DAVID PENBERTHY:
Energy Ministers are in Melbourne today at a special COAG meeting to discuss the shortcomings in our national energy supply - shortcomings that were exposed last week by the failure of the entire system right here in South Australia. That storm and the subsequent state-wide blackout triggered a furious political debate over what if any role our states reliance on renewable played in that crisis. Now we’ve spoken to Malcolm Turnbull, our Prime Minister many times here on 5AA Breakfast – we do so again this morning. Malcolm Turnbull, thanks very much for joining us here again today.
PRIME MINISTER:
Yes, great to be with you.
DAVID PENBERTHY:
I was watching late last night the Deputy Prime Minister, Barnaby Joyce - you know, one of the most senior members of the Government – he said he fears that South Australia’s energy supply is so unreliable that our state risks becoming a backwater. Pretty strong words. Is that a concern that you share?
PRIME MINISTER:
Well, I’d express it in a different way. We’ve got a very big commitment to South Australia. Our defence industry plan is going to create thousands of jobs, it’s going to create advanced manufacturing not just in the shipbuilding at Osborne but of course it will spread right across the State so we are making a massive commitment there. You’ve got the transition of the car making, car manufacturing there. The last Holden Cruze being produced - that’ll effect the jobs of 280 workers in South Australia. We’ve got Ford closing down operations in Australia. So there is a big transition out of older manufacturing businesses into the new frontier of advanced manufacturing and right at the heart of that is South Australia. Now, one of the things South Australia needs is absolutely reliable energy. You’ve got big industrial operations in South Australia that are still without adequate power. It is absolutely critically important, David, that South Australia is able to keep the lights on, keep the wheels of industry turning and that requires reliable energy. We need, as you know, I am not against renewable energy – I’m a supporter of it, I’m a purchaser of it, a user of it – but what we do need to achieve, and this is what we are seeking to do today, we need to achieve a very clear plan that secures energy security – keep the lights on. Affordable energy so that we can, households can afford it, businesses can afford it. And we have to meet our emission reduction obligations under the Paris Treaty, our global obligations.
DAVID PENBERTHY:
What do you make Prime Minister of our Premier Jay Weatherill’s initial assessment of the preliminary findings of the Australian Energy Market Operator’s report into what happened last week? He is emphatic that that initial report shows that renewable energy did not play any role in what happened last week. Do you agree with that assessment?
PRIME MINISTER:
Let’s be quite clear what the assessment concluded. Because of South Australia’s very heavy reliance on wind power, which is an intermittent renewable, you know, it only generates electricity when the wind’s blowing. The State has become more and more dependent for baseload power on Victoria, on actually Victoria burning brown coal by the way, which is the dirtiest form of fossil fuel generation – it generates the most CO2 per megawatt. So what happened, as you know and it was quite clear, the storm knocked out transmission lines to the north of Adelaide which was connected to a large number of wind farms. That then caused more demand to be imposed on the interconnector with Victoria. That overloaded the interconnector, which turned off, switched off, and of course then you had the blackout. And that is basically what happened. So the real question is, one of the many questions, and this what the energy ministers will be talking about today, is was that over reliance on intermittent renewables, did that cause in turn and over reliance for base load power on generation in Victoria and hence on those interconnectors.
DAVID PENBERTHY:
So PM, do you reckon South Australia has been too noble by half? Have we gone too far too fast down the renewable path?
PRIME MINISTER:
This is a matter to be carefully assessed, David. The question that has not been asked is how do we maintain energy security? There has been, and this is particularly – and look I don’t want to be overly political about this – but this has been very much a Labor obsession; to set these heroic renewable energy targets. Although I saw yesterday Jay Weatherill suggesting it was only an aspiration, I don’t recall him saying that before. But anyway, they set these heroic renewable energy targets. South Australia is one that has achieved a very high level of renewable energy. If you look at Queensland, where they are currently at about 4 per cent, they say they’re going to get, by 2030, to 50 per cent. Well how on earth is that going to happen? Ditto, similar targets in Victoria. They set these targets and rather than planning for energy security, they just treat it as an assumption. They assume that they can change the composition of the energy mix and that energy security will always be there and the lights will stay on. That has been brought into question.
So I just repeat, what we need to do is achieve three things; energy security, keep the lights on. Affordable energy, no good having lots of energy if people can’t afford to pay for it, businesses won’t invest. Thirdly, we have got emission reduction obligations under our Paris Treaty which as a nation we must meet and we will. We’ve got to achieve all three. They’re all of importance but the fundamental one is keep the lights on.
WILL GOODINGS:
Is a method for achieving those outcomes adopting a universal renewable energy target? So you don’t have states like South Australia declaring aspirational targets?
PRIME MINISTER:
Yeah, I believe there should be one national – there is one renewable energy target administered through the Federal Government, but the state targets, we believe, and Josh Frydenberg and I both talked about this, we believe they are distorting the national energy market and they are essentially political statements which have been made by Labor governments without regard to either energy security or energy affordability.
