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Doorstop with Keith Pitt, Federal Member for Hinkler Bundaberg Walker Engineering, Bundaberg, Qld

31 January 2019

Subject: Energy


KEITH PITT: I'd like to welcome Minister for Energy Angus Taylor to the electorate and here to Bundaberg Foundry with Enio Troiani. We are here to look at the real world, where the rubber hits the road for energy prices. We know that places like Bundaberg Foundry are under threat from the high power prices from companies delivered by the Queensland State Labor Government. I will call again, as I have done for a very long period of time, the Queensland Premier can fix this. She can fix it today by reducing energy costs for businesses like this which have been in our electorate for over 100 years. Businesses like Bundaberg Foundry have delivered jobs, they've delivered apprentices and trainees into our local systems, into our local businesses, into our community. We want them to continue to be strong and continue to be based right here in this electorate.

JOURNALIST: What are you hearing from local businesses - how bad are the power prices?

KEITH PITT: What we are hearing is that power prices in regional Queensland are unsustainable - they are unsustainable. When you are in a business like the sugar industry, where the price moves up and down based on what happens right around the world, when you are dealing with changes and exchange rates, and you rely on low cost of energy, and of course, the highly skilled workforce which are here at places like Bundaberg Foundry. Now, what we are doing federally I'll let Minister Taylor make some more comments on but I know this - the big stick legislation is coming. I have said to Minister Taylor, I have said to the Prime Minister, I've said to everyone that the moment that that is available take it out of the holster and use on the Queensland Government because they are not doing the right thing by consumers in this country, in this state. They're not doing the right thing by consumers right here in this electorate. They have driven up prices and absolutely rorted the electricity system in terms of returns for them. Now, it is unaffordable, it is unsustainable, and there needs to be action. If they won't act, we will.

JOURNALIST: And are the price increases across all industries, as well as households and everything like that?

KEITH PITT: There have been massive increases in the cost of electricity - not only for domestic use but commercial users like Bundaberg Foundry, like our local irrigators, like our cane farmers and our tree croppers. For them to be operational, for them to be competitive, particularly in worldwide market they need cheap, affordable, reliable energy. As a Government at a federal level, that is what we want to ensure.

JOURNALIST: Keith, do you fear that businesses like this will close down, will close their doors?

KEITH PITT: Look, I am very concerned, not only for places like Bundaberg Foundry, but our local sugar producers which are on a low margin broad acre style crop. It is at the point now where they cannot afford irrigators, because the value of the product, which is increased from irrigation; it's just not worthwhile, given the cost of energy. They are moving to diesel pumps. Now you can't tell me that that is in the best interest of the environment. If they're shifting across to diesel-based energy, rather than what has been a clean supply of reliable generation for a very long time, particularly in Queensland.

JOURNALIST: Can I ask you about the regional deal? Fraser Coast Regional Council has outlined what they want from the regional deal. It includes a better Hervey Bay CBD, and sports precinct; how likely are they to receive these requests?

KEITH PITT: I'm yet to see what the list is for Fraser Coast Regional Council, but can I say, they've been very good at their consultation. This is a tripartite approach. All three levels of government need to contribute. I'm pleased that they've sat down and consulted with their local businesses and their local community, and we will look at what they put forward. We are doing everything we can at a federal level to make sure there is a significant contribution from the Federal Government, but everyone needs to be on board - we need contributions from local government and state government. We'll see this as the deal is put together over the coming months.

JOURNALIST: Is there a timeline that we might be able to see, like from these initial requests to actually implement to fruition?

KEITH PITT: I believe that the statement of intent, the agreement between all three levels will be done in coming weeks. Then of course we'll be working on what projects, what interconnectors, roads, and other infrastructure are critical for expansion. Keep in mind, this regional deal is about jobs. It is about jobs in our electorate in the long-term. It's purpose, it's the reason I fought for so long to get it delivered. It is the only regional deal of this type in Queensland for a regional area – and there are only two right across the country.

JOURNALIST: Where is local funding coming from?

