then we made another change. The reason we made that secondary change, which occurred around about 21 May, was that the uptake to the scheme had been very, very strong. Without some form of cap, the cost above what was budgeted for would have been very, very large. Indeed, as it was, with the conscious decision that cabinet made to cap that system at 150 megawatts, the cost of doing that, which is to say increasing the capacity and setting a cap at 150 megawatts, around the four-year period was about $100 million. That was government policy: in excess, a conscious decision was made to increase it to $100 million. Mr E.S. Ripper : What was the 10-year cost of government policy? Mr C.C. PORTER : I will get to that in a moment. What is interesting to observe is that we as a government came under immense criticism from the opposition for putting that cap on the system. The opposition’s position seemed to be that there was not a cap. What I can absolutely guarantee is that, as the subsidy was so generous, without a cap the applications would never have stopped and the costs would have been basically exponential. The opposition’s criticism of us at that time was that there should not have been a cap. Indeed, I think the shadow minister in charge in the other place put in a petition stating that the cap should be gotten rid of—which of course would have increased the cost. Over four years, at a mixture of 40c net kilowatt hour and 20c net kilowatt hour, we said the cost would be about $100 million—that is, give or take a few million, but, for brevity’s sake, let us say $100 million. Not only did we put a cap on the total quantum of 150 megawatts, we also had some other timing conditions; namely, people had to complete a correct and full application form by 30 June 2011 and prove that the energy system would be installed and connected to the grid by 30 September 2011 to get the 40c-a-kilowatt rate. Everyone else could apply after 1 July to 2011 for the 20c-a-kilowatt rate, but that the cap would be at 150 megawatts. The next part of the member’s question was: when did I become aware that there may have been a breach of that 150-megawatt cap? I became aware shortly before the last Economic and Expenditure Reform Committee meeting, which from recollection was early November, but I would have to check that date. The advice that came from the Office of Energy in preparation for that last EERC meeting struck the Premier, our respective officers and me as likely being inaccurate; that is to say that the 150-megawatt cap and the number of applications received did not appear to us to be well counted. It may well have been that there was a breach of the 150-megawatt cap. Mr M. McGowan : Whose responsibility is that? Mr C.C. PORTER : Immediately, it is the responsibility of the Office of Energy, which administers the scheme. But the member’s question is this: over four years the scheme — Mr M. McGowan interjected. Mr C.C. PORTER : I am answering the member’s question. Over four years this scheme was budgeted at about $100 million. Over four years, will there be a cost increase of that $100 million to $600 million—that is, a $500 million increase? Absolutely not. Over the 10-year period, the cost is roughly a $300 million program, based on the 150-megawatt cap and the mixed 40c and 20c feed-in tariff. The member’s question is: will that $300 million turn into $800 million? The answer is—absolutely not. Mr E.S. Ripper : Will it turn into $500 million? Come on—answer that. The SPEAKER : The Leader of the Opposition! Mr C.C. PORTER : The final figure will depend upon an application-by-application audit by Treasury that is underway at the moment and that, frankly, will take some time. My view would be, based on my very preliminary observations, and the Treasury’s preliminary look at this, is that the cap of 150 megawatts was likely breached. How substantial was that breach? It was nothing like $500 million; it was nothing of that order. It is likely to be a moderate breach, but that will require a full audit. The information that the member has been receiving that either the four or the 10-year cost will be $500 million greater than what was budgeted — Mr E.S. Ripper : It is $500 million in total. Mr C.C. PORTER : That information is absolutely incorrect. The reason I know that is that we have had a very preliminary look at it. It will be nothing like that. We have gone through this audit process because I do not have faith in the preliminary information that we have been given.