WILL GOODINGS:
They’re more than statements though aren’t they? Because where the national target is in the low 20 per cent, you’ve got South Australia in the 40s. In some regard, the power prices that South Australians pay - are they as a result of those aspirations and that proportion of electricity generated through renewable sources?
PRIME MINISTER:
That is certainly the view of your own business leaders, your own Chamber of Commerce.
WILL GOODINGS:
Is it your own view?
PRIME MINISTER:
Based on, let’s wait until we have this independent review, but certainly the assessment of your own business leaders who are paying for energy in South Australia and are struggling to compete with other states, their complaint is that South Australia has the highest wholesale energy costs in Australia. Now you know, for a state that has got manufacturing businesses closing down, that wants to start to attract new investment - we’re playing our part, we’re making a massive investment in your state. And you have Christopher Pyne as the Defence Industry Minister there leading the charge on that. We’re putting enormous investment into South Australia. Surely affordable energy must be the highest priority, or one of the highest priorities of the State Government?
DAVID PENBERTHY:
Mr Turnbull, we saw this week that the bank chiefs all appeared before a parliamentary inquiry. There is now talk about the possibility of your Government setting up some kind of a tribunal. Is that an idea that you think has got merit?
PRIME MINISTER:
Well it is an idea, it’s a proposal that we are working towards and we have Professor Ian Ramsay conducting a review of a number of bodies, ombudsman type bodies, tribunal type bodies, that deal with claims in the financial services sector with banking, with insurance and superannuation. And what we are working towards is having a one tribunal that deals with, if you like, consumer claims in a cost-effective and speedy way to get these matters resolved. Now you can see the virtue, or the merit of these hearings before the House Economics Committee which was an initiative of my Government - the Treasurer and I announced that some time back. What you’ve got already is, you’ve had the CEOs brought before the committee, they’ve been accountable in the House of Representatives to the peoples’ representatives and a number of the banks have said yes, we’d support that tribunal. So, they’ve come to the party but you can rest assured that we’ll obviously wait for the advice from Professor Ramsay’s expert group as to how it should be set up, but we will get a low cost, speedy tribunal to deal with these types of consumer complaints, customer complaints against banks and this will be real action. This is an example of my Government governing, taking action now, dealing with these problems now - not kicking them off into the long grass of a royal commission for years and years and hundreds of millions of dollars.
WILL GOODINGS:
It’s contingent though on those that are complaining, knowing that they are being mistreated is it not? And that’s not necessarily the case with all the evidence that’s been heard over the course of the inquiry this week - that the consumer would be aware that they were the subject of a predatory sales scheme for example.
PRIME MINISTER:
Well there have been many cases where consumers have not had the right thing done by them by the banks and that’s what we are addressing and that is what we are taking action on and you can see again that the merit of bringing the CEO’s before the Economics Committee. Because what that means is that the CEO’s, and I’ve done this in order to affect really cultural change, this has been a very deliberate move on my part because I understand how these institutions work. It’s very easy for the CEO’s to, in effect, hide behind the public affairs representative, an industry representative. You bring them before regularly, this is not just going to happen once this will happen several times a year but it will happen right in to the future. They will be doing this 20 or 30 years from now and what that means is that the CEO’s know that they can’t hide behind someone else, they are accountable. So they will be saying to their subordinates in their banks, we have got to get our act together, I’m going to have to answer for this, the CEO will say to his subordinates, so he’s going to make, she’s going to make big changes. So you will see very significant cultural change and increased accountability because of bringing these CEOs before the House Economics Committee.
DAVID PENBERTHY:
Prime Minister, just finally, we saw yesterday that the so-called ‘Budgie Nine’ were freed from the police station in Malaysia. Eight of them have now returned home to Australia so the whole funny little affair has concluded. We’re certainly not baying for the bloke’s blood but do you think that Jack Walker, who is the senior adviser to our Defence Industry Minister Chris Pyne, does he still deserve a senior adviser’s role in government?
PRIME MINISTER:
Well Christopher is overseas at the moment with the Defence Minister. I will speak to Christopher when he is back and certainly the young man involved needs to have a very hard look at himself and he’ll be, I’m sure, will be considering his future carefully. They apologised to the court and that was appropriate and they are home or on their way home and that’s good. And you can see why the Foreign Minister and I were very careful and circumspect in what we said publicly, because what we always seek to achieve in these situations is that Australians are able to return home after incidents like this and I think the Malaysian authorities were very lenient and I think the young Australian men were very repentant. But they do need to reflect very seriously on their conduct. And it is just a reminder - as Julie and I have said many times - when you are overseas, you have to respect the laws of the country that you are visiting. Just as we expect foreigners to, visitors to respect and comply with the laws of Australia when they are visiting us.
DAVID PENBERTHY:
Prime Minister Malcolm Turnbull, thanks very much for joining us again on FiveAA Breakfast.
PRIME MINISTER:
Thank you so much.
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