PRIME MINISTER: May I start by saying it's great to be in Newcastle today and we're obviously joined by the local Member, Sharon Grierson, I'm also joined by my Parliamentary colleagues Greg Combet, the Minister for Climate Change and Energy Efficiency, and Mark Dreyfus, the Parliamentary Secretary for Climate Change and Energy Efficiency. And of course, we're here today in pursuit of tackling climate change. The Government believes that climate change is real and in order to tackle climate change we need to do three big things: we need to make more use of renewable energy, we need to put a price on carbon, and of course, yesterday we had the Multi-Party Committee on Climate Change discussing the pricing of carbon. And thirdly, we need to be more energy efficient.
We're here today for two important purposes related to energy efficiency. Firstly, to sign the funding agreement for the Smart Grid, Smart City project. This is an important project to demonstrate how we can get more efficient as a community with the use of energy.
This innovative project is centred on Newcastle but also involves parts of metropolitan Sydney and the small township of Scone. That means it covers a large regional centre, metropolitan Australia and a smaller township. It will, through new technology particularly new information technology, enable the driving of energy efficiency. It will tell consumers, people in their homes, how much energy they're using and it enable them to be more efficient about the use of energy. For example, it would enable you to automatically turn on your washing machine in the middle of the night if that is going to give you the biggest advantage to use off-peak power. It's also going to be of great assistance to local businesses as they will be able to monitor their energy usage and reduce their energy usage. This is a demonstration project in the lead around the world and I'm very proud that we've been able to support it with the Federal Government investment of a $100 million.
Of course, we need to keep doing more on energy efficiency and the Government has made a range of commitments on energy efficiency including, mandatory standards for future power stations to make sure that we don't build dirty coal fired power stations in the future. We've also committed to helping to make our car fleet cleaner and greener. We've committed to working with building owners and businesses so that we work in greener buildings. We've, of course, already engaged in our solar schools project to help schools make more use of solar energy. These are part of the measures that we are investing in to help with energy efficiency. But today I also add to that suite of measures by launching the Prime Minister's Report on Energy Efficiency, put together for us a special taskforce. This energy efficiency taskforce report will help guide future policy development on energy efficiency. Now energy efficiency is important to tacking the challenge of climate change, but it's obviously also important to Australian families to help them deal with electricity bills, to help them monitor and cut their own power usage which makes a difference for their cost of living.
I'll turn now to Greg Combet for a discussion of the contents of the report.
MINISTER COMBET: Thanks very much Prime Minister. And as the Prime Minister indicated there are three elements of the Government's strategy, to deal with the challenge of climate change that we are focusing on. One of course is the importance of supporting renewable energy and its contribution to our energy demands, and we've set a target for the achievement by 2020, that 20 per cent of our electricity supply will come from renewable energy sources. Secondly, the government has committed, of course, to working on the introduction of a carbon price in our economy so that we can cut emissions, provide an incentive to cut carbon pollution in our atmosphere. And yesterday, the Multi-Party Climate Change Committee met for the first time to begin the discussion of that issue. Thirdly of course, is the importance of improving energy efficiency, and today of course as the Prime Minister indicated, we have signed the contract, or the contract has been executed with Energy Australia and other partners for the Smart Grid, Smart City program to be trialed here in the Hunter and in some areas of Sydney. Also today, the Prime Minister is releasing the taskgroup report on energy efficiency, and at the outset could I thank all of those who've contributed to the formulation of this important contribution to the debate on energy efficiency improvements in our economy. The task group was chaired by Dr Martin Parkinson, the Secretary of the Department of Climate Change and Energy Efficiency, who is here today. There are other members of course on the taskgroup whom I thank and there was also an advisory panel comprising a number of important representatives from business and non-government organisations, they included a number, but, several of them I'd just like to mention. One being the Climate Institute that made a very worthwhile contribution, along with Origin Energy, Rio Tinto and the Clean Energy Council amongst others. One of the important findings of the task group report that is being released today is that, in order to reduce the levels of pollution we do have in our atmosphere and to achieve the emissions reductions targets, that the government has committed to, and that are bipartisan targets, we need a price on carbon in our economy. Renewable energy and energy efficiency, as important contributions as they can make, need to be coupled with an approach to introduce a price on carbon to provide the incentive to reduce pollution levels. That's one of the important findings of the report that's being released today.
