Subjects: same sex marriage; East Coast gas supply; Northern Australia Infrastructure Facility; Snowy Hydro 2.0; clean-coal power stations

E&OE

BARRIE CASSIDY:

 

Now from Cairns we’re joined by the Minister for Resources, Senator Matt Canavan. Good morning. Welcome.

 

MINISTER CANAVAN:

 

Good morning Barrie.

 

BARRIE CASSIDY:

 

Just before I go on to your portfolio matters, just on the gay marriage issue, what do you make of  the argument the issue ought to be sorted out now, so that you get clear air between now and the Budget?

 

MINISTER CANAVAN:

 

Well, I think it’s an unusual argument Barrie. What we should be focussed on in this last fortnight before the Easter break is bringing taxes down for businesses so we can create jobs, solving the energy issues we have been working on in the past week and also bringing childcare fees down for families as well. There’s lots to do.

 

The Coalition’s policy on the marriage question is very clear. We took it to the last election. We think the Australian people deserve a say. Now, that was rejected by the Parliament late last year but we’ve got a lot of other things to go on with that we also took to the election in terms of bringing down people’s living costs, helping us get lower prices and maintaining jobs and also bringing down taxes in our economy.

 

So, that’s what we should be focussed on, I think. The notion that we’d distract ourselves in going to other issues would be a massive diversion this next fortnight.

 

BARRIE CASSIDY:

 

And, as you read it, would there be any prospect anyway of changing the Prime Minister’s mind on this, and dropping the plebiscite?

 

MINISTER CANAVAN:

 

Well, he’s been very clear in his views on the matter. We have been very clear as a party. We had a very respectful debate on this matter a couple of years ago and it’s resolved as far as the Coalition is concerned.

 

I would just like to see a lot more respect in the debate. I mean, I respect others who have a different view. My personal view is that we should not change the definition of marriage but what I found a little uncomfortable this week with the position of CEOs is there’s almost a level of contempt for those that might have a different view and I think that the customers of QANTAS or the shareholders of Telstra deserve to have a say just as much as any other Australian …

 

BARRIE CASSIDY:

 

By them expressing a view …

 

MINISTER CANAVAN:

 

… Their views deserve to be respected too.

 

BARRIE CASSIDY:

 

But by them expressing a view, how does that then show contempt for others?

 

MINISTER CANAVAN:

 

Well, it’s not just they expressed a view Barrie. There was a notion this week in that letter that somehow unless the Parliament legislated for gay marriage this fortnight it will be bad for business. You know, I really struggle to get that far. I mean we live in a region, we trade –  our biggest trading partners in Asia – there’s no chance any of these countries – Indonesia, Japan, China – will legislate for gay marriage any time soon. They have strong and socially conservative positions on this issue. If we treat others in our own country with that level of contempt that have a view on traditional marriage, how can we go to our region and respect their views as well?

 

Let’s just respect each other. There can be different views on this issue. I know it’s a very important issue for some people but, if we just had a little bit more respect and common sense, we could probably deal with the matter and also deal with a lot of the other challenges facing our nation. 

 

BARRIE CASSIDY:

 

Alright, let’s talk about the Snowy Mountain expansion now. You’ve  dusted off plans drawn up in the 1980s. They’re more than 30 years old. Are you absolutely convinced that the plans will survive a thorough feasibility study?

 

MINISTER CANAVAN:

 

I’m very convinced by the plans. I first met Snowy Hydro a few years ago in another capacity about these plans. They have always been a little capital-constrained as a government-owned entity, But these plans will help bring down prices, particularly at peak times. They will help protect jobs and ensure there’s not as many load-shedding events as we saw over summer that put at risk aluminium jobs at Tomago. These plans are a real solution to the real problems facing our energy situation and good on the Prime Minister for grabbing it.

 

It is a complicated situation with three different shareholders –the New South Wales and Victorian Governments as well – but the Prime Minister has made it clear that he wants to act and, if the other States won’t follow, he’ll lead the charge.

 

BARRIE CASSIDY:

 

Yeah, it is complicated too with the two States, New South Wales and Victoria, having such large shareholdings. Why do you seem uninterested in them chipping in money?

 

MINISTER CANAVAN:

 

Well, I’m sure the Government would welcome their contributions but we’re also, I don’t think, going to sit around on our hands waiting here. We need to act. We need to take action in response to what particularly we’ve seen over summer.