Mr M. McGowan interjected. Mr C.C. PORTER : Perhaps if I just answer the member’s question. It is a complicated area. I will give members some background, and I will give a fair answer to the member’s question. I think we should start with the mechanics of the feed-in tariff. The feed-in tariff revolves around applicants making certain undertakings and the government making certain undertakings. The cost of that can be measured over the budget out years, the four years, but also over the period that those undertakings are made for, which heads out to 10 years. People undertake to have the photovoltaics installed, have the inverter capacity, and the government undertakes to buy from them the electricity they generate over what they use. That amount of money is obviously subsidised by the taxpayer. The total quantum of that subsidy over four years is one cost measure; over 10 years, it is another cost measure. The history of it, as the member would know, is that both parties made election promises that they would fund that subsidy to the tune of $23 million, which was the four-year figure. Originally, I think that was an election promise from Labor at a 40c gross feed-in tariff. When we came to government and had information from the Office of Energy, we changed that subsidy to a 40c-a-kilowatt-hour net feed-in tariff, and then we made another change. The reason we made that secondary change, which occurred around about 21 May, was that the uptake to the scheme had been very, very strong. Without some form of cap, the cost above what was budgeted for would have been very, very large. Indeed, as it was, with the conscious decision that cabinet made to cap that system at 150 megawatts, the cost of doing that, which is to say increasing the capacity and setting a cap at 150 megawatts, around the four-year period was about $100 million. That was government policy: in excess, a conscious decision was made to increase it to $100 million. Mr E.S. Ripper : What was the 10-year cost of government policy? Mr C.C. PORTER : I will get to that in a moment. What is interesting to observe is that we as a government came under immense criticism from the opposition for putting that cap on the system. The opposition’s position seemed to be that there was not a cap. What I can absolutely guarantee is that, as the subsidy was so generous, without a cap the applications would never have stopped and the costs would have been basically exponential. The opposition’s criticism of us at that time was that there should not have been a cap. Indeed, I think the shadow minister in charge in the other place put in a petition stating that the cap should be gotten rid of—which of course would have increased the cost. Over four years, at a mixture of 40c net kilowatt hour and 20c net kilowatt hour, we said the cost would be about $100 million—that is, give or take a few million, but, for brevity’s sake, let us say $100 million. Not only did we put a cap on the total quantum of 150 megawatts, we also had some other timing conditions; namely, people had to complete a correct and full application form by 30 June 2011 and prove that the energy system would be installed and connected to the grid by 30 September 2011 to get the 40c-a-kilowatt rate. Everyone else could apply after 1 July to 2011 for the 20c-a-kilowatt rate, but that the cap would be at 150 megawatts. The next part of the member’s question was: when did I become aware that there may have been a breach of that 150-megawatt cap? I became aware shortly before the last Economic and Expenditure Reform Committee meeting, which from recollection was early November, but I would have to check that date. The advice that came from the Office of Energy in preparation for that last EERC meeting struck the Premier, our respective officers and me as likely being inaccurate; that is to say that the 150-megawatt cap and the number of applications received did not appear to us to be well counted. It may well have been that there was a breach of the 150-megawatt cap. Mr M. McGowan : Whose responsibility is that? Mr C.C. PORTER : Immediately, it is the responsibility of the Office of Energy, which administers the scheme. But the member’s question is this: over four years the scheme — Mr M. McGowan interjected. Mr C.C. PORTER : I am answering the member’s question. Over four years this scheme was budgeted at about $100 million. Over four years, will there be a cost increase of that $100 million to $600 million—that is, a $500 million increase? Absolutely not. Over the 10-year period, the cost is roughly a $300 million program, based on the 150-megawatt cap and the mixed 40c and 20c feed-in tariff. The member’s question is: will that $300 million turn into $800 million? The answer is—absolutely not. Mr E.S. Ripper : Will it turn into $500 million? Come on—answer that. The SPEAKER : The Leader of the Opposition! Mr C.C. PORTER : The final figure will depend upon an application-by-application audit by Treasury that is underway at the moment and that, frankly, will take some time. My view would be, based on my very preliminary observations, and the Treasury’s preliminary look at this, is that the cap of 150 megawatts was likely breached. How substantial was that breach? It was nothing like $500 million; it was nothing of that order. It is likely to be a moderate breach, but that will require a full audit. The information that the member has been receiving that either the four or the 10-year cost will be $500 million greater than what was budgeted — Mr E.S. Ripper : It is $500 million in total. Mr C.C. PORTER : That information is absolutely incorrect. The reason I know that is that we have had a very preliminary look at it. It will be nothing like that. We have gone through this audit process because I do not have faith in the preliminary information that we have been given.
