PRIME MINISTER:
Yanggu gulanyin ngalawiri, dhunayi, Ngunawal dhawra. Wanggarralijinyin mariny bulan bugarabang
I acknowledge we are here gathered on the lands of the Ngunnawal people and recognise their elders past and present.
It is wonderful to be here tonight. Vanessa, thank you very much for your very warm introduction, for the compliments you’ve paid the government. So many of our ministers are here tonight - Barnaby Joyce, the Deputy Prime Minister, Julie Bishop, the Foreign Minister and so many others and as you said many other distinguished former ministers including Macca, Ian Macfarlane, former resources minister, Martin Ferguson you mentioned is here and of course Matt Canavan, he is the sort of once and future Resources Minister.
Brendan, thank you very much for your address. I have to say some of our, I can understand why our agencies had a sense of humour failure about the pork shaped like sticks of gelignite.
In the mid-1980s, the Economist described Australia as “one of the best managers of adversity the world has seen, yet the worst manager of its prosperity.”
It has been a favourite of Treasury Secretaries ever since, and it has continued to ignite debate on whether the two parts of the statement have held true - indeed, whether they’ll continue to hold true.
Those who still take the ‘lucky country’ view argue that we have sailed through economic shocks with a sort of blissful ignorance, raking in the profits of an unprecedented period during which the price of our mining exports more than tripled in the space of a decade.
They argue that while our natural endowments have made us an envy on the world stage, we’ve become so used to this comparative advantage that our competitive spirit has been dampened - our ability to tackle new challenges and exploit new opportunities diminished.
Of course, complacency is a real risk. And a superficial reading of the relentless cycle of commodities might suggest that the softening of new investment somehow marks the passing of comparative advantage.
But I’m well aware that I’m speaking to a room tonight full of pragmatists and that’s not just the politicians. And you know two things. The investment phase was not an end in itself, but the means to an ongoing lift in production. And, secondly, you know that the cyclical nature of commodities business means you can never be complacent; yours is the constant challenge of securing our comparative advantage now and into the future.
You know instinctively - as your government does - that just as our mining sector has been key to Australia’s prosperity up until now, it will continue to play a vital role driving our prosperity well into the future.
And that role comes from a commitment to adapting to change, playing to your strengths, encouraging invention and turning it into productive innovation, and capitalising on those changing market forces.
It’s just as I said at this dinner a year ago - the greatest assets of Australia are not the rocks under the ground but the men and women walking on top of it. The greatest asset of your industry is you, and the sharpest tool you have at your disposal is your ability to innovate and adapt to change.
Australia’s mining workforce is the ‘other’ part of our comparative advantage - generations of experience built upon decades of practical application.
So together - the people and the nation’s resources potential - means our comparative advantage is very, very real.
There are massive rewards in minerals and energy commodities yet to be unearthed. You know the catalogue of opportunities - gold, iron ore, lead, nickel, rutile, tantalum, uranium, zinc and zircon - where we have the world’s largest resources and so many others where we are in the top five: bauxite, coal, copper, manganese, silver and tin.
It is well appreciated we are the world’s largest exporter of iron ore and coal.
Less well known and Vanessa touched on this, is that Australia is the biggest lithium producer and has the fourth largest lithium reserves in the world, valued at around $11 billion at today’s prices.
There are some enormous opportunities in the near future for your sector.
In the meantime, resources continue to be a faithful contributor to the Australian economy. The Treasurer sends his thanks. And a significant driver of growth and Australian jobs. Today there are twice the number of jobs in the sector than before the beginning of construction boom – so the jobs boom continues! Jobs and growth – not just a slogan.
It is from this position of advantage that the sector can navigate the challenges and opportunities ahead.
For our part, the government’s policies are focussed on supporting our areas of comparative advantage and using them to help develop our emerging areas of competitive potential.
That’s why our policies are focussed on delivering opportunity to help drive the continued prosperity of our nation.
Whether it’s securing greater access to the region’s biggest markets through new and enhanced trade deals, delivering tax cuts so that our businesses can remain internationally competitive, our commitment to the rule of law on building and construction sites through the restoration of the Australian Building and Construction Commission or strengthening our human capital through reforms to education at the primary, secondary and tertiary levels - everything that we are delivering is designed to encourage investment, drive innovation and improve the competitiveness of Australian businesses, and of course our economy.
