Bank

In the general pandemonium surrounding the unveiling of the carbon tax package last week, it was easy to overlook the dodgy little purchase incentive that came as part of the bundle.  Shrink-wrapped to the side of the carbon tax box was something called the Clean Energy Finance Corporation (CEFC).

Behind the feel good name, this new bureaucracy is little more than a $10 billion, off-the-books venture capital fund, underwritten by the taxpayers and created for the sole purpose of providing generous loans and guarantees to highly speculative startups in the renewable energy sector. 

This shonky “Gillard Bank” will involve an unelected board, chosen by Julia Gillard and Bob Brown, picking winners with minimal public scrutiny, no apparent requirement for cost benefit analyses and no apparent tender processes with objective criteria to ensure value for money. In all probability the CEFC will direct funds to projects that conventional financiers wouldn’t touch because they would be deemed too risky. While the actual policy documents are silent on where the $10 billion will come from, Government sources have suggested the money will come from the issue of billions of dollars in government bonds.

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