Mr C.C. PORTER : Perhaps if I just answer the member’s question. It is a complicated area. I will give members some background, and I will give a fair answer to the member’s question. I think we should start with the mechanics of the feed-in tariff. The feed-in tariff revolves around applicants making certain undertakings and the government making certain undertakings. The cost of that can be measured over the budget out years, the four years, but also over the period that those undertakings are made for, which heads out to 10 years. People undertake to have the photovoltaics installed, have the inverter capacity, and the government undertakes to buy from them the electricity they generate over what they use. That amount of money is obviously subsidised by the taxpayer. The total quantum of that subsidy over four years is one cost measure; over 10 years, it is another cost measure. The history of it, as the member would know, is that both parties made election promises that they would fund that subsidy to the tune of $23 million, which was the four-year figure. Originally, I think that was an election promise from Labor at a 40c gross feed-in tariff. When we came to government and had information from the Office of Energy, we changed that subsidy to a 40c-a-kilowatt-hour net feed-in tariff, and then we made another change. The reason we made that secondary change, which occurred around about 21 May, was that the uptake to the scheme had been very, very strong. Without some form of cap, the cost above what was budgeted for would have been very, very large. Indeed, as it was, with the conscious decision that cabinet made to cap that system at 150 megawatts, the cost of doing that, which is to say increasing the capacity and setting a cap at 150 megawatts, around the four-year period was about $100 million. That was government policy: in excess, a conscious decision was made to increase it to $100 million. Mr E.S. Ripper : What was the 10-year cost of government policy? Mr C.C. PORTER : I will get to that in a moment. What is interesting to observe is that we as a government came under immense criticism from the opposition for putting that cap on the system. The opposition’s position seemed to be that there was not a cap. What I can absolutely guarantee is that, as the subsidy was so generous, without a cap the applications would never have stopped and the costs would have been basically exponential. The opposition’s criticism of us at that time was that there should not have been a cap. Indeed, I think the shadow minister in charge in the other place put in a petition stating that the cap should be gotten rid of—which of course would have increased the cost. Over four years, at a mixture of 40c net kilowatt hour and 20c net kilowatt hour, we said the cost would be about $100 million—that is, give or take a few million, but, for brevity’s sake, let us say $100 million. Not only did we put a cap on the total quantum of 150 megawatts, we also had some other timing conditions; namely, people had to complete a correct and full application form by 30 June 2011 and prove that the energy system would be installed and connected to the grid by 30 September 2011 to get the 40c-a-kilowatt rate. Everyone else could apply after 1 July to 2011 for the 20c-a-kilowatt rate, but that the cap would be at 150 megawatts. The next part of the member’s question was: when did I become aware that there may have been a breach of that 150-megawatt cap? I became aware shortly before the last Economic and Expenditure Reform Committee meeting, which from recollection was early November, but I would have to check that date. The advice that came from the Office of Energy in preparation for that last EERC meeting struck the Premier, our respective officers and me as likely being inaccurate; that is to say that the 150-megawatt cap and the number of applications received did not appear to us to be well counted. It may well have been that there was a breach of the 150-megawatt cap. Mr M. McGowan : Whose responsibility is that? Mr C.C. PORTER : Immediately, it is the responsibility of the Office of Energy, which administers the scheme. But the member’s question is this: over four years the scheme — Mr M. McGowan interjected. Mr C.C. PORTER : I am answering the member’s question. Over four years this scheme was budgeted at about $100 million. Over four years, will there be a cost increase of that $100 million to $600 million—that is, a $500 million increase? Absolutely not. Over the 10-year period, the cost is roughly a $300 million program, based on the 150-megawatt cap and the mixed 40c and 20c feed-in tariff. The member’s question is: will that $300 million turn into $800 million? The answer is—absolutely not. Mr E.S. Ripper : Will it turn into $500 million? Come on—answer that. The SPEAKER : The Leader of the Opposition! Mr C.C. PORTER : The final figure will depend upon an application-by-application audit by Treasury that is underway at the moment and that, frankly, will take some time. My view would be, based on my very preliminary observations, and the Treasury’s preliminary look at this, is that the cap of 150 megawatts was likely breached. How substantial was that breach? It was nothing like $500 million; it was nothing of that order. It is likely to be a moderate breach, but that will require a full audit. The information that the member has been receiving that either the four or the 10-year cost will be $500 million greater than what was budgeted — Mr E.S. Ripper : It is $500 million in total. Mr C.C. PORTER : That information is absolutely incorrect. The reason I know that is that we have had a very preliminary look at it. It will be nothing like that. We have gone through this audit process because I do not have faith in the preliminary information that we have been given.