On the specific matters of energy efficiency improvements, I think this report will contribute significantly to a productive debate about the best measures that we can take. Importantly, the report has recommended that there be set, a national energy efficiency target to improve our energy intensity by the year 2020, of 30 per cent. That is, an improvement in energy intensity of 30 per cent, by the year 2020. That is one of the principal recommendations of the report. Secondly of course, as a mechanism to achieve that, there is a recommendation for an energy savings initiative, a major market-based approach to try and drive energy efficiency improvements. There are a number of other very important recommendations about how best, at a national level, to go about achieving improved governance frameworks for achieving energy efficiency improvements, particularly in light of the fact that, State Governments, of course have, implemented a number of very important energy initiative schemes over the years, and if we are to have an effective national approach we obviously need a coordinated national effort involving the states in particular and other important stakeholders.
So there are a range of very important recommendations. The Prime Minister has indicated that the Government has already acted in relation to three of them contained in the report. And they are the new standards, emissions standards, for new power stations, the new mandatory emissions standards for light vehicles, and the taxation arrangements that were announced in the election campaign to support energy efficiency in commercial buildings. So the Government's made an important start on these matters contained in the report. I wish to emphasise that we are releasing the report today on the basis that it is important that there be more input and consultation from stakeholders about the recommendations that are contained within, particularly with State Governments for the reasons that I pointed to. And so what we anticipate from here is a period of solid consultation on the recommendations so that, in the national interest, we can come forward with a government response that has the genuine support of all of the key stakeholders.
PM: Thank you, yes?
JOURNALIST: Minister, you spoke about bi-partisan targets there, and you may have had a chance to have glance at this report, but in it we're talking about mandatory penalties for those who organisations that don't meet their targets. We've got an Opposition that claims not to believe in climate change, let alone a carbon price, are you committed to these things or are they just recommendations?
COMBET: Let's just get something very clear and not confuse the issue of targets. There are bipartisan targets for emissions reductions across the economy, that, by saying they are bipartisan, are supported by the Government and the Opposition and that has been the case for some time. They range from a cut by the year 2020, over the year 2000 levels of between 5 and 25 per cent depending upon the extent of international action to deal with climate change. That's at an aggregate level. What this report says however, is that we should consider establishing an energy efficiency target, and that of course is not an issue that the government has yet committed to, nor anyone else, other than the taskgroup members and it has been put forward for discussion and consultation by stakeholders. So I just wish to clear that up.
JOURNALIST: In regards to the report, the Opposition have labelled it a giant electricity tax hike. What's your comment?
PM: Well, obviously the report is here, as Greg says, for a consultation and we'll be working through with stakeholder groups. But generally what I would say about the Opposition's approach is, we believe climate change is real, we believe in tackling climate change. That requires work on renewable energy, energy efficiency and putting a price on carbon. And I continue to say to Mr Abbott, who rejects generally the science and also specifically rejects putting a price on carbon, that we can work together on this. We've got a standing invitation to him and his political party to join the Multi-Party Committee on Climate Change. We'd need him to recognise climate change is real and we need him to recognise that to address climate change we need to put a price on carbon. Then, of course, he can work constructively rather than seeking to find things to wreck.
JOURNALIST: Is there merit in his concern though?
PM: Mr Abbott is throwing a slogan around, he threw a slogan around during the election campaign, he's throwing slogans around now. Slogans aren't going to tackle climate change for us, that requires methodical work, including dealing with a price on carbon. That's why we have the Multi-Party Climate Change Committee. We've invited Mr Abbott to put down the cudgels and actually work for a constructive outcome rather than engaging in slogans and seeking to wreck things. We do need to remember it was Mr Abbott who wrecked the consensus for the Carbon Pollution Reduction Scheme.
