Interview - 2SM Sydney Breakfast

Richard King
Scott Morrison’s secret portfolio roles; ACCC gas inquiry; Increasing energy prices; Australian gas supply; Industry energy consumption

Richard King: Well, power to the people and it’s costing us more and more. As many of you who have received an electricity or a gas bill recently know, it’s on the up, and that’s something that my next guest is concerned about, the Assistant Minister for Trade and Manufacturing, Senator Tim Ayres, who was in my neck of the woods yesterday and he’s on the line. Good morning, Senator. 

Tim Ayres, Assistant Minister for Trade and Assistant Minister for Manufacturing: Good morning, Richard. It’s really good to be on the show again.

Richard King: Yes, yes. Nice to – look, I can’t ignore the current issue about the former Prime Minister swearing himself into multiple portfolios. I read an email from one of our listeners a moment ago and I’ll quote it again. “I’m so over this lousy Labor Government. Albanese on a witch hunt. All a smokescreen as they have no idea how to fix the economy.” Do you think this is a smokescreen or we should be genuinely concerned about what happened a couple of years ago? 

Assistant Minister for Trade and Manufacturing: Well, it doesn’t – it doesn’t sound like he regularly votes for us, your correspondent, but this is a very serious issue. We knew that the previous Prime Minister was secretive and trashed the normal conventions of government, but this is absolutely extraordinary. He secretly swore himself in as a Minister, repeated times; we’re told four or five times. It’s a complete trashing of all of the democratic conventions. If you care about democracy, you should care about this. If you care about protecting our institutions and the way our democratic governance functions, you should care about this. 
As Malcolm Turnbull said last night, a basic function of democracy is transparency, and he said that people should know who their Ministers are. And I’d be very interested to see if there’s any explanation at all that can be offered. You know, for a bloke who allowed conspiracy theorists to profit on his back benches, this bloke, Mr Morrison was a walking self starting conspiracy theory himself.

Richard King: Look, Malcolm Turnbull on 7.30 on ABC TV last night said he was extremely surprised that the Governor General got embroiled in this. Do you think there was an obligation on the part of the Governor General to make this public? 

Assistant Minister for Trade and Manufacturing: Well, as I understand it, there’s going to be an investigation that’s going to get to the bottom of all these questions. The key thing here is to make sure that we learn the lessons of what’s happened here. There will certainly be a judgment about Mr Morrison’s behaviour, but this investigation is designed to, you know, get to the bottom of these questions so that we can make sure that we protect our democracy into the future. There should be nobody, whether they vote Liberal or Labor or National, or for anybody at all in Australia, who should think this is okay what Mr Morrison did. It’s not okay. It’s very damaging. And you can be pretty sure that when people do things in secret, they’ve got something to hide.

Richard King: Nineteen past 7. My guest is Senator Tim Ayres, the Assistant Minister for Trade and Manufacturing, who was in my neck of the woods yesterday afternoon. Look, as I understand it, we are the world’s largest seaborne exporter of liquefied natural gas. We have lots of it here. So, why is the price going up if we have so much of it, Senator? 

Assistant Minister for Trade and Manufacturing: Well, you’re right, Richard. We are the world’s largest exporter of seaborne liquefied natural gas. The ACCC report indicates that there’s plenty of uncontracted gas out there, so it’s not just that the gas exporters are exporting Australian gas that’s contracted overseas. They are exporting gas onto the market that hasn’t yet been contracted. That means that there should be – there should be sufficient gas for Australian households and Australian industry. The big spike in prices is, of course, being driven by what’s happening in Ukraine with Russia’s illegal and unjustifiable invasion of Ukraine. That is a – [indistinct]  – going past me, mate.

Richard King: Yes. 

Assistant Minister for Trade and Manufacturing: That is putting up prices significantly around the world, but the big crisis for Australian industry is a crisis of supply and a price, and we can’t afford to have, you know, manufacturers who use gas as a key part of their feedstock being put under this pressure.

Richard King: Right. Well, look they have a reservation policy over in Western Australia. As I understand it, they have to reserve 15 per cent of all their production for local consumption. We don’t have that on the eastern seaboard, but you’re against that reservation policy for the eastern seaboard. 