People undertake to have the photovoltaics installed, have the inverter capacity, and the government undertakes to buy from them the electricity they generate over what they use. That amount of money is obviously subsidised by the taxpayer. The total quantum of that subsidy over four years is one cost measure; over 10 years, it is another cost measure. The history of it, as the member would know, is that both parties made election promises that they would fund that subsidy to the tune of $23 million, which was the four-year figure. Originally, I think that was an election promise from Labor at a 40c gross feed-in tariff. When we came to government and had information from the Office of Energy, we changed that subsidy to a 40c-a-kilowatt-hour net feed-in tariff, and then we made another change. The reason we made that secondary change, which occurred around about 21 May, was that the uptake to the scheme had been very, very strong. Without some form of cap, the cost above what was budgeted for would have been very, very large. Indeed, as it was, with the conscious decision that cabinet made to cap that system at 150 megawatts, the cost of doing that, which is to say increasing the capacity and setting a cap at 150 megawatts, around the four-year period was about $100 million. That was government policy: in excess, a conscious decision was made to increase it to $100 million. Mr E.S. Ripper : What was the 10-year cost of government policy? Mr C.C. PORTER : I will get to that in a moment. What is interesting to observe is that we as a government came under immense criticism from the opposition for putting that cap on the system. The opposition’s position seemed to be that there was not a cap. What I can absolutely guarantee is that, as the subsidy was so generous, without a cap the applications would never have stopped and the costs would have been basically exponential. The opposition’s criticism of us at that time was that there should not have been a cap. Indeed, I think the shadow minister in charge in the other place put in a petition stating that the cap should be gotten rid of—which of course would have increased the cost. Over four years, at a mixture of 40c net kilowatt hour and 20c net kilowatt hour, we said the cost would be about $100 million—that is, give or take a few million, but, for brevity’s sake, let us say $100 million. Not only did we put a cap on the total quantum of 150 megawatts, we also had some other timing conditions; namely, people had to complete a correct and full application form by 30 June 2011 and prove that the energy system would be installed and connected to the grid by 30 September 2011 to get the 40c-a-kilowatt rate. Everyone else could apply after 1 July to 2011 for the 20c-a-kilowatt rate, but that the cap would be at 150 megawatts. The next part of the member’s question was: when did I become aware that there may have been a breach of that 150-megawatt cap? I became aware shortly before the last Economic and Expenditure Reform Committee meeting, which from recollection was early November, but I would have to check that date. The advice that came from the Office of Energy in preparation for that last EERC meeting struck the Premier, our respective officers and me as likely being inaccurate; that is to say that the 150-megawatt cap and the number of applications received did not appear to us to be well counted. It may well have been that there was a breach of the 150-megawatt cap. Mr M. McGowan : Whose responsibility is that? Mr C.C. PORTER : Immediately, it is the responsibility of the Office of Energy, which administers the scheme. But the member’s question is this: over four years the scheme — Mr M. McGowan interjected. Mr C.C. PORTER : I am answering the member’s question. Over four years this scheme was budgeted at about $100 million. Over four years, will there be a cost increase of that $100 million to $600 million—that is, a $500 million increase? Absolutely not. Over the 10-year period, the cost is roughly a $300 million program, based on the 150-megawatt cap and the mixed 40c and 20c feed-in tariff. The member’s question is: will that $300 million turn into $800 million? The answer is—absolutely not. Mr E.S. Ripper : Will it turn into $500 million? Come on—answer that. The SPEAKER : The Leader of the Opposition! Mr C.C. PORTER : The final figure will depend upon an application-by-application audit by Treasury that is underway at the moment and that, frankly, will take some time. My view would be, based on my very preliminary observations, and the Treasury’s preliminary look at this, is that the cap of 150 megawatts was likely breached. How substantial was that breach? It was nothing like $500 million; it was nothing of that order. It is likely to be a moderate breach, but that will require a full audit. The information that the member has been receiving that either the four or the 10-year cost will be $500 million greater than what was budgeted — Mr E.S. Ripper : It is $500 million in total. Mr C.C. PORTER : That information is absolutely incorrect. The reason I know that is that we have had a very preliminary look at it. It will be nothing like that. We have gone through this audit process because I do not have faith in the preliminary information that we have been given.
