PRIME MINISTER:
Welcome everyone. I want to thank the Premiers, Chief Ministers and the President of the Local Government Association for a very good discussion today. These meetings are often described as talks, but we've had a lot of delivery today, too. I want to acknowledge and thank the hard work of our officials who have put in the spade work before this meeting.
We've agreed to work together to deliver key reforms that will improve the outcomes for all Australians and show the national leadership they expect of us.
We've established a forward work agenda that focuses on four key pillars - economic reform, social reform, Indigenous affairs, national security, community safety and social cohesion.
As always, our conversations have been wide ranging, positive and frank and despite different perspectives from time to time, we have a common goal and a common vision - to keep Australians safe, secure and ensure we retain our position as a high wage first-world economy with a generous social welfare safety net.
But there are challenges. The GDP outcome this week was a sobering reminder that we can't just hope that our living standards will keep rising. We can't take economic growth for granted.
We owe it to future generations to undertake the serious structural and budgetary reform to lift the capacity of our economies and improve productivity.
In that regard I'm pleased that all states and territories with the exception of Victoria, Queensland and South Australia have signed a new intergovernmental agreement on competition and productivity enhancing reforms.
This reduces regulatory burdens, boosts innovation, promotes more efficient investment and flows of course from the Harper Competition Review.
These are exactly the kind of reforms we need to lift our growth in both the short and the long-term. I want to thank our Treasurers for their work in finalising this agreement.
Now, critical to maintaining our international competitiveness is energy prices and energy security. We need to ensure that energy is reliable - we keep the lights on, we need to ensure that it is affordable. We need of course, to achieve the emissions target cuts that we have agreed to in the Paris Treaty.
Dr Finkel, the Chief Scientist, presented his interim report on the national energy market. This is a discussion paper and it precedes a final report to be delivered in the first half of 2017. Three of the key issues we discussed with Dr Finkel are the changes needed to the electricity market rules, to better integrate renewables into the grid; the opportunities arising from new technologies, including storage technologies; the need for more supply of gas - a very critical transitional fuel - and an understanding from Dr Finkel of the way in which renewables are changing the nature of our electricity grid, which was built and designed for a different era. Different types of central generation, different types of synchronous generation.
And what we need to do is to ensure that we can have the stability and the security that we've been used to, as the grid evolves to one that is not synchronous, not always derived from base-load power-sources of the kind we've been used to, but with more intermittent sources. Also, with more distributed sources of power. So his interim review is a discussion paper. It is well worth reading. It's very important, it raises a lot of engineering and technical challenges. But I think we're all satisfied that the solutions are there, but a great deal more work needs to be done. We look forward to that being undertaken.
I want to thank my colleagues for the spirit of collaboration with which they're approaching the rollout of the National Disability Insurance Scheme. Our shared commitment to ensuring the scheme is a success is absolutely crucial for people with disabilities, their carers and families. We acknowledge that we're all accountable for the success of the NDIS and we're seeking to work through implementation issues, as is inevitable when you're undertaking such a transformational reform.
We discussed the very complex issue of youth detention and child protection. While we await the findings of the Royal Commission being conducted in the Northern Territory, we'll continue to work across jurisdictions, particularly to reduce the overrepresentation of Indigenous children in these systems.
The Closing the Gap report is a report card on our nation on all jurisdictions on all communities. I have invited First Ministers to participate in the 2017 tabling of the report in Canberra, in recognition this continues to be an important shared priority. First Ministers agreed to refresh the Closing the Gap agenda with a desire to focus on jurisdictional targets as well as the broad national targets. We also reiterated our support for recognising our First Australians in our Constitution.
Today we continued the momentum to address the great scandal of violence against women and children, domestic violence. Not all disrespect of women leads to violence against women but that's where all violence against women begins. We reaffirmed our commitment to say - loudly and clearly - that we will not tolerate, accept or ignore violence against women and children. We acknowledge the important work done by the Victorian Royal Commission into Family Violence, and action on many of its recommendations is already underway.
Today I announced the Commonwealth will change the law to make it a crime to breach personal protection injunctions issued by Federal Family Courts. This new offence sends a clear message that family violence is not a private matter, it's a criminal one.
The Premier of Victoria and I have agreed our Health Ministers will examine and work together to establish what gaps there are in GP services for victims of family violence. Sadly, it is often the victims of that violence who have to leave the family home.