Assistant Minister for Trade and Manufacturing: Well, the time for that kind of policy is at the outset, of course, when the contracts are being established with these gas companies. You know, these gas companies are mining Australian gas. It is an Australian resource. I understand the argument for gas reservation, but the time for that argument has passed us by. Right now, the Government is focused on three tracks, essentially, to drive this down. One is the existing albeit imperfect mechanism that the Morrison and Turnbull Governments have left us with. That’s the gas supply mechanism, and that’s been activated. It takes a long time to activate. It takes six months to work through, mandated in the legislation. Secondly – so, we’ll see what we can do with that. 

But secondly – secondly we have a reform program where we’re going to have a look at this supply mechanism and examine what are the kinds of reforms that could make it more active, more responsive to Australian industry – Australian industry’s needs and the needs of households? 

And the third thing is while all this is going on I just call upon the gas industry, think about your responsibility here, consider your social licence, think about what ordinary Australian households whose gas it is that you’re extracting expect you to do to secure the needs of industry and households and set about making sure that you deliver it in a reasonable way. There is no reason why Australia can’t be a responsible exporter of gas to the world to meet the world’s energy needs, particularly as this crisis in Ukraine unfolds, but we can also be an effective, efficient producer and manufacturer in Australia with low energy prices. And the gas industry should be pulling in the same direction as the rest of us.

Richard King: Okay. Is it right to say that all our major gas producers are foreign owned companies? 

Assistant Minister for Trade and Manufacturing: I think that’s largely right. You know, there is a lot of these gas projects require foreign investment to get off the ground. You know, that’s a feature of the global energy market everywhere.

Richard King: Right. Back to Scott Morrison, when he was PM, he unbeknownst to the rest of us made himself a joint Resources Minister. We know Keith Pitt was quite happy about giving approval to PEP 11 and certainly in my neck of the woods and down the east coast, the Central Coast and Sydney as well, this PEP 11, the Petroleum Exploration Permit No.11 for gas offshore, the Prime Minister, in fact, I spoke to him and he said no, he thought it should be canned. Well, we didn’t know that he was also the joint Resources Minister. Keith Pitt, I spoke to, and Angus Taylor. I don’t think they were happy about canning PEP 11. Do you think that that was maybe a bad move on the part of the Government of the day, canning that PEP 11? You think we should be looking for more gas? 

Assistant Minister for Trade and Manufacturing: Well, there’s two separate issues here, Richard. One is the Prime Minister’s behaviour. The fact that this was done while there was multiple Energy Ministers and multiple Resource Ministers, unbeknownst to everybody else, including the Ministers themselves, is an utter scandal. On the broader question of future gas exploration, it really, in my view, is just disconnected with the issue that we’re talking about. All of these projects will live or die depending upon, you know, whether the economics stack up and whether they get the requisite environmental approvals. You know, and we’re taking the environmental approval process very seriously. But, even with the best will in the world, these projects would not have gas on stream after five or 10 or 15 years. We have a gas price and supply problem today. You know, none of these issues will assist us to resolve, you know, the crisis for Australian industry today. And it is an industry that’s working really hard to come up – to come to grips with the requirement to make their production processes more efficient, to lower the cost of energy. You know, Comsteel itself, very significant investments in renewable energy, they’re striving down, you know, putting downward energy on their energy prices. You know, these are companies that they, you know, they are resilient, effective, competitive companies that are just under pressure today because of spikes in gas prices. You know, Comsteel’s been around – it’s hard to believe, Richard, but it’s been around Newcastle for longer than you – even longer for you!

Richard King: That’s right! 

Assistant Minister for Trade and Manufacturing: It’s a resilient business. It’s the only manufacturer of grinding balls and railway wheels in the country. It’s got an innovative, effective, flexible workforce. It’s got a management that works really hard to cooperate with its workers. It’s a strong Hunter Valley business, and it’s working its way through this crisis. But what it doesn’t need – what it doesn’t need, is unfair, unjustifiable spikes in gas prices and challenges in supply. We should be pushing Australian industry forward, building the manufacturing industries of the future, and this problem – there’s one way of resolving this, and this is by Australians pulling together, the gas industry, the Government and industry, and fixing the problem.

Richard King: Thank you very much for your time this morning, Senator. Good to talk to you, and I hope you enjoy the rest of your Tuesday. 

Assistant Minister for Trade and Manufacturing: Good on you, mate. Catch you soon.

Richard King: Thank you. Thank you, Assistant Trade and Manufacturing Minister Senator Tim Ayres. He was in my neck of the woods.