Interview with Greg Jennett, ABC News 24

Greg Jennett
National Reconstruction Fund, energy prices

GREG JENNETT: According to unions with coverage of manufacturing workers, the current energy price spiral represents an existential threat to many firms, Industry and Science Minister Ed Husic has spoken of the sense of urgency to get it fixed, and he's with us in the studio now. Welcome back, Minister.


GREG JENNETT: We will move on to coal, but ‑ and gas, energy generally. Why don't we start with something that is firmly on your plate and has been this week. This is your making good on the promise of a $15 billion Reconstruction Fund. The legislation is now in the Parliament. The cost of money has gone up, that's interest rates since this was first conceived. Does it mean it will be harder or more expensive for manufacturing companies now to access this pod of money that you're forming? 

ED HUSIC: No, I don't think so. I mean we'll sort out a number of things through consultation with industry, that will kick off next week, talking around the shape and the way in which the NRF will actually be guided by its investment mandate, targeting seven different priority areas that we've said we want to be able to pursue, but this National Reconstruction Fund will be the greatest peace time investment in industrial and manufacturing capability in living memory. It's designed to strengthen what we're able to make onshore and drive future growth; really, really important, and looking at what we can do involving the regions, growing jobs and growing capability, which a lot of Australians are very keen to see happen. 

GREG JENNETT: It's a capital fund though, and because we're going to move on to the crippling costs of energy for manufacturers, in that sense it couldn't come at a worse time, could it? 

ED HUSIC: I think that there are a lot of firms that knew they've got the capability to grow, they've got good ideas to be able to get them there. They're worried that it's harder to get that capital, particularly through some of the pathways they'd be used to pursue that money. What we want to do with this fund is invite cooperation with superannuation venture capital private equity, that we team up, and that we're able to make sure that when Australian firms have got great ideas and they want to be able to grow jobs, that they don't feel like they have to go offshore to chase that money, to leave our country, and that we lose the opportunity, because of that departure, to be able to grow the economy and industry. So it actually is coming at a really critical time for them, and we need funds like this to be able to also deal with some of the supply chain vulnerabilities we have, and deal with some of the lessons we learnt through the course of the pandemic, where we needed critical items, they weren't there, and so that's why we're targeting these priority areas to make a difference.

GREG JENNETT: All right. Well, there's certainly a bit happening in industry at the moment, and there's no escaping the fact that energy ‑‑

ED HUSIC: Great portfolio to be in. 

GREG JENNETT: Well, yeah, energy, it's hurting all within it.


GREG JENNETT: Just terms compensation. As you move down the track towards some sort of price capping, and therefore, price relief, is just terms compensation, particularly for coal, we're talking, because price caps are going to be introduced, is that something the Federal or the State Governments are going to have to wear.

ED HUSIC: I'm a bit conscious of the fact, Greg, I absolutely appreciate why you and your colleagues in the gallery are very keen to get info on where the Government's headed on this. We are going through a cabinet process, so it limits my ability to be able to speak very openly, as much as you would want me to on that, but I guess a number of things: we do recognise, and we flagged for quite some time, we've got to see energy prices go down, given the trajectory that was outlined by Treasury leading into the budget. We are keen to work with states. I heard the comments of Premier Perrottet, if I may say, and we've been very grateful there's a sense of cooperation across the board, regardless of politics. Everyone knows we've got to get these prices down. States are paying a lot of money at the moment because of what they're seeing with energy prices. They shouldn't be forced to do this because of the behaviour, in particular, of some gas companies that are just wanting to be able to make profit no matter what, and we are committed to working with them on finding common ground and getting a solution done. So while it's natural they're going to raise their concerns publicly, totally under that, and we'll work all through that, but they, like us, realise that we have a common objective, which is to get power prices down, to get energy prices down, to get gas prices down.

GREG JENNETT: It might be a common objective. It's just how you get there ‑‑


GREG JENNETT: ‑‑ and how you get there legally. So this just terms compensation is in effect out of the Constitution as something that lawyers to the New South Wales Government are citing.  Is it accepted that someone is going to be up for this form of compensation, if you move into the market and cap prices? 

ED HUSIC: You can be assured that whatever we do, we're absolutely conscious of meeting our obligations. Clearly the Constitution is the starting point. We'll work through that, and we'll work with the states and territories on this issue. But again, they are being forced to shoulder high costs at the moment, and they recognise, as Premier Perrottet recognised as well, he knows that we're trying to drive down costs, and he cited how much money he's paying in trying to assist New South Wales residents with those high costs, and if we can find a way to bring cost down, it will be good for him and his budget, it will be good for households, and importantly, it will also be good for manufacturers as well, and industry, to see those costs come down.

GREG JENNETT: Queensland has concerns. Dan Andrews, on the other hand, looks forward to something, "Profound about what the National Government or the Federal Government is going to do here, so I'm not quite sure what his expectations are. But if it all gets too hard, could you revert to a super profits concept, if legally, constitutionally, it is too difficult or too costly to move into compensating coal miners.

ED HUSIC: Look, Greg, if you don't mind, I probably won't sort of journey into scenario territory. I take on board the question, absolutely, but if I may say, as a cabinet, we're contemplating a range of things; we're thinking through those options and what they mean and what's required to support them. I, for one, have been saying for quite some time, we do need to make some reforms for the Code of Conduct, which will be one of the best ways to improve the bargaining framework. We have the market, itself, dominated by some very suppliers, and they occupy up to 90 per cent based on what the ACCC is saying of control of 2P reserves, proven and probable reserves, and we do need to see a better bargaining arrangement to allow for customers to get a good deal. So we'd be looking at ‑‑

GREG JENNETT: You're being significantly more assertive in some of your comments previously than you are this week.

ED HUSIC: I'm glad you noticed, thank you so much.

GREG JENNETT: I'm wondering why. Did you get clipped around the ears after some earlier comments? 

ED HUSIC: No, no, no, no, no. 

GREG JENNETT: I think that was alluded to in Parliament earlier this week.

ED HUSIC: No, no. Look, what I've done is engaged in full faith in the cabinet process. I've been grateful for the opportunity to represent industry stakeholders, who I might add, industry makes up, as we previously discussed, and please forgive me for sounding like a broken record, but industry demand, industry or manufacturers make up nearly half of domestic gas demand. So there's a lot at stake for them. I've spoken up very strongly for them because I also know, as you indicated as well in your comments, manufacturing unions represent a lot of workers, we have nearly 900,000 people employed in manufacturing, and so their voices do need to be heard, and I've been grateful for the opportunity to bring that to the cabinet table, and I recognise with that comes great responsibility as well. So I've just sort of had to balance that out while, obviously giving you the straight talk that you're accustomed to.

GREG JENNETT: Well, I note the tone shift. That's probably understandable at some level. What it means is, we're not going to bear much fruit with our questions today. And for that reason, we might wrap it up, and thank you. 

ED HUSIC: Thanks, Greg. 

GREG JENNETT: Good to have you back on the program ‑‑

ED HUSIC: Thanks for having me here, as always. 

GREG JENNETT: ‑‑ as in many instances throughout the year. 

ED HUSIC: And if we don't get a chance to speak, I wish you all the best for the rest of the year.

GREG JENNETT: Appreciate it.