Joint Press Conference at Parliament House with Prime Minister Anthony Albanese and Minister for Climate Change and Energy Chris Bowen
12.32pm | June 16, 2022
Subjects: Energy, climate change, Nationally Determined Contribution, National Cabinet meeting, healthcare funding, National Energy Market, renewables.
ANTHONY ALBANESE, PRIME MINISTER: Well, good morning. Today, the Minister for Climate Change and Energy and I have written to the Executive Secretary of the UN Framework Convention on Climate Change, Ms Patricia Espinosa, to convey Australia's enhanced 2030 Nationally Determined Contribution under the Paris Agreement. This is done. We announced last December what our policy framework would be. At that time, we released the most comprehensive modelling of any policy by any opposition since Federation. What we didn't do was set a target and then work out how to get there. What we did was work out what good policy looked like, and it happened to come out with a 43 per cent target by 2030. What businesses have been crying out for is investment certainty. The certainty they need to invest over a longer timeframe than the political cycle of three years, let alone the cycle that dominated the former Government's thinking, the 24-hour media cycle.
When we met with Rio Tinto yesterday, including the CEO, Kelly Parker, she was talking about a 20-year investment cycle for Rio there in Gladstone. We went to the alumina refinery. It's looking at being powered with renewables, with some backup, but powered by renewables and then looking at green hydrogen and what it can do to lower their emissions right down, but also to lower their costs. The thing with climate action is it's all about the short-term capital investment that's required but then you get the long-term benefit. Because the cheaper, cleaner energy flows well into the future. And that's what sets Australia up for a prosperous future. A future powered by cleaner, cheaper energy. A future in which we make more things here. A future in which we participate in the global effort to deal with the challenge of climate change but also seize the opportunity that is there from acting on climate change. When I've spoken with international leaders in the last few weeks, they have all welcomed Australia's changed position. Our changed position of 43 per cent, up by 17 to 15 per cent, from the 26 to 28 per cent target that has remained there since Tony Abbott determined it in 2015. Scott Morrison went to the Glasgow Conference last year and gave an empty speech to an empty room with no changed position. We saw a pamphlet released by a former Government rather than a policy framework and we continued to see arguments, even during the election campaign, about the science of climate change, let alone the need to act. What today demonstrated with the presence of the Australian Industry Group, the Business Council of Australia, the Australian Chamber of Commerce and Industry, the Clean Energy Council, the Australian Conservation Foundation, the Australian Council of Trade Unions and others who couldn't make it because the chair and heads of the NFF are overseas, but they support the policy as well, is an opportunity that Australia has to end the climate wars. An opportunity to reach for solutions, not arguments. An opportunity to provide the certainty going forward so we get that investment, we get the 604,000 new jobs created, five out of every six in regional Australia. We get the $52 billion of private sector investment. We get the energy market transformed, which we can see the result at the moment of the delay and the inaction of the former Government over almost a decade. We have that opportunity to move forward. We will introduce legislation when the Parliament sits in July. We don't need the legislation to be clear. It will be up to Parliament. But I hope that what happens is that people from across the spectrum have a look at not just the Government’s position that we have a clear mandate for, but have a look at, as well, the backing that is there for our position and to seize this opportunity to head Australia in the right direction. This is economic reform, it's substantial, but it will have an environmental benefit. I will ask Chris and Jenny to make some comments. And then we'll take questions.