And no industry has done more to innovate and invest, adapt to change and embrace technology than yours; Australia’s mining sector.
And as representatives of successful mining companies, you know the importance of sustaining the exploration sector.
Despite a recent improvement, exploration for minerals is down 70 per cent over the past decade.
It is a big country, there is a lot more to be discovered and that’s why last week we announced the Junior Minerals Exploration Tax Credit to incentivise new investment and bring forth the next wave of mineral discoveries.
And as some of you know I have a history in your sector in different parts of the world and there is nothing more exciting, I say that as an amateur in many areas whether it is in mining engineering or whether it is in geology, complete rancour, there is nothing more exciting than discovering what is hidden underground. It is a big country with a big mining sector but as Vanessa and I were discussing a moment ago, for a range geological reasons, a huge part of our continent is unexplored. There is a lot more to discover. We need a lot more exploration. So we are optimistic about the incentives that that new tax credit will give.
Now Vanessa touched on energy policy and you know Vanessa, affordability and reliability – we are absolutely on the same page there.
A critical component is ensuring sufficient dispatchable demand for stability and lower prices. That’s why I asked the energy market operator, AEMO, to examine the system and look at it now and into the future.
The findings released this week are very significant – you know we were discussing in the Parliament today. Well we were discussing it - our opponents were discussing other things.
The findings released this week are very significant. It highlights that as the system changes the need for maintaining dispatchable capability is crucial.
You see, what has happened is that there has been a failure, a lack of a business-like approach to energy policy. It is as simple as that really. What you had is a process where higher emission dispatchable energy - and by dispatchable I mean energy that can be dispatched on demand, it is available essentially 24/7 – higher emission dispatchable energy has been driven out by low emissions variably.
Now what that is not replacing high emission apples with low emission apples – what we have been doing is reducing the stability and the security of our energy system and it has been done without very much thought. It has been a massive failure of policy so that is why we are taking a different approach to energy policy – it is not grounded in ideology and idiocy which I fear have been two hallmarks of previous approaches by our predecessors in government, it is focussed on engineering and economics.
As AEMO noted, with the planned closure of Liddell power station in the Hunter Valley in 2022, “time is of the essence to obtain the appropriate level of resources to support overall system reliability.”
You know what that means - a 1,000 megawatt shortfall is a recipe for blackouts and a chill on investment. There is a serious challenge now to be dealt with.
Australian industry, particularly mining and minerals processing, has critical needs in competitively priced and reliable energy. Industrial demand makes up almost 50 per cent of electricity demand, one of the highest proportions in the developed world. And it has a particular demand profile -continuous and dependable.
So that is why we have begun discussions with the owners of Liddell, AGL about how to keep that power station operating for some years into the future, at least five years beyond 2022. We understand, accept their stated position to close, but they don’t want to own it after 2022, but we welcome their willingness to engage with us and discuss with us the prospects of selling it to a, what they describe as a responsible partner.
It is vitally important that every option is examined very carefully to ensure that we maintain the reliability, the security, the affordability of our electricity system.
There may be other plants which may also benefit for ongoing investment to increase their efficiency and lower emissions. The Chief Scientist, Dr Finkel, noted yesterday: “Investing in extending the life of existing coal generators is absolutely in line with our recommendations.”
Energy policy is an absolute priority for my government and that is why are securing gas supplies for industry through our Australian Domestic Gas Supply Mechanism and a peak demand gas guarantee in the electricity sector, we are accelerating pipeline markets reform, we are removing the ability of network companies to use the courts to circumvent regulators determinations what they can charge for their poles and wires, we are empowering the competition watchdog, the ACCC, to closely examine the behaviour of energy companies and we are ensuring that electricity retailers are providing the best possible deal for their customers.
And while we are committed to delivering relief in the short term, we are also looking to the future, developing an energy mix that delivers affordability and reliability, while, as Vanessa acknowledged, reducing emissions over time consistent with our international obligations.
And just as innovation has been central to the success of your businesses, you know that energy generation is going through an extraordinary period of change and disruption. Indeed, many of your companies have driven that very change.
On your own sites you are leaders in the use of co-generation - converting heat into electricity. Around the world, you provide the high quality coal in the latest high efficiency, low emissions coal plants. Your uranium fuels the baseload needs of the Asia region and your minerals and metal are the building blocks of the new wind and solar technologies.
