Thank you all for coming back after lunch. Many of you also probably missed out on quite a bit of sleep last night watching the cricket. Can I say that I, for one, am pretty much done with unexpected victories this year. I’ve had more than my fill for one year.
You’ve had a great series of panels and people who are so much better informed than I am about this extraordinary transition in the transport sector. So, I’m not going to talk about what’s happening in the industry in any technical sense or even really the detail of policy, although I’m happy to take questions on that.
I thought what I’d do is try to discuss my view at least about the politics of transport, and particularly the politics of emission standards and the transition to electric vehicles. How is it that transport in a relatively short space of time shifted right to the front line of the climate wars - a front line that had previously been exclusively occupied by the coal-versus-renewables debate. Now, history records that - in the longer term at least - the establishment of second fronts doesn’t tend to end well. But certainly in the shorter term, for those interested in climate policy, we do have a very serious challenge ahead of us.
In the lead in to the 2016 election, things were pretty quiet on transport. We’d all received the Climate Change Authority’s report in June 2014, essentially recommending that we adopt the Obama/US standards on light passenger vehicle emissions. Labor took that as a policy to the 2016 election. Abbott and then Turnbull had been very quiet about the Climate Change Authority’s report and really nothing much was said, that I can remember at least, in the 2016 election around transport. There was fury around electricity, but nothing much about transport.
The seeds of what we saw in this year’s election campaign around transport and EVs in particular were sown, I think, by Malcolm Turnbull’s National Press Club speech at the beginning of 2017. There’s a tradition that the Prime Minister and the Leader of the Opposition will do a Press Club speech to map out their ambitions, their hopes for the coming year. And you might remember that the then Turnbull Government leaked, or strategically dropped, stories to the newspapers that Mr Turnbull would be announcing in his Press Club address the adoption of the Climate Change Authority car standards. So, as he came to deliver his speech, we were eagerly anticipating a platform for a bi-partisan position on emission standards. Instead, rather surprisingly, he decided to announce an offer to partner with any businesses interested in building new coal-fired power stations, which was sort of weird because no-one had indicated any interest. That offer was met by the sound of crickets, until Clive Palmer said, ‘Yeah, I’ll partner with you, once I’ve finished building Titanic II, my other great idea about Australia’s future.’ And it all went from there.
The Daily Telegraph, when it was leaked that the government might be considering the US emissions standards for Australian light passenger vehicles, splashed on their front page, “CARbon Tax”. And, from there, a very strong push emerged from the right-wing of the Coalition party room against any sort of intervention into the transport market that might be climate-related.
To his credit, Josh Frydenberg, who was the then Energy Minister, tried to push the reset button in the beginning of 2018 with a Fairfax op-ed titled something like ‘Standby, the electric car revolution is nigh’ and trumpeting the fact that there might be as many as 1 million electric vehicles on Australian roads by 2030. But again, there was very quick push-back from the hard-right within the Coalition party room, particularly Barnaby Joyce, who by then had become the Transport Minister and canned the government’s own idea of conducting a bi-partisan inquiry into road user charging; an obviously important policy in the longer term given the degree to which we rely on fuel excise for the funding of roads. In a very typical Barnaby way, he injected a whole lot of other hyperbole to the debate; for example, the dangers inherent in electric vehicles because kangaroos will crush them too easily, killing a whole lot of unsuspecting motorists.
Not to be outdone was Barry O'Sullivan, who has now gone to political pasture, but was then the Chair of the Senate Transport Committee and said, with a straight face, ‘I would rather die in a ditch than drive an electric vehicle’, which seemed to me a bit of an over-reaction to electric vehicles and an undervaluing of his own life. It was quite clear that the Right in the Coalition party room was very much, by this stage, on the march.
Despite all this heat and fury within the Coalition party room, Government officials were still working on a policy that assumed something like 25-50% of new car sales being electric by 2030. So, there was something of a dissonance between what Government officials were doing in the back rooms of Canberra offices and what, particularly, the Right within the Coalition party room was doing to try and drum up a climate war around transport regulation.
Even the new Energy Minister by the end of 2018, Angus Taylor, issued a media release, as he’s done again today, trumpeting some ARENA funding for ultra-fast chargers that he said would charge a car up to 400km of travel in as little as 15 minutes. So it was a bit hard to tell where the Government was going come the end of 2018.
