National Press Club address: Q&A session
ANDREW TILLETT: Minister, thank you for your speech there and your outlining of Labor's agenda on climate. But can I just go back to, as we sort of opened, talking about the energy crisis which fell in your lap in the first few days. How we saw sort of the unprecedented intervention by AEMO. We saw pleas for people to sort of cut back their energy use in the evenings. How close did we get to the prospect of mass blackouts across the east coast, and how confident are you that we can sort of avoid similar sort of concerns in these coming months, particularly the colder months?
CHRIS BOWEN: Well, Andrew, supply was tight at several of the evening peaks. We would have gone through load shedding before we got to blackouts. So load shedding was a possibility we were preparing for. I'm confident that that would have avoided blackouts, but I didn't want to go down the load shedding line either. And working together, we managed to avoid that. No load shedding and no blackouts, and that's a tribute to everybody involved. But it was no easy thing, and, as I said, it shows the scale of the problem we're dealing with. Far too many megawatts taken off with not enough megawatts brought on. That's the problem. A deficit in energy generation as well as some market issues.
So that was what we were facing. Now, in terms of your question about confidence, I'm very confident that all the people who worked together to avoid load shedding and blackouts in the recent weeks will continue to do so. As I've said, we run the risk of major unexpected outages. That's - that's a risk when you've got a system that is under pressure. But any challenges we face we will apply the same determination to put consumers first and ensure reliable energy supply in those difficult circumstances.
ANDREW TILLETT: Thank you. The first question for today is Mike Foley.
MIKE FOLEY: Mike Foley from The Age and Sydney Morning Herald. Thanks for your address, Minister. You mentioned consumers there. Just to stay on that sort of unprecedented chaos that rolled across the grid a couple of weeks ago, you know, as you know, it was the scale of intervention that the market operator had to undertake, forcing generators to fire back up and enter the market when they had withdrawn their power, will incur, you know, a big compensation bill under the market rules that they're owed, it's estimated, you know, up in the air could be in the billion dollars or more of how much that will be. And as the market rules stand, consumers should bear the cost of that compensation that flows through to future default market offers, potentially.
So my question is: will the government intervene in the market rules? Do you see a need to rewrite the market rules or essentially what can you do to help bill payers as, you know, inflation costs just rise across the economy?
CHRIS BOWEN: Well, Mike, in relation to the compensation to generators, because AEMO responded the way they did, therefore the compensation regime is different. That was - that was one of the benefits of their intervention, their, as you said, rather extreme intervention, because it means generators are compensated for their actual cost, not necessarily opportunity costs which might apply under a different set of arrangements. That's a good thing. It will take AEMO some months to work through the quantums and work through the process. That's, I would say, a six-month exercise for them to undertake.
In terms of market rules, I'm not anticipating any particular intervention in market rules, but of course state and territory energy ministers will examine all the implications of this crisis and examine all possible options to ensure that consumers continue to come first and that, to the degree that we can avoid these short-term challenges in coming months and next year, that every step has been taken - that can be taken will be taken.
MIKE FOLEY: So would you advise bill payers to get - you know, prepare for a bit of a hip pocket hit, you know, so they don't get bill shock?
CHRIS BOWEN: Well, we've already - I mean, we've already seen the increase in the default market offer which happened a couple of weeks after the election. Of course, it was clear to the previous government before the election. They chose not to share that with the Australian people, just as they chose not to share that Snowy was running 18 months late. So we've already seen that - we've been, you know, up front. We're already seeing that pressure.
ANDREW TILLETT: The next question is from Catherine Murphy.
KATHARINE MURPHY: Hello, Mr Bowen. Can I take you to something that you didn't actually mention in your speech today and that's the process for reaching the safeguard mechanism which will bring down industrial emissions in line with Labor's policy of a 43% cut. Can you give us a sense of how you'll conduct that process, given that's the live, real world test of whether or not the climate wars have ended. And also related, you've backed the capacity mechanism since taking the portfolio and through the crisis of the last couple of weeks. But why, when you could use the safeguard mechanism, you could engage the safeguard mechanism and create an explicit emissions reduction trajectory for the national electricity market, perhaps pegged to the ISP or something else, without having to create a bespoke separate policy mechanism which half the states don't like because they didn't trust how Angus Taylor put it to them and because a number of them think it will bake in coal for longer?
