E&OE….
Topics: Renewable Energy Target, Iron Ore inquiry, Federal Budget
PATRICIA KARVELAS:
A deal on the long awaited agreement on the Renewable Energy Target has finally been struck. The Coalition and Labor have agreed to a target of 33,000 gigawatt hours of electricity to come from renewable sources by 2020. Legislation could be tabled in Parliament next week, but Labor says it will not vote for the bill that includes burning native wood waste.
We’re now joined by the Environment Minister Greg Hunt, welcome to Drive.
GREG HUNT:
And good evening to you Patricia.
PATRICIA KARVELAS:
First time you’ve come on Drive while I’ve been a presenter.
GREG HUNT:
I think that’s right. Congratulations on the new gig.
PATRICIA KARVELAS:
Let’s get to this business. Why has it taken so long to do a deal on this?
GREG HUNT:
Well, it did take the ALP pretty much a year to put any figure on the table. We have tried to negotiate constructively in that time and this is the sixth major piece of environmental legislation that it now appears we’re likely to get through, so that will have been three agreements with the crossbenchers, two with the ALP, presuming this passes, and one with the Greens. So my approach is to be focused, patient, but we you’ve got to be persistent. What does it mean…
PATRICIA KARVELAS:
But it does take two sides to do a deal.
GREG HUNT:
Absolutely it does and there’s only one side on the field previously.
PATRICIA KARVELAS:
So you don’t take any responsibility for how long this has taken?
GREG HUNT:
Look, to be frank I don’t think on a day where we struck the agreement it is especially constructive to try to level blame. What I care about is that we’ve reached an agreement which for the general public represents about 23.5%, not the long talked about 20% renewable energy.
So that’s a good target, it means that the small scale or household solar, everything up to what’s known as 100 kilowatts remains completely unchanged, and the large scale we’re looking at a near doubling of installation, so that will be a challenge for the industry. The Clean Energy Council and the Government’s Clean Energy Regulator say they can achieve that.
So it’s their job now to get cracking. The small scale solar producers have an additional incentive under the $20,000 instant asset write-off that was announced in the Budget. So I think it’s a positive time, but we’ve done it in a way which protects consumers.
PATRICIA KARVELAS:
On RN Drive my guest is the Environment Minister Greg Hunt, our number is 0418 226 576 if you’d like to text us your views on this deal on the RET, what does it mean to you, do you think it’s taken too long, perhaps you disagree.
Labor says it won’t support a bill that includes burning native wood waste. So we’ve heard that a deal’s been done, but actually, they have made it quite clear that they won’t support this component of the bill. Do you have enough support amongst the Senate crossbenchers to get this bill through without Labor or the Greens?
GREG HUNT:
Well, in the end I think we will get bipartisan support through the Senate. I think the ALP’s position, as I understand it, is that they don’t support that component. If, however, they are not successful in removing that in the Senate and I am quite hopeful that it will pass through the Senate processes intact, then my belief and understanding is that they certainly wouldn’t drop bipartisanship over that particular component or issue.
In other words, they’d seek to remove it in government, but they wouldn’t seek to block the legislation. Let me also address the issue, this is the ALP’s own provision which was in their original legislation…
PATRICIA KARVELAS:
But they have since…
GREG HUNT:
Something the Climate Change Authority has recommended, is something that happens in Europe…
PATRICIA KARVELAS:
But they since dumped it, didn’t they?
GREG HUNT:
And that is true, they have.
PATRICIA KARVELAS:
It is true. So you’re talking about their original proposal but they moved away from it.
GREG HUNT:
They are the ones that had it in their legislation. And for the public it’s about if you’ve got wood waste on the ground which would otherwise rot and create methane or be burnt and create CO2, why wouldn’t you use that to reduce the emissions that would occur in the normal course of events.
So it actually reduces emissions – it happens in Europe, the Climate Change Authority recommended that it be reinstated, it was the ALP’s own legislation and I’m very confident that we’ll get this legislation through. There’s good bipartisan spirit between the two parties.
