Chapter 2Views on the bill
Introduction
2.1This chapter examines key stakeholder views on the National Energy Transition Authority Bill 2022 (the bill). It draws on both the submissions received, as well as evidence heard by the Senate Economics Legislation Committee (the committee) during the public hearing in Canberra on 28 February 2023.
2.2The chapter provides an indicative, although not exhaustive, account of the key issues examined during the committee’s inquiry and concludes with the committee’s views and recommendations on the bill.
2.3There were mixed opinions on the bill and whether it would achieve its objectives. Concerns were raised by many submitters regarding the function of the bill—the general provisions of the authority, and the structure of the authority as an advisory board only.
Main functions of the authority
2.4Many submitters commented on a lack of clarity of the function the proposed transition authority, its scope, and what power the bill outlined the authority would hold; and made recommendations for changes to the bill. For example, the Australian Manufacturing Workers’ Union (AMWU) highlighted in their submission to the committee:
The National Energy Transition Authority (‘NETA”) appears to be framed as an advisory body rather than an organisation that can direct and implement change for affected workers and communities.
2.5AMWU’s concern was repeated in the public hearing in Canberra on 28 February 2023 by Mr Steve Murphy, National Secretary. Mr Murphy agreed with the need for a federal transition authority for Australia but warned that it needs to be done correctly:
We have a number of concerns about the current bill and we’ve recommended that it be withdrawn to allow for proper and respectful consultation to take place. AMWU members have already been affected by a movement away from fossil fuels.
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These are workers who have powered our country for generations and have kept the lights on for us, and they deserve a properly planned transition that provides new economic opportunities.
2.6Dr Amanda Cahill, Chief Executive Officer from The Next Economy expressed support for the bill; however, she underlined the need for NETA’s role to be more clearly defined:
[I]t’s not enough to just establish a national authority; we need to establish the policy frameworks funding and coordinate government.
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The national authority’s role can be setting up the right policy mechanisms and a national plan to make sure that funding is directed to the right place at the right time.
2.7Representatives from the Australian Council of Social Services (ACOSS) advocated for amendments to be made to the bill to include policy and framework to support disadvantaged Australians during the renewable energy transition. In her evidence to the committee, Dr Rochelle Braaf, Senior Advisor for Climate and Energy, expressed concern that frameworks aren’t in place to support those most acutely affected by the transition.
2.8The ACT Government’s submission sought clarification around the clear distinction of responsibilities from those of the existing Department of Climate Change, Energy, Environment and Water (DCCEEW), the Australian Energy Regulator (AER), Jobs and Skills Australia, the Department of Industry, Science and Resources (DISR), and the Energy Security Board (ESB).
2.9Further, the Local Government Association of Queensland (LGAQ) submitted that:
Some of the broad powers outlined in the Bill seem to be without limitation or clear focus. Especially the reference to an objective of the proposed Authority to have abilities for law reform function to review Commonwealth, State and Territory laws relating to mining, resources, industry policy, industrial relations, electricity generation and related matters and propose changes to those laws.
2.10The Department of Prime Minister and Cabinet provided evidence to the committee at the public hearing on 28 February 2023 in relation to the newly established Net Zero Economy Taskforce (the Taskforce). The Taskforce is a cross-agency taskforce in the Department of Prime Minister and Cabinet, with its purpose being to provide advice on how to support regional communities as Australia transitions to a net zero economy.
2.11Mr James Chisholm, Deputy Secretary for the Net Zero Economy Taskforce, outlined the government’s role in addressing the reservations held by stakeholders:
There are different views on how the transition should be managed and supported… Despite those differences, though, there is a commonly held view that the Commonwealth has a really important role to play here, with the issue of regional economic transition and associated decarbonisation being in the forefront of people's minds. What people are saying to us is that they want better coordinated government services and gearing of that around a clear strategy associated with regional transformation. In addition to that focus on coordination of support and services, we're also very focused on how to design a framework of supports that's place based and reflective of the views and needs of those communities, as opposed to something that is just imposed from above.
2.12Following this, Mr Chisholm emphasised the Taskforce’s success with engagement with state and local governments to better understand where support is needed to assist in achieving secure growth and employment opportunities as part of the economic transformation.