Today I have also committed an additional $117 million for the National Partnership on Homelessness, which will provide additional support for vulnerable Australians.
We've also agreed to strengthen the National Firearms Agreement in relation to the classification of lever-action shotguns. This is the first time the National Firearms Agreement has been strengthened in this way in 20 years. It continues Australia's strong approach to the regulation of firearms. It reflects detailed discussions with all jurisdictions and stakeholders.
As we've previously foreshadowed, the Commonwealth has also secured agreement from the states and territories to undertake a national gun amnesty expected to commence in mid-2017. This is aimed at reducing the number of unregistered firearms in Australia. It is not a buy-back, it is not targeting law-abiding firearm owners.
On another community safety issue, in November the Commonwealth Government announced that we'd developed additional measures to stop child sex offenders from travelling overseas to commit criminal acts against children. COAG is committed to ensuring that children are protected and perpetrators are brought to justice, whether the crime occurs in Australia, or is committed or facilitated by an Australian overseas.
Over lunch we discussed the worrying international test results which showed that our relative ranking of our students has gone backwards. We have received them earlier this week and last week. Given the scale of the investment we make in our schools, we should expect to be a clear education leader, not lagging behind. We had a very frank and valuable discussion about what more can be and what is most effective in ensuring better educational outcomes for our children.
The Murray Darling Basin First Ministers have asked their Water Ministers to report to the next COAG meeting with practical solutions and projects to implement the Basin Plan in full, while addressing impacts on communities, and ensuring that the impact of any projects is either neutral or positive in socioeconomic terms.
Finally, we've talked a lot about what we will do, but not as much as about what our past decisions have delivered. We all face fiscal headwinds to ensure that our children and grandchildren aren't paying higher taxes or receiving lower quality service in the future.
We must ensure we're getting value for money for taxpayers. To that end we have agreed that expiring national partnerships will be subject to formal, independent reviews. We have also agreed on measures to improve the transparency on how well we are doing in achieving our targets with real-time data transparently and accessibly delivered to the citizens of the various jurisdictions.
So, I now invite Michael Gunner to address you.
NORTHERN TERRITORY CHIEF MINISTER:
Thank you Prime Minister. That was a concise summary of five hours work. It's a privilege to be at my first COAG. Indeed, an honour to Chair my fellow CAFF meeting.
I want to thank my fellow First Ministers for their warm welcome and their understanding of Territory issues and the Territory context. Obviously everything on the COAG agenda is important but there are a few items that had a particular territory resonance.
There was a common thread that ran through them. From youth justice to family violence to Closing the Gap. We have got difficulties at the acute end that we need to address. But if we want to achieve long-term, meaningful, generational change, then it requires an investment in the earliest of years.
I want to thank my fellow First Ministers for their willingness to embrace that themselves and their jurisdictions and the understanding that we need to invest in our kids if we want to see that long-term change.
I will obviously be a very active participant in refreshing the Closing the Gap agenda in full partnership with Indigenous Territorians and Indigenous Australians and I thank the Prime Minister for what I thought was a productive five hours and the Territory's better off for the work today.
Thank you.
PREMIER OF NEW SOUTH WALES:
Well thank you Prime Minister. It's always great to be down in Canberra for a sunny day, great to see summer is still going well here in Canberra. A couple of quick points I want to make in terms of the agenda. Sorry, Andrew, sorry, mate.
Two things I really want to focus on. Very pleased with progress across a change of issues. Two things that stand out to me.
First, if you asked me what the biggest challenge we face is, it's how health is going to be funded from 2020 to 2030. It is an unbelievable challenge and the numbers continue to be daunting and is going to require a lot of work. So the agreement today is not just to consider health in 2018, but before that, and to ensure by the time we get to 2018, we're actually in a position that we have policies in place to deal with that fiscal gap in health funding.
That's a very significant step forward, and one that we have to address and we will address. It will take a lot of work but the commitment to have that done by 2018 is a very significant step.
The second is reflecting on the economic conditions, and those GDP numbers are very sobering. You can't put any other word on it - they are sobering. The question collectively we have to ask ourselves is can we do more as leaders to address some of these head winds that are coming economically.
I'm pleased there was a discussion around how we could potentially pursue additional infrastructure, and I see that genuinely as the best thing that we can do to drive more economic growth and obviously investing in productive infrastructure for the future.
