Senator the Hon. Mathias Cormann
Minister for Finance
Leader of the Government in the Senate
Senator for Western Australia
KIERAN GILBERT: Let us go live to the Leader of the Government in the Senate, the Finance Minister Mathias Cormann. Thanks very much for your time as always. The Prime Minister says the Government is agnostic when it comes to the energy supply that might be underwritten by the Government. The Deputy Prime Minister, you heard him there, says the competition watchdog has given the green light to new coal-fired power plants. Which is it?
MATHIAS CORMANN: I think you are putting words into the Deputy Prime Minister’s mouth. He was actually talking about base-load power and in response to a different question he was saying that Liberal National Members and Senators support coal. Of course we support coal. Under the National Energy Guarantee, which is technology neutral, the Prime Minister is right our focus is on bringing down the cost of electricity and improving reliability. Under the National Energy Guarantee, the projections are, by the Energy Security Board, that about 60 per cent of our energy supplies by 2030 will come from coal. The National Energy Guarantee provides the policy framework that gives coal-fired power generation the best possible chance it has had in years to attract additional investment. We commissioned the ACCC report. We are very heartened by the ACCC’s endorsement of the National Energy Guarantee framework as the best way to fix a broken energy market and to do so in a technology neutral way. Because as Rod Sims has said, unless we pursue this energy policy framework in a technology neutral way, we will be pushing prices up. If you pick winners you push prices up.
KIERAN GILBERT: You said I put the words in his mouth, but the question, just to reiterate, my question to him was, “Do you see the ACCC recommendation to underwrite dispatchable power as giving the green light to new coal-fired power plants?” That is exactly what I asked him and he said, “Indeed.” How do I misinterpret that?
MATHIAS CORMANN: I listened to the quote, his answer, very directly. He talked about base-load power. Coal-fired power generation is a very important based-load power source. There are other base-load power sources, but all of us agree that coal-fired power generation will continue to be an incredibly important part of the Australian energy mix for a very long time into the future. By 2030 the projections are that under the National Energy Guarantee about 60 per cent of our energy will come from coal-fired power generation. So I think that people are getting way too obsessed here, as the Prime Minister says, with the input, when what we need to focus on is how do we best achieve lower cost, more reliable energy supplies. The way to achieve that is by attracting additional investment into energy generation and the way to attract additional investment is by providing certainty, policy certainty, for investors.
KIERAN GILBERT: It makes sense. Certainty, the message from Rod Sims as well. But some of your colleagues do not see it that way. They see this as and even the Deputy Prime Minister is saying that it gives them the clearance to maintain their embrace of coal and their support for new coal plants. That is the reality, that is the view of your colleagues.
MATHIAS CORMANN: The view of our colleagues, and I can assure you we are all very united in relation to this, the view of Liberal National Members and Senators is that we need to do everything we can do bring electricity prices down and to improve the reliability of energy supplies. That is what we are focused on. The ACCC report makes a series of recommendations, which the Government will carefully consider. It is a report that we commissioned. It is part of our efforts to bring prices down and improve reliability. The ACCC report has endorsed our National Energy Guarantee framework as the appropriate way forward to fix the energy market which is broken. But there are a whole range of other recommendations on how we can take further steps to bring electricity prices down and that is something that we will consider and make decisions in relations to as we always do.
KIERAN GILBERT: Do you think that it will open up the prospect of a viable HELE clean-coal plant, because Alinta, other players this morning in the AFR, have welcomed the ACCC report. Does it make them more viable this context?