Mr E.S. Ripper : What was the 10-year cost of government policy? Mr C.C. PORTER : I will get to that in a moment. What is interesting to observe is that we as a government came under immense criticism from the opposition for putting that cap on the system. The opposition’s position seemed to be that there was not a cap. What I can absolutely guarantee is that, as the subsidy was so generous, without a cap the applications would never have stopped and the costs would have been basically exponential. The opposition’s criticism of us at that time was that there should not have been a cap. Indeed, I think the shadow minister in charge in the other place put in a petition stating that the cap should be gotten rid of—which of course would have increased the cost. Over four years, at a mixture of 40c net kilowatt hour and 20c net kilowatt hour, we said the cost would be about $100 million—that is, give or take a few million, but, for brevity’s sake, let us say $100 million. Not only did we put a cap on the total quantum of 150 megawatts, we also had some other timing conditions; namely, people had to complete a correct and full application form by 30 June 2011 and prove that the energy system would be installed and connected to the grid by 30 September 2011 to get the 40c-a-kilowatt rate. Everyone else could apply after 1 July to 2011 for the 20c-a-kilowatt rate, but that the cap would be at 150 megawatts. The next part of the member’s question was: when did I become aware that there may have been a breach of that 150-megawatt cap? I became aware shortly before the last Economic and Expenditure Reform Committee meeting, which from recollection was early November, but I would have to check that date. The advice that came from the Office of Energy in preparation for that last EERC meeting struck the Premier, our respective officers and me as likely being inaccurate; that is to say that the 150-megawatt cap and the number of applications received did not appear to us to be well counted. It may well have been that there was a breach of the 150-megawatt cap. Mr M. McGowan : Whose responsibility is that? Mr C.C. PORTER : Immediately, it is the responsibility of the Office of Energy, which administers the scheme. But the member’s question is this: over four years the scheme — Mr M. McGowan interjected. Mr C.C. PORTER : I am answering the member’s question. Over four years this scheme was budgeted at about $100 million. Over four years, will there be a cost increase of that $100 million to $600 million—that is, a $500 million increase? Absolutely not. Over the 10-year period, the cost is roughly a $300 million program, based on the 150-megawatt cap and the mixed 40c and 20c feed-in tariff. The member’s question is: will that $300 million turn into $800 million? The answer is—absolutely not. Mr E.S. Ripper : Will it turn into $500 million? Come on—answer that. The SPEAKER : The Leader of the Opposition! Mr C.C. PORTER : The final figure will depend upon an application-by-application audit by Treasury that is underway at the moment and that, frankly, will take some time. My view would be, based on my very preliminary observations, and the Treasury’s preliminary look at this, is that the cap of 150 megawatts was likely breached. How substantial was that breach? It was nothing like $500 million; it was nothing of that order. It is likely to be a moderate breach, but that will require a full audit. The information that the member has been receiving that either the four or the 10-year cost will be $500 million greater than what was budgeted — Mr E.S. Ripper : It is $500 million in total. Mr C.C. PORTER : That information is absolutely incorrect. The reason I know that is that we have had a very preliminary look at it. It will be nothing like that. We have gone through this audit process because I do not have faith in the preliminary information that we have been given.
Mr C.C. PORTER : I will get to that in a moment. What is interesting to observe is that we as a government came under immense criticism from the opposition for putting that cap on the system. The opposition’s position seemed to be that there was not a cap. What I can absolutely guarantee is that, as the subsidy was so generous, without a cap the applications would never have stopped and the costs would have been basically exponential. The opposition’s criticism of us at that time was that there should not have been a cap. Indeed, I think the shadow minister in charge in the other place put in a petition stating that the cap should be gotten rid of—which of course would have increased the cost. Over four years, at a mixture of 40c net kilowatt hour and 20c net kilowatt hour, we said the cost would be about $100 million—that is, give or take a few million, but, for brevity’s sake, let us say $100 million. Not only did we put a cap on the total quantum of 150 megawatts, we also had some other timing conditions; namely, people had to complete a correct and full application form by 30 June 2011 and prove that the energy system would be installed and connected to the grid by 30 September 2011 to get the 40c-a-kilowatt rate. Everyone else could apply after 1 July to 2011 for the 20c-a-kilowatt rate, but that the cap would be at 150 megawatts. The next part of the member’s question was: when did I become aware that there may have been a breach of that 150-megawatt cap? I became aware shortly before the last Economic and Expenditure Reform Committee meeting, which from recollection was early November, but I would have to check that date. The advice that came from the Office of Energy in preparation for that last EERC meeting struck the Premier, our respective officers and me as likely being inaccurate; that is to say that the 150-megawatt cap and the number of applications received did not appear to us to be well counted. It may well have been that there was a breach of the 150-megawatt cap. Mr M. McGowan : Whose responsibility is that? Mr C.C. PORTER : Immediately, it is the responsibility of the Office of Energy, which administers the scheme. But the member’s question is this: over four years the scheme — Mr M. McGowan interjected. Mr C.C. PORTER : I am answering the member’s question. Over four years this scheme was budgeted at about $100 million. Over four years, will there be a cost increase of that $100 million to $600 million—that is, a $500 million increase? Absolutely not. Over the 10-year period, the cost is roughly a $300 million program, based on the 150-megawatt cap and the mixed 40c and 20c feed-in tariff. The member’s question is: will that $300 million turn into $800 million? The answer is—absolutely not. Mr E.S. Ripper : Will it turn into $500 million? Come on—answer that. The SPEAKER : The Leader of the Opposition! Mr C.C. PORTER : The final figure will depend upon an application-by-application audit by Treasury that is underway at the moment and that, frankly, will take some time. My view would be, based on my very preliminary observations, and the Treasury’s preliminary look at this, is that the cap of 150 megawatts was likely breached. How substantial was that breach? It was nothing like $500 million; it was nothing of that order. It is likely to be a moderate breach, but that will require a full audit. The information that the member has been receiving that either the four or the 10-year cost will be $500 million greater than what was budgeted — Mr E.S. Ripper : It is $500 million in total. Mr C.C. PORTER : That information is absolutely incorrect. The reason I know that is that we have had a very preliminary look at it. It will be nothing like that. We have gone through this audit process because I do not have faith in the preliminary information that we have been given.
