Interview with Andrew Clennell, Sky News

Interviewer
Andrew Clennell
Subject
Gas Heads of Agreement, new resource projects, stage three tax cuts, windfall profit tax, WA’s role in the federal election, the Mangles Bay Fishing Club.
E&OE

ANDREW CLENNELL: Here is my interview with Resources Minister Madeleine King, conducted in Perth late last week, where we talk about stage 3 tax cuts and the future of coal and gas in this country.

ANDREW CLENNELL: Madeleine King, thanks so much for your time. You recently secured this agreement with gas suppliers meaning you don’t have to use the security mechanism. How hard was that, and what does it mean?

MADELEINE KING: Well, it was a difficult negotiation, but that’s because there’s a lot at stake. So, the heads of agreement was a mechanism created by the former Liberal-National coalition government, and we have sought and have achieved a vast improvement on it where it sets an excellent amount of supply – more than, I mean, nearly triple than what the ACCC had predicted would be the shortfall for next year. So, it’s reassuring for the supply in the East Coast that the gas producers will make it available. But also, I want to clarify that they’ve already got 195 petajoules of gas under contract into the East Coast already. So, the gas producers are making sure there is supply. But equally, you know, there is concerns from manufacturers around the pricing, and that’s something the gas producers must be very much well aware of.

ANDREW CLENNELL: You said when you announced this that gas prices would not return to pre-Ukraine war levels of less than $10 a gigajoule. You expect them to stay at what they are now? What does this mean for consumers in terms of what their gas prices will be going forward?

MADELEINE KING: Gas prices will fluctuate. The point I was trying to make is that the cheaper gas that came out of the Bass Strait for the southern states – Victoria and New South Wales – has depleted more quickly than anyone expected. And that was relatively inexpensive to extract and therefore it cost less, whereas the coal seam gas out of Queensland does just cost more to produce and to transport. So this is where the pricing is difficult and won’t be as low as it has been for that domestic supply. We’ve had the heads of agreement agreed to put downward pressure on those prices through that basically excess supply. The concept is with more supply there will be downward pressure on those prices. But I do accept if prices don’t come down there will be more for the Government to do in that regard.

ANDREW CLENNELL: Such as?

MADELEINE KING: Well, we will look at that and we will see. The gas producers have to make the code of conduct and the heads of agreement work. They have to prove themselves to the Australian people but also to those manufacturers that they can make affordable gas available to them. And if they fail to do that the Government always has other levers and it should always use them if manufacturers find this, you know, grossly unaffordable or unsustainable.

ANDREW CLENNELL: Do you feel the difficulty in your role in the sense that the government's so big on renewables – and your colleague Chris Bowen is almost a zealot in this space, it’s got to be said – and you’ve got to keep talking up, I guess, or making sure that gas is there in particular, but even coal? Do you feel that in your role that you’re pushing against the government in some respects?

MADELEINE KING: Look, not at all. We’re working together to the same ends. We as a government took to the people of Australia a commitment to net zero emissions. The people of Australia that voted for us right around the country, especially here in WA, backed that goal in. So, we’ve now legislated for that. So, it’s all shoulders to the wheel across all portfolios to make sure that happens. What we absolutely know is that without the resources sector this country and the world doesn’t get to net zero emissions.

ANDREW CLENNELL: Now, Chris Bowen said when Labor hit power he didn’t want to see any more government finance for new coal and gas fields. Do you agree with that?

MADELEINE KING: Well, the thing is coal and gas fields, if they’re not financially able to stand on their own two feet there shouldn’t be government injection of cash into them. And that does not make sense, especially in these constrained times. And we all know that companies that are seeking to undertake new projects usually are pretty – very much financially stable and have the backing of banks from around the world and international investments. So there is no – there’s not really any reason for a government to intervene in new projects. They look after themselves financially, and if they don’t they shouldn’t go ahead.

ANDREW CLENNELL: Did the previous government then have too many fossil fuel subsidies in your view?

MADELEINE KING: Yeah, I think they probably did. And fossil fuels, they make a lot of money, and we’re seeing them make a lot of money now, and companies involved in it are in profit mode. Having said that, they put a lot of investment over decades into many of these projects and, you know, profit is okay, but when it’s – you know, people can obviously, you know, not be that happy to see government cash go into profit-making enterprises when they’re finding it hard to fill their petrol tank.

ANDREW CLENNELL: Let me ask about some of the projects that have been proposed and about Labor’s position on them. One is the Beetaloo Basin, the other is the Barossa project. What’s going to – how successful do you think these projects are going to be getting up?

MADELEINE KING: Well, the Beetaloo Basin project in the Northern Territory has been an active exploration project for a number of years. And it's also been a very proactive study of that field by the Northern Territory government. They undertook the PEP review, a scientific review, of hydraulic factoring. So we support the ambitions of the Northern Territory government in that regard. They know it’s important to develop that basin to diversify their economy, but also the Northern Territory government and our government realise there’s a lot to get through in making sure the public have confidence in those projects and also that traditional owners’ rights are respected in that regard too.

ANDREW CLENNELL: Do you see Narrabri ever going ahead?

MADELEINE KING: I hope Narrabri goes ahead. It would be a good project that would be very helpful for the gas supply in New South Wales and also Victoria. But it is a matter for the proponents and the government of that state.

ANDREW CLENNELL: And has the Victorian government done enough to secure gas supply?