While this internal battle seemed to be raging within the Coalition, we in the Labor party just got on with the job of trying to prepare our climate policies across the economy, particularly including in transport. And for me, as the person leading that policy development processes, there was a world of difference between the period leading into 2016 and leading into this election.
When I talked to people in the lead-in to 2016 about what a Commonwealth Government might usefully do to stimulate the uptake of electric vehicles, I was met largely with blank stares, I have to say. Some people suggested we could get rid of the luxury car tax on electric vehicles entirely, which I responded was not a particularly great Labor thing to do. But, tee wasn’t much else on offer.
By the time I came to start engaging with stakeholders, along with Albo, the Shadow Transport Minister at the time, in the lead-in to 2019, it was clear to me that things had shifted dramatically. We’d had the EV council commissioned here. Overseas, there had been a number of nations that had announced phase-out dates for internal combustion engines, which had meant the global car industry had essentially lifted their multi, multi-billion dollar R&D budget from petrol and diesel engines to electric vehicles, whether they were battery vehicles or hydrogen vehicles.
A whole bunch of other organisations here, ClimateWorks, Bloomberg, many others, and obviously RenewEconomy by launching Driven, started to stimulate not just a great public debate, but extraordinary policy detail that we could draw on shamelessly - really good policy detail drawing on all of the substantial things that were happening around the world.
Of course, as you know way better than me, there is a whole range of really compelling reasons why you would support this transition. While we start to see some progress in the electricity sector, though not to the extent we’d like, transport emissions just continue to climb. They’re the fastest growing area of emissions in our economy. In my state of South Australia, which has obviously cut its emissions in the electricity sector quite deeply, transport is now by a long way the biggest source of emissions - I think last time I looked as much as 35 per cent of South Australia’s emissions. So it is, from a climate policy perspective, utterly essential that we find a way to drive down emissions and I think you’ve heard that message already today.
But also we have the poorest energy efficiency of any land transport sector in the OECD and we’re falling further and further behind the pack, given that every other OECD nation has, at the very least, emission standards, and most a range of other policies - not only to drive down emissions, but also to improve fuel efficiency and drive down fuel bills for consumers.
Turnbull Government modelling showed that by not just adopting the US emission standards, we are costing motorists about $500 every year because we drive such gas-guzzling cars. So, from an economic productivity point of view there’s a very strong reason to do this. Connected to that is the fact that we are sending 16 billion Australian dollars overseas every year for fuel imports that we should be starting to reduce, and ultimately get rid of altogether, not only from a fuel security point of view, but obviously also to remove such a large economic drag.
There are other reasons; air quality is, we know, a driver of more deaths in Australia than road traffic accidents, as is the case in most developed countries. But still we can’t have a serious discussion about our fuel quality here. We rank 70th in the world in fuel quality. Only Mexico in the OECD has dirtier fuel than us, and in parts of Australia like Melbourne for example, which is still dependent upon domestically refined fuel, people walking the streets are breathing in twice as much sulphur as they are in Sydney, because Sydney uses imported fuel that’s much cleaner because it’s being refined in places like South Korea and Singapore and so on, to much stronger sulphur standards. So there’s a great public health argument for us to be doing that.
But I think the most compelling reason why we should be finding policy to drive this transition, to support and accelerate this transition, is we have no choice. We are a technology-taker, particularly since we destroyed car manufacturing in the country under Tony Abbott’s prime ministership.
The car industry has moved; it’s not moving, the industry HAS moved. Australian consumers have become used to having the broadest possible choice of models available in the world. We have more models of cars available in our showrooms than Americans do, and if we want to continue to have that level of choice as motorists we’re going to have to recognise the reality that the global car industry is starting to shift to electric vehicles. Now, Barnaby might think that we can just pull our cardigans over our head and stick to our petrol and diesel cars, but in ten years’ time we’ll be like Cuba, just doing up our 2017 Commodores because the rest of the world is not making petrol and diesel cars to sell to us anymore. I think consumers actually want us to keep that level of choice as well as doing all those other things that I think are really important.
Now, in 2017 and 2018 we heard some pretty stupid things from some hard-right politicians and the media in this space. But, in the 2019 election campaign they completely jumped the shark, (for Happy Days fans here), they completely jumped the shark - from the Prime Minister down. The Prime Minister accused us of threatening the “Aussie weekend”. Michaelia Cash, who frankly had not been sighted in the media for months, popped up and committed to “saving our tradies’ utes”, because apparently no car company is looking to make an electric ute over the next decade, which is news to them I’m sure.