KEITH PITT: At the federal level, it will depend on what type of infrastructure or assets or projects it is. It depends on which portfolios we need to draw out of. I'm very keen on some particular road and connecting infrastructure. I think the state government should be looking at an expansion of its electricity network delivery, particularly to the port. I'll be very happy to sit down and have those discussions and move forward on the regional deal.

JOURNALIST: And Keith, may I just ask another question? Regarding the Cashless Card and the A Current Affair program that labelled Bundaberg the 'dole capital'. Do you have a response to that? Do you think we are the 'dole capital' of Australia?

KEITH PITT: My view is that I can't control what the media says and what statements they make. This is about ensuring that we implement a very tough social policy, but at the same time, through things like regional deal we drive our regional economy and deliver more local jobs. As a Member of Parliament, it's one of the reasons that I am there. We've got to deliver for our community. It is a tough, but necessary policy.

JOURNALIST: Do you think we are the 'dole capital' of Australia?

KEITH PITT: Look, in my view, I think that's a statement made by media - they just want to sensationalise something. I can't control what they say. I want us to be the best possible community in regional Australia. I want our kids to have opportunities when they finish school. I want them to have opportunities for apprentices and trainees. We have things on the table right now. The Skilling Australia Fund is $240 million, just for Queensland, and we can't get the State Labor Government to sign up. That is up to the 50,000 apprentices and trainees. We have kids desperate for those jobs. I'd say to Premier Palaszczuk again - sign up to these deals. It will ensure that we can deliver into Queensland what is necessary.

Now, I'll ask Angus to make some comments.

ANGUS TAYLOR: Well thanks, Keith. It is great to be here with you at Bundaberg Walkers, and with Enio. Businesses like this are the backbone of regional Australia - obviously, regional Queensland - and this region, with over 100 people employed here, these are exactly the sort of businesses we want to see prospering in the years to come. In the last five and half years since we got into Government, 1.2 million jobs created in Australia. The majority, full time. We've committed to a similar number of jobs over the coming six years or so.

Now, the truth of the matter is that there are some real impediments to job creation in the coming years that we and others need to knock down. The first and most important of those, the electricity tax being imposed on businesses, just like this one, by the Queensland Labor Government.

Last year, they ripped $1.65 billion out of the hardworking businesses and households of Queensland to bolster their coffers because they're struggling. They're struggling to make ends meet and so they're making every Queenslander pay an additional $269 million in the 12 months. We're here now, and many others, they'll talk more about this, but Inio's about to see a 70 per cent increase in his electricity charges coming direct from the Queensland Government. They need to do the right thing by the electricity users of Queensland. They should drop their tariffs as Keith said, and they should do it tomorrow. They can do it tomorrow and they absolutely should.

Now there's another tax coming if the wrong thing happens. If Labor gets into government, they have committed to a 45 per cent emissions reduction target. That will be a huge tax for businesses just like this one and on every household. The Climate Change Authority has told us this way back in 2013, they told us there would be a very significant cost imposed by that kind of target. We won't stand for it. A 45 per cent emissions reduction target, as the Business Council has told us, is an economy wrecking target. We will not stand for it and we will fight against that from today right through until the election.

Now, we on the other hand are absolutely committed to bringing in new low-cost, affordable, reliable generation into the market, so businesses just like this one can get access to the low cost affordable, reliable generation that they need. 24/7 reliable generation. We want the Queensland Government to join with us to provide that low-cost electricity for businesses like this one, a business that uses a large amount of electricity each year. We call on the Queensland Government to do the right thing - join with us to provide low cost electricity for businesses just like this.

JOURNALIST: What are you doing federally to make sure, I guess, help the state government, or work with the state government-

ANGUS TAYLOR: We're offering them the opportunity to work with us to bring new generation into the market. Low-cost, reliable, 24/7 generation. We've put out a registration of interest, we've got proposals that have come in, and we'll announce more about that in the coming days. We've had very, very strong support for this program. This is new, low-cost, reliable generation into the market, underwritten by the government. We want large customers to have access to that low-cost electricity because that will ensure that you get jobs in places like this, in businesses like this one. This is crucial for the future of regional Australia and Australia more generally, the sorts of jobs that Australia has always been able to support. Unless we get low cost electricity, unless we have underwritten generation in the marketplace, we won't get the access to the jobs that we know we need. This is not just for every employee - young Australians need these jobs too. We've seen 100,000 young Australians come into work in the last financial year. Unprecedented. I know there's been a significant reduction in youth unemployment in this area. They're the sorts of jobs that we want to see, but we've got to have a low electricity price to do it, that's why we're underwriting new 24/7, reliable generation into the market.