 

Up here in Queensland, wholesale power prices have averaged over $180 a megawatt hour this calendar year. That’s up from $60 or $70 usually at this time of year. That’s not sustainable and, while the Snowy scheme is more of course for southern markets, we need to act across the country to keep power bills down, particularly if you want to maintain a manufacturing industry in this country.

 

I think there is no reason we can’t have a strong manufacturing sector in Australia that creates thousands of jobs. We have the energy resources and the minerals to do so but we just need to harness them and bring some common sense back to the energy policy debate.

 

BARRIE CASSIDY:

 

It’s just that the comment from the Prime Minister was that he’s happy to pay the lot, he’s happy to go it alone. Why would you not try and persuade the States to at least play a part?

 

 

MINISTER CANAVAN:

 

Well, as I say, I think we’re happy to take action here Barrie. Obviously, there is a little bit more work to do, in particular to update the business plan for some new modern technologies that might be brought to bear but, on everything I’ve seen Barrie, this a wealth-maximising, wealth-creating investment, so, if the other States don’t want to join us, and if the sums add up, why wouldn’t the Commonwealth Government make an investment which would pay off for us financially on our own balance sheet?

 

This is an investment. It is not a grant, it is not something we’re not expecting money returned on. There is a real market need here, in terms of providing more supply of energy at peak times in our system and this project can do that.

 

BARRIE CASSIDY:

 

And what about Infrastructure Australia? Have they played a part in any of this, given that it’s an independent statutory authority that prioritises these kind of things?

 

MINISTER CANAVAN:

 

Well, these things are going to be looked at by ARENA. They’re the relevant body here for renewable energy investments. They’ve obviously assessed a range of projects around the country. They’re looking at one up here near Cairns at the moment, also a pumped hydro storage project at the old Kidston gold mine. So they’re the appropriate body to look at these things and I’m sure they’ll look at it very, with great forensic detail..

 

BARRIE CASSIDY:

 

With that meeting with the gas exporters during the week, after that there was a story on page one of the Financial Review that suggested that some of the agreements were vague at best. Are you able to say there was a rock-solid guarantee from these exporters that they will direct extra gas to the domestic market?

 

MINISTER CANAVAN:

 

Well, both in the meeting we had this week that I attended, Barrie, as well as discussions I’ve had with the gas industry over the past month, they’ve made strong commitments to bring more gas to domestic markets.

 

We need more gas supply to be brought to bear in domestic markets. We need to bring those prices down to maintain jobs in our manufacturing sector as well. Now, I’m happy to take those commitments that the gas industry made at face value. I’m happy to give this a go. I think there is a justifiable market requirement for more gas to come domestically, but the Prime Minister made clear this week that if those commitments are not met, if we don’t see more gas come into the domestic markets, we will act, we will take decisions in our national interest, to secure our nation’s energy supplies.

 

And there was no misapprehension, Barrie, from the gas industry that this is unusual. This is what every nation around the world would do. They always secure their own energy supplies first. The gas industry understand that and that’s what we need to see delivered now through some changes in the market environment.

 

BARRIE CASSIDY:

 

Now, your leader Barnaby Joyce – again this morning in fact – has embraced South Australia’s idea to pay farmers 10 per cent of royalties if they allow coal seam gas drilling on their land. Who drives, that, though, is this something the Federal Government can roll out or is it a matter for the States to individually decide?

 

MINISTER CANAVAN:

 

Look, it is the States’ resource, Barrie, and I am not prescriptive about how or what might happen as the Resources Minister. We’re just solutions-focussed as a Government, Barrie, in all these energy issues, just looking for practical, pragmatic ways to get more of our energy resources to people, bring down power prices and maintain jobs and security.  So it’s been clear to me for some time, as someone who spends a lot of time in regional areas, that there is not a lot of support for gas development and I think, when we’ve got to the position in the last fortnight where the Victorian Government has banned conventional gas development – something that has been safely used for more than 100 years – we’ve got to have a look at ourselves and think that something’s not right.

I’m critical of the Victorian Government’s decision, I don’t think it was right, but, clearly, there is a groundswell of opinion in regional areas that’s not that supportive of gas development, so we need to try to find to unblock that support, to give people a better share of the development of this industry that happens on their land, in their communities.  And, clearly, something like what happens in America, where royalties are shared with the land owners – indeed, they’re the principal participant in royalties – it can unlock gas development, it’s something that should be looked at.