The agreement today is to enable to work collectively on the capacity to do more, invest in more infrastructure beyond what is in the estimates so the forward projections for all states and territories and the Commonwealth - how we could potentially do more? What infrastructure could we bring forward? What mechanisms could we do to fund it? And could we potentially consider a target as part of that?
There'll be a significant amount of work done before the next COAG to look at this, but I think that is ultimately one of the best things that we can do in terms of driving economic growth in the next few years, is bring infrastructure forward that’s not only it's going change the shape of our cities and our states and territories but ultimately provide a great buffer to some of the economic head winds that are there. There was significant progress on that today.
PREMIER OF VICTORIA:
Thanks, Prime Minister. Can I thank the Prime Minister for his acknowledgement that many of the recommendations of Victoria's Royal Commission into Family Violence are being actioned. They're not being talked about, they're being delivered in full, and there's nothing arguably more important than that. Those recommendations, in my community, in my state are central to keeping women and children safe.
There are a number of those recommendations that can only be delivered with the agreement, the consent, and the partnership between Victoria and the Commonwealth and indeed if that was secured those recommendations could be delivered right across our nation. I think that would be a good thing for safety, for security, for dignity, and for equality. I am saddened today that we have not been able to agree a number of those matters.
And whilst I am pleased that there'll be further work done particularly around making sure that Medicare, a health system that belongs to all of us, adequately provides for arguably the most vulnerable in our Australian community, women and children fleeing family violence. I'm pleased to see that further work will be done. I do think we could have gone further today. Whilst I'm pleased to have at least had an opportunity to talk about family violence leave, I think we need to do more than talk about family violence leave. We need to deliver it in full.
There are a number of other items that we talked about today. The test for all of us and the test particularly for those, the only people who can provide national leadership on this, the national government, the test is that we very soon stop talking about these issues and very quickly start delivering on them. That's my commitment and I hope that's a commitment that we'll see from all governments’ right across our nation.
In relation to infrastructure, can I join Premier Baird in saying we need to be a bit more hopeful about this. We need to be really clear to markets, to ratings agencies, to the constructors of our nation, that we are determined certainly the Government of Victoria and from Premier Baird's comments, he's very keen, perhaps we all are, to get on and put Australians to work building the infrastructure that we need for the future. I hope we can have more to say about an infrastructure plan that is more than just about the budget cycle, that takes a long-term view.
Let's hope we can do that work and have a more positive and more concrete conversation about building the things that we need today including the skills that we need and creating the employment opportunities that can only come from a big and bold public works agenda.
PREMIER OF QUEENSLAND:
I might reiterate what Daniel is saying and Mike when it comes to infrastructure. I think governments work best when they can deliver infrastructure not just for our respective states but right across the nation. We talk about jobs and growth. Well, the best way to get people into work is actually have an infrastructure plan which I know Queensland has and other states do, and rather than keep battling the Commonwealth, I think we actually need to work more constructively together. So I welcome the discussion we had on infrastructure and, you know, Queensland's a huge state. We've got roads that need to be built, we've got transport solutions in hand, but if we can just all work together then that can go ahead.
Secondly, in relation to domestic and family violence, I just want to back up what Daniel just said there as well. I came in to this COAG meeting having just had a fantastic National Domestic and Family Violence Summit in Brisbane where I thought we could all agree today on national employment standards for domestic and family violence leave. Queensland has legislated for this. I think it's the next step to take. To come back again after the Fair Work makes their decision I think, we've had a missed opportunity.
So, also too, just in relation to the National Partnership Agreements, the fact that we don't have the Commonwealth funding for dental is a big issue for my state. 38,000 people will not have access to dental services which I believe is a fundamental right. So hopefully we can reach some agreement on our national partnerships but now today's a good first step.
I know we're meeting in Canberra - perhaps we need to get out to regional Australia and meet in regional Australia and understand a bit more of the issues that they are facing when you're talking about two-speed economies, out in regional Australia, there are people who are hurting because they don't have jobs. If collectively we can move around the nation and meet in those different pockets I think we'll understand the issues of people a lot more clearly.
PREMIER OF WESTERN AUSTRALIA:
From a Western Australian point of view, I guess this COAG meeting sort of marks a point where Western Australia and the Commonwealth have agreed on the NDIS being rolled out as of July 1 in Western Australia, so that's significant in the sense it's the last jurisdiction now. So brings NDIS to a milestone.