2.13Addressing the support expressed by submitters for a coordinated approach to a national authority, Mr Chisholm expanded on the Taskforce’s purpose:
The objective of the task force in terms of why it was established is that the government is very keen to receive advice from us on how we can best support regional communities that are dealing with the impacts of the transition to net zero, and in particular the issues associated with decarbonisation and impacts on the different industries…coordination is key—aligning investments and services at a Commonwealth level so that the sum of the parts helps to produce the desired transformation that communities are looking for.
2.14Beyond Zero Emissions expressed concerns and emphasised the need for the NETA to coordinate government efforts.
While a National Energy Transition Authority will not control spending across state and federal government funds available to invest in an energy transition (e.g. via Rewiring the Nation, Renewable Energy Zones, Clean Manufacturing Precincts) it will be imperative that such an authority builds strong relationships across portfolios and jurisdictions to maximise the impact and implementation of national planning and coordination in order to drive the much needed and rapid transition of Australia’s energy system.
Supporting regional communities
2.15Many submitters expressed support for regional communities, with an emphasis on ensuring local community involvement and initiatives. This support ranged from re-skilling and training of workers, to support of economic development and infrastructure investment to assist affected communities.
Genuine input from workers and unions
2.16Witnesses and submitters emphasised the key and genuine role workers and workers’ representatives must play in energy transition, and within the structures of an energy transition authority. Further to workforce and industry impact, evidence provided noted the beneficial perspective workers have of their impacted communities more broadly.
2.17In the hearing, Mr Murphy from AMWU spoke to the justification for including workers at the centre of transition and an energy transition authority:
… it's about making sure that we have the confidence and the trust of the workers that are at the centre of this … Taking the time to do it properly, although there is a sense of urgency about it, no doubt, and having workers at the centre of this and building that ownership is just as critical as the work that it's going to do for the next decade or longer.
2.18Mr Murphy also addressed the broader input role that workers can have in transition, and particularly on the future and economic security of their communities:
It's also about listening to those voices and the jobs and industries we want to see put into these regions to make sure they have economic security, but most importantly for workers that they can see there's going to be a future for them and their kids so that they can watch their grandkids grow up.
2.19Mr Murphy particularly commented on the authentic role that workers must play in all stages of the energy transition, and that structures must include and not just consider workers experiences when decision making:
That’s exactly what we see the national energy transition authority planning; to make sure that at end of the day workers are treated with a level of respect and there’s justice for them, recognising their contribution for generations, as I said. It has to be independent. It has to have the power to make decisions and it has to be a board that is representative of what is going on in the industry and making sure that workers retain a voice.
2.20Mr Murphy further elaborated on this view with respect to the bill, addressing his concerns that the National Energy Transition Authority would act more as an advisory body without structured inclusion of workers’ perspectives:
I think this is of critical importance. … We’ve tried to make sure in everything we’ve done with the Hunter Jobs Alliance, Collie, Latrobe and Central Queensland that unions aren’t just having a one-way conversation with our members talking to them, but we’re actually spending a lot of time listening. … If the transition authority is set up so that it has the capacity to make decisions and compel things to happen, that we have that partite set up with the unions having a place on there, it allows a direct line and a direct conduit with the infrastructure that unions have in place to make sure that workers are kept informed of what is going on and what is being discussed and what is being decided.
2.21ACOSS similarly recommended that the NETA explicitly consult and include affected stakeholders, including workers and their trade unions:
ACOSS sees that regional economic development planning is best achieved through active, ongoing and inclusive consultation and co-design processes. These include with: local and state governments, workers, trade unions, employers, farmers and affected communities, as well as people experiencing poverty and social disadvantage, including long-term unemployment…
2.22Dr Amanda Cahill, CEO of The Next Economy, provided evidence to the hearing on how international equivalent authorities include the perspective of workers and trade unions, and that successful models have also included industry, environmental and community groups:
There are a few different models, and in some countries it’s a tripartite model where it’s government, industry and unions. I would suggest that, if you’re looking at examples like the Ruhr valley in Germany, they extended beyond that to involve other stakeholder groups, including environment groups, and I think traditional owners need to be definitely a part of that, and also social services as well.
