Speech to the Business Hunter Economic Update Breakfast, Newcastle
Acknowledgements
I’d like to begin by acknowledging the Traditional Owners of the lands on which we meet, the Awabakal and Worimi people.
I thank also the team at Business Hunter for organising this Economic Update – along with sponsors at the University of Newcastle, Oxford Economics and KPMG.
The CEO of the Net Zero Economy Authority, David Shankey, is here today, too. David, it’s great to see you here.
Building a Future Made in Australia
It’s been almost twelve months since my appointment as the Minister for Industry and Innovation, and Minister for Science, in the Albanese Labor Government.
My mission remains to deliver, with purpose and impact, on the promise of a Future Made in Australia.
There are, as I see it, two interrelated imperatives for that plan.
First, Australia must maximise its future competitive advantage in energy.
Second, Australian reindustrialisation is central to driving Australia’s national security and resilience – making Australia stronger.
That’s why in our first term, the Albanese Labor Government put together the largest pro-manufacturing policy in Australian history.
That policy architecture includes the $15 billion National Reconstruction Fund progressing Australia’s most important industrial priorities.
Priorities like turning Australia’s abundant minerals into metals the world needs for components to power electric vehicles and clean energy infrastructure.
Or making Australia more technologically capable in defence terms in a period of growing strategic volatility.
The Net Zero Economy Authority, harnessing investment and creating new jobs in Australia’s industrial regions.
Not softening the edges of deindustrialisation but driving reindustrialisation and economic diversification.
The same broader imperatives drive this Government’s work on artificial intelligence and digital infrastructure.
Including our Data Centre Expectations, making clear that proponents must bring with their proposals for new infrastructure the necessary investment for renewable generation and transmission.
I am determined to put Australia’s research and development system to work for our Future Made in Australia industrial objectives.
The recent Ambitious Australia report – the most comprehensive evaluation of Australia’s research and development system in nearly twenty years – sets out a vision for a more efficient, mission-focussed, cohesive research and development system.
One that harnesses the full talent of Australia’s public research agencies, universities and industrial sector, and focuses in on Australia’s economic and industrial priorities.
I don’t see binary propositions here – between backing heavy industrial facilities or supporting the work that happens in our research sector.
Only half of Australia’s innovation happens in laboratories.
The other half happens in factories, workshops, mines and hospitals – real workers in real workplaces driving innovation and productivity uplift.
I think of the CSIRO’s Energy Centre here in Newcastle, and the Renewable Energy Integration Facility, which works with local industry and the University of Newcastle to tackle shared challenges.
That’s exactly the type of collaboration we need, and it was fantastic to visit the Renewable Energy Integration Facility earlier this year.
The Australian way is to drive all of that effort to build a future economy and identity that makes Australia stronger.
The current crisis
It’s been repeatedly said that the current energy shock hitting the global economy is the worst since the 1970s.
As the head of the International Energy Agency, Fatih Birol, pointed out last month, global oil supply chains are experiencing “more than double the combined shortfalls of the 1970s crises”.
The Albanese Labor Government has worked day in, day out to shield Australians from the worst effects of this crisis – at home and abroad.
Temporarily relaxing fuel standards, lowering Fuel Excise and the Heavy Vehicle Road User Charge.
Leveraging relationships in our region to boost Australia’s stockholding of liquid fuels.
Fast-tracking $6.15 billion in capital from the National Reconstruction Fund, including the $1 billion Economic Resilience Program, which opened on Monday.
$1 billion of zero interest loans to manufacturing firms and logistics businesses producing and transporting the fuels, plastics, fertilisers and agricultural protection chemicals that Australian businesses rely on.
As it stands – we have more fuel in Australia now than we did in early February. But we know the domestic impacts of a war on the other side of the world continue and things are going to be challenging for some time to come.
The scale of the current crisis reinforces the mission for a Future Made in Australia.
That clean energy generation and transmission will make Australia more productive, competitive and resilient.
No maritime blockade on the other side of the world can stop Australians from using Australian wind, solar and gas to mine for minerals, refine and smelt metals and manufacture high-value goods.
Investing in Queensland’s future
The aluminium sector is a useful microcosm of the opportunity Australia needs to grasp today.
Global demand for aluminium is expected to increase 40 per cent by 2030.
