TIM SHAW:
I’m pleased to say that the Prime Minister, half an hour before he greets the Sri Lankan Prime Minister, has taken the time to speak to us this morning. Prime Minister Turnbull, good morning.
PRIME MINISTER:
Good morning, great to be with you.
TIM SHAW:
Are you hoping to get a win over your Sri Lankan counterpart who is visiting Canberra today?
PRIME MINISTER:
Absolutely – we certainly are. It’s about time. The PM’s XI has been matched against Sri Lanka on two occasions since 1986. Sri Lanka won the match in 2008 and the match in 2012 was abandoned because of rain so we’re very keen to notch up a win today.
TIM SHAW:
Australians listening to this program are very keen to get you explain to them in the simplest language possible about our national energy security. What do we need to do Prime Minister, to secure Australia’s energy?
PRIME MINISTER:
Well our goal is to ensure that energy is reliable, that the lights go on when you flick the switch. It’s affordable, that households and businesses can pay for it and that we meet our emissions targets.
What that means is that we need to have a plan. You can introduce renewables into the grid and we’ve been doing that but what you’ve found in South Australia Tim is it’s been done without a plan and the result has been the chaos, the blackouts, the least reliable and the most expensive electricity in Australia. So we need to have a strategy that includes all of the above. Every type of electricity generation has a role to play and it’s important that we use all of them.
Labor is trying to trivialise this. Mark Butler – their spokesman said it’s just a hiccup in South Australia.
Can you imagine the blackout they had there in September which went on for days in some parts of the state being described as a hiccup? It’s vitally important we get on top of this. Electricity prices have soared 106 per cent according to research recently published in The Australian just over the last ten years. So that’s outstripping the growth of every other single household expense.
TIM SHAW:
Well over the ten years you just described – 106 per cent - Tony Abbott said listen, we’re getting rid of this carbon tax because we want to keep your energy prices low. But in the last three years of Coalition government we’ve seen those electricity charges continue to rise. On two things I want to ask you. Are you anti-renewables?
PRIME MINISTER:
No absolutely not. This is part of the problem that people say you’re for renewables, against renewables. Renewables, wind turbines and solar panels are getting cheaper and more efficient all the time but they have one important characteristic, they don’t work all the time. The wind doesn’t always blow, the sun doesn’t always shine. And so you need to have a plan, if you’re going to have renewables that puts in place the back-up power, might be storage and that’s one of the things that we’re working on. We’ve just put some funding into a project in Queensland that will, in due course, involve pump hydro. I’ve asked ARENA and the Clean Energy Finance Corporation to prioritise storage projects because of course what that means is that you can use your off-peak power - it might be wind, it could of course be a traditional baseload power station, to pump water uphill at night and then run it down during the day. Of course this happens at the Snowy River at the Snowy Mountain Scheme and it had been doing so for fifty odd years. But after the Snowy, Australian governments seem to forget about the importance of storage. It’s critically important. The other important thing is having back-up power - whether it is baseload or peaking stations like gas-fired power stations.
TIM SHAW:
Alright, 16 per cent of Canada’s electricity comes from nuclear power. Do we need to have a sensible, 2017 conversation about nuclear power in Australia?
PRIME MINISTER:
I think we should always have a sensible discussion about nuclear power. You may remember in the last year of the Howard Government we commissioned a report by Ziggy Switkowski on this. It has to be said, however, that it would take a long time to build a nuclear power station in Australia, to have the debate, to get the permitting to design it and build it. We need solutions that are much nearer term than that.
So we’ve got to make sure that we don’t have unplanned closures at existing power stations. We’ve got to make sure that we maintain that baseload power where we need it.
So we shouldn’t say, as Labor does, we can never build another coal-fired power station.
We’ve got to plan our energy future using every technology that is available as part of a plan to ensure that we maintain the reliability, the affordability and we meet our emissions reduction targets. And we can do all three, but you can’t go about it in the sort of complacent, mindless, negligent way you’ve seen in South Australia. The consequences that they’re living with there are disastrous.
TIM SHAW:
Alright, Hazelwood is about to close. Is there anything that the Commonwealth Government can do to have a sensible conversation about trying to keep that baseload power station open?
PRIME MINISTER:
Well it’s very much under the jurisdiction of Victorian State Government and of course it belongs to a private company.
So far the advice we have is that the grid stability can be maintained after the closure of Hazelwood but it’s a matter that we need to look at very carefully because it is about 20 per cent of Victoria’s generation and you can see how dependent for example, South Australia has become on Victoria. Now it is a very old power station, that is true. But you see again, there is the evidence of the lack of a plan. Of course old plants will be closed down for all the usual reasons but you need to have new capacity coming on. And what the Victorians, like the South Australian Labor Government, have got these big renewable targets and big renewable plans but what they’re not doing is putting in place the reliable, consistent baseload power that industries need.
TIM SHAW:
The ACT Labor Government been in power 15 years Prime Minister and until 2020 in coalition with the ACT Greens. 100 per cent renewable target here in the ACT. What is your response to that government’s target of 100 per cent renewable? How guaranteed are Canberrans of the secure energy supply here in the ACT in your view?
PRIME MINISTER:
Well it depends very much on what that renewable target really amounts to. If they are genuinely only buying energy from renewable sources, then you would be very vulnerable. But I suspect that the reality is that they’re doing it in a sort of artificial way.
