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Interview with ABC Radio North and West SA

27 August 2015

Subject: Industry in South Australia, resources sector, automotive sector, renewable energy, uranium


JOURNALIST: Good Morning Minister, so what are you doing in Port Augusta today?

IAN MACFARLANE: Well I’m here having a look at a couple of things and talking to the local mayor and to local businesses as well as addressing the conference. The area is looking at a very serious change in its economic base. I’ve just been out to Sundrop Farms and looked at the expansion that’s going on there. It’s a fantastic opportunity with the potential for lots more to come and looking at how various Government programmes could assist and accelerate that potential expansion and talking with the management. As I say, I’ll be having a discussion with the mayor both here and in Whyalla, talking about how the communities are coping with the changes ahead and also talking to business. It’s a testing time for this region.

JOURNALIST: It’s testing for the State as well in industry obviously with Holden’s closure and Alinta’s power station forecast to close possibly as early as next March. What can be done to kind of drive investment and industry across the State?

IAN MACFARLANE: Well we already have in place for South Australia the Growth Fund and that’s providing between South Australia and Victoria $155 million to assist industries to transition, to assist workers in the auto industry to retrain and upskill to other industries. There’s the Next Generation Manufacturing Investment Programme which assists new business to come to South Australia and to set up and attract jobs into this area. We’re looking at a couple of other things that we’re doing as well on top of that. Simon Birmingham, the Assistant Minister for Education and Training is making sure that his Industry Skills Fund is being rolled out and made available to businesses so they can upgrade the skills of people who are working in the industries. So look, we are also emphasising that the Federal Government is removing the imposts on business, so we’ve got rid of the carbon tax for the high intensity energy users and we’ve exempted them from the Renewable Energy Target. We’re getting rid of red tape and green tape, we’re lowering the cost of doing business in Australia and we’ve given small business a tax concession. So we’re doing everything we can but we need to do it in concert with the South Australian Government and also with the local governments in the region.

JOURNALIST: One thing a lot of people around the Port Augusta region are keen to see is renewable energy such as a solar thermal power plant. A lot of people are saying it’s kind of difficult with this Government to get those kinds of projects through. How can those projects be better supported?

IAN MACFARLANE: Well look that’s a misconception and the reality is the Renewable Energy Target is now bigger than it’s ever been. So it’s now 23 per cent of the electricity we’ll consume in 2020. So there’s a huge opportunity through the Renewable Energy Target. We’ve still got the Australian Renewable Energy Agency (ARENA) which is assisting industries in South Australia and if we look at funding from ARENA in South Australia for renewable energy projects, it’s topping $80 million. That’s on top of the subsidies they get from the Renewable Energy Target and the Clean Energy Finance Corporation is also active in this area. We are as a Government doing a lot to encourage renewable energy and as I say, the target for renewable energy in Australia is now up from 20 per cent to 23 per cent.

JOURNALIST: There’s obviously lots of cuts in mining at the moment because of the low iron ore prices. How do you see that industry being able to move forward in the future?

IAN MACFARLANE: Well look iron ore is still well above the long term average price and those efficient mines that are able to produce iron ore below that price are more than competitive and in fact are reaping quite handsome returns from producing iron ore. The more marginal mines are finding it difficult and they have to, as we’re seeing in coal in eastern Australia, introduce production efficiencies. They are changing the structures of their workforces and some of the inefficiencies that grew in the boom times need to be basically pruned out. The long term prospect for the resources sector in Australia is still very strong, it still is the major exporter in Australia, and it still provides a solid base to Australia’s economy. So whilst it has cycled up and down, overall the industry continues to be strong.

JOURNALIST: People are confident anyway that the iron ore body will still be there, so people in Roxby Downs particularly with Olympic Dam as well; do you see those communities still continuing to thrive?

IAN MACFARLANE: Well look the long term prognosis for uranium is very strong. People continue to use steel in their everyday lives, so again the long term demand for iron ore is strong. We just have to ride out these commodity cycles. As I say it requires efficiency, it requires Government to reduce the burden it places on business. It requires the community to basically work together. We’ve been through these cycles before. Sure, this one coincides with the closure of the automotive industry in South Australia and that’s an added issue, but it’s something we can manage. Australians have been more than resilient to adversity and also innovative in the way we get out of difficulty. So one of the things I’m doing as the Industry and Science Minister is bringing science and innovation into industry so that we produce high value, more competitive products for the international market that provide long term jobs here in Australia.