2.23Mr Murphy from AMWU recommended a tripartite model including industry, unions and government for an effective energy transition authority:
If the transition authority is set up so that it has the capacity to make decisions and compel things to happen, that we have that partite set up with the unions having a place on there, it allows a direct line and a direct conduit with the infrastructure that unions have in place to make sure that workers are kept informed of what is going on and what is being discussed and what is being decided. More importantly, it becomes a two-way communication about what workers' expectations are and where things are going well and where things aren't so that it can adapt and change to make sure that, as I said at the start, this is a just transition, meaning that there's justice for workers in the transition.
2.24Dr Heidi Edmonds from Beyond Zero Emissions referenced extensively in their evidence to the hearing the work of the Australian Council of Trade Unions and other organisation in ensuring worker voices are incorporated in translation work. The ACTU’s paper ‘Sharing the challenges and opportunities of a clean energy economy: Policy discussion paper A Just Transition for coal-fired electricity sector workers and communities’references evidence that ‘early planning involving a variety of stakeholders delivers better outcomes for working people’ and recommends that an energy transition authority should legislatively incorporate workers’ representatives, industry and government:
To ensure appropriate consultation with industry and unions, the ETA would be overseen by a tripartite advisory board – comprising industry, unions and government – and enacted in legislation. The ETA would be responsible for reporting to the Parliament, as well as to the responsible Minister.
Incorporating First Nations peoples’ perspectives
2.25Submitters and witnesses to the hearing spoke to the need to ensure that First Nations people and their perspectives are party to and incorporated in the functions of an energy transition authority in a broad sense.
2.26Dr Heidi Edmonds from Beyond Zero Emissions highlighted the inclusion of First Nations perspectives as an element of best practice in an energy transition authority:
Some of the other best practice principles which are important are also making sure that elements such as First Nations engagement, benefits to First Nations, making sure that they're consulted and part of agreement making, First Nations people. We would also like to acknowledge that the First Nations Clean Energy Network is leading in this space.
2.27Dr Edmonds also responded to the need to ensure that more than just cultural considerations are taken into account, and that at an economic level First Nations people are contributing to and engaged in energy transition:
They have expressed publicly that they wish to be included in conversations. They wish to see benefits that they can be part of. They wish to see opportunities for their community to potentially be partners in investments. Reflecting back on that, some of the critical themes are, of course, that there is informed consent from First Nations people, that they are given clear and correct information so that they can make the partnerships that they see as relevant, and obviously respecting their land rights.
2.28Dr Amanda Cahill, CEO of The Next Economy provided evidence to the hearing on how First Nations people are being impacted by transition at an economic level and the role they can play in energy transition:
… in other parts of the country, traditional owners are saying they've depended on royalties from fossil fuels for a long time; they can see that eventually over time they won't be able to depend on that anymore. But where are the structures around renewable energy on country and the range of benefits they can get beyond just the financial training opportunities, potentially setting up workforce labour hire companies that can work in different places, being involved in rehabilitation of existing sites. There are so many different opportunities here, which is different from other industries. It is really exciting to see that First Nations leaders are on the front foot with this.
Training and re-skilling
2.29The importance of training and reskilling during the transition was a theme highlighted by stakeholders. For example, AMWU submitted that: ‘there is a need for NETA to have a dedicated function of providing funding support for reskilling, industry policy, and targeted investment, working with relevant State, Territory and local governments to address these needs now, not just in the next decade’.
2.30In his evidence to the committee, Mr Murphy stressed the importance that a core function of the transition authority needs to be supporting affected workers in reskilling and training:
It has to provide worker support, regional economic diversification and skills and training…it’s got to coordinate with other government entities and fund those programs, including with Jobs and Skills Australia, the National Reconstruction Fund, and the Powering the Regions Fund.
2.31Snowy Hydro Limited echoed these sentiments.
…Snowy believes providing workers with access to job retaining services is crucial to ensuring the positive impact of economic diversification policies on impacted workers and providing both near-term and long-term solutions to coal closures.
2.32The Next Economy’s submission supported the bill, but with recommended additions. It recommended that ‘the authority works with state and local governments using a place-based approach to engage industry, education and training providers, workers, First Nation and other community leaders as active participants in planning to create long-term resilience’.