CHRIS BOWEN: In relation to those, I think, to be fair, probably two questions Catherine, in relation to the safeguard mechanism we're engaging - we're beginning the process of engaging in genuine consultation with the sector. It's a big and important policy. We're not going to reduce emissions in Australia unless we reduce them from the top 215 emitters. I mean, that's why we embarked on the politically challenging decision because we knew it would be subject to a scare campaign, or reforming the safeguard mechanism. But it was absolutely essential. We listened to the business community, we listened to the BCA, we listened to the AIG, and we embarked on that reform. And from Opposition we have a mandate to deliver it. But it is complicated. Hence a serious process of consultation. Hence the 1 July '23 start date. So, you know, it could not properly be done this year. We could not, in all good conscience, make such change without proper consultation. We'll be issuing the first round of consultation documents in August, probably another round in December. We'll be engaging very clearly with the sector. We've already done that from Opposition, to some degree, but now of course in government we will engage in further detail, the Clean Energy Regulator who's here today, the department, the new department whose secretary’s here today will be helping lead that consultation and that will be a very real process because there's many detailed issues to be worked through. But our - our very clear intent is there in our election policy.
In relation to the capacity mechanism, I don't quite agree with you, Catherine, that we could achieve a similar aim by some reforms, further reforms for a safeguard mechanism. They're quite different things, in my view. We do have a capacity problem and the way to do that, the way to deal with that, in my view, is a capacity mechanism, as is quite common around the world in similar economies.
Now, I accept your point that there's a lot of cynicism because under the previous government it would have been used to keep generators alive that shouldn't be kept alive. It would have been used for that purpose. Under us it won't be. Under us it will be used as a genuine safety net as we undertake this very significant transformation in the economy. We need that safety net. The last few weeks have reminded anybody who needed reminding that we need that safety net.
Under us it will be utterly consistent with our emissions reduction target. It will support new technologies. It will support new generation. It will support storage. Now, there are issues that I'm working through with the state and territory colleagues. We unanimously agreed to progress this work at the last meeting. I mean very genuinely I've appreciated the spirit in which all the state and territory energy ministers are engaging with me on it.
It is a complex task. I'm very confident that when I announce the capacity mechanism that's been worked through with the state and territory ministers, the ESP has provided a good start to that work. It's now increasingly being handed over to us to work through those issues. We need that - that safety net, as I said, under that transformation but it will complement the transformation by renewables and not get in its way under us. I accept the cynicism that it might have happened differently under previous management.
ANDREW TILLETT: Our next question is Greg Brown.
GREG BROWN: Greg Brown from The Australian. Mr Bowen, Labor's pre election modelling assumes electric vehicles will account for 89% of new car sales by 2030, well above the former government's prediction based on their policies on 29%. Now, experts, including the Grattan Institute, say they can't see how this will be achieved based on Labor's already announced policy initiatives which you went through today, noting that free trade deals do make the tariff exemption largely redundant. So what is the assumption behind the massive growth in EV sales under Labor? And will the government need new policies in this space, such as vehicle emission standards, to make the 89% prediction a reality?
CHRIS BOWEN: Thanks, Greg. But to be clear, the assumptions in the modelling are just that. They're assumptions, they're not policy decisions in relation to those figures. So we didn't have a target of meeting, you know, any particular EV rate. So that's not a policy decision, that's what the modellers have worked through. Some of that will be natural increases; others will be as a result of policies. But we're very committed to increasing the penetration of electric vehicles and increasing the penetration of electric vehicles at an affordable rate. And there'll be a lot of flow-through impacts of our policies that we've already implemented - I mean in the process of implementing and have announced.
For example, one example, our commitment to take the Commonwealth fleet to, in the first instance, 75% no emissions: very important. One, because the Commonwealth has a big fleet, 10,000 cars. But, secondly, the Commonwealth turns over its cars every 3 years. That leads into the second-hand market. At the moment you can't buy a second-hand electric car in Australia and, as we all know, if you really want an affordable car it's almost certainly a second-hand car. So if you're in the market, if you're in the place of the market as many young people are, for example, buying their first car, they'd love an EV but you can't get one second hand.
When the Commonwealth fleet starts to roll through and we have the Commonwealth disposing of its electric vehicles in 3 years after they've been purchased, you start to get the second-hand market. Same with private fleets, our FBT discount and our tariff discount has its biggest impact, I'm happy to concede, on fleets. Again, big proportions of car sales in Australia are fleet. But again, they turn over, depending on the company, every two, three or four years. Flow through to second hand.
So there's a lot to do. And, yes, in relation to the second part of your question, we have an electric vehicle strategy which we will now develop in office, as we said we would from Opposition, and we'll consider further policy positions to add to and build on what we've already committed to.
