Court Simon; Shaw JamesSIMON COURT (ACT): It's heartening for some no doubt to hear the Minister of Climate Change's confidence but not for the ACT Party. Minister the bill allows Ministers future Ministers—could be you—to re-evaluate the allocative baseline for industries as often as every five years. So this is the amount of so-called free credits that industries get in terms of the emissions trading scheme which means they don't have to pay for their carbon emissions or all of them—they get a proportion allocated for free.Minister every five years: submitters pointed out that this is likely to undermine the incentives that they potentially have to invest in emissions reductions which have a longer payback period than five years because if for example they want to invest in a $200 million piece of equipment to reduce emissions by a significant amount the payback period from that for heavy industrial equipment is typically 15-plus years potentially not returning a profit or return on that investment for over 15 years. So they identified the risk that having their industry or having their activity called in or re-evaluated after five years and therefore a risk that their allocation would be reduced means that for executives going to a board saying Can we have $200 million please to invest in decarbonisation equipment?" their board might say "Well yes but if this thing happens where a Minister calls in our industry for a reassessment and we lose that allocation then we're going to be underwater." Minister do you just want to address that concern?Hon JAMES SHAW (Minister of Climate Change): Yeah very happy to. So under the existing legislation the way it's set up at the moment there is no time and it's entirely arbitrary and up to the Minister. So there's a level of uncertainty that companies already face because they could face a review at any moment. And because it has been over a decade since we last looked at it when I did initiate a review to say are we—you know we kind of had a sense that perhaps there were companies that were receiving over their allocation in fact in some cases well over 100 percent so they were actually receiving more free pollution permits than they were emitting in total. You know we kind of looked into it and discovered that a number of businesses were.Now what that means is that companies who have kind of been counting on that or using that as a revenue stream can suddenly have that taken away with no predictability at all. So in setting up a schedule where we say "no sooner than five years no later than 10 years" what that means is that businesses understand that there is a set series of reviews.Now a review does not mean a change in the allocative baseline. What it means is that you take a look at it and say you know does it still stand that the basis on which companies are receiving their allocation remains the same? If they have done that and made those investments in good faith then there's no particular reason why that would lead to a change.But the whole point of having a regular schedule here is actually to provide the industries that are receiving these free units—that there is some predictability to that process and that there are some considerations or some constraints on the Minister despite the godly powers that that member bestowed earlier on in the evening."