Interview on 2HD with Richard King

RICHARD KING, HOST: Gas reservation is a very hot topic, and at the moment the Federal Government is trying to pass a package of laws that would require gas producers to keep up to 20 per cent for the domestic market. But it's interesting, a lot of people have had a lot to say on this one, including Paul Farrow, who's the influential head of the Australian Workers Union. He said the Government had tried to fix shortcomings in its plans when it drew up the draft legislation, which is now before Parliament. But he's warned that there are big loopholes in this legislation. With more on that and a number of other things, joining me now is our Federal Industry Minister, Tim Ayres. Good morning, Tim. 

SENATOR THE HON TIM AYRES, MINISTER FOR INDUSTRY AND INNOVATION AND MINISTER FOR SCIENCE: G'day, Richard, and g'day to your listeners. 

HOST: You're a former AWU rep, aren't you, Tim? You were with the Australian Workers’ Union? 

AYRES: I was with the Australian Manufacturing Workers’ Union and worked closely with Paul. He's a really good fellow. Paul Farrow was a delegate in the Boeing facility in Bankstown. He came up as a young tradesman, just like the National Secretary of the AMWU too. Both are tradesmen who have become secretaries of these key big blue-collar unions, and they both would say to you, as I would – I spent 25 years as a trade union official in manufacturing.  

I watched Australian manufacturing facilities close and go overseas because the price of our gas was too high. And the price of our gas was too high because we were connected into the global market when we began LNG exports and we didn't take this step to reserve Australian gas for Australian industry like every other gas exporter in the world has done. As a consequence of that, thousands and thousands of heavy industrial jobs have gone offshore. It's our job to fix that. And the Domestic Gas Reservation Scheme, it's controversial, many elements of the gas industry don't like it, but it's our job to stand up for Australian industry and deliver Australian gas for Australian industry. 

HOST: Well, a lot of them, and it's not just unionists like Paul, but experts warning that there's plenty of ambiguity and loopholes in this legislation you're trying to get through Parliament at the moment. Are you happy with the legislation or do you think it does need a bit of tweaking? 

AYRES: No, we've worked very hard on the legislation. It is complex. It's complex for two reasons. One is we're retrofitting, this should have happened in 1998, 2000, 2001, so we are fitting onto Australian gas production and Australia’s gas market a mechanism to impose a very heavy obligation on the gas companies to divert up to 20 per cent of their exports into the Australian economy for consumers and for our electricity system, principally for heavy industrial gas users, to drive down the cost of gas for industry and make Australian industry more competitive and strengthen our economy for the future. It's complicated because we've said that we'll respect existing contracts. It's complicated because we're retrofitting it, but it will deliver lower prices. It's a big step in the Australian interest and in the interest of manufacturing and Australian industry. 

HOST: Well, I hope that that's correct because I'm a gas user and I notice in the last few years the price of my gas has gone through the roof. So, if that's correct and it does –  

AYRES: Oh, that's right. But you can imagine, for your listeners, they see elevated gas prices and because every time a coal-fired power station fails, we use gas as a peaking agent in the electricity sector and that's expensive, people see it reflected in their electricity prices too. But if you're a heavy industrial firm that uses a petajoule of gas – huge amounts of gas – gas prices when we came to government were above $30. Industry needs them much, much lower than that. Gas is now above $12. We've had a chaotic gas market where firms can't contract for long-term contracts like they can in Western Australia, where Western Australia has its own reservation scheme –  

HOST: Yes. 

AYRES: And so, you need low prices and you need certainty for decades to make the multi-billion-dollar investments that we need to see in manufacturing. That's what this is about. It's about making sure that low-priced gas is a source of competitive advantage for Australia and that we're onshoring manufacturing and that we're reindustrialising the economy.   

This is the biggest blue-collar intervention, and our opponents haven't made their minds up about where they're at on this. You can't be for Australian manufacturing and vote against the Gas Reservation package.   

One Nation says they're against it. Well, they'll have to account for that. Mike Newman and Barnaby Joyce and all these people, they were for gas reservation and then one of their principal donors has said – you’ve always got to follow the money with One Nation – one of their principal donors said don't do that. So, they're not doing it.   

Actually, if you're in politics you've got to stand up for the national interest, and I'm on the side of big industrial regions, like the Hunter Valley and Central Queensland, that need low-cost gas to sustain jobs.   

HOST: Well, I hope it does keep going down. It is certainly coming down, which is great news. Another story that was in the Sydney Morning Herald, which your office alerted us to, this was on the weekend, ‘Coal, colouring-in in classrooms: Hunter Valley mines push into schools’. The operator of the Hunter Valley coal mine, who last week secured the intervention of the Premier to allow increased output, is targeting children in marketing materials spruiking coal and whose stated goal is to influence the school curriculum. Well, Comms Declare, which is a not-for-profit organisation that highlights fossil fuel marketing by companies, Belinda Noble, who is a representative and the founder of Comms Declare, had a bit to say on this:  

These companies are so embedded in institutions to the point where we have fossil fuel corporations co-sponsoring state government education programs.  

Sponsoring state government education programs. Although I noticed Pru Carr, who's quoted in the article, said NSW public schools deliver the syllabus as developed by the NSW Education Standards Authority and they don't engage with mining companies on curriculum perspectives. You alerted us to that article, I'm just wondering why, Tim. What did you want to comment about? 

AYRES: I was taken to this issue in Estimates. I was a bit surprised. I read the article. I mean Pru's right about the independence of the NSW curriculum, but I was kind of shocked. These are kids in school who are doing colouring-in books that are about the work that their mums and dads do, or their uncles and aunts do, in the coal mining industry. They should be proud of what they do. They don't need a newspaper or a group of kind of sneering, big city types telling them that there's something wrong with what their mum and dad do. They should be proud of it.   

There are people who want to go to all sorts of lengths to take all sorts of extreme positions about the role of mining. Mining is really important. Mineworkers in the Hunter Valley have been contributing to working-class communities, industrial growth, the energy that sustains the country, and they don't need people kind of taking shots at them, particularly when it's little kids filling in a colouring book. You know, a picture of a big coal truck. Well, what is wrong with that?   

We need a bit less of the kind of sneering and a bit more supporting our communities. The coal industry will go up and down and we know what's going on in terms of the long-term trajectory. We get that. But having one of our newspapers, and all these kinds of people, taking a shot, that's not right. We should support the workers who deliver these projects. I'm on their side –   

HOST: Right. 

AYRES: And I'm on the side of this community – a proud, working Hunter Valley community.  

HOST: Well, I think they're very happy to hear that, Tim. I think that you're on their side. Always good to talk to you. Thank you very much for your time this morning and enjoy the rest of your Wednesday, Tim. Tim is our Federal Industry Minister.