CHRIS BOWEN, MINISTER FOR CLIMATE CHANGE & ENERGY: Thanks, Prime Minister. Today, Australia turns the climate corner. For years, the Australian Government told the world that was all too hard. Told Australians it was too hard. Told the world that Australia wasn't up to it, and wasn't up for it. Well the Albanese Government today sends a very different message. We send a message to the workers in traditional industries, in traditional energy, that we'll provide the framework for the jobs of the future, as we did yesterday in Gladstone. We'll provide the policy for manufacturing jobs, powered by clean renewable energy. We'll provide the framework for renewable energy for storage and transmission, creating hundreds of thousands of jobs across the country, and particularly in Australia's regions. We send the message to the rest of the world, to our friends and allies, that we're partners in tackling the climate emergency. We send the message to Australians that we seek to end the climate wars, as the Prime Minister said. Representatives of business and the unions, representatives of energy users and energy providers. Representatives of climate groups, representatives of groups who spend their time thinking about the economic future of Australia. Bringing those groups and bringing all Australians together. At the moment, we are facing, as you know, a very serious and challenging situation in the energy market, what some would describe, I think accurately, as a crisis setting. That makes this work more important, not less, setting the framework for the future, getting the investment going that has been so lacking, getting the policy framework working together with the states and territories to get the job done. A decade of denial and delay is a decade too long. We have drawn a line under it and we are getting on with it. That is what we were asked to do by the Australian people. That is what the Albanese Government is doing every single day.
JENNY MCALLISTER, ASSISTANT MINISTER FOR CLIMATE CHANGE & ENERGY: As the Prime Minister has said, this is an important economic reform. It is also an important strategic reform. It matters a lot to our region. But for me, it is also a democratic reform. When I speak to young people in recent years, it has broken my heart to hear that they believe that the Australian Government has failed them. That Morrison Government's failure to make any progress on ending the climate wars has imperilled their future. It is hard to think of an issue that matters more for the young people of Australia. The announcements today by my friend, the Prime Minister, by Minister Bowen, will mean so much. Young people need to know that democracy will work for them. They need to know that our system will deliver for them. They need to know that we will be a Government who has their back. Today, we lay down that marker. An Albanese Government will take climate change seriously. Under Prime Minister Albanese, we will work hand in hand with any other actor in this building, any other actor in civil society who wants to make a difference. I couldn't be prouder to be here today with both of my colleagues and being part of this immensely significant announcement.
JOURNALIST: Can I ask on the National Cabinet and also one to the Energy Minister? On National Cabinet, we heard that Annastacia Palaszczuk has called for a 50-50 split in health funding. Is this something you will consider and discuss? To Mr Bowen, can you explain simply to the average Australian what this market intervention will mean for their gas bills?
PRIME MINISTER: On the first question, there is nothing new in Annastacia Palaszczuk's call for that. There is nothing new in my response. We are meeting this evening. I look forward to working constructively with state premiers and chief ministers. We do inherit not just a decade of denial and delay when it comes to climate change, we inherit a trillion dollars of debt with not much to show for it from the former Government. That is the context in which we will consider discussions going forward. We are not in a position to do everything we would like to do immediately. What we are in a position to do, as our Government, is to do what we said we would do. We said we would do this. We are doing this. We had a number of health reforms, including urgent care clinics, more support for primary healthcare, including specific commitments that we have made, including a $750 million commitment over three years working with the AMA and others about primary healthcare and delivery of those services. I look forward to constructive discussions with the premiers and chief ministers tonight and then tomorrow.
CHRIS BOWEN: What yesterday's announcement, yesterday's invention, means it is the best chance of getting a properly functioning energy system for Australia's consumers. AEMO took a big step. When the Chief Executive said to me yesterday he felt this step was necessary, I told him the Albanese Government would support him 100 per cent. I asked him to inform the state and territory ministers impacted by the National Energy Market, and to proceed at every haste he chose to proceed at. What it means is that the National Energy Market was not working as intended. It was necessary to step in. The Government, through the AEMO and an independent action, stepped in. It will continue for not a day more or less than is necessary. It means that the operator is effectively determining the best way for Australia's energy to be generated and proceed and paid for and provided to consumers while the market simply wasn't functioning.
JOURNALIST: I preface my question by saying - limiting it to one maybe challenging, because it is about the immediate power challenges. As Opposition Leader going into the election, you said you wanted to lead a country that made things. At the moment we have challenges for our manufacturers because they can't get the electricity that they need in order to make things, aluminium being one example. Does that concern you about the scale of the immediate power shortages? And that does lead me to a question for Mr Bowen, which is what are the immediate solutions here? Is demand management really the only solution? Some people have said in the industry that fixing those coal-fired power generators is an option. Is that a near-term option or are we only looking at demand management as the immediate solution?
