Interview with Richard King, 2HD Newcastle

HOST: And on the subject of the bailout of the Tomago Aluminium smelter, joining me now is our Federal Industry Minister Tim Ayres. Good morning, Tim. 

SENATOR TIM AYRES, MINISTER FOR INDUSTRY AND INNOVATION AND MINISTER FOR SCIENCE: Richard, really good to be on the show. 

HOST: We've spoken about this subject for some time and in the past I revisited a bit of what Daniel Mookhey, the NSW Treasurer had to say earlier in the year, saying that we can't really afford to go 50/50 on this bailout as the Queensland Government did with the smelter in Queensland. But you've come to an agreement obviously and we'll be hearing more about it later this morning. Tim? 
 
AYRES: Yeah, I'm really proud of this agreement. An equal commitment from the NSW and Albanese Federal Labor Government to deliver security for this facility all the way through to 2039. What it'll deliver too Richard, importantly for your listeners is around 3 gigawatts of additional electricity generation brings forward electricity generation projects that will put downward pressure on electricity prices for households and for business. This makes NSW and Australia more competitive and delivers for about 500,000 blue collar workers through the Hunter Valley.

HOST: Look, I've had a lot of comments. Leah rang me earlier this morning and this is a little bit of what Leah had to say on this bailout. 

 
LISTENER: It's not only important to Tomago, it's important to every Australian that they get a fair cut of this taxpayer money that they're spending on Tomago. And I get it, all these people need jobs. We've bailed out Qantas during COVID and look at what Qantas is doing now, farming jobs out to India. Is that fair? Where's my cheap Qantas flight? You know, like really and truly the government does all this kind of stuff with money that is not their own, they're only custodian of it. And I get a little bit tired of hearing about oh we must do this, we must do that, we must give these footballers in Papua New Guinea tax free money. You know, like, wouldn't we all love tax free money? 
 
HOST: We certainly would.
 
LISTENER: Wouldn't we all love a Qantas flight. Wouldn't we all love cheap electricity? Where is the equity? There is none. 

HOST: And that was earlier this morning, Leah rang and I've had emails about people railing against the government bailing company. I mean, is it just about the jobs, Tim? 
 
AYRES: No, this is vital for our national resilience it makes Australia stronger, it makes the Hunter Valley's industrial economy stronger. It's what Future Made in Australia is all about - delivering industrial investment and certainty for jobs for what will be over the, you know, as far as the eye can see through to 2039 and beyond. Thousands of jobs, hundreds of apprenticeships, billions of dollars' worth of investment in new, new electricity generation and transmission, new industrial capability. This is a Future Made in the Hunter being delivered by this investment. It's in the national interest, it's in NSW interest and it's in the interest of the Hunter Valley. 
 
HOST: Right, so it's $2.5 billion over 10 years and that's what, a 50/50 split between the Federal Government and the NSW Government. 
 
AYRES: It is not a bailout, it is not a subsidy. It is an investment in not just this facility, but in the electricity system itself. See what the problem for Tomago has been that the failure of the previous government to invest in the electricity system and ageing coal fired power was too expensive. Rio, one of the owners of Tomago Aluminium made this very clear. Coal is too expensive. That's the truth of it. The Albanese Government here is investing in new electricity generation, driving down the cost of electricity, not just for Tomago, but building out the electricity system that we need that will deliver more productivity, more investment, more jobs and lower prices for households and business.  

That's why this deal has been complex, that's why it's been large. It delivers for those 5,500 workers and their families across the Hunter Valley who rely upon this amazing facility. But it delivers for Australia and for taxpayers and for the national interest world. Aluminium's in everything. You know, there's so many parts of our economy. This is a vital mineral, a vital metal for our end-to-end aluminium manufacturing capability, from bauxite through to advanced manufacturing products. It's vital in Australia's national economic resilience interest. It delivers jobs, delivers for the economy, and delivers for the electricity system. This is the right thing to do. 
 
HOST: OK, 2HD 18 to 7. My guest, Federal Industry Minister Tim Ayres. On the subject of the $2.5 billion so called bailout of the Tomago aluminium smelter. Tomago's agreed to invest, as I understand it, just a bit over a billion dollars as part of the deal, which includes 100 million to drive further decarbonisation activities at the smelter and also undertaken an innovative demand response program to support the NSW grid. Can you sort of explain what that's about in layman's terms, Tim? 
 
AYRES: Yeah. Right. Now, Tomago plays a vital role in the grid. Like it's a user of well over 11% or 12% of NSW electricity and it can what they call demand flex. It can increase or reduce its demand as required to stabilise the electricity system. There will be more investment in that capability so that it's more useful for the electricity grid. It can flex down on those days when there's super high demand in the electricity grid. You know, really hot summer evenings.  

Tomago can drop back its demand a bit for that, that vital three or four hours that are required to sustain the grid. It does that work. Now this means it can increase its value to the electricity system and that is valued as part of the deal. This is why I say it's been a complex arrangement here because so many economic and resilience and security interests are engaged in the ongoing operation of this facility and demand flexibility is a crucial part of the deal. 
 
HOST: Right, ok, I'll keep moving. You're a busy man at the moment. You're everywhere at the moment. Tim. Are you by any chance a left-hander? It's International Left-Handers day today. 
 
AYRES: My wife's left-handed. I am not. But yeah, I'm certainly busy. This is the job of a lifetime, Richard. Been able to work across the manufacturing sector to rebuild Australia's manufacturing capability. You know, you've got a government led by Anthony Albanese here who's the most pro manufacturing Prime Minister Australia has ever had with the largest pro manufacturing industry policy. This is a huge opportunity to reindustrialise the economy and the Hunter Valley is the beating heart of Australia's industrial and energy economy and that's why I spent a lot of time here. 
 
HOST: Yes, you do.   
 
AYRES: I've got real confidence. People talk Australian manufacturing down, you know. Tomago aluminium is Australia's largest, its youngest, its most efficient aluminium producer. 
 
HOST: Right. 
 
AYRES: It was, it was delivered here by the Rand Labor government in the late 1970s, not 1970s, early 1980s. It was built here on the basis of cheap electricity delivered by a Labor government. And this is the Albanese Labor Government and the Minns Labor Government working together to do the same thing. Low cost electricity that delivers investment in Australian jobs and a vital national Australian capability. 
 
HOST: Alright. Appreciate your time this morning. You are very busy. You're a Rabbitoh supporter. You almost let that lead against the Parramatta last week disappear, Tim. 
 
AYRES: I wasn't good for my blood pressure that game, I can tell you. But rugby league this season is fantastic. 
 
HOST: I think you got the Bulldogs, haven't you? On, I think, this weekend. Anyway, good luck. Good luck. 
 
AYRES: We've got them. All right. We'll get them.   
 
HOST: Appreciate your time this morning. Enjoy the rest of your Thursday. Tim is our Federal Industry Minister in Newcastle for the big announcement. The Prime Minister and the NSW Premier, Chris Minns will be here this morning as well. Coming up.