PATRICIA KARVELAS:
Explain exactly what will happen with native wood waste with your proposed bill, what’s considered waste?
GREG HUNT:
So waste is effectively the off cuts, the by-products. I spoke of existing processes. I spoke with the CEO of the Australian Forest Products Association today. His view, and their policy, was that no forest need be touched over and above what’s already occurring.
So, in other words, it’s pure waste which would sit on the floor of the forest, rot and create methane or be burnt, so instead of just wasting it let’s use it, reduce emissions and, in any event it’s a very minor component of the Renewable Energy Target, but better to make use of something which would otherwise rot and create methane.
PATRICIA KARVELAS:
My guest on RN Drive is Environment Minister, Greg Hunt. Two yearly reviews have been dropped as well.
GREG HUNT:
Correct.
PATRICIA KARVELAS:
Why did you want such reviews in the first place? Because Labor’s argument is they had a deal that there’d be no reviews then you put it back in, why did you jump around on this issue? I’m not sure it makes sense to me.
GREG HUNT:
This is an existing provision that again the ALP and the Greens specifically introduced into the legislation, so it was their provision currently in the legislation. We presumed that it would be absolutely fine that they continued with their own provision.
They’ve decided that obviously they got it wrong. In the end we were happy to be flexible and we found a better way of providing, certainly with everybody, with the Clean Energy Regulator, that’s the Government’s regulator…
PATRICIA KARVELAS:
And that’s for annual statements?
GREG HUNT:
…providing an update – an annual statement or update to the Parliament on progress towards the Target and electricity price implications.
PATRICIA KARVELAS:
What will be in the reports? I understand there’ll be further discussions, what do you think should be in the reports?
GREG HUNT:
Well, there are two basic pillars to what goes into the report. One is the progress towards the Target, the second is any electricity price implications, and what it does is it allows us in almost real time to monitor progress. I’m very confident that we’ll achieve precisely what we’ve set out to do.
And it’s quite interesting – I have to say the person who came up with the solution was the Prime Minister himself in a discussion with Ian Macfarlane and myself on Thursday night. He said, well, look if these reviews are such an issue for the ALP, what we’re really after is transparency and advice to the public and consumers, why don’t we do an annual report and we looked at each other and said done.
PATRICIA KARVELAS:
And the ALP took the option up immediately?
GREG HUNT:
Yes, yes, we had discussions with the Clean Energy Council which is the primary or peak body for the renewable sector over the weekend. We also had some soundings with the ALP. Mark Butler and I spoke and we’ve worked pretty well together on this – obviously, we’ll have plenty of disagreements.
But a lot more work happens across the lines in Parliament than people may recognise and then we inked the deal as it were today with myself and Ian Macfarlane and Mark Butler and Gary Gray on the telephone. So a good outcome and look, all credit to the PM for proposing the solution.
PATRICIA KARVELAS:
On iron ore pricing, do you think a government inquiry’s a good idea?
GREG HUNT:
Look, I think it’s a very reasonable thing to do and nobody need to have any fear presuming everything is going accordingly. I obviously wouldn’t want to pre-empt a decision and I wouldn’t want to pre-empt an outcome if there were a review, but it’s a healthy thing to have a review of different industries at different times.
PATRICIA KARVELAS:
We know there are differences of opinion here in the Coalition, doesn’t it indicate that this is best left to the ACCC?
GREG HUNT:
Look, there are different roles. The ACCC is of course focused on pure predatory pricing issues. The law and the letter of the Act – a parliamentary inquiry also allows us to look at long term government policy settings. So it’s the option on the table, but clearly the Prime Minister has indicated a desire to head down that path, so you would presume that’s precisely where we are heading and there’s very broad support for that – the details need to be worked through.
PATRICIA KARVELAS:
Are there any concerns though, I mean what’s the message to our trading partners for instance if we have a government inquiry in this area. There are genuine concerns around how this would look internationally.