PRIME MINISTER: We don't want to create a precedent. But we will do the double barrel. Last one. I will answer the first part of the question. During the election campaign, I did say that I want Australia to be a country that makes things. I want a future made in Australia. And we have a range of policies to address that, including a Buy Australia plan. It is quite clear to me, and it has just been reinforced by what we have seen over recent days and weeks, that the decade of denial and delay has had real consequences. And what I think is really tragic is that our plan, including the Powering Australia plan, wasn't the first part of the policy that we announced. I announced our Rewiring the Nation plan to fix transmission in my first Budget Reply. It wasn't something that we worked up in my office or Mark Butler's office, it was something that was worked up by the Australian Energy Market Operator. Their Integrated Systems Plan outlined where the investment needed to happen. It is on their website. It has been on their website for years. I frankly thought during my period as Opposition Leader that I spoke about kicking with the wind in the fourth quarter, in part that was because I thought good ideas often get pinched. They half pinched our child care policy that we announced in that same speech. But I thought it was necessary in the national interest to advance good ideas regardless. It wasn't a secret. Kerry Schott, in charge of energy security, had been advancing and talking about this for a long period of time. We consulted extensively. We announced it, a $20 billion fund. And what happened with the Government? Nothing. Nothing, just crickets. Too busy, Angus Taylor standing up, talking about how good he is. Too busy producing letters that didn't exist to the Sydney Lord Mayor to worry about his day job. Meanwhile, that is why we are at where we are now. The tragedy of this is that the solutions have been identified by the sector itself. What we are doing is listening to the experts, as we have, we announced a policy, and we are putting this in place today. But you can't fix a decade of inaction in 10 days. What you can do is to provide that certainty going forward, whilst dealing with the immediate pressures which are there, which Chris might want to respond to.
CHRIS BOWEN: Demand management is not the only option. Indeed, it is not the best option. The best option is ensuring that energy generation occurs at the level needed. And that is what has been happening. We have been working collectively, AEMO, the Federal Government, the states and territories to avoid load shedding. So far, we have successfully avoided any blackouts and any load shedding. The New South Wales grid will be under significant pressure between 6pm and 8pm tonight. Everybody is working all day to avoid load shedding this evening. We are confident we can avoid blackouts. We will work hard to avoid load shedding. AEMO and Minister Keane have asked people nothing essential should be turned off, nothing that is necessary for heating. If you have a choice about when to run certain items, don't run them from 6-8. That is a small part of the equation. This is primarily a problem driven, many factors at play actually, but high amongst the factors is unscheduled outages of ageing coal-fired power stations. Everybody is working to fix that.
JOURNALIST: Is it fixable in the short-term?
CHRIS BOWEN: Where there is repairs necessary, absolutely. Generators are getting on with that. There have been some scheduled, which everybody knew about and factored in. And they have been accompanied by unscheduled and hence the pressure on the system. Doing all the above is what is necessary.
JOURNALIST: Picking up on that, this is the fourth night that Australians are being told to conserve their energy. We have heard a lot about there being options not on or off the table. Are there any further actions that you can take now that would alleviate that pressure? And even if we get through this period now with the cold snap, is there anything that can be done in the coming weeks that won't mean we are back here asking Australians not to turn on their power at night?
CHRIS BOWEN: What we will do is keep doing what we are doing. Gas supply mechanism triggered early. State and territory ministers convened, some short-term responses, some medium and longer-term responses, including giving AEMO the power to buy and store gas and release it where necessary, medium term. Not immediate, not long-term, coming months. We will continue to do that. Yesterday, a significant intervention, a quick intervention, as was necessary at the time, state and territory ministers being consulted quickly and AEMO acting very quickly as necessary, that sort of action will continue.
JOURNALIST: In the same realm as Clare's question to Mr Bowen, in the last few days you have been playing the whack-a-mole with a few different cascading sets of issues. You talked this morning about having a short, a medium and long-term plan. In the short-term is your job putting out the fires as they pop up, or do you see a point where there is some certainty in the future?
