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Interview with Melinda James, ABC radio Illawarra

5 June 2020

Melinda James

Subject: The Regional and Remote Communities Reliability Fund and microgrid grants, and the HomeBuilder scheme and renovation grants.


MELINDA JAMES: One of the other things you just heard about in the news is the group of local dairy farming families in the Nowra area, they are building a bio gas power generation plant that will be fuelled by, yes, manure - from dairies, pig farms, beef cattle feedlots, chicken farms, those sorts of things, I think. Although these ones are dairy farms primarily in Nowra. It's all part of a microgrid grants that has been delivered by the Federal Government. It is from the Regional and Remote Communities Reliability Fund. To tell us a bit more about that and discuss the events of the week federally, I'm joined now by the Member for Hume and the Energy Minister Angus Taylor. Angus Taylor, good morning.

ANGUS TAYLOR: Thanks for having me, Mel.

MELINDA JAMES: Do you know much about this “poo power plant” that they're setting up there in Nowra? [Laughs]

ANGUS TAYLOR: Well the program is in my portfolio, and it's an important one. I haven't actually seen the potential sites of the project, but I do know a little bit about it. Look, this program, it's a $50 million program across Australia for regional and remote communities to establish microgrids. This is little, self-contained electricity grids. What's great about these little projects is they are a way to pioneer new technologies, get them to work, and solve a problem which we see in regional and remote communities, which is they are obviously out from the grid. That means getting electricity to them can be very expensive, and so having a microgrid can often make sense. And increasingly we're seeing in regional areas, people are establishing their own microgrids, but we want to pioneer new technologies. Hydrogen is a technology that some of the microgrids that we've announced today will use, but of course this is one using “poo power”, as you say, which is a really interesting way to establish what's called bio gas and you use bio gas then to generate electricity. So a really great opportunity, and particularly for dairy farming, where manure, obviously there's a lot of it because it's pretty intensive farming and you've got to deal with it, and this is a great way to deal with it and bring down your electricity costs while you're at it.

MELINDA JAMES: It sounds like as critical mass builds it's the kind of thing that lots of farms could implement. Am I right in saying that? Is this something we could look at?

ANGUS TAYLOR: Yeah, that's exactly right, that's the purpose of the exercise here - to get some example projects up, template projects up, get them to work and then, assuming they're successful, not everything works in life, but certainly we think the ones that we've selected have got the best possible chance, then they've got potential to roll out more generally. And for dairy farmers power, energy is a big cost. They use a lot of energy and you've got to milk the cows every day. And that is an important cost to try to bring and down for them. So this has enormous potential.

MELINDA JAMES: And people will hear more from those local dairy farming families who are involved. I shouldn't call it the “poo power plants”, I just kind of coined that term myself and it's probably going to stick now. But you'll hear from them later on, on ABC Illawarra. Angus Taylor, one of the things that was revealed this week, that was highly anticipated with several, kind of, speculative articles in the lead up and then was finally - the details were released, really, yesterday. But it's been attacked on a couple of fronts and this is the Renovation Grant, part of the HomeBuilder scheme, in order to stimulate the construction sector. $150,000 is the minimum, the minimum that people can spend on one of these renovations and get access to the $25,000. Who has $150,000 renovation, who should really be receiving $25,000 in government funding?

ANGUS TAYLOR: Well let's be clear, there's two parts to this - there's new homes and renovations. And the idea here is very simple; it is jobs. Jobs, jobs and jobs. So, we need bigger projects to be able to generate jobs, and the advice was that this is the best way of getting bang for our buck. Now, what it means in practice is for every dollar of government spending, we get many dollars of private sector spending, and that is the best way to drive jobs. That's been the very clear advice. It's true that, as a result, not everyone will be eligible, but the point here is that we all benefit from getting people back into work. That is absolutely crucial. We benefit, because so many people in that supply chain, in this case the construction industry, they get work. Manufacturers, you know, we were hearing from timber mills yesterday, who were delighted about this because it allows them to keep their businesses going. And of course, as more people go into that sort of work, they need services and they're able to spend money on services. So, this is the approach of getting maximum bang for our buck from government money to maximise the number of jobs we can get-

MELINDA JAMES: So, is it fair to interpret then, that a by-product of getting those jobs remaining in the system, a by-product of the stimulation, is just that a bunch of people who can afford, at least $150,000 up to $750,000 dollars on renovations. People who probably aren't on struggle street, are just going to get $25,000 dollars in government cash? That's just a by-product rather than a benefit.

ANGUS TAYLOR: Well Mel, the overwhelming focus here is jobs and it has to be. I mean, look, as we go into the post-COVID environment, finding ways to get the maximum number of jobs for the minimal amount of government spending. Because we have, let's face it, we're facing very significant debts and we have to pay those back and we have to pay interest on them, we've got to get absolute maximum bang for our buck and that's the approach that this program is taking.

MELINDA JAMES: Would we get more bang for our buck though - but if those people who were given jobs were doing work on something that had a public benefit or a lasting benefit. There's been a lot of talk about public housing, social housing, even public schools, those sorts of things, if they were working on those kinds of investments. Isn't that more bang for taxpayers' buck?

ANGUS TAYLOR: Just on social housing - which has been raised a lot - we spend $6 billion a year on our social housing, but the issue is that for every dollar we spend, we get a dollar of activity. Here we're talking about spending a dollar and getting at least $6 and potentially much more of activity. So, you know, this is, if government- 

MELINDA JAMES: Why do you get more out of renovating a private home, compared to a public housing property? 

ANGUS TAYLOR: Because there's a multiplier. Because we're putting in $25,000 and the homeowner is putting in at least $150,000. That's the point. 


ANGUS TAYLOR: And you've got to get those multipliers. Look, if every dollar that is stimulating the economy, comes from the government, we'll be broke. We cannot do that. We simply can't. So, what we've got to do is stimulate private investment and we all benefit from that. And, as I say, you know, there's the direct benefit to the homeowner - I understand that point and that's the point you're raising - but, the indirect benefits of the flow on of job creation, for everyone who's involved in that construction supply chain and then everyone involved in that construction supply chain, goes to local businesses and buys services and goods, you get that flow on. We have to absolutely maximise that flow on, and if we don't, we will be stuck with high levels of unemployment. We can't afford that and that's why we're doing it this way.

MELINDA JAMES: We'll have to leave it there, we're about to hit the news. But thanks so much for your time this morning.