E&OE…
Topics: Hazelwood; Arrium; meeting with Posco;
HAMISH MACDONALD:
We'll get to Arrium in a moment. First, though, a few questions on Hazelwood.
This announcement later this morning about the future of the power station, its closure, 1000 job losses as we understand it.
The Victorian Government is stumping up $40 million as an adjustment package. They're putting that on the table for the Latrobe Valley region, but the relevant minister in Victoria has said this morning it is not the Victorian Government's responsibility alone.
What can the Federal Government contribute?
GREG HUNT:
The first thing is that I am deeply, deeply concerned for the workers and for the Latrobe Valley community.
This would be an enormous blow to them. So we will be in a position to announce a package immediately today, if there is an announcement.
Sadly, I'm presuming that the worst is potentially likely to occur, so we will be in a position to support communities, to support workers, to support the families in the area and to assist with economic development.
So, the Federal Government has been preparing a contingency in case.
I won't pre-empt the Minister Josh Frydenberg who'll take the lead on that as Energy Minister.
But the focus, the concern, has absolutely been on the workers, on the community, and we have prepared on the contingency that this may happen and we'll be ready for an express, clear, immediate response.
HAMISH MACDONALD:
Can you give us, though, some insight into the order of magnitude? I mean, if the Victorian Government is putting in $40 million, is it going to be like for like?
GREG HUNT:
Look, I won't pre-empt the Energy Minister Josh Frydenberg.
He'll be speaking if and when there is announcement, very, very shortly afterwards. But, this is something which has been worked through …
HAMISH MACDONALD:
But there'll be a lot of people listening this morning in Morwell and Moe who are pretty worried. What assurance can you give them in terms of how they might be looked after?
I understand, you know, things need to play out, you've got processes in place, ministers want to do their thing, but clearly for our listening audience this morning there will be significant household stress.
GREG HUNT:
Oh I agree. Absolutely. And this has been one of the things that as a government we have been making the case very clearly, that we have to support our industries, to push to do everything we can to take pressure off electricity prices, not to drive up electricity prices.
Sadly as the Shorten Opposition and the Andrews Government have wanted to do, and, in addition to that, to provide support for the local community, which is the first thing we will be doing, to provide support for local infrastructure projects, to provide support for workers, and to provide support for local small businesses.
So they're the four big things that we'll be addressing today, and the Energy Minister has been working with all of the other relevant ministers, and the Prime Minister has been deeply engaged because his concern has been about the workers, the families, the community, and the economic development in the region.
And we remain concerned that driving up power prices has an impact, not just in the Latrobe Valley, but in other areas where firms and industries rely upon affordable and reliable power.
HAMISH MACDONALD:
You were until recently the Environment Minister, Hazelwood is Australia's dirtiest power station. Where does its closure leave the other brown coal-fired generators, all of which are in the Latrobe Valley as well?
GREG HUNT:
Well I'll leave that for them to make their individual assessments. I do know that we are in a position where, coming into this term of government, we were on track to beat our emissions by minus 78 million tonnes, our emissions target for 2020, and on track to meet and beat our very aggressive 2030 targets, and that was prior to Hazelwood coming in.
So Australia is one of the countries that is leading the world already, prior to this, on its emissions targets.
So our focus today has to be on the workers, it has to be on ensuring that we have reliable and affordable power, because as we saw in South Australia if we don't have that that can have a huge impact on business.
Which is precisely why we were visiting Posco to talk about the future of the Whyalla steel plant, and most interestingly why Posco has developed its own plan for an affordable base load gas generation plant of 220 megawatts to assist with the South Australian grid, and assist with affordability, and to help protect and preserve the jobs in Whyalla.
HAMISH MACDONALD:
I do promise some more questions about that …
GREG HUNT:
One would be good.
HAMISH MACDONALD:
We're getting there. Is this not the reality though of moving to a low carbon economy?
That you end up with job losses and bail outs and scenarios like this where governments have to acknowledge that energy prices will go up. Isn't that the new reality?
GREG HUNT:
I think we have an approach for a renewable energy target. We have an approach through the steps that we've taken to take pressure off electricity prices.
That is very different to a state ALP, which has deliberately tried to drive workers out of their jobs, and a federal ALP which only a couple of weeks ago put a motion in the Senate to drive workers out of their jobs, both in energy generation and in significant manufacturing.
To close down Australia's manufacturing deliberately, as the Shorten Opposition set out to do in a motion before the Senate, presented by Senator Dastyari, I think is an extraordinary proposition.
But Australians will continue to drive automobiles, to live in buildings made of steel, to use materials made of lightweight aluminium, which themselves assist in reducing emissions in transport.
And the question is whether we make these things ourselves, or whether we simply export the jobs, the emissions, and the profit, and then re-import the goods.
And so our goal is to make sure that we do this in as low a cost, lower emissions way here in Australia.
And we keep the jobs in Australia, rather than send them overseas, which is again exactly why we were on a mission jointly with the South Australian Government and the head of the AWU to Posco in South Korea.
HAMISH MACDONALD:
How strong is Posco’s interest in Arrium?
GREG HUNT:
I was surprised and delighted at the utter professionalism and extent to which they have gone into the Arrium bid.
So, they have a major plan to transform the Whyalla Steelworks, they want to bring in a new technology, to invest a very significant amount in adding 50 per cent to the capacity of the plant, and to use the world's most innovative steel-making process.
As part of that, they would reduce the cost and improve the quality…
HAMISH MACDONALD:
Is this called FINEX, is that what we're talking about?
GREG HUNT:
Yes. So the FINEX technology doesn't require a blast furnace. What does that mean?
Instead of using a traditional blast furnace they have a series of steps which refine the iron ore, which means that they get rid of a middle process called sintering.
For the general public, it means that a three stage process becomes a two stage process, and as a consequence of that you need less in the way of resources, you get a higher quality, and there is a waste gas which is created which can be used to generate electricity.
We saw what they were doing at the Posco plant on that front, and in South Australia they would propose a 220 megawatt gas-fired power station using the waste gas which would power the plant, but also provide very significant energy for the South Australian grid.
Base load electricity coming from gas, and doing so in a way which gave a deep, long-term expansionary future to Whyalla, the community, the workers, and the state.
HAMISH MACDONALD:
Ultimately, though, the Posco bid will be up to the administrators, KordaMentha. Are you satisfied that this proposal can get through?
GREG HUNT:
Well the final decision is up to the administrators, and to the creditors.
So we made this clear to POSCO that their bid had to be financially competitive, because that decision would be taken at the private level.
Both the Australian Government and the South Australian Government have set out what we would do.
At the federal level we would support with the Clean Energy Finance Corporation, and the Export Finance and Insurance Corporation, and that would build on the support we've given in relation to purchasing rail line for the Adelaide to Tarcoola rail project.
So all of these things were very well received, and where they felt that there was a unified national approach, federal, state governments, together with unions, that had a huge impact.
And this business climate that we create, coupled with a sensible approach to policy and electricity, shows that we can be very successful in manufacturing, and that's the attitude, and that's the approach which Australia and Australian governments, both at the federal and the state level, has to take.
HAMISH MACDONALD:
We'll need to leave it there. Industry Minister Greg Hunt, thank you very much.
GREG HUNT:
Thanks very much, and I come away from yesterday with a genuine sense of hope for Whyalla.
(ENDS)