LEON BYNER:
Prime Minister, thanks for joining us today.
PRIME MINISTER:
Great to be with you.
LEON BYNER:
There’s a crisis in energy cost and availability which could derail our economy if not dealt with ASAP. What are you doing to prevent this?
PRIME MINISTER:
Well, Leon, what we’re doing is ensuring that we take a non-ideological approach to energy policy.
This crisis in South Australia is the consequence of a State Labor Government pursuing a massive increase in renewables – in wind in particular – without doing anything to put in place the backup, the storage or the baseload to cover the state when the wind isn’t blowing.
I mean you’ve got the wind resource there in South Australia, which is very large. It is capable of providing all of the state’s electricity demands, or none of it depending on whether the wind is blowing.
This is the fundamental complacency and negligence that Jay Weatherill has to take responsibility for.
LEON BYNER:
But there’s a contagion in the system.
PRIME MINISTER:
He did not plan it.
LEON BYNER:
Prime Minister, a lot of people will agree with that and the big issue now is the price of gas and the availability is going to be a huge issue economically for Australia.
PRIME MINISTER:
Yes, it is Leon, and I spoke about that at the beginning of the year at the Press Club. I warned this was coming.
What you’ve got is a focus from, again, largely Labor governments, and the worst case is Victoria where they have a lot of gas and they have a ban on both conventional and unconventional gas onshore exploration.
And what that means is that as old coal-fired power stations close and Hazelwood is the most recent example – where is the new baseload going to come from?
It can’t come from windmills and solar panels unless they’re backed up with storage.
And my Government is the first one to make that a priority and you know we’re getting on with that, including with a project in South Australia.
But the big alternative was always then assumed to be gas.
But the problem is, you’ve got at the same time as the Labor Party is condemning coal and condemning traditional forms of baseload, they’re then preventing the exploration and development of gas resources which you obviously need to fill that gap.
The reality is that there is less gas available than there should be and it’s much more expensive than it ought to be.
LEON BYNER:
Well you see we are going to be shortly the world’s most abundant supplier of this resource. You’ve had a letter from the AWU asking you for a reservation policy. You’ve had WA’s Premier, who is about to face an election suggest that we do in Australia what he’s done, by reserving 15 per cent. And of course ALCOA’s boss has recently said this will make and does make life easier for us. Would you envisage, would you consider such a policy?
PRIME MINISTER:
We will consider all measures that we need to ensure that our energy security is assured. Leon, the objective that all Governments have to have, state and federal, is that energy security is assured.
Now I’ll be meeting with the CEO’s of the east coast gas companies next week. They’ve been put on notice. I need to hear from them. I’ll be demanding from them their explanation as to how they’re going to deliver security for their customers.
LEON BYNER:
Shouldn’t we put that in our license conditions? Because after all this is a resource that we own.
PRIME MINISTER:
Western Australia did that from the outset and what the gas companies would say, their response to imposing a reservation on them would be to say: ‘You’re changing the ground rules - we did this exploration, we built these LNG trains on the basis that there would not be a constraint on what we could export’. But clearly the security is the first responsibility of every government. That is, national security and energy security.
LEON BYNER:
How long do you think it’ll be before you can resolve this? The reason I ask that Prime Minister is that I know you’re going to do a bit more work on the economic message around Australia. But the big threat to that is this problem of energy security and availability at a reasonable price.
PRIME MINISTER:
It is a very big threat and it is being threatened by years of ideological complacency by the Labor Party. Again, look, I know this sounds like a very partisan remark but it is simply, it is a fact. They have pursued renewables without any regard to the fact that you need baseload and backup power. Whether it is storage - they’ve done no work on storage at all - and they have allowed the gas situation to get to a point where gas, being of course the fast response fuel that can jump in, for example, when the wind stops blowing. But they’ve put bans in place around Australia and particularly, Victoria, being by far the worst case, which has had this consequence that we have a shortage of gas on the east coast.
LEON BYNER:
Will you encourage the Liberal Party of SA - they have got a policy which is a complete moratorium for some years on any fracking down south – would you encourage the Liberals to change that?
PRIME MINISTER:
I encourage all parties, Liberal and Labor to support the development of our gas resources.
We have massive gas resources, Leon. You know, we have so much gas.
The problem we’ve got at the moment is the political opposition to its exploitation by, you’ve mentioned the Liberals in South Australia, but overwhelmingly this is the agenda of the Labor Party and the Greens.
LEON BYNER:
Now, I understand there is a suggestion that Cabinet today will sign off a new strategy to promote the reduction in Sunday penalties – is that the case?
PRIME MINISTER:
I am not going to discuss what Cabinet is discussing. Cabinet discusses matters in confidence as you know and when decisions are taken then we announce them. But I can discuss the penalty rate issue with you – I am very happy to do that.
LEON BYNER:
Well, you see, the thing is, there is now an enormous campaign against you with regards to these rates and yet it was the Commission that delivered the result. Are you planning any modification or change to this decision?
PRIME MINISTER:
No. I mean, the decision was, let’s be quite clear about this, the decision was a very carefully considered one by the independent umpire, the Fair Work Commission. They heard evidence from businesses right across Australia including South Australia, that to the effect that they would offer more shifts and more jobs if the Sunday penalty rates became closer to those penalty rates that applied on Saturday.
I mean, there was Mr Bullock, the Chief Executive of 1834 Hotels in South Australia said that because of penalty rates, 16 individually owned hotels, 500 employees, he said because of the high Sunday penalty rates they have reduced trading hours on Sundays. He said lower priced meals are no longer being offered at a number of hotels on Sundays because of that.
The owner of the Marryatville Hotel in Kensington gave similar evidence. When you look at what the Commission did, they heard from hundreds of witnesses and they made a decision that they could get the balance right, they could back small business, they could back jobs, they could back employment and we back small business.
Now Bill Shorten doesn’t. Bill Shorten is telling lies about this decision. You see this absurd announcement from the Labor Party today that this decision could affect policeman and nurses. It is ridiculous. This decision applies only to the retail and hospitality sectors and, of course - and the Commission has been very clear about that - and of course nurses and police officers are under state awards and state agreements anyway, so they are not under the jurisdiction of this Commission in any event.
LEON BYNER:
Prime Minister, thank you. And I hope you’ll keep us in the loop on this energy situation because the biggest, from the businesses and the people who run them talking to me, the biggest issue for employment is this damn energy issue.
PRIME MINISTER:
Leon, it is the biggest issue in your state and South Australia, as the head of your Chamber of Commerce said is like the canary in the coalmine. That is what the rest of Australia will look like with the most expensive and least reliable electricity. And the real question for Jay Weatherill, is what on earth were you thinking, what were you thinking as you proudly boasted of the great experiment of having 40 per cent of your states electricity capacity being wind, but did nothing to ensure that there was the backup power to provide electricity when the wind wasn’t blowing, or the storage capacity. Not a finger has been lifted in respect of that. And his lazy assumption was he could just keep on importing more electricity from Victoria where I might add, Leon, it is generated by burning brown coal which is the most emissions intensive form of generation in Australia.
LEON BYNER:
Prime Minister, thank you for the opportunity of talking with you and talking to South Australia.
PRIME MINISTER:
Thank you very much Leon.
[ENDS]