Karvelas interview 22/01/2017

January 22, 2017





PATRICIA KARVELAS: My second guest tonight is Labor’s Shadow Minister for Climate Change and Energy Mark Butler. Mark Butler welcome to the program.


KARVELAS: I’m really well. Firstly on Labor’s renewable energy target, you’ve said you’ve kept an open mind on how the target will be implemented but the problem with that is that it provides no certainty. Doesn’t the voting public deserve more detail on how you will actually achieve it?

BUTLER: What we did say in our 2016 policy that we took to the election last year is that the centrepiece of our policy and our plan to modernise Australia’s electricity system would be what is called an emissions intensity scheme. This was a scheme recommended by the Energy Markets Commission, which runs our national electricity market, and is also supported by the Chief Scientist, by the Climate Change Authority, by the industry itself, and by all State Governments Labor and Liberal alike. Now we had a very brief glimmer of hope in December when Josh Frydenberg said that the government itself might adopt that sort of scheme but after some rumblings from Cory Bernardi, Tony Abbott and some others in the hard right of the Liberal party, Malcolm Turnbull overrode Josh Frydenberg and said there would not be a consideration of this emissions intensity scheme. Now this is a scheme that is utterly critical to sending a long-term price and investment signal to the industry that needs to undertake a very serious piece of work to renew our electricity infrastructure, because three quarters of it we’re told by AGL, the biggest power company in the country, three quarters of our existing coal and gas fired generators are already operating beyond their design life. There is a critical need to start renewing it and at the moment given the utter vacuum in energy policy at a federal level you see real chaos, a real lack of investor certainty, reliability concerns and rising prices which is exactly what the Energy Markets Commission said would happen if an emissions intensity scheme was not adopted. So from Labor’s point of view that is the critical foundation for modernising our electricity scheme and it will drive a very strong price signal in favour of renewable energy and gas-fired power as well.

KARVELAS: Alcoa’s aluminium plan in Portland, Victoria; we obviously had the announcement of its rescue on Friday. Are you happy to see it keep running even if it does mean continuing to use brown coal-fired power effectively now below market rates? That seems like an inherent contradiction to your broader climate agenda?

BUTLER: We do want to see aluminium continue to be made in Australia it’s been an important part of our industrial base since about 1948 when the first smelter was built in Australia and it should be part of our future industrial capability as well. Strategically, it is a very important part of industry policy but also it has a whole lot of downstream impacts as well which are important not just for the Portland regional economy. But the carbon footprint if you like, the carbon impact from aluminium as you point out now Patricia is essentially one of electricity consumption. They don’t have the direct emissions you have from steelmaking for example, it is a question of what sort of electricity you are generating. So obviously I think it is going to be in the medium-long term interest of the country for companies like Alcoa in Portland and other heavy manufacturing operations around the country to start using cleaner power than they perhaps were intended to use when a lot of these smelters were built in the 1980s, including Portland. That really goes to the point I was just making earlier, we need an energy plan, we need a clear sense of direction from the Federal Government about how we are going to renew our electricity infrastructure because it is simply getting too old, and how we are going to do that in a way that aligns with our climate change commitments that the country has made in Paris in 2015.

KARVELAS: Sure but if you look at the Alcoa deal that was announced, the bail out of federal state and the deal itself. Doesn’t it show that big emitting industries are getting effectively better, different treatment? Doesn’t it particularly inevitably mean that others will have to pay more to get to this 50 per cent target that you have because the other industries are being cushioned?

BUTLER: Well no I don’t accept that. The only reason that Australian consumers are going to have to pay more as we think about renewing our electricity infrastructure is if there is a lack of a plan that you see currently under the Turnbull Government. You don’t have to ask my advice on that. Danny Price, who was Malcolm Turnbull’s former energy adviser, and the Energy Markets Commission itself said that before Christmas a failure to adopt an emissions intensity scheme which would smooth that pathway to modernisation or renewing our electricity infrastructure, that failure will lead to power prices being $15 billion higher over the next decade than they would otherwise be. There is a clear danger that all Australian consumers have whether they're households big businesses or small businesses, but that danger really lies in the complete lack of an energy modernisation plan under this Government.

KARVELAS: You heard my interview with Arthur Sinodinis, I asked him if he was a liability for the Government because Labor had particularly his ICAC testimony and his further elevation in this reshuffle. He says it is because he is an effective minister, is that right?

BUTLER: Well that remains to be seen. This is the third Industry Minister we’ve seen in 12 months I think at a critically important time for industry policy in this country. There is real chaos at a Federal Government level and I hope Arthur will be judged on what he contributes to industry policy. Because what we’ve seen really over the last three years as Tony Abbott took power in late 2013 is a real shambles in terms of industry policy. We saw what is really the greatest act of vandalism to our industrial base, certainly in living memory if not in Australian history, when this Government chased the car industry out of Australia. In South Australia you’ll see at the very least 10,000 jobs go over the next 12 months because of that and 30,000 in Victoria. There is likely to be tens of thousands of downstream jobs impacted as well because of that decision. So we support the Government getting involved in the Alcoa rescue package, a package that was really driven by the State Labor Government in Victoria but beyond that you’ve seen real chaos in industry policy. The steel maker Arrium in Whyalla here in South Australia, which has only over the last few days had to cut work for the workers up there because of the continued dumping of low priced steel by Chinese manufacturers. We’ve heard this Government over a range of different industry ministers talk the big talk about anti-dumping measures. But because of the chaos, and the constant change of Industry Ministers we’ve seen nothing serious done about dumping that would protect a strategically critical industry like steel making.

KARVELAS: Mark Butler thank you so much for your time and we’ll talk I suppose many times over this very intense political year we are about to see. Thank you so much. 

BUTLER: Look forward to it, see you Patricia.