Remarks at launch of Energy Efficient Communities Program - Dairy Farming Business Grants, Bodalla, NSW
22 June 2020
Subject: Energy efficiency, energy prices
ANGUS TAYLOR: Really delighted to be here in Bodalla, to talk about energy efficiency in agriculture, in particular in dairy. This has been a major issue for dairy farmers right around Australia. Energy costs are one of their biggest costs, along with labour and fertiliser. We need to make sure that they're getting a fair deal on energy. There's a couple of ways to do that. One is get prices down. The other is to help them to better utilise their energy, be more energy efficient, and that's what this program is all about. It's $10 million. We announced or gave a preview to it before the election, and now we're announcing today there's $10 million for 500 dairy farmers, $20,000 grants. They don't need any co-contribution to help with their energy efficiency. So that could be buying new equipment. It could be doing an energy audit. It could be putting measuring equipment on their energy so they better know where it's actually being used. We're looking forward to really helping dairy farmers, not just to reduce the price, which is an important issue and one that we're seeing very good progress on, but to reduce their usage and still get the same outcomes from it. We know this is an important issue for them. Look, dairy farmers have faced tough times in recent years with prices being squeezed by their customers. We need to make sure they're as efficient as possible. We need to help them in every way we possibly can and of course, this is an important means of doing that, alongside accelerated depreciation which we know dairy farmers have been using to try and improve their equipment. This is an important contribution to making sure that they can run viable, competitive organisations, businesses that can be successful and profitable for them and their families.
JOURNALIST: As far as the Government's contribution, $20,000, what numbers are there around that $20,000 and how much money it will actually save farmers?
ANGUS TAYLOR: It just depends on the circumstances. So this can be all the way from doing an audit - a lot of dairy farmers and other small business people we're finding are getting great gains out of just getting someone having a look at their equipment and seeing that they can switch out of a bit of gear or change their usage patterns and get significant reductions - right through to buying equipment. We'd expect that to be used in association with the accelerated depreciation allowances, which we've obviously increased in recent times. Savings can be 10, 20, 30 per cent typically for dairy farmers and other small businesses. This is part of a broader program, a $50 million program which includes other businesses, but we have a dedicated $10 million here for dairy farmers because we know they're facing particularly difficult circumstances. Energy is a big cost for dairy farmers. We've got farmers around here paying $10,000 a month in energy bills. That is a big number for a small business to be able to handle. So, taking $1000, $2000, $3000 off that through energy efficiency measures can make a really big difference.
JOURNALIST: How do they qualify?
ANGUS TAYLOR: They've got to apply. They've got to apply. There's no need for co-contributions. This can be just for a particular initiative of up to $20,000 or they may want to co-contribute but they've got to apply. The main thing is they get in there, fill out the application forms. We have made it as simple as we possibly can. We know traditionally one of the challenges with these programs is getting the application forms filled out. We've made it as simple as we can. My strong recommendation is fill it out and get it in as quickly as possible.
JOURNALIST: You touched on the broader issue of farm gate prices and the drop there. This, I would assume, only goes part of the way to really addressing that issue. What is the Government committing in terms of further support?
ANGUS TAYLOR: Well, obviously, the code of conduct is in place. We were just talking about that earlier. I'll leave the details to the Agriculture Minister. He's the guy who is focused very much on these things. For me personally, I'm deeply passionate about the dairy industry. I worked for many years in the dairy industry, both in New Zealand and here, and I know how important that farm gate price is. That's one that I know that the Agriculture Minister will continue to focus on. The focus here today is on energy costs, which, as I say, it's not the whole answer for dairy farmers but it's an important part of it because they are such big users of energy, whether it's in their dairies or for pumping water, this is an important cost. We've got to do everything we can to get that cost of business down.
JOURNALIST: In terms of leaving it to the Ag Minister, are you still at least confident that while today's announcement certainly helps, that there will be more support on the way as we navigate our way through this?
ANGUS TAYLOR: I know the Agriculture Minister is always focused on dairy prices. It has been an important issue for him since he came into that role and he's been very focused on it, and he'll continue to focus on it. I'll leave him to announce what we're doing in that area and what's happening in that area. But I would say it is a crucial issue that farmers get a fair price. There's no doubt about that. We expect their customers to do the right thing by them. If they don't, they won't have suppliers. It's as simple as that. And it is important that there's a fair price for dairy farmers in this region as there needs to be right across Australia.
JOURNALIST: Matt, what are your thoughts on today's announcement and how this will help your farm?
MATT BROAD, DAIRY FARMER: Yeah, we have a few major infrastructure works that are required to help with energy or keeping our energy bill down and any little piece along the way is a massive help.
JOURNALIST: Yeah. And as far as in terms of the energy component to fuel your farm-
MATT BROAD: Yes.
JOURNALIST: How important is this announcement?
MATT BROAD: Well it's one of my four big bills. So, anything that we can reduce our bills with is a huge help to the bottom line. Cooling milk is a huge user of energy. Pumping water, especially irrigation water, to keep feed up to the cows is another huge energy bill. So, anything along the lines there is a great help.
JOURNALIST: Talk about the impact the drought and the bushfires have had on your farm?
MATT BROAD: It's probably the worst 12 to 18 months I think I've ever been through. I've been through the GFC. When it happened, milk price crashed, and these last 12 months just dwarfs the whole lot of them.
JOURNALIST: You mentioned that this $20,000 will go a long way, but do you need more support from the government?
MATT BROAD: Look, support from everyone. The Australian public has been huge, the Government has been huge with grants and the likes from the bushfires. But really dairy farmers across Australia just need support with milk price.
JOURNALIST: And do you see light at the end of the tunnel? Not only just for your farm but talking to a lot of your neighbours and a lot of dairy farmers in this region?
MATT BROAD: I'd love to be super positive. Yes, there is a light at the end of the tunnel. I mean it's a fantastic industry. We only need a few things to change just a little bit to really crank it up.
JOURNALIST: Yeah, and when you say those few things?
MATT BROAD: Well, it basically comes back to milk price, milk price, and milk price.
ANGUS TAYLOR: I just wanted to add - great news in the last couple of days that we're now seeing the big energy companies, as they move towards July 1 price changes dropping their prices. We've seen Origin now offering a reduction of prices of over 5 per cent from July 1. That is great news, and we need to see more of this. I want to see the rest of the energy companies driving down those prices. We've seen wholesale prices around half of where they were. Even before COVID came along we'd seen significant reductions in wholesale prices. We want to see this passed through. That's good for dairy farmers, it's good for all farmers, it is good for all business, as well as for households. It's an important development. It is an important part of this overall picture and we want to see people like Matt - and it's good to see Fiona and Trevor with strong agricultural linkages and backgrounds, really focused on the issues that matter to farmers. Those lower prices are a really important development. I can say very safely that if you get in there and shop around as you move towards your contracts rolling over, you will get a better price. It's crucial you do that. Go to the Energy Made Easy website where you'll be able to upload your historic bills and you'll be able to see what sort of savings are up for grabs with these reductions in prices we're now starting to see.