CHRIS BOWEN: We are doing it all. Yes, part of my job is to engage with the regulators, with the Australian Energy Regulator. I was on the phone with Clare Savage, the Australian Energy Regulator this morning and with Daniel Westerman multiple times yesterday, with state and territory ministers, as and when required. That is a key part of the job. The other part is getting on with the medium-term plan. The BCA has said navigating out of the current energy crisis and ensuring we don't find ourselves here again in a decade means we have to shift the focus to planning a smooth transition. We are doing that that the same time because we were elected to do that.
JOURNALIST: Prime Minister, National Cabinet sits tomorrow, will you give local government a seat at the table? And how differently will it look and operate under your leadership, will you give it a different name, for example?
PRIME MINISTER: We are going to have dinner tonight with the premiers and chief ministers. I will be discussing the whole range of issues, the way that the National Cabinet operates. I haven't participated in those processes up until today. I will work those things through cooperatively. That is one of the things that is on the agenda, informally tonight before we get to tomorrow's meeting is the whole way that the process functions. I have spoken to every one of the premiers and chief ministers, most of them face to face since the election. I also spoke to everyone except for the Tasmanian Premier because he is pretty new, prior to the election as well. I didn't start at zero at the beginning of the process. Part of that will be, I want to see how we can involve local government, I will discuss that with them tonight, as I will discuss the way that we progress into the future. As well as that, I have expressed my concern publicly that some of the processes of the former COAG have just disappeared. We need to lift productivity in this country. One way that we lift productivity is through micro-economic reform. And I have foreshadowed with the premiers and chief ministers that is something that I want to discuss as well, how we get that driving through of that reform, how we get better national consistency, how we remove some of the duplication which is there as well. All of that has just disappeared. And it is understandable, while the pandemic was on, that there was a concentration on that. I get that completely. As we emerge from the pandemic, we need to look at how we grow the economy stronger. I want productivity to be front and centre of that agenda. And I will be discussing that tonight, as well as, no doubt, we will have a discussion about energy tonight as well.
JOURNALIST: We are just at the start of winter, there is issues with coal and they don't seem like they can be solved immediately. The rewiring of the grid won't happen immediately either. Are you able to provide a guarantee to Australians that this winter we won't see blackouts across the east coast?
PRIME MINISTER: What we are doing is working with AEMO. We are working with the energy operators to make sure that we avoid that happening. That is why you saw the intervention yesterday, which is there. We understand that you have got to be straight with people as well. I got asked yesterday in Queensland about the Collinsville power plant plan. Millions of dollars given to the proponents of a new coal-fired power station in Collinsville that everyone knows - Josh Frydenberg as the former Treasurer said it wasn't going to happen. No-one actually thought it was going to happen. Millions of dollars of taxpayers of money was spent on something that was a mirage. What we actually need to do is do stuff that is real, that has a real impact, and be honest and straight and up-front. Because what has been occurring is because the cheapest form of new energy is clean energy, that has been where investment is going. But it hasn't been feeding into the grid because the transmission system isn't a 21st century one. Meanwhile, the ageing coal-fired power stations have been more susceptible to outages and disruption because they are old. We know that is the case. We had years of debate in the Chamber over there about Liddell. They stood up and said Liddell is going to stay open. Liddell can't stay open because of the ageing nature of that infrastructure. People, if they asked Kerry Schott, if they asked the experts who were appointed by Government, they didn't have to ask us, if they asked themselves and their experts say that was the answer that they were given. But you had politics put ahead of, and scare campaigns, put ahead of good policy and now, now we are having to deal with the consequences of that.
JOURNALIST: One of the problems with the electricity market at the moment is the lack of direct accountability by the operators to the people. Do you, or any of you, regard the privatisation of electricity assets by state and Liberal governments over the last decade as a contributor to the current mess? And in that vain, is there any benefit to be gained in the current situation, any consideration given by wielding the big stick legislation for divestment if some of these people continue to push against profitability and supply and put profit first?