Angus Taylor accused us of putting in place a “housing tax”, and apparently forgot the fact that he had trumpeted these new ultra-fast chargers that can charge 400 kilometres of range in as little as 15 minutes - saying instead that it would take hours and hours and hours to charge these electric vehicles we were trying to foist upon Australian motorists. He was also caught out posting that famous Top Gear video that you might remember where Top Gear was exposed as having deliberately run down a battery so that it could portray an EV as having a much shorter range than the car actually did.
But it wasn’t just the hard-right - self-styled moderates in the Liberal Party jumped on the bandwagon as well. Dave Sharma, who professes to be a Modern Liberal here in Wentworth likened our 2030 target to Soviet style politics and said “I don’t want to see us become like the Soviet Union”. Well I’d agree with him, I don’t particularly want us to become like the Soviet Union either. And he added “electric cars might be made obsolete by autonomous vehicles” which sort of puzzled me because I didn’t think that a shift to autonomous vehicles meant that we were going to return to petrol and diesel.
Even the voice of economic reason in the government, Mathias Cormann, who usually is relatively sensible about these things, used a piece of economic analysis that I didn’t really follow. He said “I happen to think that Brussels sprouts is an amazing food, but I’m not proposing a law that 50% of all food that Australians consume must be Brussels sprouts.” I think he was referring to our EV target there but I’m not quite sure. And I’m not even going to go to Andrew Bolt or Alan Jones or any of the really hard-right commentators who jumped all over our policy.
You’ll be pleased, and I hope not surprised, to understand that I didn’t get in a room with a blank sheet of paper and write this policy myself. It followed very deep engagement with stakeholders and with industry. Although I think it was ambitious, when you set it against where the global car industry is heading I don’t think it was a particularly remarkable policy. We focused on the fleet sector and I think that reflects the nature of our market and the nature of some of the policy tools that we had in the kit. I think that was a very sensible thing to do, to essentially target a sector that makes up 50% of new sales every year, and to stimulate a second-hand market at the same time. Other details I think were relatively unremarkable; targets were politically contentious, but if you look at North America, Europe, Asia, are pretty orthodox policy tools in this area.
I think it was also consistent, broadly, with where public opinion sits. Galaxy Polling during the election campaign showed that as many as 62% of voters either supported our target, the 50% target by 2030, or thought it should be stronger; and as many as 64% of soft voters took that view. But it is clear in all the research that, among consumers, there is a concern about both cost and about range. And what the campaign showed, perhaps surprisingly in its ferocity, is that the hard-right in the media and in politics was willing to milk that concern quite mercilessly.
Which brings me in summary to where we find ourselves now. From here I think it’s a pretty long, hard road. In electricity, with a Federal Government stepping back from the plate if you like, there is the ability for State Governments to do something in the that space as you see for example in Victoria, Queensland, and I hope ultimately you’ll see here in New South Wales. It’s a little bit harder to have good policy put in place when the Commonwealth Government has decided to vacate the field in transport. And the government from the Prime Minister down dug themselves in pretty hard in this area - to the point where it’s difficult to see how they’re going to be able to climb out of this quickly without sparking another internal struggle within the Coalition party room.
On emission standards they endorsed some utterly ridiculous modelling, suggesting a $5,000 up-front cost to adopt the US emission standards -completely at odds with local modelling and modelling in the US for example. And on EVs, well it’s hard to walk away from a hand on heart commitment in an election to protect the Aussie weekend. So, it’s hard to see how the government is going to pulls themselves easily away from some of the rhetoric and the hyperbole that you saw in the campaign. Sure, there is a policy promised for next year, but I can’t see how that policy is going to have much meat on it beyond technical stuff like addressing plugs and standards for charging infrastructure and such like.
But ultimately, this transition is unstoppable. The Commonwealth Government can slow it down and make it much harder for consumers to get the maximum benefit out of the transition, but this transition is ultimately unstoppable. In the Labor Party, as you might have seen and heard, across the policy spectrum, we are obviously going through a pretty substantial review of policy detail. But, we are very keen to remain engaged in this area and make sure that we can play a role in ensuring that consumers get the maximum benefit from the EV revolution, because it is truly a revolution.
Thank you very much.