JOURNALIST: There's plenty of energy intensive industries here in this region and the aluminium sector is particularly concerned about the carbon price and how that's going to impact them. In the future will their concerns be taken into consideration during this consultation?
PM: As we've outlined the Government will have a working group with business, we will be out there listening to the views of Australian industry, Australian businesses and the Australian community as we work through this process. We want to do it methodically, we want to listen to people, have a genuine dialogue. But you would have seen the calls from Australian business for Government to get on with working through a price on carbon. It's Australian businesses that are calling for certainty because so many big businesses want to make investments in our future, but really want to know what will be done with carbon pricing before they authorise those big investments. That's true of the electricity sector and it's true more generally of the Australian economy.
JOURNALIST: When do you see that carbon price coming in Prime Minister?
PM: Well we said when we announced the terms of reference for the Multi-Party Climate Change Committee, and these terms of reference were affirmed yesterday, that we would work through, the Committee will keep meeting until the end of 2011 and we will see how much progress we can make.
JOURNALIST: You've also announced the Climate Change Commission, is that correct?
PM: Yesterday at the Multi-Party Committee we talked about, and this is in the communiqué, a Climate Change Commission. This was something that was announced during the election campaign. Its role is obviously to assist members of the community with the best of the scientific advice and with furthering the dialogue and the generation of community consensus on climate change. We will work through as to the exact form of the Commission and who will be the commissioners and how it will work.
JOURNALIST: (inaudible)
PM: No we don't.
JOURNALIST: The 30 percent (inaudible) increasing energy efficiency, obviously the carbon price is not going to solely get that 30 per cent. So what other things can the community expect to get that efficiency up?
PM: Well I will get Greg Combet to comment but I will say this as well. This Report, the Prime Minister's Energy Efficiency Taskgroup Report, makes it very clear that as a nation we will not cut carbon emissions the way we want to by renewable energy and energy efficiency. The Report makes it very clear that we also have to price carbon. I'll get Greg to comment on the 30 per cent target.
COMBET: We've got to bear in mind that the 30 per cent target is a recommendation of the Taskgroup's report to try and improve our energy efficiency. And, that's an important thing, now that the report has been released for all of the interested parties in the community to now consider and to provide feedback to the government in relation to it. But it's a recommendation that's now open for public discussion. But, energy efficiency initiatives for households reduce to a simple proposition, and that is, if we can improve energy efficiency we can cut people's power bills. And that's the importance too of the Smart Grid, Smart City initiative in which up to 50,000 households in the Hunter and elsewhere can participate, to learn how to improve the energy efficiency in their particular household. To use appliances in off-peak periods, to use information technology - the internet, to alter the way in which and the time in which their energy usage occurs in their particular homes. By doing things like that and becoming smarter in how we use energy in households and in business, we can reduce costs and that is a very important element to keep in mind, considering the recommendations of the Taskgroup's report.
JOURNALIST: Why was Newcastle and the Hunter chosen for this Smart Grid, Smart City initiative?
COMBET: Well, I suppose as a local MP, I can hardly do that, with much impartially, answer that question. But, I think the fair answer is that, there are great people here that are very committed to finding innovative ways for an economic future for this region, who came together with EnergyAustralia, IBM, many other partners, the Newcastle City Council, other local organisations, the University of Newcastle, all came together with the support of colleagues of mine, like Sharon Grierson and others, to say well, this region's going to continue to change. We are going to be smarter in how we do things. This is the heartland of electricity generation in NSW, it's the heartland of the coal industry in NSW, we've had a lot of industry, aluminium smelting was mentioned a moment ago which is a very emissions intensive business. We're also going to be in the leadership of thinking about how we can use energy smarter. What we can do with renewable energy and the Federal Government has provided a lot of support to the CSIRO facility here to try and do research on important things about renewable energy, and how it can feed into the grid. Where we've been in here today, is looking at ways in which renewable energy can be factored in to the electricity system in an efficient manner. So, I think it's a sign of the innovative capacity of Newcastle. That's what I'd certainly like to think, and I think that was reflected in the successful bid, which was an open process. And the best bid won.