Over four years, at a mixture of 40c net kilowatt hour and 20c net kilowatt hour, we said the cost would be about $100 million—that is, give or take a few million, but, for brevity’s sake, let us say $100 million. Not only did we put a cap on the total quantum of 150 megawatts, we also had some other timing conditions; namely, people had to complete a correct and full application form by 30 June 2011 and prove that the energy system would be installed and connected to the grid by 30 September 2011 to get the 40c-a-kilowatt rate. Everyone else could apply after 1 July to 2011 for the 20c-a-kilowatt rate, but that the cap would be at 150 megawatts. The next part of the member’s question was: when did I become aware that there may have been a breach of that 150-megawatt cap? I became aware shortly before the last Economic and Expenditure Reform Committee meeting, which from recollection was early November, but I would have to check that date. The advice that came from the Office of Energy in preparation for that last EERC meeting struck the Premier, our respective officers and me as likely being inaccurate; that is to say that the 150-megawatt cap and the number of applications received did not appear to us to be well counted. It may well have been that there was a breach of the 150-megawatt cap. Mr M. McGowan : Whose responsibility is that? Mr C.C. PORTER : Immediately, it is the responsibility of the Office of Energy, which administers the scheme. But the member’s question is this: over four years the scheme — Mr M. McGowan interjected. Mr C.C. PORTER : I am answering the member’s question. Over four years this scheme was budgeted at about $100 million. Over four years, will there be a cost increase of that $100 million to $600 million—that is, a $500 million increase? Absolutely not. Over the 10-year period, the cost is roughly a $300 million program, based on the 150-megawatt cap and the mixed 40c and 20c feed-in tariff. The member’s question is: will that $300 million turn into $800 million? The answer is—absolutely not. Mr E.S. Ripper : Will it turn into $500 million? Come on—answer that. The SPEAKER : The Leader of the Opposition! Mr C.C. PORTER : The final figure will depend upon an application-by-application audit by Treasury that is underway at the moment and that, frankly, will take some time. My view would be, based on my very preliminary observations, and the Treasury’s preliminary look at this, is that the cap of 150 megawatts was likely breached. How substantial was that breach? It was nothing like $500 million; it was nothing of that order. It is likely to be a moderate breach, but that will require a full audit. The information that the member has been receiving that either the four or the 10-year cost will be $500 million greater than what was budgeted — Mr E.S. Ripper : It is $500 million in total. Mr C.C. PORTER : That information is absolutely incorrect. The reason I know that is that we have had a very preliminary look at it. It will be nothing like that. We have gone through this audit process because I do not have faith in the preliminary information that we have been given.
The next part of the member’s question was: when did I become aware that there may have been a breach of that 150-megawatt cap? I became aware shortly before the last Economic and Expenditure Reform Committee meeting, which from recollection was early November, but I would have to check that date. The advice that came from the Office of Energy in preparation for that last EERC meeting struck the Premier, our respective officers and me as likely being inaccurate; that is to say that the 150-megawatt cap and the number of applications received did not appear to us to be well counted. It may well have been that there was a breach of the 150-megawatt cap. Mr M. McGowan : Whose responsibility is that? Mr C.C. PORTER : Immediately, it is the responsibility of the Office of Energy, which administers the scheme. But the member’s question is this: over four years the scheme — Mr M. McGowan interjected. Mr C.C. PORTER : I am answering the member’s question. Over four years this scheme was budgeted at about $100 million. Over four years, will there be a cost increase of that $100 million to $600 million—that is, a $500 million increase? Absolutely not. Over the 10-year period, the cost is roughly a $300 million program, based on the 150-megawatt cap and the mixed 40c and 20c feed-in tariff. The member’s question is: will that $300 million turn into $800 million? The answer is—absolutely not. Mr E.S. Ripper : Will it turn into $500 million? Come on—answer that. The SPEAKER : The Leader of the Opposition! Mr C.C. PORTER : The final figure will depend upon an application-by-application audit by Treasury that is underway at the moment and that, frankly, will take some time. My view would be, based on my very preliminary observations, and the Treasury’s preliminary look at this, is that the cap of 150 megawatts was likely breached. How substantial was that breach? It was nothing like $500 million; it was nothing of that order. It is likely to be a moderate breach, but that will require a full audit. The information that the member has been receiving that either the four or the 10-year cost will be $500 million greater than what was budgeted — Mr E.S. Ripper : It is $500 million in total. Mr C.C. PORTER : That information is absolutely incorrect. The reason I know that is that we have had a very preliminary look at it. It will be nothing like that. We have gone through this audit process because I do not have faith in the preliminary information that we have been given.