JOURNALIST: Can you explain to us how that works and are there other states that have come on-board with it?

ANGUS TAYLOR: We're asking every state to come on-board with it. We have a large number of proposals, as I've said, that are coming forward. We look forward to working our way through those. State governments are more than welcome to work with us on this. It is crucial that they do. We need the planning approvals and we need the support from the state governments to make sure these happen. This is a test for every state government, particularly the Queensland Government - do they want low-cost electricity available for the hardworking businesses and households of their state? Or do they want to continue to impose a $1.65 billion tax each year on hardworking Queenslanders? This is a test for the Queensland Government.

JOURNALIST: Does that mean more competition like locally?

ANGUS TAYLOR: This is about low-cost, reliable 24/7 electricity provided to businesses just like the one we're here talking to today. As I said, we've been very clear - we are going to underwrite, we're going to play a role. The ACCC recommended this. This is a strong recommendation coming out of their report from last year - we're adopting it and we're asking the state governments to work with us on it. We'll see a number of proposals coming forward in the coming weeks, including in Queensland.

JOURNALIST: How does Queensland compare to the other states in power prices? Are we at the highest across Australia?

ANGUS TAYLOR: It is very clear that the sort of impost that's been imposed on this business, a 70 per cent increase and $1.65 billion tax on Queenslanders is like no other state. The network charges here are extremely high. The Queensland Government could bring them down tomorrow, but they've got to make ends meet and the real problem for the Queensland Government is that they can't manage money like Labor governments everywhere. They can't manage money so they whack everybody with an electricity tax. It is not on. We won't stand for it, and that's why we're bringing forward new generation into the market.

JOURNALIST: I've got a few other questions just from Canberra. On the jobs you were talking about before, those 1.25 million jobs, will they all be full-time?

ANGUS TAYLOR: There has been 1.2 million jobs, a little over 1.2 million jobs in the last five and a half years since we've been in Government. The majority of those are full-time and we certainly want to see the majority of jobs into the future being full-time. There are people who are happy to take part-time jobs, but we want to see the majority of these being full-time. We also want to see a real focus on youth unemployment and, as I say, an extraordinary outcome for the last financial year - 100,000 young Australians in work, who previously weren't in work. That is good for them, it is good for the Government, it is good for everyone.

JOURNALIST: The Assistant Treasurer said they would all be full-time - is that correct?

ANGUS TAYLOR: The majority of the jobs that we've seen created across Australia - 1.2 million jobs in the last five and a half years - the majority have been full-time, and we want to see a continuing focus on full-time jobs. We've had a very strong performance on full-time jobs in the recent past.

JOURNALIST: Just another topic now, is the Treasurer at risk of losing his seat because the Coalition has abandoned plans to take further action on climate change?

ANGUS TAYLOR: Josh Frydenberg is an exceptional Treasurer, he's an exceptional local member, and he has worked hard in his electorate since he was first elected there. I'm sure the people of Kooyong will reward him for that hard work. He's doing an amazing job as Treasurer. We're going to see the first surplus, the first surplus in Australia since 2007. The facts here are stark – Labor hasn't delivered a surplus since the Berlin Wall came down. Well, we've fixed the terrible budget situation they left us with. Josh Frydenberg will be the Treasurer to deliver that, deliver that as a strong Treasurer, a fantastic local member and I'm sure he'll get the support that he deserves.

JOURNALIST: Lastly, how much of a threat is independent candidate Oliver Yates in that area?

ANGUS TAYLOR: Josh Frydenberg is a very, very strong local member. He's a very strong Treasurer. He's energetic, he's fighting hard for businesses exactly like this one, he's fighting hard for jobs for Australia and he's fighting hard for his electorate, he does that every day and I'm sure the good people of Kooyong will reward him for that.

