SUBJECTS: Blueberry access to China market; electricity prices; closure of Liddell; Clean Energy Target.
SKY NEWS PM AGENDA
WEDNESDAY, 13 SEPTEMBER 2017
DAVID SPEERS: I want to go straight to our panel because as we have the local Member for Hunter, Joel Fitzgibbon, and Craig Laundy with us as well. Lets hope everything is ok boys it is only the first half of September and we are talking about bushfires already.
JOEL FITZGIBBON, SHADOW MINISTER FOR AGRICULTURE, FISHERIES, FORESTRY AND RURAL AND REGIONAL AUSTRALIA: Very early.
SPEERS: On a brighter note you have brought us blueberries today.
FITZGIBBON: I have.
SPEERS: Which is very good of you.
FITZGIBBON: As the Shadow Minister for Agriculture I come bearing gifts.
SPEERS: Craig you are going to have to step things up.
FITZGIBBON: These are the worlds best blueberries
SPEERS: I am sure they are.
FITZGIBBON: Produced in northern NSW, sadly we cant get them into the China market because the Government hasnt gotten off its backside.
LAUNDY: Joel, I told you I am going there tomorrow night.
FITZGIBBON: So you are going to fix it for us?
LAUNDY: Not fix it necessarily but starting working
SPEERS: Are you going to make the case?
LAUNDY: After the Chinese Free Trade Agreement we set up a Technical Barrier to Trade Committee chaired by both countries and I am one of the Ministers responsible and I am meeting with my counterpart over there Friday and Saturday.
SPEERS: Blueberry bipartisanship.
FITZGIBBON: Free Trade Agreement is ok but you dont get access until you get the protocols done. Many, many horticultural products have no access to China whatsoever.
SPEERS: And we are meant to have a Free Trade Agreement. Now lets get to the energy debate. A lot of debate this afternoon about whether Sydney households are paying $1000 more than they were before your mob came to Government, Craig Laundy, you are a Sydney sider what has happened to your bill?
FITZGIBBON: He doesnt even look at his bill.
SPEERS: No, come on, I am sure he does.
LAUNDY: Bills across Australia are going up.
SPEERS: No, your own bill. Whats happened?
LAUNDY: Its gone up, as bills across Australia have gone up. The reason, as we keep saying, if you keep losing base load and dispatchable power which we have done over the past ten years, you are going to be in a situation the way the market functions of course with gas shortages that have resulted in increased gas prices. You are seeing the result of that. The Prime Minister in Question Time today said that Hazelwood closing increased the cost by $50 a megawatt hour.
SPEERS: Dont people say, hang on, since you have been in Government there have been I think seven
FITZGIBBON: Seven power stations.
SPEERS: Seven power stations shut down. Now you are very agitated about Liddell, which is shutting in another 5 years from now. What have you been doing the last five, four years?
LAUNDY: Thats great and you have just bought Labors line.
SPEERS: No I am asking you
LAUNDY: David, with due respect, there are three coal-fired, three power stations in South Australia that were closed down by the State Governments move to a RET. Hazelwood power station was closed down by their move to RET and a tripling of coal royalties.
SPEERS: You are blaming the States for all of this? Why isnt it a Federal Government role to intervene and do something about this? Why wasnt it earlier a Federal Government role to intervene and do something?
LAUNDY: David, what I am saying is you have got State and Federal Governments, you have got a heap of historical policy failures in this space and if you dont sit down now and identify that a) we have got a problem and b) we need to fix it which is exactly what the Prime Minister started to outline. Last week when we were on, Joel said
SPEERS: It has been happening for years.
LAUNDY: Last week Joel said lack of certainty has led to no investment in renewables. There is currently $7 billion being invested, more than ever before, in renewable energy. The problem the Prime Minister started to set out is that storage has never gone with it. The shortage of, that policy failure historically, and not having it, you cant retrospectively do it now. You can say, and what we said, and the Finkel Report pointed out, you can do that moving forward and you can revisit others over time, but you need to rely on the base load.