People want that 'ubiquitous’ metal for all manner of things.
Electric vehicles, lighter-weight airplanes and public transport.
Australia has one of the world’s few end-to-end aluminium supply chains – from bauxite mining at Weipa right through to fabricated aluminium products.
The handbrake on alumina shipments through the Strait of Hormuz, damage to aluminium smelters in the Middle East and the hit to aluminium exports in a region that normally supplies around ten per cent of the world’s demand – this all shows the strategic value of an end-to-end supply chain.
As coal-fired power becomes increasingly unreliable and expensive, aluminium producers like Rio Tinto are moving to renewable energy to secure their future production.
Last month’s $2 billion joint investment from the Albanese Government and the Queensland Government will see Rio Tinto underwrite at least $7.5 billion in additional energy generation in Queensland.
It means Boyne smelter near Gladstone will be a world leader in solar and wind-powered aluminium production.
Secured through to 2040, their power purchasing agreements extend beyond that for 25 years.
It means more generation and transmission more quickly, decarbonising 10 per cent of Queensland’s energy grid and driving down power prices for Queensland homes and businesses over time.
Investment as far as the eye can see in future Queensland blue-collar and tech industrial jobs.
It futureproofs Queensland’s exports as the world demands more low-carbon materials from reliable providers.
And, ultimately, it secures a cornerstone employer for that region, safeguarding 3,000 blue-collar jobs in Gladstone’s supply chain and thousands of future apprenticeships for Central Queensland girls and boys over the decades ahead.
The case for the Hunter
Which brings us here…
The same challenges, and the same opportunity to score an economic home run for Australia, exists in the Hunter Valley.
In the 1980s, this region was called ‘Wran’s Ruhr’.
It was largely thanks to the state Government under Neville Wran’s relentless efforts, and statecraft in the form of fixed-term power contracts from state-owned coal-fired power stations, that an aluminium smelter was built at Tomago.
That facility is now the biggest and youngest aluminium smelter in Australia, and accounts for 12% of electricity usage in New South Wales.
More than ever, Tomago is an anchor employer for the Hunter, with 500 suppliers and services, and plenty more purchasers downstream.
But just as in Central Queensland, the days of cheap and reliable coal-fired power in the Hunter are receding rapidly in the rear-view mirror.
The energy infrastructure is ageing and expensive to maintain. Unplanned outages are costly for the region and Australia.
Now that coal-fired power stations like Eraring have announced end-of-life closure dates, the work of NZEA is crucial not just for supporting workers into new jobs and opportunities, but for working across government to attract and drive the investment that unlocks new industrial activity.
By 2035, 3 Hunter power stations and around half of the Hunter Valley’s coal mines are expected to close.
New industries for 11,200 jobs will need to be attracted.
Tomago, for its part, needs substantial additional power to be added to the electricity grid.
This is the challenge.
But it is also how the Hunter, and New South Wales more broadly, can enjoy all the same economic benefits of a low-emissions aluminium and metals processing sector that has been delivered in Queensland.
Strength through collaboration
The Prime Minister and I travelled to Tomago in December to set out our commitment to securing a future for that facility in partnership with New South Wales.
Tripartite commitment from the Commonwealth, New South Wales and the owners of Tomago will help deliver a renewable energy solution for NSW’s energy users, homes and businesses.
It worked for Queensland jobs – it can work for Hunter jobs.
The path that led to Boyne provides a useful roadmap.
Joint Commonwealth and New South Wales investment would unlock a further $1 billion in investment for capital and maintenance at Tomago itself, while the Commonwealth–State power purchasing agreement would accelerate additional generation equivalent to 12 per cent of NSW's electricity grid by underwriting large-scale renewable generation.
I know an economic slam dunk when I see one. And I’m confident my counterparts in the New South Wales Government do as well.
Plenty of hard work will be involved in the coming weeks and months, and there’ll be inevitable discussions between the Commonwealth and New South Wales governments on delivering for the Hunter, for New South Wales and for Australia.
As the Prime Minister and I said at Tomago in December – the Albanese Government has the back of the Tomago workers, their families, the associated businesses and the Hunter region.
Because – in addition to the thousands of jobs at stake in the Hunter – we know that the decisions we take today will shape Australia’s industrial and energy security for many years to come.
It will make the Hunter and Australia stronger.
Thank you