GREG BROWN: So vehicle emissions standards, are they on the table as we move forward?
CHRIS BOWEN: We will consider all viable options to build on the policy announcements we have already made and are implementing.
ANDREW TILLETT: Thank you. Our next question, Melissa Clark.
MELISSA CLARK: Melissa Clark from ABC. In the recent crisis we had in the energy system, we had AEMO price cap kick in and subsequent to that we saw generators withdraw their offers of service. Does that price cap on wholesale spot market prices that was put in, does that price cap need to be reset? Was it too low, having not been reassessed or re evaluated for a number of years? Are you reviewing where that price cap kicks in?
CHRIS BOWEN: Thanks, Melissa. What I'm mainly interested in reviewing is the causes not the symptoms, and the fact that prices hit the cap was a symptom not a cause. Yes, it had flow-on impacts on the market and forced AEMO's actions, that is true. But that wasn't actually the driving problem. The driving problem is a range of factors. Yes, there are international geopolitical factors of course, as I've readily acknowledged; there are coal fire power outages some of which were anticipated, many of which weren't, because we're reliant on an ageing coal fired fleet because of the lack of investment in new energy generation under previous management.
All these - we had floods in coal mines, which is nobody's fault, you know, but the fact that we weren't prepared for this perfect storm is the major problem. And that is what drove the crisis, not a particular price cap. That was just a symptom. Now, as I said, energy ministers will, in due course, work through very carefully and methodically anything we need to consider arising out of the situation. But I'm mainly focused on the things which drove the crisis, not which were results of the crisis.
MELISSA CLARK: Most of those factors are still present. We could well hit that price cap again. Do you anticipate that that price cap will be reached again this winter?
CHRIS BOWEN: I will be monitoring the situation closely with AEMO. I am not about to start making predictions other than whatever needs to be done, will be done to keep the lights on just as we did in recent weeks.
ANDREW TILLETT: Amelia Dunn.
AMELIA DUNN: Hi, Minister Bowen. Amelia Dunn from SBS World News. Just on from that question, Japan is going through a heatwave right now and the Japanese government has asked their citizens to not use lights where possible, turn off the air con. Obviously we've just seen the same thing but in the opposite. Of course, Australia has a very hot summer coming up. Is it possible, that was just asked, we're going to hit that point again and we're going to see people like you get up and ask Australians to turn off their air con, and are you discussing that with nations like Japan about how we solve these crises?
CHRIS BOWEN: Yeah, thanks Amelia. It's a very fair question, but I think that we have to acknowledge too that the pressures on energy systems are changing as our energy system changes. In the old days when I was a boy, summer was the period of maximum pressure. That's when energy ministers, when I was growing up in the 70s and 80s, would come on the TV and say "Please turn off your air conditioner". We're changing because we now have much more solar generation, and while solar does play a role in winter of course, it plays a much bigger role in summer, and we are seeing massive generation from solar panels on our roofs, one in four houses, in summer,
So, yes when our energy use goes up because we all put our swimming pool filters back on and we put the air conditioner on, that is true. That used to put huge pressure on the energy system, and still provides some pressure, but we have the solar contribution to offset that much more than, say, Japan does because we are the world's leading rooftop solar country. So I don't think that - I don't think we should look at it through that prism to say well, Japan's going through this so we might, because we're a very different economy.
Of course we remain vigilant to any threats. But we are dealing with a very different set of arrangements both to the past and to countries in our region who are dealing with their own sets of challenges.
ANDREW TILLETT: Thank you, minus 5 in Canberra today for anyone at home, so the heaters were getting a workout there. Jade Gailberger.
JADE GAILBERGER: Jade Gailberger from the Herald Sun. The Energy Security Board's latest report on the capacity mechanism warned about the prospect of renewable drought, renewable energy droughts, that could last for days in Victoria during winter next decade. Given batteries can currently only last for a few hours at a time and provide that additional support, what kind of generation do you expect will help provide that dispatchable power Victoria is going to need during those droughts?
CHRIS BOWEN: Well that's 100% right and we do have to prepare for that. That's the whole point of this ISP on steroids that I'm talking about, to prepare exactly for that situation, because we do need to store the renewable energy when it's generated and save it for when it's not being generated, and that needs to be both short term, which as you say, batteries - battery technology is improving and lasting longer. But, as I've said consistently, batteries are vital but they're not enough. They're great for short term but we need the longer term. We need to store for what the Germans call the Dunkelflaute, which is the long winter without wind, or the dark doldrums which is Dunkelflaute. That's what we need and our system is not ready for that. So in terms of the long duration storage and ultra-long duration storage, then we're looking at pumped hydro which we have some but not enough. Again, Snowy 2.0 is important but it's running late. And then in the longer term you're looking at green hydrogen which is ultimately a form of storage, and long duration storage. They are the complements to batteries and the longer term storage. But they both take time. Pumped hydro is great. It's got a very important role to play but there are big environmental approvals to be worked through. And green hydrogen is not yet commercial. So these are both issues which I think underline the importance of the work the states and territories are doing with us for that long term enhanced ISP on all the investments necessary.
