Senator the Hon Matt Canavan

Minister for Resources and Northern Australia

30 September 2016

Craig Zonca

Subject:  Investment in Northern Australia, NAIF, SA blackout

E&OE

CRAIG ZONCA
Well the Minister for Resources and Northern Australia is Senator Matt Canavan. He's about to present a speech to the Committee for the Economic Development of Australia in Brisbane.

You'll be talking up northern development Senator, yet, as we've just heard, IFED hasn't been able to complete its Environmental Impact Statement for its massive development proposal along the Gilbert River in the Gulf Country. Do you see that as spelling the end for IFED?

MINISTER CANAVAN
Well, I can't speak for IFED or any individual project. That would be a matter for them. I certainly don't think it's the end of water development on the Gilbert River, because I know there's huge opportunities up there.

We, a few years ago at the Federal Government level, funded a CSIRO study into both the Flinders and Gilbert Rivers, and that showed there was an enormous potential for new water use and agricultural production. I know there's a number of other property owners out there who would love to buy water.

CRAIG ZONCA
And the Mayor Warren Devlin…

MINISTER CANAVAN
And the mayor and I'm right behind the plans up there for Charleston Dam near Georgetown to secure their water supplies. There's a lot of potential, a lot of; it's a really proactive Council up there that tries to drive development and I want to support that.

But what we really need to do is for the State Government now to allocate the water. They've opened up a process for the Flinders River but hadn't done that on the Gilbert, I believe partly because of IFED.

CRAIG ZONCA
Well pending the IFED.

MINISTER CANAVAN
If that has been delayed - and that's a matter for the State Government - if that has been delayed, well I call on the State Government now, get going and issue some water licences on the Gilbert.

CRAIG ZONCA
Warren Devlin says he'd love to see you up in the Etheridge Shire. Will that happen sooner?

MINISTER CANAVAN
Pretty sure I have plans to go up there next month. Things can change of course in this job, but Warren, he mentioned I think he's coming to Canberra so we'll definitely catch up and I'll be up there again very shortly I'm sure.

CRAIG ZONCA
Senator Matt Canavan is my guest on the Country Hour. Now Senator, you have been talking up over the past six to 12 months or so the interest in the $5 billion Northern Australia Infrastructure Facility. Yet there is just one formal application. Just one.

MINISTER CANAVAN
That's not a completely accurate characterisation of the situation. It’s not like a typical government program, where we're asking people to fill out a form and apply it in a formal sense. There is one project at the moment that has gone through due diligence, that's close to potentially being ticked off.

CRAIG ZONCA
So it has progressed from an expression of interest stage?

MINISTER CANAVAN
Yeah, there's a number of stages that the board has mapped out but it's progressed from a proposal stage through to the due diligence process. Obviously, when we're talking about lending … [interruption to broadcast] …

… which we're hopeful could go through to due diligence over the next couple of months some of those. There is another 40 on top of those 12 proposals which are in active discussion, and I'm very comfortable about where things are at.

… [interruption to broadcast] …

CRAIG ZONCA
Matt Canavan, this one application that is due diligence stage – can you tell me, is that in Queensland? Northern Territory? WA? Can you give me any further details?

MINISTER CANAVAN
No, I can't get to that level because of the commercial-in-confidence nature. Actually, I'm not completely sure of it, I know some of the nature of the projects, the more advanced ones, but I'm not sure which one in particular has gone through to due diligence. That's a matter for the board, and when they have made a decision they will provide that advice to me and I will have to decide whether the government funds it.

CRAIG ZONCA
Is that final decision on funding – is it up to the board, or is it up to you?

MINISTER CANAVAN
It's finally up to the Minister, but the Minister cannot direct the board to fund particular projects. The board must make recommendations or can make recommendations to the Minister and the Minister decides whether it goes out or not.

CRAIG ZONCA
So if the board says “Yes, we like this project”, you as a Minister can say “No, I don't”, or “Yes, I do”?

MINISTER CANAVAN
In brief terms, yes. I have to meet various criteria in the Act. But that's right.

CRAIG ZONCA
I'm putting it in its simplest form on the Queensland Country Hour this afternoon. Will money be flowing from NAIF before the end of this calendar year?

MINISTER CANAVAN
Well, look, I think there are a number of projects that are well advanced.

CRAIG ZONCA
Well, only one is through to that due diligence.

MINISTER CANAVAN
Well, as I say, those others are well advanced as well. The other 11. But I can't make guarantees or predictions on this. These are commercial deals and commercial arrangements and they involve a lot of money. So you can't count chickens until you sign people up on bottom lines on those things. So I am hopeful that we will have projects being funded shortly. But I can't make any guarantees or predictions.

CRAIG ZONCA
Because it was announced with much fanfare that this would be a key driver of development around northern Australia. If it is taking so long to actually get that rolling, is it delivering?

MINISTER CANAVAN
Yeah, I dispute that. I don't agree with that. When we announced it, we said it would be established by the first of July. We had that legislation in place before the first of July. We have established the board in that time and they've had a couple of meetings so far and another one shortly. That is that is on track for the timeframe we announced. When we announced the White Paper, it's very important to point out that this is a decades-long plan to develop the north. It's not something that we were saying is going to happen overnight. Indeed, it can't happen overnight.

CRAIG ZONCA
The Minister for Northern Australia and Resources, Matt Canavan, is my guest. Minister, earlier in the week you were in South Australia, when effectively the lights went out. It's prompted a lot of discussion about the reliance in South Australia on renewable energy, but also the wider national electricity market and grid. What's the message out of it for Queensland?

MINISTER CANAVAN
The message for Queensland is this could be our future unless we're not very careful. I just arrived from Adelaide this morning and, in a sense, perhaps I have come from an alternate future that we could face.

The Labor State Government here has a 50 per cent renewable energy target, the same as what South Australia has. The situation here of course is we only have about 5 per cent of our power produced by renewable energy right now. The idea that we're going to get to 50 per cent by 2030 is fanciful. It's not going to happen. We may as well talk about building an alpine ski resort in North Queensland.

But, be that as it may, that's what the Queensland Government is pushing for, and I think they need to wake up to themselves and realise that coal is an essential element of keeping our lights on and, if we walk away from coal, we are risking our energy security. We are risking the stability, particularly for manufacturing operations and other industries, which cannot just switch themselves off at short notice.

CRAIG ZONCA
Is that really fair comment?

MINISTER CANAVAN
It's a very, very serious issue.

CRAIG ZONCA
Hence, why I come back to that question about grid design, network design, rather than reliance on one source of power or another.

MINISTER CANAVAN
Well and that's why – these guys are the government right – if Annastacia Palaszczuk and the Labor Government are going to propose a 50 per cent renewable energy target in just 14 years, you'd think they'd have a plan for us to say: “OK, we're going to take these coal-fired power stations off, this is the other power stations we're going to have, this is what it means when a certain event might happen or a cyclone or something, and how we're going to keep the grid secure.” They have none of that. You ask them for that. They release election policies which are full of platitudes about how we've got to have a clean energy future, all this stuff that is just disconnected from basic engineering, which is what we really need to keep the lights on.

CRAIG ZONCA
Senator Matt Canavan, thanks for joining the Country Hour today.

(ENDS)