E&OE…
Topics: Green Army; environmental policy; meeting with major gas companies; gas policy
ROSS GREENWOOD:
So to address that issue plus plenty more, let's now go to our Industry Minister Greg Hunt. Now Greg Hunt, as you are well aware is also the former Environment Minister for Australia, so before we get onto the gas, he's on the line right now. Many thanks for your time as always, Greg.
GREG HUNT:
And good evening Ross.
ROSS GREENWOOD:
So you were the Environment Minister when the Government introduced the so-called Green Army, you would I presume be very disappointed that it's been disbanded by the current government to try and get some budget savings.
GREG HUNT:
Oh look, I won't pre-empt anything for what's called the mid-year economic forecast…
ROSS GREENWOOD:
But the Government said today it's getting rid of it, hasn't it? It has said it's getting rid of the Green Army.
GREG HUNT:
Oh look, I'm not aware that there's been any confirmation to that effect. There's been speculation, you know…
ROSS GREENWOOD:
Well the former Prime Minister was introduced, Tony Abbott has today come out on his Facebook page and said it's disappointing that it's actually disappearing.
GREG HUNT:
These have all been good contributors, and the Treasurer and the Prime Minister ultimately have to make decisions about meeting the allocation of resources, but you know, all up, whether it's Landcare, whether it's Green Army, there a lot of good ways to help the environment.
But I'll leave any statement on the future to the Treasurer.
ROSS GREENWOOD:
But there's been a statement today on his Facebook page by your prime minister at the time, Tony Abbott, in regards to saying how disappointed he is about the disbanding of the Green Army.
I mean, surely that would be a retrograde step, I would imagine, in regards to the way in which we'd be trying to reduce emissions in Australia.
GREG HUNT:
Sure. Look I understand the point, I'm simply but respectfully not going to be drawn on what at this stage is speculation.
ROSS GREENWOOD:
Okay. Then the second part about this that many people are looking at the moment, and I notice this comes from the current Environment and Energy Minister Josh Frydenberg today acknowledging really that Australia has now got a carbon price.
I wouldn't call it a carbon tax, but we do have a carbon price. The Emissions Reduction Fund has successfully conducted four auctions today, securing 178 million tonnes of emission reductions at an average price of $11.83 per tonne.
So can I take it from that that the carbon tax in Australia right now, or the carbon price in Australia is now $11.83 per tonne?
GREG HUNT:
No, can I clarify this, because I think some have misrepresented what Josh has said.
There's a complete difference between a carbon price, which is a tax no matter whether it's a fixed price or a floating price.
Carbon price is a tax on emissions, and therefore it's a tax on electricity usage.
An emissions reduction scheme actually writes a contract to reduce emissions, and it's entirely voluntary, and it can come from any different source of emissions reduction, and overwhelming it comes from the land sector of energy efficiency.
And so this is a way of reducing emissions at the lowest costs, and it was set up precisely as the opposite model to Labor's electricity tax, to Labor's gas tax, to Labor's energy tax.
So it's a completely different approach, and interestingly what you see is the World Bank has now adopted the Australian model.
The international aviation industry is looking at the Australian model, and you know, the World Bank's methane auction, or what they call a pilot auction scheme is very similar to what we're doing in Australia.
So the Australian model is actually beginning to win support of a low cost, non-tax system which does not put pressure on electricity and gas prices and indeed they reduced dramatically under us and you've now got Labor trying to drive up the costs through closing power stations and adding a new tax. It’s not something we are about to do.
ROSS GREENWOOD:
Okay, but just to spell it out to people though, the price of emissions, carbon emissions in Australia is right now $11.83 per tonne.
GREG HUNT:
No, the price of emissions in Australia is zero. The price of emissions reduction actually where we contracted people to reduce emissions on average has been well it was $10.69 I think at the last auction, but that's reducing emissions, that's not about taxing people.
There is no tax on emissions in Australia at this point in time, although there would be under Labor. That's what they want to do. In other words that's an electricity and a gas tax.
ROSS GREENWOOD:
Let's move it forward onto gas because I do want to come to this.
How does Australia get in to the position where we are the largest exporter of liquefied natural gas in the world?
How is it as you heard from Malcolm Roberts there say that Australia does have a shortfall of gas coming that is going to push up gas prices on the east coast and potentially as we've heard over the past few days here on this program, because of the price increases that are already coming is potentially going to drive some gas dependent businesses out of business here in Australia?
GREG HUNT:
So there is a risk and I think Malcolm Roberts is absolutely right and I called a meeting of the chief executives and senior executives from four of Australia's major gas companies today.