ANDREW TILLETT: Jacob Greber with our next question, thanks.
JACOB GREBER: Jacob Greber from the Australian Financial Review. Minister, just to have you look beyond the borders for a moment. Several hours, the G7 leaders, who include some of our biggest customers, such as Japan, issued a communique about how they want to accelerate their - the end of their dependency on Russia, Russian energy. We stress the role increased deliveries of LNG can play and acknowledge investment is necessary in gas. So rather than talking about gas triggers in Australia or domestic reservations, shouldn't we be exporting more gas to our allies so they can get off Putin's gas?
CHRIS BOWEN: Well, I mean our allies, whether it be G7 or EU are also increasing their ambitions in relation to renewable energy, as they should, as they are. They're increasing their medium term targets; they're increasing their investment in photovoltaics, they're increasing all that because that also reduces their reliance on Russian gas, as they need. That is a matter for them as it is for us, of national security. In our circumstance, I will deal directly with your question, but in terms of the broad, our circumstance there's one source of energy that no geopolitical situation can interrupt in relation to our supply chains out or in, and that's the sun to our land mass and the wind on and off our shore. That's good energy security. Storing that, that's a matter of national security.
In relation to Europe we should assist them with that transition, both in technology and in relation to renewables wherever we can. In terms of gas exports, I think we've made very clear our view that the gas sector has a social licence here in Australia, and it is required to support the manufacturers in particular who rely so heavily at the moment on it before new technology emerges. Of course exports have a role to play and those continue, and particularly contracted ones that will continue. But we make no apologies to your question for assessing what policy levers are necessary going forward, including reforms to the AGDSM, which is a particularly blunt instrument. To be fair it was designed for a different circumstance; not really designed for this circumstance. But it's of no or little use in this circumstance, hence we are going through the process of looking at reform options there and that is the right thing to do.
JACOB GREBER: Does it worry you, as a follow up, that some of these countries appear to be slowing or reducing their ambition because of the very real, very immediate crisis of - caused by the
CHRIS BOWEN: I don't accept, with respect, your proposition because I think they're actually increasing their ambition in relation to renewables. Yes, they are saying gas will play a role, as it will here, as I've made consistently here. Gas is playing a role here and will continue to. It does have a flexible energy source. Gas fired power stations can be turned on and off, much more quickly than coal. So that has a flexibility premium which is important as we are managing this transition, this transformation. But they are saying gas can here play a role in their system for the foreseeable future. I've said the same consistently from Opposition and in government, about our system that gas will continue to play a role. We've got to get the balance right and we've got to super charge that transformation which has been so lacking.
ANDREW TILLETT: Thank you. Maeve Bannister for your next question.
MAEVE BANNISTER: Maeve Bannister from AAP. The UN climate change conference is going to be taking place in Egypt later this year. Will you be going? And what message do you think Australia will have for the rest of the world in terms of the policies that you've mentioned today, and also working towards net zero targets which are global targets?
CHRIS BOWEN: Yes, so we'll be going and the message is we're back. Australia's back, at the table, as a world leader. That's the message I'll be taking to Egypt and this COP. And as I said before, if my conversations in the early stages are anything to go by, the response from our partners will be very warm and strong, as it has been from John Kerry, from Jennifer Granholm, from Alok Sharma. A real sense that Australia's back. And I know the Prime Minister's felt the same in his conversations with world leaders, and I expect that to be reflected in Egypt.
ANDREW TILLETT: Can I just ask a bit of a change of pace question, we have seen the Governor General today have to apologise for making a video endorsing a Canberra builder's works during his home renovations. Now, this was on his private home. It was paid for out of his own pocket, it didn't involve spending of taxpayers' money. But I was wondering, as a senior sort of minister in government what your reaction is to that and then what does it say about the Governor General's judgment?
CHRIS BOWEN: I think the Governor General has said he made a mistake and apologised for it, and I think that's fair enough. I mean, I don't think we should be, you know, second guessing. He's made an honest error, and he's done the right thing by acknowledging that error and apologising for it and I think - I think reasonable Australians will accept that apology.
