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Interview with ABC Radio

2 April 2015

Subject: Renewable Energy Target, country of origin food labelling

E&OE

JOURNALIST: Minister, both parties appear to believe that aluminium should be fully exempt from the Renewable Energy Target so will the Government make that happen through regulation?

IAN MACFARLANE: Well the advice that the Labor Party’s got from the Parliamentary Library is incorrect. The Labor Party should know that because they administered the Renewable Energy Target for six years in Government. If they really wanted to resolve this issue and get the right information, they know that all they have got to do is ask if they’ve got such a short memory that they can’t remember from less than eighteen months ago. The reality is that the Act doesn’t provide the ability through regulation to provide a total exemption for energy intensive trade exposed industries. It does allow partial exemption but not total. The only way to resolve this issue properly is to sit down and come to an agreement and we’ve been trying to do that with the Labor Party now for six months and at no stage have they made a meaningful offer on this issue and have simply continued to play politics.

JOURNALIST: So there’s no mechanism the Government can use, other than legislation, to make the aluminium sector fully exempt from the Renewable Energy Target?

IAN MACFARLANE: There is no mechanism to make the aluminium sector fully exempt from the Renewable Energy Target, other than legislation. Regulation simply won’t do it and the Labor Party has to stop playing politics and actually take seriously the need to negotiate a fully legislated outcome in regard to the Renewable Energy Target.

JOURNALIST: Where are these negotiations up to? You said that they have been going on for six months but they appear to be at a stalemate.

IAN MACFARLANE: Well the Coalition has put forward a number of proposals. We’ve moved our position originally from 26,000 gigawatt hours through to 31,000 gigawatt hours and now to 32,000 gigawatt hours. Every time we move that target, we increase the risk that even the reformed scheme will default. We currently are proposing a target for renewable energy of 23 per cent in Australia. Now we’ve basically done all we can, but while the Labor Party continues to play politics, I am pessimistic that we’ll get an outcome from them. So I am very deep into discussions with the Crossbench to see if we can use the Crossbench in the Senate to pass legislation and make the scheme sustainable in a way that will ensure that we reach our target and in fact exceed it to, as I say, a level of 23 per cent renewables by 2020.

JOURNALIST: Does that provide the sector much certainty though, because Labor has already indicated that if you do strike a deal with the Crossbench, they are not necessarily going to honour that deal if they should win the next election?

IAN MACFARLANE: Well let’s be clear, it’s the Labor Party who is causing the uncertainty in the industry now. We’ve provided the industry with an opportunity for certainty. We’ve provided the industry with an increase in the overall target by three, to 23 per cent by 2020. The Labor Party continues to play politics on this issue, and not once has made a solid proposal to us in return for our negotiation.

JOURNALIST: The sector itself has put forward a solid proposal of 33,500 gigawatt hours. Now Manufacturing Australia last week came out saying that the difference between your proposal and the industry’s proposal is insignificant compared with the continued uncertainty and likelihood of much higher costs if a deal is not done. So why not move to that 33,500 target?

IAN MACFARLANE: Well we’ve already moved three times. Every time we increase our target, we increase the likelihood that the scheme will fail. We believe we’re already exceeding the comfort range in ensuring that the scheme succeeds and the Coalition is not prepared to move off 32,000 gigawatt hours. We’re already over and above the number which I believe we could be confident that the scheme is sustainable in that the challenge to industry to double the size of the renewable energy generating sector in the next five years in terms of what they’ve built in the last fifteen is enormous. And to keep increasing that target keeps increasing the risk that the scheme will simply default and collapse around us.

JOURNALIST: But if you have the renewable energy sector and now Manufacturing Australia calling on the Government to seriously consider that 33,500 gigawatt hour target, is it the Government that’s being intransigent?

IAN MACFARLANE: No it’s not. We’ve already moved three times and the offer from the Clean Energy Council was the first offer put on the table. It’s their obligation to come to an agreement with the Government and we are not prepared to put the scheme at risk any further by further increasing the target. We are at the top limit of what we believe is the safe band in terms of the scheme being sustainable. It’s now up to industry to make the next move.

JOURNALIST: Just on one other issue in your portfolio Minister, food labelling. You had initially indicated that you would be taking a proposal to Cabinet by the end of the month. You’ve now announced that there will be a few months of consultation. What is the hold up with this?

IAN MACFARLANE: No, we have already taken the Cabinet Submission to Cabinet, we did that last week. Cabinet agreed to take the next step in progressing the issue of food labelling by giving us the green light to go out into market testing and a consultative phase with the industry and we began those roundtables this week in Sydney and they’ll continue around Australia through this month and into May. Once we have the findings of those consultations and market testing, we will now take a second proposal back to Cabinet in August and that will give us the imprimatur to go out and then begin the discussions that need to take place both with the States and industry to implement a new labelling regime. I said right at the start that this would be a laborious process, that it would take us probably till the end of the year to actually implement, and at the moment we’re still on target for that.

JOURNALIST: What is so difficult, I guess, from the Government’s perspective, about telling consumers where their food comes from via food labelling?

IAN MACFARLANE: Well it is a process where we need to make sure that after thirty years of missteps and mistakes that we actually put in place a labelling system that gives the consumer the information that they need to know where the product is processed and where the ingredients come from. That requires us to consult with the manufacturing industry and the processing industry, but also with consumers because we want to make sure that the final labelling system is one that consumers understand and welcome.

JOURNALIST: Isn’t also the other difficulty though that you need to give manufacturers some flexibility because of course you’re dealing with fresh produce and there could be supply issues along the way?

IAN MACFARLANE: Well from our discussions to date, we’ve certainly solved that issue of flexibility. It’s now a case of making sure that we comply with things like the World Trade Organisation rules and also be confident of the cost to manufacturing and consumers of implementing a new labelling regime. That’s what the process that we’re currently involved in through consultation and through market testing - will give us a clear picture on - and that’s what we will be taking back to Cabinet in August.

JOURNALIST: So do you actually have a proposal at the moment that you’re putting forward to industry. Or have you just been given the green light to proceed with this process?

IAN MACFARLANE: No, we are discussing with industry an option around an emblem, a symbol and a lineal, round pie chart to give a visual indication along with a descriptor, and those discussions are well advanced and we are finalising a number of options around that, that we’re going to market test with consumers. So the process is moving along, but we don’t want to make a mistake with this. As I say, over the thirty years that I’ve been involved in food labelling all we’ve come out with so far is ‘made in Australia from local and imported products,’ which tells the consumer absolutely not a thing.

JOURNALIST: And just finally Minister, there were some reports around last week that the Nationals were concerned that there wasn’t really the appetite within the Liberal Party to actually move on this, and that there was a move perhaps to delay the process. What’s your response to that?

IAN MACFARLANE: Well I mean that was just a rumour. The reality is that Agriculture Minister Barnaby Joyce and I sat side by side yesterday and made it explicitly clear to industry that we, the Government, were proceeding with this and we needed to get on with the job. In terms of the Government, that is our very committed view, that we will complete this process, we will provide consumers with meaningful information and that they can understand - where a product is processed and where the ingredients come from - when they go into a supermarket.

JOURNALIST: And you’re hoping to have that all finalised, and a proposal to Cabinet by the end of the year?

IAN MACFARLANE: Well we’d like to see the regime implemented by the end of the year and the next stepping stone in that process is to take a submission to Cabinet and then to the Party Room and that will occur in August.

[Ends]