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2019
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
Coal-Fired Power Funding Prohibition Bill 2019
EXPLANATORY MEMORANDUM
and
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
Circulated by authority of
Adam Bandt MP
Coal-Fired Power Funding Prohibition Bill 2019
OUTLINE
This Bill will prohibit the Commonwealth or an associated Commonwealth body from providing
financial assistance to coal-fired power plants in a number of respects.
A primary aim of the Bill is to assist in the reduction of Australia's greenhouse gas emissions by
preventing the Commonwealth from actively assisting in the construction of new coal-fired power
stations, extending the life of existing coal-fired power stations, helping purchase new coal-fired
power stations or assisting the owner of a coal-fired power station to use, fund or operate the
station.
The Bill will also protect the Commonwealth and the Australian taxpayer from unnecessary
exposure to the significant financial risk associated with providing financial support to potentially
stranded assets. It also protects from exposure associated with underwriting the carbon risk of new
coal-fired power generation, which may be significant if a future government takes steps to limit
greenhouse gas emissions.
Upon commencement of this Bill, the Commonwealth must not provide financial assistance for the
building of, refurbishment, or purchase of coal-fired power stations. This includes the provision of
indirect assistance, such as through the underwriting or guarantee of someone else's financial
obligations. Without limiting the kind of assistance prohibited by the bill, the following would be
prohibited:
Direct payments
Loans
Underwriting of agreements, including between purchasers of power and the builders or
operators of coal-fired power generation
The issuing of government bonds
Contracts for difference
Guarantees of a 'floor price'
Equity in a company
Capacity payments
Indemnity from carbon risk
Financial assistance to purchase coal for the power station
Exemptions are provided to permit the Commonwealth to exercise its usual regulatory process, to
provide support to workers and communities affected by power station closures, to fund research
related to coal-fired power stations generally or to manage the closure of coal-fired power stations.
FINANCIAL IMPACT
The bill will have no financial impact.
NOTES ON CLAUSES
Clause 1: Short Title
This clause provides for the Act to be cited as the Coal-Fired Power Funding Prohibition Act 2019.
Clause 2: Commencement
This clause provides for the whole of this Act to commence the day after it receives Royal Assent.
Clause 4: Definitions
This section defines authority of the Commonwealth as an entity or company under the Public
Governance, Performance and Accountability Act 2013 and any other body (whether incorporated
or not) established for a public purpose under the law of the Commonwealth or where the
Commonwealth has a controlling interest.
Part 2 - Prohibition on Commonwealth support for coal-fired power stations
Item 1: Section 5 Subsection (1)(a) - (c)
This section prohibits to Commonwealth or any authority of the Commonwealth from providing
financial or other support for the purpose of:
(a) building or refurbishing a coal-fired power station; or
(b) purchasing or assisting in the purchase or transfer of ownership of a coal-fired power
stations; or
(c) assisting the owner of a coal-fired power station to use, fund or operate the station.
'Support' includes those kinds of matters outlined in the Government's Underwriting New
Generation Investments Consultation paper, as well as other kinds of support, including:
Direct payments
Loans
Underwriting of agreements, including between purchasers of power and the builders or
operators of coal-fired power generation
The issuing of government bonds
Contracts for difference
Guarantees of a 'floor price'
Equity in a company
Capacity payments
Indemnity from carbon risk
Financial assistance to purchase coal for the power station
Item 2: Subsection (2)(a) and (b)
The Commonwealth is not prohibited from exercising its usual regulatory functions with respect to
coal-fired power stations.
Item 3: Subsection (3)(a) and (b)
Provides exemptions for transition assistance or research. The Commonwealth is not prohibited
from providing transitional assistance to workers affected, or who may be affected by the closure
of coal-fired power stations. The Commonwealth may also fund research by an approved research
institution, provided that the research relates to coal-fired power stations generally, and not a
particular coal-fired power station.
Item 4: Subsection (4)
Provides for exemptions so the Commonwealth may assist in managed closures of coal-fired
power stations.
Item 5: Subsection (5)
Relates to the acquisition of property. Subsection 1 does not apply to the extent (if any) where the
operation of this Act would result in the acquisition of property, within the meaning under section
5 (xxi) of the Constitution, from a person otherwise than on just terms.
Item 6: Subsection (6)
Subsection (1) has effect despite other laws the Commonwealth (whether passed, or made before,
or after the commencement of this section) unless the law expressly provides otherwise.
Item 7: Subsection (7)
Subsection (6) does not affect the operation of subsection (5).
Item 8: Section (6)
The Commonwealth will only be limited by section (5) of this Act and this Act does not, by
implication, limit that power to any other extent.
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Coal-Fired Power Funding Prohibition Bill 2019
This bill is compatible with the human rights and freedoms recognised or declared in the
international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the bill
This Bill will prohibit the Commonwealth or an associated Commonwealth body from providing
financial assistance to coal-fired power plants in a number of respects.
A primary aim of the Bill is to assist in the reduction of Australia's greenhouse gas emissions by
preventing the Commonwealth from actively assisting in the construction of new coal-fired power
stations, extending the life of existing coal-fired power stations, helping purchase new coal-fired
power stations or assisting the owner of a coal-fired power station to use, fund or operate the
station.
The Bill will also protect the Commonwealth and the Australian taxpayer from unnecessary
exposure to the significant financial risk associated with providing financial support to potentially
stranded assets. It also protects from exposure associated with underwriting the carbon risk of new
coal-fired power generation, which may be significant if a future government takes steps to limit
greenhouse gas emissions.
Upon commencement of this Bill, the Commonwealth must not provide financial assistance for the
building of, refurbishment, or purchase of coal-fired power stations. This includes the provision of
indirect assistance, such as through the underwriting or guarantee of someone else's financial
obligations. Without limiting the kind of assistance prohibited by the bill, the following would be
prohibited:
Direct payments
Loans
Underwriting of agreements, including between purchasers of power and the builders or
operators of coal-fired power generation
The issuing of government bonds
Contracts for difference
Guarantees of a 'floor price'
Equity in a company
Capacity payments
Indemnity from carbon risk
Financial assistance to purchase coal for the power station
Exemptions are provided to permit the Commonwealth to exercise its usual regulatory process, to
provide support to workers and communities affected by power station closures, to fund research
related to coal-fired power stations generally or to manage the closure of coal-fired power stations.
Human rights implications
This bill does not engage any of the applicable rights or freedoms, other than to promote the safety
and wellbeing of people by helping to ensure a safe climate.
Conclusion
This bill is compatible with human rights because it does not otherwise raised any human rights
issues.
Adam Bandt MP