ANDREW TILLETT: Thank you. Our next question, Simon Grose.
SIMON GROSE: Simon Grose, Canberra IQ. My question is about carbon offsets but first I just want to check my numbers on the 43% target. 43% reduction on 2005?
CHRIS BOWEN: Yes.
SIMON GROSE: When our emissions peaked at 641 million tonnes, 43% of that is 275 million tonnes. Brings it down to 366. That's your - that's what your 2030 target would be?
CHRIS BOWEN: 351.
SIMON GROSE: 351, okay. You're coming off last year which was 488 million tonnes.
CHRIS BOWEN: Correct.
SIMON GROSE: So, as you said in your speech, you need to cut it about 1340 million tonnes between now and 2030. Over 8 years that's an average of about 15 plus million tonnes a year. To what - what proportion of those - of that reduction would you expect to be earned through carbon offsets? Would it be around 50%?
CHRIS BOWEN: Well, it depends on what sector you're talking about.
SIMON GROSE: Yeah, overall.
CHRIS BOWEN: Well, it won't be much in transport. It won't be anything in transport. It will be a reasonable amount in safeguards, because safeguard facilities will have options as to how they meet the target reductions that are set out by the Clean Energy Regulator and my department that they are obliged to achieve under the safeguard reforms. And so offsets will be an important part of that and we've said we'll create a new safeguard offset which will be similar to but separate from actives, and they will play a role. And they should play a role. And that's why it's important we get the governance of those carbon credits right, that's why we're having an integrity review which I'll say more about in the not too distant future.
But a reasonable amount will come from offsets, particularly around that safeguards and industry sector, not electricity or transport or the other sectors.
SIMON GROSE: So your modelling for your target doesn't include some kind of ballpark for offsets?
CHRIS BOWEN: No, no. It does, it does, it does in relation to safeguards. I'd have to check the exact figures but it does go through an expected or predicted amount which would be offset via offsets or which would be achieved by offsets, that's in the modelling.
SIMON GROSE: Thank you.
ANDREW TILLETT: Our next question, Matt Killoran from Courier Mail.
MATT KILLORAN: G'day Minister. Matt Killoran from the Courier Mail. Thanks for your time. In the lead-up to the elections, part of your Powering Australia policy, you promised voters electricity price cuts of up to $275 by 2025. We've just seen some - some sustained record high wholesale electricity prices which will be falling on to consumers, as Mike Foley touched on, potentially compensation to the generators also being passed on to consumers. How will you be able to deliver those promised price electricity bill savings on to consumers, and will they even be able to notice them if wholesale prices are driving and being passed on to consumers in the coming years?
CHRIS BOWEN: Well, Matt, you're right. But this is even more important. Our policies are even more important than the life of what we're dealing with. You know and the life of the fact that we're dealing with this, have been dealing with this crisis, in light of the fact that Snowy 2.0 is running 18 months late, which is a recent revelation; in light of the fact the default market offer has gone up after the election which is a recent revelation. Sure, that makes our task harder but it makes it even more important.
And it is truer than ever that renewables are the cheapest form of energy. So it is more important than ever to get them into the system, and that's exactly what our policies will do and that's exactly what they will achieve and they will achieve a downward pressure on power prices.
MATT KILLORAN: Are you confident still, though, in those figures on that?
CHRIS BOWEN: Well, as I said, it's more important than ever. Of course figures will move around. You know, since the modelling was done we've seen Snowy 2.0 running late, we've seen default market offer going up. But I'm very, very confident that the policy impact which we modelled will be met, and that is downward pressure on prices through more renewables in the system.
ANDREW TILLETT: Thank you. Next question, Dan Jervis Bardy.
DAN JERVIS BARDY: Dan Jervis Bardy from the Canberra Times. Thanks for your speech, Minister. Just a question about the negotiations with the crossbench on the climate change bill. You mentioned that you're willing to consider what you described as sensible additions. A number of the crossbenchers, including Zali Steggall and David Pocock have suggested that they would like to see the 43% considered a floor rather than a ceiling. Would you consider including a provision or at least flagging through your rhetoric that that 43% would be a floor rather than a ceiling to Labor's emissions reduction ambitions?
