Interview with Laura Jayes, Sky News AM Agenda

Laura Jayes
Energy Ministers Meeting; Coal and gas prices; Procurement strategy for rail stock

Laura Jayes, Host: Let's go to the Assistant Trade and Manufacturing Minister, now, Tim Ayres. Tim, I know you'd be really interested in what happens out of this energy meeting today. 

Tim Ayres, Assistant Minister for Trade and Manufacturing: G'day, Laura. 

Jayes: The Government is working on it. You're part of the Government, of course. You're looking mostly at manufacturers. There needs to be a solution here and one quickly, doesn't there? 

Assistant Minister: Well, as I've said, I think we've talked about this over the course of the last three or four months, Laura, on your program. There is an absolute need for reform here. The government acted swiftly on the supply challenge in terms of gas. There does remain these questions about price. 

I was listening to your interview with Tony Wood [Grattan Institute, Director of the Energy and Climate Change Program] before. I think he gave a pretty good overview really of the challenges that we face. There are sharp price rises that are exposing manufacturers and households to very significant, very significant cost imposts, and we've been particularly concerned about a set of those manufacturers on the east coast who rely upon gas as feedstock for their production processes. I think what you've seen over the course of this week is the government moving to bring some of these issues to a conclusion, but it does require cooperation across the Commonwealth. 

There is a shared problem here - a shared national problem - and the Government is determined to use the Cabinet processes properly to reach the right answer, but also to use the National Cabinet properly to make sure that we're cooperating with the states, acting on what is in the interests of all Australians and bringing it to a successful conclusion. 

Jayes: And do you support Annastacia Palaszczuk's super profits tax? 

Assistant Minister: Well, I think - I like the way that Tony characterised these issues, and I think what we've seen over the course of the last - you know, over the course of this year, in particular, is two dynamics. One is the war in Ukraine. Russia's illegal war in Ukraine has caused significant price spikes right around the world. This is a shared global problem. There are a series of countries around the world that are acting on these questions. Secondly, of course, it occurs against the backdrop where there hasn't been much progress in energy policy over the last decade. 

Now, the arrangements that states make in terms of royalties, in terms of their own taxation arrangements are a matter for the states. What I am focused on, and what the Government is focused on - 

Jayes: But, Mr Ayres, as we can see - 

Assistant Minister: - is reaching a solution to these - 

Jayes: Sure. But it's a matter for the states. But in this scenario is affects the whole east coast and, really, the whole of Australia, because if the Federal Government needs to compensate Queensland for royalties, well, it's not just a matter for the states, is it? 

Assistant Minister: Well, I'm not going to anticipate today on Sky, much as I would like to, what the final result of all of these processes will be. Each of the states has their own distinct royalty and tax arrangements. There has been considerable work done by Treasury, considerable work in cooperation with the states, to work through what impact the policy solution will have in each these jurisdictions. 

I'm very confident that as the Energy Ministers meet and as the Prime Minister convenes the National Cabinet virtually tomorrow, that we'll get to a landing on these that, as Tony Wood said earlier, these are complex issues. It is not - this is not a policy reform that the Government is undertaking for any other reason than that there are significant price hikes as a result of the Russia invasion of Ukraine. That is the only reason that we are in this position. 

Jayes: Sure. 

Assistant Minister: We are going to work it through in the interests of all Australians and then, as Tony Wood said - and I thought that was a pretty good interview - you know, the big issues in terms of making sure that we have structural downward pressure on prices that the transmission grid and storage, and the injection of low cost renewables into that drive a long-term structural downward pressure on prices is absolutely critical over the coming years. 

Jayes: Yeah, it is critical, but for the intervening years, gas and coal are the things that are going to keep our prices down because there is a massive underinvestment in transmission lines and the list goes on. Do you accept that as the reality of the next - 

Assistant Minister: There's - there's a consequence of a decade of inaction. These things have consequences. When the last government had 22 goes at landing an energy policy, it wasn't just a story in - for - you know, inside the beltway in Canberra. It's got real life affects. It means that the investment community hasn't had the confidence to get behind the kind of technologies, the kind of reforms that were necessary. Now, we've got an ambitious plan. 

Jayes: Yeah, but, Mr Ayres, Australians will be looking at this — 

Assistant Minister: We are rewiring the nation. We are going to work — 

Jayes: Australians would be looking at this, particularly looking at America as a comparison. They're looking towards being energy independent. That is their number one priority. Yes, going green is a priority as well, but in such a resources rich nation like Australia, to not have reliance on at least a gas going forward for bringing down prices in the medium term and delivering that reliability would be insane, wouldn't it? 

Assistant Minister: Well, energy independence is important to the United States. We have very significant energy reserves in Australia. We have, as you pointed to, very significant reserves of coal and gas, but also, we are the sunniest nation on earth with vast solar reserves and vast wind reserves as well. As the Prime Minister has said, we are in a position if we get the energy reforms right, to be a renewable energy superpower. That does mean, as you point to, there are challenges as we work these issues through in the short term. But it means lower prices for households and business in Australia, making energy a competitive advantage, but also that we should be in a position to be exporting energy right around the world. That's the future for Australia if we get a government that's — you know, we've got a government that's actually going to put its shoulder behind the wheel and deliver some certainty in this area. 

Jayes: Okay. Before we let you go, because we are standing by just for our viewers, to take you live to Melbourne, soon we'll have an announcement on who the next Liberal leader in Victoria is. But, Tim Ayres, before I let go, the Greens are accepting donations from billionaires. What do you think about that? 

Assistant Minister: Well, there's always hypocrisy in this area, isn't there? We're determined to make sure that there's a transparent, proper regime around donations, that the Labor Party declares its donations in accordance with the law. We've got good processes. I suppose I should leave commenting on the donations that other parties receive to them. 

Jayes: Okay. Just finally, the New South Wales election, fast approaching. You've been quite critical of Dominic Perrottet for sending jobs offshore. How? 

Assistant Minister: Well, this Liberal Government in New South Wales off shored wave after wave of rail rolling stock, trams and ferries. Effective independent studies have underscored that that's cost at least 4,000 jobs, just out of three of the five of those big infrastructure projects off shored. That's 4,000 jobs mostly in the regions and in the outer suburbs where those jobs count. It's a strong counterpoint to what's happened in Victoria, and Queensland and Western Australia where [indistinct] of rail rolling stock has led to a hundred per cent local construction in Queensland and Victoria and Western Australia. 

Now, the procurement failure in New South Wales has led to higher costs to the projects being delayed, so going over budget and over time, and, of course, a series of reliability and quality issues that are still plaguing New South Wales' fleet. Now, it's important that we point to these failures because if we don't recognise the problem, then we won't be able to achieve the cooperation and reforms that are required to make sure that we've got effective national procurement strategy in rail. Now, this is multibillions of dollars’ worth of rail infrastructure and rolling stock going in every year. It is a real public good - you know, encouraging commuters off the roads and onto low emissions fast public transport is a really important economic reform for the country - and the New South Wales Government has just got this dead wrong over the course of the last decade. I'd like to see them shift their position. I'd like to see a commitment to local manufacturing here in New South Wales because it'll lead to a better outcome. It'll be better for taxpayers and commuters, but also it creates good blue-collar jobs in the regions where they really matter. 

Jayes: Okay. Tim Ayres, a pleasure. We are out of time, but we'll speak to you soon. 

Assistant Minister: Good on you, Laura. See you soon.