2.33In her evidence to the committee, Dr Heidi Edmonds from Beyond Zero Emissions highlighted the importance that communities are the primary source of information regarding where training and reskilling needs to be implemented in regional areas, and that programs should be community driven.
2.34In light of these concerns, Mr Chisholm from the Taskforce explained to the committee that there are already government initiatives in place creating frameworks to support workers:
There’s quite a bit of work happening in that portfolio to do with things like the Clean Energy Capacity Study for skills, new energy apprenticeships and new energy skills.
2.35Mr Chisholm highlighted the benefits that the recently established policies and programs by the government, such as Powering the Regions Fund and the National Reconstruction Fund, will have on supporting workers to reskill and their communities. More broadly:
What we’re seeking to do is find ways in which we can help work with those initiatives to ensure that they are targets where its appropriate and according to the independent decision-making process of the board or the decision maker; that is well targeted to the communities who have a lot to offer and who would benefit from those sorts of initiatives.
Potential overlap with established agencies and functions
2.36Submitters highlighted concern for a potential overlap of; function, responsibility, and power the bill may have with established government agencies and initiatives.
2.37The primary agency mentioned by submitters was the Australian Energy Market Operator (AEMO). AEMO was established by the Council of Australian Governments (COAG) on 1 July 2009 to manage the National Electricity Market (NEM) in the eastern and south-eastern states and Australian gas markets.
2.38AEMO has formed the NEM2025 Program to deliver several energy market reforms, including the Energy Security Board’s (ESB) Post 2025 Electricity Market Design Project. These reforms are providing changes to the market design to facilitate the transition to modern energy systems that will meet consumer needs.
The ESB’s Post-2025 electricity market design addresses essential change in a world of expanding consumer choices, new technologies, and large-scale capital replacement as old thermal power stations leave the market.
2.39Various energy providers were concerned that existing functions should not be duplicated. For example, Snowy Hydro Limited highlighted the key role that AEMO currently plays in the Integrated System Plan:
The Australian Energy Market Operator (AEMO) undertakes an extensive planning process as part of its Integrated System Plan. Snowy Hydro recommends that in providing advice on these matters the National Energy Transition Authority should coordinate with AEMO (and other market bodies) in order to avoid duplication and leverage existing planning processes.
2.40Similarly, Alinta Energy recommended a clearer distinction in the bill to avoid duplication work undertaken by other energy sector bodies.
2.41Dr Cahill took a broader view of the role of NETA and emphasised the need for a NETA to be a coordination body, rather than an advisory or implementation body. She highlighted the symbiotic relationship NETA should have with agencies such as AEMO:
…very highly technical things that we need engineers and technical to figure out—that is AEMO's role, and the Australian Energy Regulator and other bodies.
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It needs to be someone's job to coordinate and make sure that the same goal is being met across all of those different government departments, all of those different agencies, so they can do their job.
2.42Dr Cahill agreed that there is work currently underway in the energy sphere, but highlighted the need for coordination in this area:
… at a federal level there's so much work being done in the energy space right now… Again, if you take the examples recently of the consultations done around the Powering the Regions Fund compared with, say, the National Reconstruction Fund, there's a lot of confusion about how these things can work together.
2.43Ms Crosthwaite addressed these concerns and highlighted the work undertaken by the Taskforce to determine the best path forward:
One part of the work has been not just in our visits but also through desktop research and other things, trying to map out what the existing structures, governance arrangements and leadership, strong voices in the community are in each place so that we can get a sense of what that landscape looks like before we start trying to propose what a Commonwealth role should be in that place. It’s a tricky one to navigate. Its not impossible. There are lots of federated structures that operate perfectly well, but its one that we’re very alert to, and have heard voiced quite explicitly in some places.
2.44Mr Chisholm explained the importance of the taskforce’s work and the relationship this needs to have with current entities:
…one of the really useful things about looking at this bill is how we think about the way a Commonwealth body here can work well with other entities that are involved in this work…whether it’s AEMO, who’s thinking 24/7 about how we keep the grid stable and then its long-term plans on the future grid and the Electricity Statement of Opportunities; whether it’s the CEFC, ARENA and the investments they’re making…or the Commonwealth agencies that are involved in designing and delivering programs, whether it’s the Capacity Investment Scheme that we talked about or whether it’s traditional regional policy work.