CHRIS BOWEN: Well, thanks, Dan. But of course it's not a ceiling. Of course it's not a ceiling. I mean, we're hardly going to treat it as a ceiling. It is the modelled impact of our policies and that's what we reflected in our legislation. But in terms of your question which is a fair one in relation to our rhetoric, I draw your attention to our nationally determined contribution, which the Prime Minister and I sent to the United Nations a couple of weeks ago. It says:
"Our aspiration is that the commitments of our industries, states and territories, and the Australian people will yield even greater emissions reductions in the coming decade."
That's what we told the UN a couple of weeks ago. I guess the previous government might have used the terms "meet and beat". If that's the way you want to describe it, that's fine.
DAN JERVIS BARDY: Just a quick follow up to - the Greens have - they would like to see a temporary moratorium on new coal and gas. They said that's - prior to the election that was almost a red line. Is that something you would describe as a sensible addition to your bill that you would be willing to consider?
CHRIS BOWEN: No, because there's environmental approvals to go through and normal processes. I understand, you know, the Greens' positions. I respect the mandate they have from their voters. I would put to them we have a mandate from the Australian people as the party that formed majority in the House of Representatives. As I said, and I've said the same to the crossbenchers, both Greens and Independents, happy if you've got sensible suggestions which complement our agenda, more than happy to look at those.
That might be changes to the bill or additions to the bill. It might be other things that we can work on together. I mean, we are actually all in it together and I have worked pretty hard to develop a good and respectful relationship with the crossbench in the first month, because, you know, we are all after a country which pulls its weight and seizes the jobs opportunity. But anything which is inconsistent with our mandate and our agenda is not something that we'll entertain.
ANDREW TILLETT: What's the danger - you've said - the government has said, you know, you don't necessarily need to legislate 43%. What's the danger if we don't get it legislated?
CHRIS BOWEN: I think, Andrew, it's about certainty and stability, mainly for the business investment community. It sends a signal, if a parliament that hasn't legislated, that maybe the country's not serious and maybe a future government, heaven forbid, a Liberal government, might walk it back. If you've legislated it, I just think it's best practice; it just provides that certainty for business. That's why we're seeking to do it. That's, I'm not sure I'd use the term "danger" but that's the down side of not legislating.
ANDREW TILLETT: Yeah, so essentially lock in perhaps a future sort of coalition government if we have one between now and 2030.
CHRIS BOWEN: Well, I mean, you know, the parliament will have legislated if we are successful in getting the legislation through, which I hope to be and certainly intend to be. But you know, as I said, as I've been crystal clear from Opposition and in government, the position's the same. We'll seek to legislate. But if the Parliament doesn't wish to legislate I mean, we're not going to spend three years, you know, arguing about the legislation and sending it back and forth. We've already notified the UN. The legislation is good practice to lock it in, but we're just getting on with it and if the Parliament doesn't want to legislate we will just continue to get on with it.
ANDREW TILLETT: Next question. Anna Henderson.
ANNA HENDERSON: Anna Henderson, SBS and NITV. You're heading to the Torres Strait imminently. What can you offer the people of the Torres Strait? What is the infrastructure cost that you're expecting and what are the islands going to look like over the next decade? How many more sea walls will you be expecting, and I'm sorry to create a shopping list here but the question that the Torres Strait Islander communities is asking is: what's the long-term ambition of the government to help us and what is that long term ambition?
CHRIS BOWEN: And a fair question but I think, to be honest, I'll be better placed to answer that when I come back. I mean that's why I'm going. And that's why Jenny is coming with me. And a very genuine exercise. I've asked Jenny to have day-to-day carriage working closely with me on adaptation. We're going to listen very genuinely. I'm not sure the last time an energy minister or climate change minister visited the Torres Strait. But I'm going fairly early because I really genuinely want to hear from traditional owners in a meaningful way about what they are dealing with, what they're worried about, what's on their agenda.
I've had meetings with them to be clear, you know, virtually and in person, but I haven't been on to their country and I'm going as a sign of respect to listen to them on their country about what they want to see happen. And then Jenny and I will bring that back and we'll talk to our Cabinet colleagues and we'll work it through. But I'm not - I'm not complaining about your question but I'm not in a position to answer what they need until I've been there and heard from them in a very genuine process.
ANNA HENDERSON: They are already talking about the need for more sea wall investment and other infrastructure.
CHRIS BOWEN: Yes.
ANNA HENDERSON: My question, I guess, is on the briefings that you have. What are you expecting is the threat that is being posed to them over the next decade?
CHRIS BOWEN: Real and substantial. And you know we've heard it from them direct, as you said quite correctly, we've heard it from them. But I want to go and see it and I want to walk their country with them and hear it from them. And I think that will better place Jenny to make recommendations to our Cabinet colleagues about what needs to happen from here.