I was pleased that we've agreed that training will be sort of elevated into a major issue for future COAG meetings. I believe that Australia's at risk of not realising its potential if we don't improve our training system, which is somewhat running out of steam.
And finally and I guess I'm a bit of a lone voice on the energy debate, I believe there is too much attention to market schemes and the like, and that the situation on the east coast would be a lot better with a few simple fundamental reforms rather than exotic and eloquent market solutions.
PREMIER OF SOUTH AUSTRALIA:
Well, we did receive I think a very intelligent and articulate report from the Chief Scientist, Dr Alan Finkel concerning the national electricity market. For better or worse it is a market and it will require a market solution to essentially grapple with the challenges it faces.
He concluded that renewable energy is here to stay. Indeed, he drew on international evidence to suggest that investment in renewable energy around the world is increasing driven by investor interest. Part of that is because the cost of renewable energy is falling and is now comparable with new coal-fired generation.
He also made the important observation that the rules of our current national electricity market are not keeping pace with this change.
And he concludes that there is an urgent need for reform because in the absence of reform there will not be the necessary investment in new generation, which will provide the solutions to the challenges that he finds.
The good news is that he found that there is broad community support for change. He also found that there is broad support for a national policy which integrates emissions and energy policy.
Dr Finkel then goes on to cite AEMO and AEMC findings with approval that the most cost effective option for integrating emissions policy and energy policy is through an emissions intensity scheme. He reaches that conclusion because he believes that it will lead to the most investment in renewable energy technologies including lower emission technologies such as transitional fuels such as gas, ultimately leading to more stability in the network and lower prices in the network.
So given that the quality of this report and its broad support from a range of experts and indeed from just about every industry group except the coal industry, it was disappointing to see earlier this week the Prime Minister rule out an emissions intensity scheme as being part of the work that could occur.
We believe that we should be basing our decisions in this area on the basis of evidence and, indeed, the Prime Minister himself, before he ascended to this role, said these words: "Mature evidence-based policy communicated to voters through sophisticated explanation rather than infantile slogans would be the mark of his leadership." That's simply all we're asking for here.
This is complex public policy. It is easy to scare people. But fundamentally I believe in the intelligence of the Australian community to actually grapple with these complex public policy issues and come up with good solutions.
Can I also say that we had the opportunity to discuss today the Murray Darling Basin Agreement, and we have seen the disappointing remarks that were made by the Water Minister, Barnaby Joyce, walking away from his commitment to implementing that plan. I do welcome the fact that the Prime Minister stepped into this space and we now have an agreement to produce a series of projects which will deliver essentially the nature of the agreement which is the 3,200 gigalitres or its equivalent down the river to keep the river healthy. That will come back in April, and obviously it will be the projects that will determine the level of commitment to the implementation of this Plan.
PREMIER OF TASMANIA:
Colleagues, Prime Minister, Tasmania's economy's in very sound shape. Certainly a lot stronger than it was coincidentally a thousand days ago when we came into government but I welcome the opportunity to work at a national level to reduce impediments to productivity, greater efficiency and greater economic outcomes and to work with our colleagues to ensure that we maintain the strong growth in Tasmania's economy. The sorts of initiatives that we have implemented in our state I think can be enhanced through this new national framework.
I'm also pleased that we're able to progress important investments into supporting vulnerable Tasmanians, notably NDIS which we have supported in its implementation, not without its challenges. We are strongly supporting Tasmanians who will benefit from that program and also progressing important reforms in family violence remain a critical priority for all governments, not the least mine.
I also welcome the opportunity to push Tasmania's case, and indeed emphasise our place in Australia's energy future. I think it's an exciting prospect for the next generation of the national electricity market, that Tasmania can stamp itself as the renewable state. 90 per cent of Tasmania's energy is renewable. We want to be the renewable battery for our nation. In that context, the concept of investment, national investment, in important, critical infrastructure in our energy market, most notably a second interconnector across Bass Strait, is something that I've been really keen to progress today, and to make the case for.
We can supply to them, we can, as I say be the renewable battery for the nation and so prosecuting a case for this critical national infrastructure is something that I was very keen to do today.
