Leyonhjelm’s plan for a State Government electricity tax

The latest plan to renege on the 41,000 GWh renewable energy target (RET) is even worse for consumers than the plans modelled by Dick Warburton’s recent inquiry, according to an analysis by The Australia Institute.

A new proposal from NSW Senator David Leyonhjelm recommends existing hydro electricity generators built before the RET become eligible for Renewable Energy Certificates.

“The proposal ignores history, ignores economics and ignores common sense,” Richard Denniss, Executive Director of the Australia Institute said.

“Senator Leyonhjelm’s proposal wouldn’t cut the cost of the RET to consumers. It would see the billions flow to the owners of existing hydro electricity generators, rather than to the builders on new renewable power plants.

“Under the scheme consumers would pay all of the costs but get none of the benefit. Indeed, if you were designing a scheme with the objective of undermining the RET and increasing electricity price, it’s difficult to think of a more effective way of doing it,” Dr Dennis said.   

Despite claiming he wants to deliver certainty to investors, Senator Leyonhjelm has proposed yet another new inquiry into the RET to consider whether gas should be defined as renewable energy, so that direct action and the RET can be merged. 

“It’s remarkable that a senator who prides himself on being a libertarian would propose a scheme that is so bad for consumers. Even the Warburton review wouldn’t recommend this stinker.

“The government is yet to respond to the Warburton review into the RET and, less than a month after passing its direct action policy through the Senate, Senator Leyonhjelm is suggesting that it too be fundamentally restructured.

“The only certainty that would come from adopting Senator Leyonhjelm’s recommendations, is the certainty that no investor would ever take this government seriously again,” Dr Denniss said.

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