The problem is that there's no shortage of gas in the ground but there's a blanket ban in Victoria and a near blanket ban in New South Wales on extracting that gas.
ROSS GREENWOOD:
But hang on, why do we need gas in the ground to be brought out in New South Wales and Victoria when there's plenty of gas in Queensland going out through Curtis Island that's going to Korea, Japan and China.
Why can't we divert some of that gas back through a pipeline into Victoria and into New South Wales just as say for example the Cooper Basin has done for years and years?
GREG HUNT:
All of that gas was developed on the basis that they had long term multibillion dollar contracts to sell it.
And the gas company said there's plenty of gas, and of course it's much cheaper to take gas from Victoria to Victoria than to transport in enormously long distance.
ROSS GREENWOOD:
But you as the former Environment Minister now an Industry Minister, you've had to confront all of those meetings with green groups.
GREG HUNT:
Absolutely I have.
ROSS GREENWOOD:
With the Shut the Gate groups, with all of the groups who do not want any gas production in New South Wales and onshore in Victoria, so you know that there is a political problem, state government problem, but it's also a federal government problem in trying to produce that gas out of the ground in those two states.
GREG HUNT:
Yep, but I think it's frankly ridiculous that some people would say we want exactly the same gas, exactly the same molecules brought up in exactly the same way but not for our state.
Whereas this is an enormous job creation opportunity and of course this is natural gas, the very thing that people use to cook their dinner, to heat their water and to condition their houses in many many cases.
So natural gas is the thing which has been such a vital part of Australia's quality of life and economic development and there's no reason why it should be allowed in Queensland but banned in Victoria in particular and to a lesser extent in New South Wales.
This is something where the natural gas suppliers are really keen to be able to contribute, where the Commonwealth is saying to everybody…
ROSS GREENWOOD:
So Greg, you've just outlined the problem, alright, so everybody understands the problem. What is the solution? Because we don't actually know what the solution is.
Because it's okay to say state governments you should do something about this but of course we know politically that they are frozen, that they can't do something about it. Where is a solution?
GREG HUNT:
The first thing is I don't accept that ban should be immutable. My view is that you see in the Northern Territory, there's already flexibility and they are moving towards I think a more flexible approach than the one they took to the election.
I think in Victoria, why would you be banning conventional gas. Then the other thing that we agreed on today, firstly for everybody to work towards actually releasing and freeing that gas from the states which have previously been built off that.
Victoria has been in many respects built of the resources that came out of Bass Strait. Why we wouldn't allow that process to continue is beyond everybody.
But secondly the gas, the natural gas companies are going to work with the Commonwealth on looking at all of the Commonwealth and state regulatory costs and these will also make it easier to produce costs and then improve the flow of gas between the states.
So there is plenty of natural gas in Australia. At the moment there are blanket bans on drawing that gas out of the ground in Victoria but some Victorians say we want the same gas from Queensland.
So firstly we've got to get common sense and rationality into it…
ROSS GREENWOOD:
And what chance given the current flavour of state governments around Australia, what chance is there that you are going to get any common sense on this matter from your perspective shall we say?
GREG HUNT:
Well I think we can for the simple reason that it's about increasing job security, decreasing electricity and energy costs and increasing the potential for manufacturing in Australia.
So something which is incredibly important at the same time it reduces emissions…
ROSS GREENWOOD:
Okay, final one on this one now Greg. I understand all that…
GREG HUNT:
We're bringing all the players together to say how do we reduce the costs and it is possible to do that and then how do we increase the supply and it is possible to do that.
ROSS GREENWOOD:
And you reckon you can do this quickly enough to overcome that shortfall which is going to see gas prices for domestic use and also for business use go through the roof that could drive some businesses that you're responsible for as Industry Minister, drive into the wall?
GREG HUNT:
Well I've got to say that the gas companies indicated they can move quickly but there are resources to which they have access which they'd be happy to work on if they were allowed to access it by the states, and secondly if we were able to remove some of the costs created by regulation.
So you know, we've dealt with more difficult problems than this and things we were told were impossible.
Exactly the example of the emissions reduction fund that we discussed before. Everybody said, you'll never get it passed, it'll never work, it will never achieve low prices.
It's achieved all of those things. So that in my mind was a harder problem than the one we face.
We just have to have the courage to have the campaign to say, let's allow Australians to continue using the natural gas which until now they've been able to rely upon.
ROSS GREENWOOD:
There you go, Greg Hunt our Industry Minister, great to have you on the program as always Greg.
GREG HUNT:
Thanks very much. Cheers.