AUSTRALIAN CAPITAL TERRITORY CHIEF MINISTER:
Thank you. I must say I'm frustrated at the lack of economic reform that we have seen out of today's meeting. A relative newcomer to COAG, this is my second year but I'm now the nation's longest serving Treasurer and I have to say that what I've seen in the last week, both at the treasurer’s meeting and today is a frustrating lack of urgency on economic reform. We have seen a circular debate around taxation reform. We've seen no real progress made after a number of years on urgent economic reform priorities for the country.
We've signed up today to the competition and productivity reforms. We have done so in the absence of any firm understanding from the Commonwealth as to what resources they are going to bring to the table. But we're doing so because we want to demonstrate national leadership in areas of competition and productivity reform. And the ACT under my leadership will continue to be a national leader in economic reform.
On renewable energy, I would note that next year 40 per cent of all energy in this city will be renewably sourced, in 2018 it will be 65 per cent and by 2020 the ACT will become the first jurisdiction in this country to be powered 100 per cent by renewable energy.
Out of today's meeting we made some progress on housing and housing affordability. And I particularly welcome working with the Commonwealth on affordable rental schemes utilising Commonwealth land that is available right across Australia but particularly in the ACT where some of the good intentions of Commonwealth policy reform could be enacted.
Finally, as a veteran of education policy debates – with seven years as an Education Minister - I must say we need to do more across all jurisdictions to focus resources on early childhood education, to invest in teacher quality and to value our teachers more and to work in partnership with the university sector to continue to lift Australia's education standards. It's only through that combination of initiatives that we will see meaningful improvement in Australia's education system. And today we had a productive starting of a discussion at First Ministers’ level, but this is something that must be a national priority alongside economic reform.
PRESIDENT OF THE AUSTRALIAN LOCAL GOVERNMENT ASSOCIATION:
Thank you. It's also my first COAG today. Local government manages and owns 75 per cent of Australia's road length, some 680,000 kilometres of road so we're always intensely interested when initiatives around road user charging and associated funding changes. We welcome that discussion. We want to be very close to that. We have a lot of low frequency roads where there is not many users but the roads are expensive to maintain which means there'll need to be some community service obligation. I'm delighted to hear the Prime Minister understands that fundamental equation for most of our regional and rural councils.
We're also delighted to see a commitment to productivity improvements in Australia's road network regarding freight and productivity. That ties in perfectly with our call for a freight strategy for $200 million a year over five years to improve first and last mile issues. Every freight journey begins and ends on a local road and they're our roads so we're very much part of that discussion.
In terms of investing in infrastructure we're also quite happy to hear that debate about increasing the investment in infrastructure. It matters a great deal to local councils and it fits in perfectly with our call for a doubling of the Roads to Recovery Program and to make it permanent. It's been a very successful program over some 15 years delivering over 53,000 projects throughout Australia. I think it's added a great deal of value to local communities and their relationship with the Commonwealth. Thank you.
JOURNALIST:
Thank you PM - just a question on competition reform. What is the stumbling block in getting all states to sign up to competition reform? We had an economic contraction revealed the other day so, that's my question to you, and I'd also be interested in answers on that from the Premiers of Victoria, Queensland and South Australia. Why not sign up?
PRIME MINISTER:
You should ask them. Can I just say that they're responsible for their own decisions, of course. Can I just say that, notwithstanding that, I think all leaders understand the critical importance of driving stronger economic growth. We are committed to economic reform. We're certainly committed, as a number of the premiers have noted, in stronger infrastructure investment. We want to accelerate the level of infrastructure investment.
Speaking on behalf of the Commonwealth, one of the reasons we're approaching a thoroughly new way of dealing with infrastructure in cities through our city deals is because we want to see more infrastructure, better coordinated infrastructure, between federal, state and local government, and indeed I was pleased that the Queensland Premier noted the importance of regional cities because today she and I are signing our first City Deal in respect of the City of Townsville, with the Mayor of Townsville. And it's a good example of the way in which we are - we have two others, Launceston and Western Sydney and there'll be others - where we are agreeing on shared objectives, substantial investments in infrastructure but above all working together in a coordinated way to ensure that we get more infrastructure and that we get a better urban outcome, a better economic outcome as well, from that investment. That is a very good example of collaboration and on infrastructure, on a city and in particular in that case a regional city.