SPEERS: You need to reflect on, when Tony Abbott became Prime Minister this was the same situation, you had a lot of investment going into renewables under Labor and not enough going to storage, why wasnt all this hyperactivity then?
LAUNDY: We reduced the carbon tax and prices decreased. They have been increasing ever since. It has got to the point now where, the relevant Minister and the Prime Minister identified the problem last year, started speaking about it at length this year and trying to do something about it.
SPEERS: Back on prices, this $1000 figure that Joel Fitzgibbon [sic] has just got up in the House, actually we have got a bit of it here, Josh Frydenberg has just got up in the House and he has said this about the $1000 figure:
[sound grab] FRYDENBERG: During Question Time today the Labor Party said that based on data from the Australian Energy Regulator, power bills for the average Sydney household increased by $1000 since the time the Coalition came to Government. This is false Mr Speaker. The data published by the Australian Energy Regulator on May 2017 in the State of the Energy Markets Report shows between the start of the Coalition Government in 2013 prices across average Sydney households on standing offers varied from increasing by $1 Mr Speaker to falling by $473 Mr Speaker. I call on the Leader of the Opposition to come to the House and correct the record.
SPEERS: He is calling on Bill Shorten to set the record straight. Interestingly, the data he is looking at there shows that in NSW there is a range from prices going up $1 to falling by $473. I am not sure that is the experience most of NSW has had, and certainly not Craig Laundy.
FITZGIBBON: I think it would be fair to let me respond to Craig. When the Coalition, when they promised prior to the 2013 election that they would reduce residential energy bills by $550 each year. They didnt say except, unless a power generator is closed. There were no conditions attached. It was a very clear promise and you are right, seven generators have closed four under Tony Abbott and three under Malcolm Turnbull. Tomago Aluminium smelter was forced offline six months ago because of their inaction and then just one day more than six days ago Malcolm Turnbull decided he was going to do something about it.
SPEERS: You dont think, to Craig Laundys point, that things like the hike in coal royalties by the Daniel Andrews Government in Victoria, the 50 per cent renewable energy target by the Jay Wetherill Government in South Australia.
LAUNDY: 40 per cent in Victoria.
SPEERS: You dont think any of this is actually
FITZGIBBON: Anyone who knows anything about Hazelwood at knows that coal royalties was not at play in the closure of that, it was a very, very old.
SPEERS: Why did it bring forward the closure?
FITZGIBBON: They milked every day they could out of Hazelwood. They had a $400, $600 maybe more hundred million dollar occupational health and safety issue they needed to spend that amount of money there just to keep it going. They had of course updated maintenance issues as well. It was a lot of money, they milked the [inaudible] out of it and they closed it down.
LAUNDY: It was $120 million, the royalty increase was $120 million over 4 years.
FITZGIBBON: In the scheme of things the royalty
SPEERS: You cant say though that was a good idea in hindsight.
LAUNDY: The CMFEU campaigned against Andrews.
FITZGIBBON: Hazelwood was a very old power station, they would have to have spent hundreds of millions of dollars to keep it going regardless of what was happening with the royalties.
SPEERS: Lets fast forward now to the current challenge to around what happens to the Liddell coal-fired power plant and the Government wants to keep it running, AGL doesnt sound like they are very keen on keeping it running. Craig Laundy, you are someone from a business background, are you entirely comfortable with the way the Prime Minister, Barnaby Joyce, Josh Frydenberg have been hopping into the AGL boss.
LAUNDY: Well, you are right, from a business perspective I cant understand the business rationale of the AGL boss that says he is going to close it and then doesnt want to sell it. As a director of a company you have a fiduciary duty to shareholders to maximise returns to them.
SPEERS: But surely the Board and the shareholders would turf the CEO if that was right?
LAUNDY: What possible reason would you not have for selling something that you were going to close and get zero dollars for? That makes no business sense to me at all.