Mr M. McGowan : Whose responsibility is that? Mr C.C. PORTER : Immediately, it is the responsibility of the Office of Energy, which administers the scheme. But the member’s question is this: over four years the scheme — Mr M. McGowan interjected. Mr C.C. PORTER : I am answering the member’s question. Over four years this scheme was budgeted at about $100 million. Over four years, will there be a cost increase of that $100 million to $600 million—that is, a $500 million increase? Absolutely not. Over the 10-year period, the cost is roughly a $300 million program, based on the 150-megawatt cap and the mixed 40c and 20c feed-in tariff. The member’s question is: will that $300 million turn into $800 million? The answer is—absolutely not. Mr E.S. Ripper : Will it turn into $500 million? Come on—answer that. The SPEAKER : The Leader of the Opposition! Mr C.C. PORTER : The final figure will depend upon an application-by-application audit by Treasury that is underway at the moment and that, frankly, will take some time. My view would be, based on my very preliminary observations, and the Treasury’s preliminary look at this, is that the cap of 150 megawatts was likely breached. How substantial was that breach? It was nothing like $500 million; it was nothing of that order. It is likely to be a moderate breach, but that will require a full audit. The information that the member has been receiving that either the four or the 10-year cost will be $500 million greater than what was budgeted — Mr E.S. Ripper : It is $500 million in total. Mr C.C. PORTER : That information is absolutely incorrect. The reason I know that is that we have had a very preliminary look at it. It will be nothing like that. We have gone through this audit process because I do not have faith in the preliminary information that we have been given.
Mr C.C. PORTER : Immediately, it is the responsibility of the Office of Energy, which administers the scheme. But the member’s question is this: over four years the scheme — Mr M. McGowan interjected. Mr C.C. PORTER : I am answering the member’s question. Over four years this scheme was budgeted at about $100 million. Over four years, will there be a cost increase of that $100 million to $600 million—that is, a $500 million increase? Absolutely not. Over the 10-year period, the cost is roughly a $300 million program, based on the 150-megawatt cap and the mixed 40c and 20c feed-in tariff. The member’s question is: will that $300 million turn into $800 million? The answer is—absolutely not. Mr E.S. Ripper : Will it turn into $500 million? Come on—answer that. The SPEAKER : The Leader of the Opposition! Mr C.C. PORTER : The final figure will depend upon an application-by-application audit by Treasury that is underway at the moment and that, frankly, will take some time. My view would be, based on my very preliminary observations, and the Treasury’s preliminary look at this, is that the cap of 150 megawatts was likely breached. How substantial was that breach? It was nothing like $500 million; it was nothing of that order. It is likely to be a moderate breach, but that will require a full audit. The information that the member has been receiving that either the four or the 10-year cost will be $500 million greater than what was budgeted — Mr E.S. Ripper : It is $500 million in total. Mr C.C. PORTER : That information is absolutely incorrect. The reason I know that is that we have had a very preliminary look at it. It will be nothing like that. We have gone through this audit process because I do not have faith in the preliminary information that we have been given.
Mr M. McGowan interjected. Mr C.C. PORTER : I am answering the member’s question. Over four years this scheme was budgeted at about $100 million. Over four years, will there be a cost increase of that $100 million to $600 million—that is, a $500 million increase? Absolutely not. Over the 10-year period, the cost is roughly a $300 million program, based on the 150-megawatt cap and the mixed 40c and 20c feed-in tariff. The member’s question is: will that $300 million turn into $800 million? The answer is—absolutely not. Mr E.S. Ripper : Will it turn into $500 million? Come on—answer that. The SPEAKER : The Leader of the Opposition! Mr C.C. PORTER : The final figure will depend upon an application-by-application audit by Treasury that is underway at the moment and that, frankly, will take some time. My view would be, based on my very preliminary observations, and the Treasury’s preliminary look at this, is that the cap of 150 megawatts was likely breached. How substantial was that breach? It was nothing like $500 million; it was nothing of that order. It is likely to be a moderate breach, but that will require a full audit. The information that the member has been receiving that either the four or the 10-year cost will be $500 million greater than what was budgeted — Mr E.S. Ripper : It is $500 million in total. Mr C.C. PORTER : That information is absolutely incorrect. The reason I know that is that we have had a very preliminary look at it. It will be nothing like that. We have gone through this audit process because I do not have faith in the preliminary information that we have been given.