 

So, I welcome South Australia’s decision, I also welcome the decision of the Victorian Liberal and National Parties to support veto rights for land owners on gas – that’s something they tried to move. We just need more in this direction. I’m not prescriptive about it, let’s just get solutions.

 

BARRIE CASSIDY:

 

If the suggestion is they can be bought off with a 10 per cent royalty, does that not suggest that it was never about polluting ground water at all, it was only ever about the money?

 

MINISTER CANAVAN:

 

Well, look, there are concerns obviously about the environmental impact. Here in Queensland, we’ve had a gas industry, a coal seam gas industry, operating for more than 20 years, I think with a good environmental record. It’s proven to be a safe form of gas extraction, but I don’t begrudge people, Barrie, wanting to have a share in the development that occurs on their property. I just ask all the viewers this morning to think, if you had a big well popped up in your back yard, with pipes going through your land, and had to provide 24/7 access to strangers onto your property, what would you think about that? And, is it fair or reasonable to think that that person, that land owner, should actually make some of the money and the wealth that is created from that development? I don’t think that’s unreasonable at all.

 

We should approach this industry in a commercial way. There’s a lot of wealth to be created by developing our gas resources and good businesses, good industries, share that wealth across the supply chain. That’s the sustainable way to develop an industry, because you get everyone to buy in and support it.

 

BARRIE CASSIDY:

 

Now, you’re managing the $5 billion Northern Australia Infrastructure (Facility) that was set up in the 2015 Budget, two years ago now almost. How many applications have you actually received for these concessional loans?

 

MINISTER CANAVAN:

 

Well, just one slight clarification: it was announced in the 2015 Budget, it was established on the 1st of July last year, so it’s been in operation almost nine months now. There’s 102 projects under consideration; 47 of those are “active”, if you like, of the 102 that have been received.

 

It was always going to be the case here that these involve large sums of money and do require some time to consider and work through them. There are five now that are close to financial close and, hopefully, some of those will be done very shortly, and there are another 11 or 12 that are at advanced stages of development. That process is on track.

 

It is always going to, of course, mean that we have to look at all of these projects properly, and in consideration, and they also require private finance as well, so it is not just the Australian Government arranging the finance….

 

BARRIE CASSIDY:

 

And would you still consider using some of this money for a coal-fired power station? Given the events of the Snowy Mountains that’s now redundant?

 

MINISTER CANAVAN:

 

I certainly don’t think it’s redundant. We’ve got to get over this obsession, Barrie, that there’s one solution, there’s one magic bullet that will solve all our energy needs. There is no such thing. We’re a big, diverse country with big, diverse needs. In terms of our energy supply, the Snowy hydro scheme is going to be an important addition, particularly for southern markets, where you are, but of course it’s not going to make a huge difference up here in North Queensland. We don’t have a baseload power station north of Rockhampton here in North Queensland. I want to continue to grow the North Queensland economy. I think there are major industries that continue to need support, like the Boyne Island aluminium smelter. I think there’s more opportunities to expand our manufacturing sector here in North Queensland and I know North Queenslanders share that passion and enthusiasm with me. So, we’re going to want a baseload power station sometime in the future. We’ve got a lot of coal up here. The new clean-coal technologies can do so at an affordable price, reliable power and also lower emissions, so they tick all the boxes. There’s nothing wrong with ultra-super-critical coal and we should look at bringing those technologies to Australia.

 

BARRIE CASSIDY:

 

So, no matter what’s going on in the Snowy, you still want a coal-fired power station for North Queensland?

 

MINISTER CANAVAN:

 

Well, as I say, there’s going to have to be a lot of investments in our energy supply system, Barrie, over the next decade. We have something like just over 8,000 megawatts of coal-fired power capacity reaching 50 years of life in the next 10 years. Not all of them necessarily will retire on their 50th birthday but that’s 20 per cent of our power supply – 20 per cent is facing retirement in the next 10 years. Now, some of that, hopefully, will get replaced with gas but that’s proving challenging, given the gas supply situation we are currently facing. I don’t think all of it can be replaced by renewables because of the intermittency we have there. We have to continue to provide reliable and affordable power if we want jobs in industries like manufacturing. And I want those jobs. The coal technologies that are being rolled out in our region – more than 700 plants in operation and another 800 or so being built at the moment – with our coal, using our coal. We should certainly look at that technology as well.

 

BARRIE CASSIDY:

 

Alright, Senator, thanks for your time this morning, appreciate it.

 

MINISTER CANAVAN:

 

Thanks Barrie.

 

(ENDS)