PREMIER OF VICTORIA:
For my part Victoria will not be signing the agreement at this point despite the fact that our state has a very proud record of delivering competition reform. Whether it be in relation to human capital or many other waves of reform that Victoria has been central to. We have a number of agreements with the Commonwealth that have not been honoured. They're in dispute at this point of time and I'm not minded to sign up to any new ones. Until things like asset recycling, and we went and sold a port in good faith, achieved a bumper price and we're being punished because we perhaps got too high a price for that asset. We'll continue to talk with the Commonwealth in good faith but I'm not minded to sign up to any new agreements until the current ones are honoured in full.
Beyond that we have some concerns about the notion of privatising or putting a for-profit element into some services for the very vulnerable. That's not a decision that's been made, but it's referenced in the document and we do have some residual concerns about that.
The third and final reason we're not signing the agreement is that it is a structure, a framework, for the payment of bonuses if you were to achieve certain reform objectives and there's no money attached to it. I don't know if I have the order right. But deals ought to be honoured, they ought to be real with money behind them and we do have some concerns about privatisation and the unique duties that we have for instance as guardians, parents in effect, for many vulnerable Victorians.
JOURNALIST:
Prime Minister, I might be wrong but I believe you got accused of some sloganeering before from your dear friend from South Australia. Without wanting to start a mud fight...
PRIME MINISTER:
You would like nothing more –
[Laughter]
JOURNALIST:
Would you concede that given there seems to be unanimity that they want a national energy plan, that you should keep all options on the table?
PRIME MINISTER:
The most striking observation from Dr Finkel this morning was that in the last six years household energy prices have risen by 61 per cent, inflation has been 14 per cent. So as he said, around 50 per cent in real terms. That is a massive increase in the burden on Australian households, Australian businesses also, and at a time when we need to support Australian families in more challenging economic times and Australian businesses, we need to ensure that we do everything we can to keep energy prices as low as we can. They have risen 50 per cent in real terms, that's after inflation, in the last six years. And we have also seen a reduction in reliability and stability particularly where there is a very large percentage of renewable energy. This is not a criticism of renewable energy but it's a fact, and Dr Finkel’s report explains the electrical engineering issues relating to that and how they can be addressed and we’re sure they can be. There are a lot of issues that we have to work through but I can tell you that restoring a carbon tax or an emissions trading scheme is not part of our policy. We want to ensure that energy is secure, reliable and as affordable as possible for Australian households.
JOURNALIST:
As the Chief Scientist points out, the way to achieve your Paris targets in the lowest economically costing way and with the lowest impact on electricity prices is through an EIS. Is the Chief Scientist wrong when he says that?
PRIME MINISTER:
We have a set of policies at the federal level which have succeeded in meeting and beating substantially our Kyoto target. We’ll meet and beat by a considerable margin our 2020 target. And we are confident that we will be able to do the same, we're on track to do the same for 2030. So we have the runs on the board in terms of meeting and beating our emissions reduction targets. We have to achieve three things. One, we have to keep the lights on. What does it do to industry, particularly in states which are crying out for more investment, if energy supply is unreliable? We have to keep it affordable, so that households and businesses are not crushed by constantly rising electricity prices. And thirdly, we have to meet our emission reduction targets, and our runs are on the board. We have done so, we are doing so and we will do so in the future with respect to the Paris targets.
JOURNALIST:
Prime Minister, just getting back to the Premier Weatherill's point, what is the evidence-based sophisticated explanation as to why Dr Finkel is wrong and you're right. That you can achieve this under the current strategy?
PRIME MINISTER:
I think you're putting a lot of words into Dr Finkel’s mouth. I don't know what you're referring to but his interim report refers to a number of studies with modelling. There have been other studies and other modelling that comes to different conclusions. The fact of the matter is that we are undertaking a review. I know it's always appealing to have instant answers but we are not going to undertake steps which will increase the cost of electricity for Australian families, for Australian businesses, and imposing a tax on electricity generation, which is essentially what is being proposed, would add to the cost, would add to that burden and that is, that is clear. So, we have succeeded in meeting and beating our targets to date and we continue to do so in the future but we welcome the review. We initiated the review, naturally. There is a lot of work to be done on it, a lot of collaboration. It’s complex. There are a lot of complex engineering issues that we discussed with the Chief Scientist relating to renewable energy and renewable distributed energy is properly integrated into a modern electricity grid.