Mr C.C. PORTER : I am answering the member’s question. Over four years this scheme was budgeted at about $100 million. Over four years, will there be a cost increase of that $100 million to $600 million—that is, a $500 million increase? Absolutely not. Over the 10-year period, the cost is roughly a $300 million program, based on the 150-megawatt cap and the mixed 40c and 20c feed-in tariff. The member’s question is: will that $300 million turn into $800 million? The answer is—absolutely not. Mr E.S. Ripper : Will it turn into $500 million? Come on—answer that. The SPEAKER : The Leader of the Opposition! Mr C.C. PORTER : The final figure will depend upon an application-by-application audit by Treasury that is underway at the moment and that, frankly, will take some time. My view would be, based on my very preliminary observations, and the Treasury’s preliminary look at this, is that the cap of 150 megawatts was likely breached. How substantial was that breach? It was nothing like $500 million; it was nothing of that order. It is likely to be a moderate breach, but that will require a full audit. The information that the member has been receiving that either the four or the 10-year cost will be $500 million greater than what was budgeted — Mr E.S. Ripper : It is $500 million in total. Mr C.C. PORTER : That information is absolutely incorrect. The reason I know that is that we have had a very preliminary look at it. It will be nothing like that. We have gone through this audit process because I do not have faith in the preliminary information that we have been given.
Mr E.S. Ripper : Will it turn into $500 million? Come on—answer that. The SPEAKER : The Leader of the Opposition! Mr C.C. PORTER : The final figure will depend upon an application-by-application audit by Treasury that is underway at the moment and that, frankly, will take some time. My view would be, based on my very preliminary observations, and the Treasury’s preliminary look at this, is that the cap of 150 megawatts was likely breached. How substantial was that breach? It was nothing like $500 million; it was nothing of that order. It is likely to be a moderate breach, but that will require a full audit. The information that the member has been receiving that either the four or the 10-year cost will be $500 million greater than what was budgeted — Mr E.S. Ripper : It is $500 million in total. Mr C.C. PORTER : That information is absolutely incorrect. The reason I know that is that we have had a very preliminary look at it. It will be nothing like that. We have gone through this audit process because I do not have faith in the preliminary information that we have been given.
The SPEAKER : The Leader of the Opposition! Mr C.C. PORTER : The final figure will depend upon an application-by-application audit by Treasury that is underway at the moment and that, frankly, will take some time. My view would be, based on my very preliminary observations, and the Treasury’s preliminary look at this, is that the cap of 150 megawatts was likely breached. How substantial was that breach? It was nothing like $500 million; it was nothing of that order. It is likely to be a moderate breach, but that will require a full audit. The information that the member has been receiving that either the four or the 10-year cost will be $500 million greater than what was budgeted — Mr E.S. Ripper : It is $500 million in total. Mr C.C. PORTER : That information is absolutely incorrect. The reason I know that is that we have had a very preliminary look at it. It will be nothing like that. We have gone through this audit process because I do not have faith in the preliminary information that we have been given.
Mr C.C. PORTER : The final figure will depend upon an application-by-application audit by Treasury that is underway at the moment and that, frankly, will take some time. My view would be, based on my very preliminary observations, and the Treasury’s preliminary look at this, is that the cap of 150 megawatts was likely breached. How substantial was that breach? It was nothing like $500 million; it was nothing of that order. It is likely to be a moderate breach, but that will require a full audit. The information that the member has been receiving that either the four or the 10-year cost will be $500 million greater than what was budgeted — Mr E.S. Ripper : It is $500 million in total. Mr C.C. PORTER : That information is absolutely incorrect. The reason I know that is that we have had a very preliminary look at it. It will be nothing like that. We have gone through this audit process because I do not have faith in the preliminary information that we have been given.
Mr E.S. Ripper : It is $500 million in total. Mr C.C. PORTER : That information is absolutely incorrect. The reason I know that is that we have had a very preliminary look at it. It will be nothing like that. We have gone through this audit process because I do not have faith in the preliminary information that we have been given.
Mr C.C. PORTER : That information is absolutely incorrect. The reason I know that is that we have had a very preliminary look at it. It will be nothing like that. We have gone through this audit process because I do not have faith in the preliminary information that we have been given.
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