MADELEINE KING: The Victorian government has – have lifted the moratorium on conventional gas and they’re working through that slowly, and I congratulate them on that. They know that gas is going to be part of their mix, and they also know that right now brown coal is very much part of their energy mix and that that will – they want to obviously bring that down so that there’ll be less emissions. And they’re investing and supporting offshore wind farms, which is going to be very important for their future power needs as well.

ANDREW CLENNELL: When do you think we’ll see the last coal-fired power generator in Australia?

MADELEINE KING: Well, my understanding is that every coal-fired power generator in this country now has a closing date, but I can’t give – I’m not a savant on numbers so I’m not sure when the last one is now scheduled.

ANDREW CLENNELL: But it seems to be around 2035 that a lot of companies are talking, aren’t they?

MADELEINE KING: It might even be 2040, but –

ANDREW CLENNELL: Is that too soon?

MADELEINE KING: Well, each state will work with those generators to make sure there is the backup there and the swap is made for new power. And I think we need to be really clear that there is a difference between the closure of coal-fired generators and also the other part of the coal industry, which is the coal for export, again, in terms of international partners.

ANDREW CLENNELL: Sure. But when you came to government this immediately became a pretty hairy issue and apparent, didn’t it – the difficulties with this.

MADELEINE KING: Yes.

ANDREW CLENNELL: And no doubt the government’s going to keep seeing them. I just wonder – I mean, State governments privatised these generators. I mean, I was told at the time that was about future private investment, but it just didn’t happen. Was that the right thing to happen at that time?

MADELEINE KING: Well, I’m not going to reflect on what state government decisions have been made in relation to privatisation. What we know is that the world is moving away from – and this country is moving away from coal-fired power generation. And what’s really important is that this country and this government encourages international investment into renewables and swift take-up of them. And through, you know, large renewable power generation like, you know, offshore wind, which is now able to be done in this country. But that will take time and it will take money and it will take a lot of effort and, you know, we’re up for that task.

ANDREW CLENNELL: I wanted to ask about the stage 3 tax cuts. A lot of workers in the resources sector sacrifice a lot to earn $200,000 a year or so. Some of them would have voted for Labor expecting a tax cut. Now, the Treasurer has been a bit shaky on this in terms of perhaps amending this promise. What do you think the government should do on it?

MADELEINE KING: Well, firstly, I don’t think the Treasurer is looking very shaky on this or shaky at all. And also I agree with what you say about there’s many resources workers that give up a lot in terms of time with their family to, you know, earn the money that keeps their family going. So, you know, I acknowledge that, and it’s very important work right around the country but of course particularly here in Western Australia. We’ve no plans to change the stage 3 tax cuts. It is legislated. What I would say is obviously there’s a conversation going in the community. Many – a number of commentators have brought it up and the media is interested in this and, you know, that’s okay to have an open discussion about that tax or any other tax. But right now this government is not planning any changes.

ANDREW CLENNELL: What do you think – as the most senior Western Australian minister, what do West Australians want to see from your government?

MADELEINE KING: Well, I think – West Australians aren’t – I mean, I know we talk like we’re different sometimes, and there can be a bit of parochialism and that’s fair enough. I mean, when you live in a place like this why wouldn’t you be a bit parochial from time to time. But Western Australians do share the same concerns – you know, cost of living pressures exist everywhere. You know, families want their children to have access to good schools, you know, right across the board, whether they’re in the inner suburbs, outer suburbs or in country towns. They want to be able to re-educate themselves if they can through TAFE.
So these are things that are common for everyone and I don’t think the needs of Western Australians differ much more than anyone else. Everyone, you know, wants a happy, quiet life where they can improve themselves and, lucky for us, we get to enjoy beautiful views and places like this.

ANDREW CLENNELL: Do you think the sort of sabre-rattling from Scott Morrison towards China had any impact on the WA vote, that people were a bit off that here?

MADELEINE KING: Look, I don’t think that was helpful overall. I think the greatest issue for the Liberal and National Party in Western Australia was this fighting with Clive Palmer was a really dense thing for the government to do.

ANDREW CLENNELL: The High Court, yeah.

MADELEINE KING: The High Court. To seek to separate Western Australians from the rest of the country like that and back in a billionaire who basically gets his money from doing nothing by taking royalties was, you know, offensive to people. And you just have to see the bumper stickers around here that say certain things about Clive Palmer. You know, he’s not a well-liked figure and the former Prime Minister Scott Morrison continually having cracks at the Premier Mark McGowan was just, you know, entirely unhelpful and just, quite frankly, rude.

ANDREW CLENNELL: Just finally, you spoke about how well resources companies are going. And, you know, there have been measures to get them to pay more tax. I’m aware of that. But what about this discussion – I know it was politically difficult last time – about a windfall tax? Do you think we’ll ever see that discussion again in the time of your government?

MADELEINE KING: Well, we’ve got no plans for that. But, you know, we’re not a government that stops discussion. If people want to raise these things, they’re perfectly entitled to. You know, we see there’s an energy and power crisis around the world for things that are entirely outside of our control, any of our control here in Australia. So there are discussions that are going to be had that will naturally – again, these ripples will hit us and, you know, that’s okay to have those discussions here as well. But right now we have no plans for any such tax.

ANDREW CLENNELL: Madeleine King, thanks for your time.

MADELEINE KING: Thanks, Andrew. Thanks so much for coming down to the beautiful Mangles Bay Fishing Club.

END