Topics: $49 million loan to Arrium, energy prices, Labor’s plan to bring back an electricity tax
Greg Hunt is with us now and, of course, he's the Minister for Industry, Innovation and Science. So, Greg Hunt, can you innovate us out of this one.
Look, sorry, I missed the lead up so you better explain what (inaudible) sorry, I've just come on the phone.
Well, okay, we've been talking about the fact that in South Australia we've got I think Professor Garnaut said an oligopoly that is actually taking advantage of the market, pushing up the prices, and doing it legally, but we're basically all getting screwed.
And it's affecting households and business and we want an answer – we want someone to fix the problem.
You're the federal Industry Minister, how would you fix it so that we don't end up having these massive spikes that we all end up paying for?
Well, look, the first thing is in terms of power prices, it's something I've been warning about and fighting for reductions in over the last six years.
We abolished the carbon tax against the clear opposition of the federal Labor Party.
It led to the largest drop in power prices in Australian history and they, frankly, want to bring it back and drive up power prices even more.
The second thing is, we took steps to put the Renewable Energy Target on a sustainable basis.
Again, we were criticised by the federal Labor Party but also the state Labor Party.
And the third things is what we have to do is work constructively with each of the states to make sure there's national electricity market reform.
Because you can’t set a target and then hope it will be alright and then complain when the very thing that you have done causes the very price rises which are hurting industries in areas such as Port Pirie and Whyalla and Port Augusta where I've been visiting in the last 24 hours.
Okay but let's just fix it. Let's not just keep talking about the problem because this has been going on now for, I mean, ever since they privatised the market in South Australia.
We gave a Chinese company, that didn't pay tax until it was dragged into court, the ability to own all the poles and wires, which you've just decided you won't do in New South Wales, but we did that in South Australia – gave them the opportunity to, I think, run the system for a century or so.
And then we've given it to private organisations that we've just heard from this report from the Energy Institute in Melbourne that they've been manipulating the system so that they can screw us and you are the federal Industry Minister saying, oh well, we got rid of the carbon tax. Well, it doesn't…
Well, actually at a federal level, that is enormous. That was a $15.7 billion tax over two years primarily on electricity, so that has had a massive impact which came directly within the federal area of responsibility.
Then we looked at the Renewable Energy Target and putting it on a much more sustainable basis. It was going to be dramatically higher than it is now.
That, of course, is a fundamental part of what's occurring in South Australia – fundamental.
Now, nobody wants to reduce emissions in Australia more than me.
But what I've always said is you have to do it in a way which means that you have a sustainable approach to electricity prices without suddenly trying to take offline major firms and communities, such as the ones I'm visiting right now – Nyrstar in Port Pirie earlier today and the steelworks in Whyalla, the Arrium steelworks which I've literally just come from, that has a $20 million a month electricity bill.
So, we're taking these steps to try to – well, to so far reduce electricity pressures, compared with what they would otherwise have been.
And then on Friday the Energy Minister Josh Frydenberg is convening a national meeting to get real reform in the national electricity market, which has been resisted by many so far.
Okay, how do you get on with Tom Koutsantonis? Because he's the local Energy Minister and he's supposed to be sorting it out and he wants to go to the ACCC and have an inquiry.
Look, I'd rather get onto real action rather than words – but I respect Tom. We're going to work very, very closely with him and other ministers such as Kyam Maher on the issue of Arrium.
We've seen success on Nyrstar, where the combination of state and Commonwealth work has helped lead to a $500 million investment by the parent company there – the state underwriting, the Commonwealth delivering the loan – that's a model which could potentially be in play for Arrium.
We've already delivered a $49 million loan for Arrium for improving the export quality of their iron ore.
And just today I had talked about the Clean Energy Finance Corporation being able to assist with stable, long-term electricity for the Whyalla plant which, as I say, is facing a $20 million a month electricity bill.
So, we're the ones that have been criticised for putting downwards pressure on electricity prices and saying that you have to adopt renewables in a staged, sustainable way.
The amount of criticism I’ve had for that over the years has been enormous but we've made a massive change compared with what it would otherwise have been…
….but our offer to the states is really open-handed – to say we want to work with you but you've got to plan and you've got to be part of a real national electricity market reform.
Just quickly, before you go, Minister Greg Hunt, Minister for Industry, the latest on Arrium's future, then?
So, I've just been with both the administrators and with the workers and the union leaders.
There is a genuine prospect here of a partnership.
Workers who have done a great job in helping to take costs out, the administrators who are similarly doing that, the state, and the Commonwealth together.
The Nyrstar model is a very real one here – a half a billion dollar investment, the four parties working together, that's the same sort of model that I think we can deliver in Whyalla.
We've already put $49 million in for the iron ore export quality upgrade, we can work on the electricity supply and stable…
…long-term lower-cost electricity. But at the end, of course, the big prize is the Nyrstar model where it's all about improving the quality and creating new products for export.
Alright, I thank you for your time this afternoon, Greg Hunt.