E&OE….
Topics: Renewable Energy Target, proposed iron ore inquiry
MARIUS BENSON:
Greg Hunt, the renewable industry seems to be breathing a sigh of relief today because the uncertainty of the past 12 months plus has ended. That uncertainty killed investment, but it comes at a cost. According to Bloomberg analysis, this decision, this lower target will mean less investment by the amount of $6 billion, $6 billion less investment by 2020.
Do you accept that figure?
GREG HUNT:
No, of course it’s a ridiculous proposition and the reason why is because the whole discussion over the last year has been about the fact that the notional target of what’s known as 41,000 gigawatt hours, simply wasn’t going to be able to be built. And in order to address that issue there was a legislated review left by the previous government. We went through that process, we’ve achieved an outcome which we believe and industry believes can be built.
It is still a very significant target of 23.5%. There will be a very large volume of investment under it. It’s pretty close to the maximum of what we think can be built and achieved within that time. But here we get certainty, we get relief for trade-exposed industries that were paying very large bills. So protection of blue-collar jobs and you also get protection for consumers.
MARIUS BENSON:
Sure. And the industry has welcomed that certainty but what’s your figure, what does the lower target mean in terms of reduced investment? Do you accept that there will be reduced investment because of the lower target?
GREG HUNT:
Well, no I don’t accept the proposition that there will be reduced investment because there was a very real proposition that instead of construction, what we would have faced is a penalty price and that penalty price for not building out the additional construction would have been the equivalent of $93 per tonne in a carbon tax world.
So it was a phantom target in effect because it simply wasn’t going to have been built, so any figure of lost investment is wrong. What we have to focus on now is that we have to build within five years pretty close to as much as was built in the previous fifteen years. That’s a huge ask and a huge task for the industry. They assure us they can do it but this is a very significant step forward…
MARIUS BENSON:
But Bloomberg is aware of all of the complexities that you’ve outlined. It’s a fairly substantial name in financial analysis. It says that your lower target, $6 billion in lost investment, 29% reduction in investment by 2020.
GREG HUNT:
No, look I just simply reject that. And the reason why is there was a very widespread view that it was impossible that that figure would have been built out.
MARIUS BENSON:
The Prime Minister when he was talking about renewables said there were two objectives – we want to get power prices down, we want to protect jobs. But that’s not the objective of the renewables, there’s an environmental agenda with renewables. If you simply want cheaper power you go for coal.
GREG HUNT:
Look, I don’t again accept the characterisation there in terms of what we’re proposing. Of course, fundamentally…
MARIUS BENSON:
They’re the Prime Minister’s words, what are you not accepting?
GREG HUNT:
Let me finish. Fundamental has been insuring that there is protection against consumer price rises, protection of jobs, but the very nature of the Renewable Energy Target is that it produces zero emissions electricity. But it’s not free and it’s not necessarily cheap.
MARIUS BENSON:
A question to end on another topic – the iron ore inquiry proposal from Twiggy Forrest has been much discussed this morning. It will go to Cabinet, you will be part of that Cabinet discussion. What’s your view on whether there should or should not be an inquiry into iron ore prices?
GREG HUNT:
Look, I think we have an extremely competitive and indeed the world’s best iron ore sector. If there are ways that can help improve its competition and improve its effectiveness even further, I don’t think any of us should be afraid of that. None of us should ever be afraid of a discussion which looks at how we add to and enhance our existing industries.
MARIUS BENSON:
So you’re in favour of an inquiry into the industry then, from what you’re saying there?
GREG HUNT:
Look, I never want to pre-empt a Cabinet discussion or pre-empt words with my colleagues, but as a general principle, if you can improve efficiency, if you can provide a pathway to reduce any bureaucratic impediments, then that can’t be anything other than a good thing.
MARIUS BENSON:
Greg Hunt, thank you very much.
GREG HUNT:
Thanks Marius.
(ENDS)