Lessons from the Net Zero Economy Taskforce
2.45The Net Zero Economy Taskforce established by the government within the Department of Prime Minister and Cabinet provided significant evidence to the hearing on what regions and stakeholders wish to see within a well functioned and effective energy transition authority.Elaborating on their interim work and wide consultation, the Taskforce provided the committee with key points and lessons that could be considered and applied to an energy transition authority in some form.
2.46The Taskforce emphasised the role the Commonwealth should play in energy transition, particularly coordination:
The Commonwealth has a role to play in helping to bring different levels of government together, industry, unions and communities around a concrete and effective plan for regional communities.
2.47The Net Zero Economy Taskforce noted there is a critical need for flexibility to address the variety of challenges and issues that are faced by different communities in transition.
Every region that we have visited is really unique in terms of the circumstances it faces, the challenges, the opportunities and the way people are organising themselves in those communities. There are different views on how the transition should be managed and supported.
2.48Functioning around a place-based framework was also a key consideration for the Net Zero Economy Taskforce, and echoes evidence from many submitters.
… we're also very focused on how to design a framework of supports that's place based and reflective of the views and needs of those communities, as opposed to something that is just imposed from above.
2.49Additionally, the Taskforce explained that a consistent theme in feedback received was the need for a local-up version of an authority being preferential to a top-down version.
There are some places we've visited where there's a real sense of community ownership over their transition process. They talk about it openly and are very actively involved, and it is places like that where there is a real tension between a potential Commonwealth role or function accidentally coming in over the top and perhaps undoing some of that good work.
2.50The Taskforce also commented on the ability of the Commonwealth to serve as a single-point of access to government services and programs that relate to energy transition broadly.
In terms of the Commonwealth's role as well, there's so much happening in a number of portfolios that would be of great assistance to these communities. One of the pieces of feedback we keep hearing and which was touched on at the start was someone that people can talk to to help them navigate services, and then also feed that back through the system to influence policy design and program design so that it's actually well targeted for communities.
2.51Importantly, Mr Chisholm emphasised that the Taskforce is likely to recommend an option that works with existing bodies but fills the gap to improve the coordination and delivery of government services and support for communities impacted by the transition.
…there is a really careful element here of thinking through how something new out of this process works well with those bodies but fills a gap that is currently there at the moment.
Committee view
2.52The committee appreciates that planning and managing the transition to a low carbon economy starts now and notes the many government initiatives that have begun on this front. In particular, the Net Zero Economy Taskforce is undertaking consultation with a variety of stakeholders, including trade unions regional communities affected by the energy transition and state and territory governments, and will provide advice to the Commonwealth Government on how best to support these communities.
2.53Accordingly, the committee considers that the establishment of a NETA would be premature given the work of the Net Zero Economy Taskforce and its wide and thorough consultation which is still ongoing.
2.54Further the committee acknowledges that the Net Zero Economy Taskforce and submitters to the Inquiry support a flexible model for any Transition Authority with:
(a)a clear coordination role to assist communities in transition to access a range of government services; and
(b)inclusion of local trade union, First Nations, industry and community expertise and voices.
2.55The committee therefore encourages the Parliament to work together towards a flexible, inclusive Transition Authority drawing on the Net Zero Economy Taskforce findings.
2.56The committee also accepts the evidence from submitters about potential duplication of existing government functions this Bill could establish, particularly the advice function of the bill, which is currently performed by AEMO. The committee notes the need to avoid replication of this and other government functions in any Transition Authority.
2.57Finally, the committee acknowledges the variety of other government programs designed to provide significant support and resources to communities that are being affected by energy transition events, including Powering Australia and the Powering the Regions Fund, the National Reconstruction Fund, Jobs and Skills Australia, Energy Apprenticeships, the National Energy Transformation Partnership, and free TAFE places.
2.58The committee notes that these programs will support economic diversification in regions affected by energy transition, and help workers retrain and develop new skills for the future.
2.59The committee recommends that the bill not pass.
Senator Jess Walsh
Chair
Labor Senator for Victoria