I think it's important for us to go there. These are Australian citizens, our brothers and sisters at the frontline more than anybody, in dealing with the impacts of climate change. And they deserve to have a federal government which listens to them and that's exactly what Jenny and Nita and Jana and I will be doing over the next 24 hours.
ANNA HENDERSON: And many of them want a higher 2030 target, so what will you be saying to them?
CHRIS BOWEN: I'll be saying to them our target is ambitious. As I said before, 90 months is not long to turn this big cruise ship around, to reduce our emissions by that level. But I completely understand that they want to see this issue dealt with and they now have a government that wants to deal with it.
ANDREW TILLETT: Thank you. Next question, John Keogh.
JOHN KEOGH: Thanks, Minister. John Keogh from the Australian Financial Review, and you've certainly had a baptism of fire in the new portfolio. I'm just thinking about internationally at the moment, further to Jacob's question. There's been criticisms of the G7 overnight, supposedly back sliding on some of their climate commitments and outlooks and use of gas. But just more broadly from that, we've seen Germany fire up moth-balled coal fired power stations. China's Premier, in the last couple of days, has encouraged more coal fired generation because of concerns about blackouts. And the UK has also cancelled subsidies for electric vehicles. So there does seem to be a bit of a shift in international thinking on climate and energy at the moment. Are you worried that there's a lot of ambition now but more pertinently that the road to net zero, the emissions reduction could be a lot more bumpy because of the energy crunch that we're now experiencing and countries reacting to that?
CHRIS BOWEN: Well, I guess, John, yes it is going to be bumpy but I'm not particularly surprised by that. I mean, I think that was inevitably going to be the case. But I actually don't - no I'm not worried about a back sliding of ambition because I think seriously countries around the world get it that actually the transformation is actually more important than before. If you don't want to be reliant on gas it's more important to be increasing your renewables.
Yes, there's short-term challenges; you know people having to, in our case, you know, try and get our existing coal fired stations working when they're breaking down and getting coal to them. That's been a challenge for me and my state and territory colleagues in recent weeks. But all of that is a daily reminder to me and at some points during this crisis, four or five times a day in my briefings via email, about how important this transformation is; how it's more important that we get on with it.
So that if this situation happens again in a couple of years time, AEMO can say to me at that point: well, it's okay Minister because we have got all these batteries that we're calling on, we've got all this storage; we've got an improved transmission line so we can get the power more efficiently through, it's okay because we're developing this green hydrogen plan, so we're in a much better place than we were a few years ago. That's why it's important.
ANDREW TILLETT: Okay, yep. Next question, Julie Hare.
JULIE HARE: Minister, thank you for your speech. Julie Hare, also from the Australian Financial Review, apologies for that, and I'm also a director of the National Press Club.
CHRIS BOWEN: [Indistinct] Financial Review [indistinct]
JULIE HARE: Yeah, we are en masse today. On Tuesday's state budget, the Queensland Government massively increased royalties from coal mining. I'm just trying to get your thoughts on that, what that means for the Australia's energy transition and whether maybe other coal rich states such as New South Wales should follow suit?
CHRIS BOWEN: I have no idea whether any other state is contemplating that; it's a matter for them. But I completely understand the need for states to ensure fair revenue for their residents from resources that are under their ground.
JULIE HARE: It is a super profits tax?
CHRIS BOWEN: I wouldn't have thought so but it's an increase in royalties which is entirely a matter for state governments and entirely appropriate for them to ensure fair share for the residents of their state.
JULIE HARE: Thank you.
ANDREW TILLETT: Thank you. We're back to Mike Foley.
MIKE FOLEY: Yeah, back for more.
CHRIS BOWEN: It's because my answers have been short and to the point.
ANDREW TILLETT: It's good, it's very good.
MIKE FOLEY: Too succinct for your own good.
CHRIS BOWEN: Okay, I can deal with that.
MIKE FOLEY: I'm just wondering about - back on offsets and when you talk about Labor's open to potentially approving new gas export projects, for example, and you state quite clearly that any of those new emissions will be captured by your safeguard mechanism if they hit the trigger, which they would. What role does Labor see international offsets, carbon offsets playing in a future economy? The former Coalition government obviously banked a hell of a lot on international offsets achieving net zero, or could Labor rule out any use of international offsets, or do you think it will play a significant role in Australia's net zero push?