JOURNALIST: So coming here today, you've said that there'll be more information coming out in coming days to do with your policies. What assurances can you give today to businesses like this, given that even though unemployment has improved, it's still rather high compared to other electorates?

ANGUS TAYLOR: Well we've seen, as I say, over a million jobs created in our time in government. We've seen a sharp drop in youth unemployment here in Keith's electorate through very significant- [inaudible] might want to make a comment about that. But the crucial thing is for jobs in areas like this is we have to make sure that businesses exactly like this prosper and succeed and that requires low energy prices. And that's why we're calling on the Queensland Government today. to drop their electricity tariffs to Queenslanders, to drop their electricity tax - a tax on jobs. That's what it is; it's a tax on jobs. Drop that tax to Queenslanders - $1.65 billion in the last 12 months and increasing $261 million. That's not on. If you want to create jobs you have to make sure that businesses can be competitive.

ENIO TROIANI - MANAGING DIRECTOR, BUNDABERG WALKER ENGINEERING: Thank you very much Keith and Angus for making the time today to come and visit us here at Bundaberg Walkers. We've been here 130 years doing what we do, and we're fairly unique in, I guess, the manufacturing industry in Queensland in that we are very specialised. We focus on the sugar industry and we work all over the world - about 50 per cent of our revenue comes from our export markets. From that point of view, it's quite critical that energy costs for us remain globally competitive. It's one thing to complain about local prices, but when you're competing with people in South East Asia who are paying 10 cents per kilowatt-hour for their power to do the same sort of work we do, we start struglle. We're very happy to compete based labour productivity. We have highly skilled tradesmen who work here, who do an excellent job and we pay them a good rate and they earn their money. Material costs are the same all over the world so we can compete on that. But when it comes to energy costs, it is a killer for us. So it is very disturbing for us - we've seen the energy price increase by 100 per cent in the last 10 years and by June next year, if we don't do anything, it's going to increase by another 70 per cent and that's pretty hard to digest. So I just hope that someone out there is listening and at some point between now and next year we can get some common sense.

JOURNALIST: What's your typical energy bill at the moment?

ENIO TROIANI: It's about $1 million a year for electricity and about another $300,000 for gas, whether it is LPG or natural gas. The stupid thing now is that even in the gas area, in the past it was like natural gas was the cheap energy source, at the moment, it's all the same - LPG and natural gas are about the same price, which is a crazy situation.

JOURNALIST: Is electricity one of your biggest, I guess, costs for running this business?

ENIO TROIANI: It certainly is, but as I said, it's extremely important to us because when our competitors come into Australia to try and undercut us, or we're competing with them directly in our markets around the world, we can compete on the other things but energy cost is a significant input and when you're three times higher than they are, it becomes difficult to win that battle. Our average energy price 10 years ago was 15 cents per kilowatt-hour. I think today it's around 28 and by the middle of next year we project it to be about 48. So that's not a sustainable situation and really, it's been brought about, it appears to me, by the stroke of a pen - someone just saying this is how it is going to be. Nothing's really changed, I don't see how costs can justify these sort of increases. So I just hope that someone out there's listening.

JOURNALIST: If those prices continue to increase and you reach that benchmark, what will that mean for local jobs?

ENIO TROIANI: Well, it's going to make it more and more difficult for us to remain competitive and we're looking at every option we can possibly think of right now. One of the options is to put 5 megawatt diesel generation here in the town to replace something that's worked quite well for the last 25 years and has no restriction on it. So that's one of the options we're looking at. There's other options - we can move the operation elsewhere. That's not something I want to do. We've been here 130 years and there needs to be a better solution than that. But to be fair, we have to look at every option.

JOURNALIST: Would you be looking at cutting back on your labour?

ENIO TROIANI: Well that will probably happen on its own accord if nothing else changes. We would have no say in that, that's not something we'd like to do - we have a very highly skilled stable workforce here. We try and, even though we work in a cyclic industry, we try to maintain that full group of skilled people. So it's like a doomsday scenario we don't want to consider, but I guess at the end of the day it will depend on what happens.