❓ A parliamentary question regarding funding for the Albany Wave Energy Project and Carnegie Clean Energy's financial capacity, with the Minister responding by highlighting the project's previous support and the impact of federal policy changes.
AnsweredQoN 896Legislative Council
QuestionView source ↗
ALBANY WAVE ENERGY
PROJECT — CARNEGIE CLEAN ENERGY — BUSINESS CASE
896. Hon MARTIN ALDRIDGE to the Minister for Regional Development:
I refer to the approval given by the
minister to pay Carnegie Clean Energy Ltd $2.625 million as a newly agreed
milestone payment towards the Albany wave energy project.
(1) Can the
minister confirm that she has not yet confirmed Carnegie's financial
capacity to deliver the project?
(2) Is it normal
government practice to provide funding to projects prior to determining the
financial capacity of a contracted company to actually deliver the project?
(3) Does the
minister regret not doing a business case for the expenditure of $15.75 million
of taxpayers' funds on her pet project, blind to the reality of its
obvious failures?
PROJECT — CARNEGIE CLEAN ENERGY — BUSINESS CASE
896. Hon MARTIN ALDRIDGE to the Minister for Regional Development:
I refer to the approval given by the
minister to pay Carnegie Clean Energy Ltd $2.625 million as a newly agreed
milestone payment towards the Albany wave energy project.
(1) Can the
minister confirm that she has not yet confirmed Carnegie's financial
capacity to deliver the project?
(2) Is it normal
government practice to provide funding to projects prior to determining the
financial capacity of a contracted company to actually deliver the project?
(3) Does the
minister regret not doing a business case for the expenditure of $15.75 million
of taxpayers' funds on her pet project, blind to the reality of its
obvious failures?
AnswerView source ↗
I thank the member for the question.
I note that in the past, right up
until the election, the National Party was a great supporter of Carnegie and
the wave project and, indeed, had made an election commitment that was possibly
unrealistic but that involved a project that intended the Carnegie wave farm to
go forward. I am not quite sure what happened between the Nationals making
those commitments in the run-up to the election and during the election, but
somehow or other they now no longer support the project that they had supported
for many years. That is the way it goes.
(1)–(3) Of
course we looked at the capability of Carnegie and its financial capacity to
contribute to that project, but as we have stated before, some eight months
after the project was signed it became possible that there was going to be a very
new set of circumstances—that was, that the federal government flagged
an intention to change the research and development tax concession, which
radically changed the circumstances of that firm, as it did for many small,
innovative companies across Western Australia. I am sure members have had
representations from Northern Minerals Limited and Lithium Australia and a variety
of companies that have been left on the back foot by these changes that were
flagged in the federal budget, subject to a review. It now appears that that
review has been completed, other than doing a carve-out for medical research,
which obviously favours people in the eastern states, and that the federal
government will proceed with these changes to research and development tax. It
was a fundamental change in circumstances that was certainly not predicted and
not predictable before the election.
Hon Martin
Aldridge interjected.
Hon ALANNAH MacTIERNAN : We
obviously were operating on the basis of the law as it existed at the time, so
we have taken very careful and detailed legal advice. Carnegie is not in
default of its agreement, but we have exercised the right we have under the
terms of that agreement to ask it to outline, in this changed legal
environment, how it is going to fund its contribution to the project before we
make any further commitments.
I note that in the past, right up
until the election, the National Party was a great supporter of Carnegie and
the wave project and, indeed, had made an election commitment that was possibly
unrealistic but that involved a project that intended the Carnegie wave farm to
go forward. I am not quite sure what happened between the Nationals making
those commitments in the run-up to the election and during the election, but
somehow or other they now no longer support the project that they had supported
for many years. That is the way it goes.
(1)–(3) Of
course we looked at the capability of Carnegie and its financial capacity to
contribute to that project, but as we have stated before, some eight months
after the project was signed it became possible that there was going to be a very
new set of circumstances—that was, that the federal government flagged
an intention to change the research and development tax concession, which
radically changed the circumstances of that firm, as it did for many small,
innovative companies across Western Australia. I am sure members have had
representations from Northern Minerals Limited and Lithium Australia and a variety
of companies that have been left on the back foot by these changes that were
flagged in the federal budget, subject to a review. It now appears that that
review has been completed, other than doing a carve-out for medical research,
which obviously favours people in the eastern states, and that the federal
government will proceed with these changes to research and development tax. It
was a fundamental change in circumstances that was certainly not predicted and
not predictable before the election.
Hon Martin
Aldridge interjected.
Hon ALANNAH MacTIERNAN : We
obviously were operating on the basis of the law as it existed at the time, so
we have taken very careful and detailed legal advice. Carnegie is not in
default of its agreement, but we have exercised the right we have under the
terms of that agreement to ask it to outline, in this changed legal
environment, how it is going to fund its contribution to the project before we
make any further commitments.
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