I think you should really get them on the line and ask them what happens when the wind isn’t blowing and the sun isn’t shining. What happens then? Where is your energy coming from?
If you look at South Australia, it’s a very good example. What South Australia has done is driven a very large percentage of renewables – wind mostly – into their grid and they have closed down baseload coal-fired power station – the Northern power station. What that has meant is that they are more and more dependent than ever. Every year they are more dependent on Victoria. So where’s the Victorian power coming from? Brown coal power stations in the Latrobe Valley. So they’re actually replacing less emissions intensive power stations in South Australia, with more emissions intensive electricity from Victoria. So in some respects what they’re doing is what people call ‘greenwash’. It’s not fair dinkum. And of course, it’s given them the outcome of the least reliable and the most expensive power in Australia.
TIM SHAW:
Yeah I spoke to you at the National Pres Club about business. Pat, my listener says: “The problem with politicians - they just don’t get small business.” Is it time you as Prime Minister reminded every member of the House of Representatives and every senator that within their electorates and states, there are small businesses? What will you do to expedite the tax cuts for business here in the country? Because I tell you what, the sources I have said that when you met yesterday with business, they’ve said to you that if President Trump gets his tax cuts through in the United States, that’s going to take away potential investment in our country, a country reliant on foreign investment for more than 200 years. What do you want to say to our small business and big business, the employers, here on the program now, about what your Government is going to do to back them in? Because at the moment Prime Minister there is a sense that Australians don’t feel like their Government is backing them in and supporting them in business.
PRIME MINISTER:
Well we are backing small business and big business as well because we know over 87 per cent of Australians are employed in the private sector.
You’re not going to get more jobs, higher wages, more hours by taxing the businesses that employ Australians more. So if you want to have more investment, you’ve got to increase the return on investment. The best way to do that is to lower company tax and that’s what we’re seeking to do.
Bill Shorten of course, says one thing to one group and another thing to another. A few years ago, he was standing up in the House of Representatives saying, justifying cuts in company tax because it would increase productivity, increase investment and increase employment. He was right then. He’s wrong now, because he’s done a complete backflip.
So our plan will reduce the company tax rate for small businesses with turnovers of under ten million to 27.5 per cent from 1 July last year. We’re seeking to get those reforms though the Senate and then it will step up every year to include more businesses with larger turnovers. But we’re beginning with small businesses because we know they are the engine room of the economy. If the Senate will pass these reforms, this will deliver a lower tax rate to around 870,000 businesses that employ over 3.4 million Australians.
TIM SHAW:
And they’re all in those electorates, as I mentioned. The Member for Jagajaga said: “No Malcolm Turnbull, all you want to do is give a big fat tax cut to big business”. For once and for all, can you explain to my listeners who will benefit and when will they benefit in the initial tax cuts for companies?
PRIME MINISTER:
Well the initial – if our whole package is passed, from 1 July last year – so in this very financial year –companies with a turnover of $10 million or less will benefit from a cut to 27.5 per cent. Then the next year it will step up to 25, and the next year to 50 and the next year to 100 and so forth. By the end of ten years, all companies, including the very biggest, will be down to a tax rate of 25 per cent.
Now it’s a very measured approach and we’ve done that obviously for affordability reasons. But you know, whether it is a small company or a big company, the experience shows that the biggest beneficiary of a reduction in company tax is labour, is workers. It puts money in the pockets of Australian workers, because businesses that have a lower tax rate will invest more, if they invest more, they employ more, they grow and so do the remuneration of their workers.
That’s why in the past Labor governments have supported company tax cuts too. Paul Keating did cut company tax. Bill Shorten used to advocate it, Chris Bowen wrote a book about it. And now, because politics is everything to them, they’re not interested in good policy anymore, they’re opposing this because it’s all part of their sort of populist, politics of envy approach.
TIM SHAW:
Paul Kelly, the editor-at-large at The Australian writes this morning that our political system is being transformed and Americanised before our eyes, as the Senate now purports to shape and determine the macro policy decisions for our economic and social future. Your comment?
PRIME MINISTER:
Well look, we have to work with the Senate, Tim. The Senate, you know, there is a crossbench there. We don’t have a majority in the Senate and of course, Governments very rarely do. I have to say we’ve got more through the Senate in the last six months of this Parliament than we did in the whole three years of the previous Parliament, even though we’ve got less seats in both the House and the Senate. So we’ll continue working constructively.
But you know, the reality is that unless we can put in place the economic reforms we’ve proposed, put in place the Budget repair that we’ve proposed, we will not be able to deliver the same level of services to our children and grandchildren that we’ve enjoyed. We cannot keep on living beyond our means and throwing onto the shoulders of our kids and their kids, this enormous burden of debt.
We need these economic reforms. We need these budget repair measures, in order to do the right thing by our kids and theirs.
TIM SHAW:
Back to the cricket, if the Sri Lankans are getting on top of the Aussies, are you going to head over with Lucy to the James Taylor concert?
PRIME MINISTER:
[Laughs]
No, no I’ll be sticking with the cricket and hopefully having an early night. I’ve got a big week ahead of us, we’re heading off to New Zealand on Friday for the annual meeting with, well, with the New Prime Minister Bill English. So a lot to do.
TIM SHAW:
Thank you so much for your time, I look forward to the opportunity again here on 2CC Breakfast.
PRIME MINISTER:
Yeah thanks so much Tim.
[ENDS]