MATHIAS CORMANN: Kieran, we have said all the way though, the National Energy Guarantee provides the investment framework that gives coal the best chance in years to attract the necessary investment into future coal-fired power generation as part of a technology neutral energy mix. If you want to attract investment into generation that needs a return on its investment over a period of 30 or 40 years, you do need to ensure that you have the prospect of policy certainty over an extended period and the National Energy Guarantee offers the opportunity to provide that. In the end, if you want to bring the price down of anything you need to increase supply. To increase supply of energy, you need to increase the level of investment. The only way we are going to attract additional investment is if we provide policy certainty. The National Energy Guarantee provides that. The ACCC has endorsed it. The ACCC has endorsed a technology neutral approach. We will consider all of its recommendations and coal, as I have indicated now several times, will continue to be an incredibly important energy source for Australia, about 60 per cent by 2030 is the current projection by the Energy Security Board.
KIERAN GILBERT: In relation to Tony Abbott’s view on this when it comes to his response to the ACCC report, he pivoted back again to the need to focus on reducing our focus on the reduction of carbon emissions and reiterated his call for us to pull out of Paris. That gives you a sense, that gives our viewers a sense of how broad the party room is in terms of its thinking on this, because you have still got the former PM who committed to Paris now saying we have got to get out of it.
MATHIAS CORMANN: As you say Tony Abbott committed Australia to Paris. The Government is focused on brining electricity prices down. The way to do that is not by Government intervention on pricing, but by putting a policy framework in place that will attract additional investment so we increase supply, so the market can work better and we are focused on improving reliability. Yes, we are also focusing on delivering on the commitments that we made internationally under the Abbott Prime Ministership. As then Prime Minister Abbott said at the time, Australia delivers on the commitments it makes internationally. Our primary focus is to reduce prices, to improve reliability and to do so in a way that helps us meets our emissions reduction targets. I think that that is an approach that Australians overwhelmingly support.
KIERAN GILBERT: There is a list released this week, more than 165 facilities, gas works, ports, water infrastructure on this list where basically they are seen as critical infrastructure according to a new Act that comes into force this week. If they do not undertake necessary security in the face of a foreign breach, that Minister Dutton, the Home Affairs Minister can intervene. Can you give us any more of a sense of what that is all about?
MATHIAS CORMANN: That is a law that passed some time ago now. That Ministerial direction would be an intervention of last resort. There are a whole range of steps that would come before that. In relation to these 165 assets that have been classified as critical infrastructure, I think that all Australians would expect us to ensure that appropriate security arrangements are in place to protect our national interest. That is what we have done through this piece of legislation. As a measure of last resort, if all other measures before that have failed, then yes there is a directions power to ensure that the Government can take the necessary steps to protect our national interest.
KIERAN GILBERT: On another issue today, Simon Benson reported on the front page of The Australian, since confirmed by Peter Dutton, that the annual permanent migration intake is down, has fallen by more than ten per cent, the lowest level in a decade. Is that underpinned by the economics as well, obviously we still need a sustainable intake of migrants to perform the necessary tasks in our economy,
MATHIAS CORMANN: The cap has remained the same all the way through since 2012/2013 at 190,000. As we have said all the way through that is a ceiling, it is a cap, it is not a target. It really depends on the quality of the applicants as to whether or not you can reach that cap or you do not reach that cap. In the end, the way to look at our migration system is that it is a massive recruitment exercise where we seek to attract the best and brightest people from around the world, from all corners of the world, with the right attitude, who want to come to Australia to help make our country an even greater place into the future. The number is ultimately what it is, after all of the criteria have been properly applied and the applicants have been properly scrutinised against those criteria. No more than 190,000, but also no more than those that qualify once the appropriate criteria have been applied.
KIERAN GILBERT: Last question on Barnaby Joyce. The expenses have been cleared by the auditor. Do you feel comfortable with where that has landed, is this that now time to draw a line under that whole episode?
MATHIAS CORMANN: It is well and truly time to draw a line. This was an independent audit by the Independent Parliamentary Expenses Authority looking at the work expenses claims that were submitted by Barnaby and his then staffer. The independent audit found that everything was above board, so yes I think that everyone should essentially move on.
KIERAN GILBERT: Finance Minister, I appreciate your time. We will talk to you soon. Mathias Cormann joining us live from Perth.