PRIME MINISTER: Ownership is just one factor. The problem here is, if you go back and give a very long answer, so I won't. Part of the problem was overinvestment in poles and wires. Some of the structures that were in place, that didn't drive the investment to where it needed to go. Ownership is just one factor which is there. And I don't think it can be viewed in isolation from regulation and other matters.
JOURNALIST: This might be more directed at Chris Bowen. All 27 EU countries agreed in April to ban the import of Russian coal. So the expectation is that Australia and other coal-rich nations will be supplying the EU with coal. That is seven weeks away when it takes place on August 10. What consideration, or assurance, have you been given about having a coal reservation policy to ensure that coal exports from Australia don't rob the domestic market of the coal that we will need?
CHRIS BOWEN: I have been talking to the key energy generators who own the coal-fired power stations about their coal supplies. And it is tight, for a range of factors. There has been flooding in the coal mines and all sorts of factors going on. The sorts of policies you are talking about would have no legislative or legal basis for us to contemplate at the moment.
JOURNALIST: How can you ensure that coal will be kept for our use?
CHRIS BOWEN: We will keep doing what we are doing. At the moment, we are dealing with pressures because of coal-fired power outages. The coal market itself has been tight but it hasn't been caused by coal shortages.
JOURNALIST: It takes weeks to shift to Europe.
PRIME MINISTER: I will take three more questions.
JOURNALIST: How acceptable is it that in 2022 we have the Energy Minister asking Australians to ration their power?
PRIME MINISTER: What I understand is that we have had a decade of energy ministers, multiple, who have delayed in denial any policy change that was required. We now have an Energy Minister who is actually doing his job, unlike what Angus Taylor did, which was to run around and boast, come up with pamphlets, rather than policies, not put in place measures that resulted in the investment that was required in the right places. We now have an Energy Minister that I am proud is a part of my Government.
JOURNALIST: Just before the press conference began, 56 per cent of the national electricity market was being run by black and brown coal, 15 per cent by gas. The wind in the market was less than a third of installed capacity at 10 per cent, in SA 25 per cent and sometimes gets up to 90. Isn't part of the supply problem the fact that you cannot direct wind into the market. The only thing you can do is to keep the coal-fired generators going to their end of life and to fix the ones that you have got now and include them in the capacity market, isn’t that the short-term fix?
CHRIS BOWEN: No, that has been a long-held view of yours and it is not one I agree with. The problem is there is not enough investment in renewable energy. There hasn't been enough investment in storage. Yes, you can say the wind doesn't always blow and the sun doesn't always shine. The rain doesn't always fall either but we can store the water and we can store renewable energy if we have the investment. That investment has been lacking for the last decade. That is the problem. State and territory ministers agree that we should proceed at pace with the capacity mechanism. I asked on behalf of all energy ministers, the Energy Security Board to proceed with that work at speed. They are doing that. I am confident I will be able to get agreement of state and territory ministers for our comprehensive capacity mechanism. I will have more to say when that work is ready.
JOURNALIST: Back to David's question about the immediate term and demand management. AEMO have been signalling that now that they have taken control of the market, the volatility of having to deal with the administrative headache of dealing with power companies withdrawing their capacity from the market. For Australians watching this, we are assuming it will get easier to manage in the very near term. How much easier do you think it will get in the next 24-48 hours? And is that a ray of hope you are looking for or are we still not out of the woods yet? Because of the change and the fact that AEMO can now call in all the power that is available, they are not so worried about the economics of who is bidding and who is not?
CHRIS BOWEN: It was done for the reason that it is the best way for AEMO to manage the immediate situation. It wasn't working. It was meant to be that the bids come in and where the bids were insufficient, AEMO would react. It was too reactive and it was constantly reactive. It was the right thing for AEMO to step in and take charge. I made it clear that the Albanese Government would back the independent decision made by AEMO because it was the best way of putting consumers first, not anyone else, the needs of energy consumers first. That is AEMO's job. And that is what have done that and they will continue to do that.
PRIME MINISTER: Thanks very much.