JOURNALIST:
The question on that is whether or not you should rule out, at the outset before you've conducted your review, whether or not you should rule out one of the possible solutions? And the Premier of South Australia, you pointed to some of the problems. Do you acknowledge the amount of renewables in your system actually is causing a security problem? The Prime Minister first.
PRIME MINISTER:
Well, our policy is very clear. We do not support a carbon tax or an emissions trading scheme. That's our policy.
JOURNALIST:
[INAUDIBLE]
PRIME MINISTER:
Can we just let the South Australian Premier answer the question?
PREMIER OF SOUTH AUSTRALIA:
First thing is we're not proposing a carbon tax and it's mischievous to suggest that we are. It's also even mischievous to suggest that we're proposing an emissions trading scheme because that wasn't the proposition that was put here. It was an emissions intensity scheme, a different thing - easy to misrepresent if you want to.
Of course the whole point of Dr Finkel's recommendation is that this puts downward pressure on electricity prices, so this gives you lower electricity prices. We have seen the CSIRO's modelling just this week estimate that there would be a $216 per annum per household reduction in their electricity bills on average across the nation, probably higher in places like South Australia.
So this is about reducing the electricity bills for ordinary consumers. How does it do that? The reason it does that is that there has been a very substantial period of underinvestment in our electricity generation system.
What Dr Finkel finds is that the reason for that underinvestment is policy uncertainty. We've had policy uncertainty for well over a decade in this country. Indeed, in 2006 it was a series of State Chief Ministers and Premiers who were proposing another solution to essentially try and find a way of sending the integration between emissions reduction and into the energy market so that we would get proper investment in the system. So the reason that we have instability, as you describe it, is twofold. One is a rather unfortunate privatisation of our electricity market, which deliberately scotched an interconnector with New South Wales to try and drive up the price of the electricity sale, the electricity market sale. And secondly, the inability to properly put a price on carbon to send the right signals to integrate energy policy and emissions policy which would have changed the mix of generation and would have meant that we don't have some of the challenges that we have in relevance to stability in our system.
JOURNALIST:
Premier Barnett, you said you didn't think there was a need for - I think you said exotic market schemes. What were the alternatives that you alluded to you think would fix this problem on the east coast?
PREMIER OF WESTERN AUSTRALIA:
I guess the point I'm making is that these schemes assume or presume that you're going to have basically a perfect market in electricity and by definition you can't. There are natural monopolies involved, there are different fuel mixes, there is different requirements for base load, mid-merit and peaking plant and what I advocate is, yeah market mechanism has got a role, I don't deny that, but if you want to look at all those things plus an emissions target, whatever it might be, you need to go back to some fundamentals. And I just find it quite incredible that Australia, with probably the world’s richest and most diverse natural energy sources, has got the sort of problems that have been experienced on the east coast. I mean that should never ever have happened and I agree with Jay on one thing, for 10 years there's been a lack of coherence around national energy policy.
JOURNALIST:
Premier’s Baird, Andrews and Palaszczuk, just to clarify, may I ask - do you three believe that an EIS should have been left on the table during the course of this review or are you comfortable with it having been taken away as an option going forward?
PREMIER OF VICTORIA:
I have made the point we're making significant investments in renewables. We don't have any plans to implement such a scheme but I'm happy to have the debate, I’m happy to listen and learn and have a proper discussion. I know Alan Finkel well. If you're going to get one of the sharpest minds in our nation, then you don't tie his hands at the start of the process. You allow it to run. You allow it to run.
JOURNALIST:
Are you going to look at gas then, Premier? One of the big things that came out of the report is he would like some onshore gas exploration in your state.
PREMIER OF VICTORIA:
He's free to recommend whatever he thinks is the best mix and then we'll have a proper process. I wouldn't be ruling things out as subject matter for his review. He should be allowed to go and do his review using the best science and the best consultation he can and then we'll consider it in due course. We have a moratorium, not a ban on conventional onshore, and we're getting our Chief Scientist to look at those matters properly and appropriately. That's a very new approach in our state one that perhaps the national government could learn from.
JOURNALIST:
Baird and Palaszczuk -
PREMIER OF NEW SOUTH WALES:
A couple of quick points on this. Ultimately, what you need is a national policy, and the Prime Minister has done absolutely the right thing and asked a whole range of people, including Dr Finkel to look at all measures and bring back recommendations across energy mix, stability, renewable, everything, all part of it, and I totally support that. I think one of the challenges we have at the moment is we have individual states doing individual things, renewable energy targets here, not there - that is not leading to the right sort of outcomes that we need.