JOURNALIST: Is it ironic that-
COMBET: I don't know why the Prime Minister is laughing?
JOURNALIST: Do you have anything to say?
PM: I'm very impressed, Sharon and Greg can always talk up this part of the world, but Greg is right, we actually asked for the best ideas around Australia and there was a competitive bid process and this idea won because it was the best.
JOURNALIST: When we talk about renewable energy is it ironic though that it's been, you know, Newcastle is home to the largest coal exporting-
COMBET: I don't find an irony in it. Coal mining started here in about 1797 I think it was, and it's been the economic heart of the Hunter region ever since then, since colonisation of the area and it continues to be extremely important, it will remain extremely important, but it's been the electricity generating hub. So it's no surprise that with an economy such as the Hunter has been, but there's also a lot of people here who think about the future and what contribution renewable energy can make and also what important contribution energy efficiency can make. The Smart Grid, Smart City program that has been executed in a contract today involves $100 million contribution from the Commonwealth but it leverages the value of a further $400 million in these projects. So all up about half a billion dollars over the next few years to find out how we can really use energy more efficiently in homes, and how we can distribute the electricity through the system far more efficiently and that will save a lot of investment, it'll save on electricity bills, it'll save of a lot of investment in the energy sector as well if we can prove it's successful.
JOURNALIST: On a different subject the State Government has today released or made public its application to Infrastructure Australia (inaudible) the Government's response?
PM: Well applications to Infrastructure Australia are then assessed by our independent experts there. I'm obviously pleased that the NSW State Government is taking the opportunity to update the infrastructure it says it needs for this State. We asked State Governments to keep Infrastructure Australia informed of infrastructure needs and the New South Wales Government's taken that opportunity, now Infrastructure Australia will work through its process to look at the new information for New South Wales.
JOURNALIST: Prime Minister I had a question about the Murray-Darling plan, the draft plan that's due to be out later today. As I'm sure you've heard the irrigators, some irrigators have warned of job losses if there is a 35 per cent or up to 37 per cent of irrigation entitlements lost, and they've also warned of massive riots, what's your reaction to that?
PM: Well the Murray-Darling Basin Authority is an independent authority. Its report on the Murray-Darling will be released today. Tony Burke, our Minister for Sustainable Australia will then lead a consultation process where everybody will get to have their say about what is in the report. So I would say to anybody who is concerned there will be a process of dialogue and consultation and they'll be able to have their voice heard.
JOURNALIST: I was just wondering, financial markets are very excited that the Aussie dollar may be hitting parity, it's very close to it right now, is this good for Australia with the balance of imports and exports?
PM: Well as I think we all know from common sense and understanding of the Australian economy a high dollar is good for some parts of the economy and places burdens on others. One of the reasons we are very keen to drive a understanding of regional development in regional Australia, it's part of the brief I've given Simon Crean as the relevant Minister, is different parts of the country are growing at different rates, that's in part connected to the value of the Australian dollar, in part connected to the kind of industries that are in different parts of the country. We want to make sure that every region has an economic plan, a plan for prosperity, and that's part of the work that Simon Crean is doing.
JOURNALIST: Just quickly will the Commonwealth consider investing money in the Newcastle CBD, we've heard so many things lately of GPC pulling out, the residents are concerned that the State Government isn't doing enough, will the Commonwealth consider putting some funding in there to boost the CBD?
PM: Well I think with the two experts, particularly Sharon here, I'll leave that as a question for her, and I know, from Sharon, I'll hear all about it in detail.
Thank you.