Now, the government recognises that all technologies have a role to play in an efficient energy system. Continuous dispatchable generation is essential for industry. And as more renewables inevitably come into the energy systems of the world, our responsibility is to ensure they do so in a reliable, secure way.
So we have agreed to the recommendations in Chief Scientist’s Independent Review into the Future Security of the National Electricity Market to improve governance of the energy system and enhance security, stability and transparency.
We are working through the details of mechanisms that can help us manage the transition to a lower emissions economy.
And longer term, we intend to the lead the world on the development of new pumped hydro, with the centrepiece, Snowy Hydro 2.0, a gigantic battery at the centre of our National Electricity Market.
It will be the largest single investment in renewable generation capacity since the original Snowy Scheme generations ago.
So as you all well know, I’m a great enthusiast for any new technologies including renewable generation technologies, and it’s remarkable how the cost of electricity generation is coming down all the time, particularly in solar photovoltaics’.
And I have to say, so much of that research continues to be driven by Australian researchers. They have absolutely led the world in that research.
And as I’ve said for many years, while renewables will have a role to play in the years and decades ahead – a bigger and bigger role in my government. They can never be rolled out at the expense of the security and reliability of the overall energy system.
And so I’ve said for many years – nearly a decade at least consistent, on this point - I would welcome a new HELE coal plant in Australia - we are after all the world’s largest exporter of seaborne coal. Surely we have a vested interest in demonstrating high efficiency, low emissions coal technology in Australia.
Now that is why we gave an ‘all of the above’ energy policy - one that includes all the technologies that are available in Australia today: solar, wind, hydroelectricity, gas and of course coal.
And we believe in energy policy that is built on facts – that’s why we commissioned the AEMO report on the dispatchablity challenge. We are determined to have an energy policy based on as I’ve said before - economics and engineering.
There have been too much energy policy debate on glib slogans, on ideology, with political arguments with no basis in fact or reality. It is our mission, and our commitment to restore confidence in the market with policies based on fact, on economics and engineering as I’ve said, so that all technologies can get the investment they need.
Affordable, reliable energy which enables us to meet our emission reduction goals—that is the policy trifecta we will deliver to ensure the Australian energy sector remains another comparative advantage for our nation.
Now the most important thing to remember here is that Australia has always worked best when we’ve played to our strengths.
History tells us a strong resources sector will leave an indelible mark on economic growth, regional development, employment, new jobs, stronger communities. Past work by the Minerals Council, with KPMG, demonstrates that regions with mining had better wages, better educational attainments and stronger communities than those without.
Resources have given life to major regional cities and vibrant communities from Ballarat and Bendigo, and Broken Hill, to Kalgoorlie, Mount Isa and Karratha.
And I was just in Kalgoorlie the other day, there at the super pit. What an extraordinary testament to Australian technology, to Australian determination is that enormous super pit. Built on so many discoveries from so many generations before and with so much more gold to win.
So resources has shaped the design of Australia’s first inland railways – and I see Barnaby there and we’re building another one aren’t we Barnaby?
DEPUTY PRIME MINISTER:
We certainly are PM!
PRIME MINISTER:
We certainly are, yep. Absolutely – Melbourne to Brisbane. That’s (inaudible) to. It’s going to be a corridor of commerce. Right through the country there, taking that railway back from the coast and opening up one big regional city, regional centre after another. Talked about, in fact just in case you think this is a case of Barnaby and I engaging in innovation – although we are very innovative – nonetheless this was first moved in the 1890’s so – but we’re actually building it.
DEPUTY PRIME MINISTER:
Good time to do it.
PRIME MINISTER:
Good time to do it – we got on with it.
And resources have shaped the design of the development of almost every tropical port in Australia, from Rockhampton to Port Hedland.
They’ve provided as everyone acknowledged long term benefits and support for our first Australians who’s land is where these mining projects – all of these mining resources projects are located. Through local jobs and opportunities for learning, development and income.
So we all need to be vigilant against the forces that misrepresent the proud history and bright future of Australia’s resources sector.
Modern Australia owes so much of its culture, prosperity and economic security to mining and resources, the foundations of our multicultural society – the most successful in the world – were laid by the resources sector. Going right back to the days of the gold rush in the nineteenth century.
And so it is my great honour to be here to congratulate you on your achievements tonight.
I thank you – as do all the members of my government here tonight - for your leadership, your resilience and your commitment to work with us to continue building an even greater Australia.
Thank you very much and have a great night.
[ENDS]