SPEERS: This is the Board of a massive publicly listed company.
LAUNDY: Maybe as a publicly listed company they should explain that to their shareholders because I cant see how if you got $1 for that coal-fired power station it would not be a better result than closing it and getting zero back. That is business 101. I cant see, using business principles, but David, in terms of, it is not just Liddell, and I know Barnaby mentioned yesterday, hes had a couple of people talked to him about potentially buying Liddell.
SPEERS: No evidence.
LAUNDY: Well Ive got another one that I cant mention. Ive got another one that is talking right now to a generator about acquiring a moth-balled coal-fired power station and redeveloping. And you know why they are keen on it? Three main reasons: first, they are already linked up to the grid; secondly, they can do more with site than just the coal and there are so innovative things they can add to the mix on coal; and thirdly, appropriate planning approvals in place.
SPEERS: OK. But surely what any of these mystery buyers will want to know is whether there is going to be a Clean Energy Target in place?
LAUNDY: I spoke to the leader of the consortium yesterday and Clean Energy Target makes no difference to him. You have got entrepreneurs out there. The leader of this consortium is an electrical engineer, knows that plant very very well they are talking to suppliers about. Yet again, that generator is in a position where they are not prepared to talk to him at the moment.
LAUNDY: Because opening it and allowing a competitor into the market..
SPEERS: So you dont need to make a decision on this.
LAUNDY: No, what I am saying is, it is well and good for someone like Andrew to talk about what they are proposing to do, however, there are two sides to this story. It suits them, in the market for generators and this nonsense out there that is a pure market, a free market, and that we as Libs shouldnt be looking at these things. It is not a free market it is an oligopoly. And when you get oligopolies you need to, as a regulator, make sure there is not market behaviour that disadvantages consumers.
SPEERS: Whats your view as to whether we try a Clean Energy Target or not?
LAUNDY: My personal view? I am not adverse to a Clean Energy Target, however what that looks like, I dont have the answer to that because that will come out of Party Room meetings and the process that is in place.
SPEERS: Labor is willing to back one but if it is designed in such a way there is plenty of incentive for old coal-fired plants, or indeed new coal-fired plants
FITZGIBBON: Surely it is impossible to have incentives for old coal-fired, not even the most conservative in the Government are arguing it is going to have incentives for old coal-fired plants.
SPEERS: Some incentive to keep
FITZGIBBON: Thats just not possible David, and Craigs explanation of AGLs reasons for not selling Liddell just shows a total misunderstanding of the situation. Liddell and Bayswater are basically integrated businesses, they are sister power stations, they share grids, the infrastructure around them they share. AGL want to invest a lot of money replacing Liddells capacity with new forms of energy generation: gas; large scale solar; pumped hydro; battery storage. You cant do that if you have just given the place away. It is a pretty simple thing to understand.
SPEERS: But to the question, will Labor back a Clean Energy Target if there are incentives there for new coal-fired plants?
FITZGIBBON: Mark Butler has made it quite clear we want a bipartisan settlement on the Clean Energy Target. If Malcolm Turnbull wants to change its name to demonstrate he stood up and to hide the fact he wasnt prepared to stand up
SPEERS: And incentives in there for coal?
FITZGIBBON: We have said that we are open to every conversation, but the people who talk about being coal and deliberately dont explain to people what that would mean. If you go to 600 kilos of carbon per megawatt hour obviously gas is in and you go to 7 and you get a bit more, you go to 8 and you might get clean coal in. But that doesnt mean the clean coal generator is getting the same benefit as the gas generator. It is a sliding scale. They want to try to drag clean coal in and we are open to that conversation but they want to take a win that sounds far more exciting than it really is for that generator.
SPEERS: Well it sounds like that window for bipartisanship is still ajar so we will see how that goes. Probably not as bipartisan as you are about the blueberries.
FITZGIBBON: You get us into China mate.
SPEERS: Craig Laundy, Joel Fitzgibbon, great to talk to you both. Thank you very much.