So, what we do is support the Federal Government in the sense of undertake this review, let's get to a Federal position and the Prime Minister's got every right to say what they will consider and won't consider. Let's get to the end of this review and we will play a constructive role in looking at what the best way is forward. There is undoubtedly more work to do in this but from our point of view it needs the Federal Government’s leadership. The Prime Minister is doing exactly that through this review. We will wait for that review. And then as you see in the communique, we're going to consider that at the next COAG.
PREMIER OF QUEENSLAND:
I agree exactly what Mike said. Once again we need national energy policy but I do want to come back to this gas issue.
Queensland is indeed perhaps, you know, the energy state in terms of our LNG industry. A $70 billion industry that we created which is driving our economic growth in our state as well as our coal exports, but also too we have just announced a further two exploration tenements for gas as well, and what Dr Finkel said very clearly today, is that gas is absolutely vital as we do this transition.
I think what you'll see is different states have got their own plans. We have a plan of 50 per cent renewables by 2030. We have a really good energy mix going forward and Queensland has a clear plan when it comes to that.
JOURNALIST:
Prime Minister, you have two reviews coming up in relation to this issue, the Finkel review and your review of Direct Action. Just picking up your own criteria, which is energy security and prices for consumers, if there is compelling evidence presented to either or both of these reviews that an emissions intensity scheme would improve security in the grid and provide least cost abatement to households, will you review your own position?
PRIME MINISTER:
It's very clear that- and I don't want to get into a semantic argument. But an emissions intensity scheme involves imposing a cost, a tax if you like, on coal-fired generators, for example, and transferring that to subsidise lower emission generators, whether they're renewables or gas, for example. So, it has exactly the same purpose as a carbon tax or as an emissions - it's a form of emissions trading scheme. It is an additional cost on the electricity system and it will increase the cost of electricity to households and businesses. Our focus is on - we want to put downward pressure on, do all we can, and of course we have limited means to do so, but do all we can to ensure that this constant rise in the cost of energy for Australian households and Australian businesses that is so damaging to our international competitiveness, stops.
Colin was talking earlier about his experience in the 90s when energy prices rarely rose. And we have seen in recent times on the east coast year after year - you know we have, as Colin Barnett said, we have some of the most abundant energy resources in the world, and yet we have seen energy prices for Australian households and Australian businesses increase by 61 per cent, as Dr Finkel said, over the last six years. That's extraordinary. Now, we can't - you know, we cannot ignore the pressure that that puts on Australian households, the pressure that that puts on Australian businesses, on Australian jobs.
And so our focus is to protect those jobs and defend those families and ensure that we do all we can to keep energy prices as low as we can.
JOURNALIST:
On the Murray-Darling Basin Plan, for the Ministerial Council, Water Minister’s come back with a plan in April, is really going back to the same position that Barnaby Joyce was trying to achieve when he wrote to Minister Hunt to start with, to raise a practical conversation about how to deliver that water. Do you feel your time has been wasted?
PRIME MINISTER:
Look, it's very clear, I mean particularly if you look for example at the 450 gigalitre reference - that needs to be delivered through water efficiency measures that will have either a neutral or a positive socioeconomic impact on the communities from where the water comes. So it requires really good projects and we have said to the states to ask them to bring forward projects that will support that. There's funding allocated to support it. That was the - you know, the whole object - if you go back through the history of Murray-Darling Basin Plan - back in 2007 when John Howard was Prime Minister and I was Water Minister, the whole point of the plan was to invest in water efficiency measures both off farm and on farm that would enable farmers to produce as much or more food and fibre with less water, so that it would be a win-win for farmers and the communities that they support and the environment.
Regrettably, the subsequent government spent a lot of money buying back water in a very untargeted and non-strategic manner. So we are essentially going back to the original vision, which is one that will support the farmers and the communities in Queensland, New South Wales and Victoria, and also ensure that there is more water down the river which is important to South Australia and of course, its irrigators and farming communities as well.
So it isn't easy, nothing to do with water is easy. But it is very clear and we all want to make it work, but we've got to achieve those great projects on and off farm that get that win-win.
So thank you all very much.
[ENDS]