GREG HUNT:
I wouldn’t accept that for a nanosecond and the reason why is what we’re doing is reaffirming that commitment to a totally free and open trading system, that’s what we really want to see. And look, I suspect that everybody who’s committed to a free and open trading system would be supportive of it and assuming and presuming that all of the players are practising that then nobody need to have anything to worry about.
But at a time when we’ve had a collapse in iron ore prices I think there’s a lot of opportunity for everybody to look at questions of are there things that governments can do in the policy space to remove regulatory barriers which may be prohibiting or preventing efficiencies, to look at a whole range of things which can improve competition and efficiency in the Australian marketplace.
PATRICIA KARVELAS:
Let’s talk about the Budget, new polls today show it’s gone down well. What does that say about long term reform? You’re elected to government saying you’re going to cut spending, that you’re going to bring the budget under control. There was the debt and deficit story, and there was a story about living beyond our means, the era of entitlement.
Given this budget spent a lot more, as many people have commented, it looked more like a Wayne Swan style Budget with its spending spree, particularly, you know, really stimulating the economy. Does this say, you know, you’ve kind of given up, I mean, given – it’s obviously popular to spend money, is this just what you’re going to keep doing?
GREG HUNT:
Look, I respectfully but categorically reject a lot of the presumptions in that question.
PATRICIA KARVELAS:
A lot of – which ones don’t you?
GREG HUNT:
Well, the first one is that we are contributing to the ability of people to invest their own money which is the instant asset write-off in the small business package. What we’re doing there is not handing out money, we’re contributing to the ability of people to invest their own money in growing their own businesses and that is a core, fundamental, Liberal principle.
The second core, fundamental Liberal principle, and this is where I completely reject, respectfully, what you said, is the idea that we have to reduce deficits, which we are. What we’re seeing is we inherited a $48 billion deficit and now we go from 35 to the mid-20s to 14 to approximately $7 billion in deficit. So, in other words we are paving the way to be back to surplus and that’s incredibly important for the long term.
PATRICIA KARVELAS:
But your original story, your case, was a lot more ambitious than that. Do you concede that you’ve changed your story significantly.
GREG HUNT:
No, I would look at it the other way. Given that there’s been a $90 billion write-down in revenues, largely off the back of the collapse in iron ore prices which we were just discussing, I think this result is extraordinary. And so when we compare it with what it would have been under the Labor Party, we’re dramatically better off over both the four and the ten years.
But if you were to factor in the $90 billion of revenue lost and assume that they would have had to have faced that, then it’s an extraordinary outcome. So I – the changes we made last year difficult, unpopular, allowed us to have this budget, which was all about opportunity and investment.
PATRICIA KARVELAS:
Greg Hunt, do you wish this is the Budget – this year’s Budget was the Budget you had last year?
GREG HUNT:
No, because we had to do the difficult things.
PATRICIA KARVELAS:
But you didn’t’ get any of the difficult things through.
GREG HUNT:
I think you’ll find that we made dramatic changes, we halved…
PATRICIA KARVELAS:
Medicare – the GP co-payment, I could list them. You didn’t get them through.
GREG HUNT:
We halved the projected national debt burden that would have been left to our children and grandchildren in 2050, we halved that in one budget, and that was unpopular, and that was difficult, but the lesson from Mike Baird, the lesson from David Cameron, the lesson from John Key, the lesson from John Howard is, what is it that Liberal governments do?
They take long term decisions, they’re willing to take unpopularity in order to achieve outcomes which will lead to real benefits over the coming years and that is actually what people want from their parliamentarians. On any one day they might say I might not like that measure, but, boy they have the courage and the guts to take decisions that might not be popular and this year we’re reaping the benefits.
PATRICIA KARVELAS:
Greg Hunt, thanks for joining me.
GREG HUNT:
It’s a pleasure.
PATRICIA KARVELAS:
And that’s Greg Hunt, the Federal Environment Minister.
(ENDS)