CHRIS BOWEN: I think, Mike, I think we would proceed with caution. You know there are some international offsets already, arrangements with Fiji for example, that's all fine and appropriate. I think I can see theoretically the importance of international offsets, but we will not do anything unless we are entirely satisfied about the integrity of those offsets and that they were real and that it would not impact in any way adversely on our national ambitions. But I'll work those issues through carefully based on expert advice at the time if there was something sensible. I'm not ideological about it like the previous government was: you know, all for it gung ho. Nor do I rule out entirely a role for international offsets only if carefully managed, properly collaborated fully - fully vetted and audited in terms of integrity.
MIKE FOLEY: So it might be part of a future review that you're doing it?
CHRIS BOWEN: It's not something that is very high on my list at the moment by any stretch of the imagination, but I'm not going to rule out that at any point if we were satisfied that it could play a carefully designed and calibrated role in the system, but it would need to be very carefully worked through.
ANDREW TILLETT: Catherine Murphy.
KATHARINE MURPHY: We didn't actually caucus, but I'll ask the other half of Mike's question just back on permits and integrity which you've raised. You've flagged that there's a review forthcoming. Andrew McIntosh, who's the respected expert in this field has said that the permits or credit system currently is a fraud, which has hurt the environment and wasted more than a billion dollars in taxpayer funding. What's your own view? Obviously you're seeking a review, but are you anticipating that that review will find major problems with the system?
CHRIS BOWEN: Catherine, I'm not going to pre empt it other than to say it will be serious and very credible, and when you see the calibre of the names that I've appointed to undertake that review I think you'll agree that the government is taking it seriously. It will be a thoroughly independent proper review without predetermined views one way or another. And that's how it should be. I don't have a predetermined view. That would be wrong. I think the concerns raised by Professor McIntyre are substantial and real, and should be taken seriously.
To be fair, we had already committed to this review because we had our own concerns before the Australia Institute raised these concerns, but I take the concerns raised very seriously. I've said the same to the Australia Institute, to the Carbon Market Institute: these are big and serious issues which need to be addressed because we are going to rely on credits whether they be [Indistinct] or safeguard credits. I do want integrity. I want confidence in the system. I want the Australian people to have confidence in the system. And unless and until we have that review that will be lacking because these serious concerns have been raised. So it's in everybody's interest to have this thorough review. So I will be saying more about it in coming days. It will be, as I said from Opposition, thorough but concise. So I will ask it to undertake its work in a six-month period. But it will be separate from government and whatever the results are, we'll all have to live with it. If it finds everything is hunky dory, if it finds there are serious issues to be addressed, if it finds things can be improved, we'll just get on with the job.
ANDREW TILLETT: Our last question of the day, Melissa Clark from the ABC again.
MELISSA CLARK: Thank you, Minister, Melissa from ABC again. I want to ask you on Snowy 2.0 which you've mentioned. Can you tell us what you've been advised or perhaps as much the Finance Minister as yourself when it comes to Snowy
CHRIS BOWEN: Both of us, we're both equal shareholders.
MELISSA CLARK: Excellent. What have you been advised is the timeframe for completion? What reasons have you been given for the delays? Are they anything that could see subsequent delays? And have you been given a new total figure of what the project is now expected to cost?
CHRIS BOWEN: Melissa, the project is currently running around 18 months late. There are a range of factors which have led to this. To be fair, this is a big and complex project. You know, some very steep tunnelling to be done. I understand, you know, why these things can get difficult. There have also been some supply chain issues which construction projects around the world are dealing with; I understand that.
MELISSA CLARK: So you're saying supply chain and geotechnical?
CHRIS BOWEN: Yeah, yeah, and some COVID related, you know, delays. All this is - all this is - all this is factors. I just prefer - would have preferred that the previous government was up front about that instead of you know, the signature policy or the signature is pretty smudged because it's running so much - so late. Now, Snowy will work to try and reduce that 19 months, as they should, but I also have to be honest with you and say of course there's risks as well. But 18 months is the current best assessment as to how late it is running. Then you have a separate issue about transmission of course, because it's got to be plugged in. It can generate all the electricity you like: unless you plug it into the grid it's not going to do much good. That's a separate issue. I also would have liked to have seen more progress on that in the past as well. But we'll continue to work to rectify both of those issues as best we can through all the levers of government we have available to us.
MELISSA CLARK: Do you have a figure, an updated?
CHRIS BOWEN: No, I haven't been provided with any particular cost blowout figure, no.
MELISSA CLARK: Thank you.
ANDREW TILLETT: Unlike Snowy 2.0, we're not running late, but let's conclude on that. Ladies and gentlemen, please thank the Honourable Chris Bowen.
CHRIS BOWEN: Thank you.