Senator the Hon Mathias Cormann
Minister for Finance
Deputy Leader of the Government in the Senate
Senator for Western Australia
QUESTION: Let’s start off with the climate change, the party room is going to discuss recommendations that have been made by Finkel, but already some within the party, such as Tony Abbott, Craig Kelly, Eric Abetz, they have criticised some of the recommendations. Tony Abbott says it is a tax on coal.
MATHIAS CORMANN: It is not a tax on coal. The biggest tax that we could impose on Australians, the biggest electricity tax we could impose on Australians, would be to do nothing. If you look at the evidence in the market, the cost of electricity is going up. That is because we don’t have the right policy settings. We need to ensure that we can have certainty for investors. That we can attract additional investment in to increased supplies of energy, in particular across the National Electricity Market. We need to ensure we get the policy settings right. Dr Finkel made some very strong recommendations for a blueprint to transform our energy sector across Australia. We need to engage in this conversation now and make some decisions focused on bringing down the cost of electricity, focused on improving reliability and energy security and doing so in a way that still helps ensure that we can still meet our emissions reduction targets.
QUESTION: Does this mean that some of the decisions the Government has previously made, such as getting rid of the carbon tax, they were the wrong decision, because electricity prices are still high despite getting rid of the carbon tax.
MATHIAS CORMANN: No, the situation would be much worse if we had kept the carbon tax in place. The carbon tax was pushing up the cost of electricity without doing anything to actually reduce global greenhouse gas emissions. The carbon tax was a very ill-thought out policy by the previous Labor government. What we have from Dr Finkel is a blueprint for our energy policy framework into the future. A blueprint to bring down the cost of electricity, to improve reliability and energy security and to do so in a way that helps reduce our emissions in a way that is consistent with our commitments that we have made in Paris.
QUESTION: How unhelpful are Tony Abbott’s comments considering as you just said, you are trying to change to the policy settings, trying to change the energy market and you have got people from within your own team fighting against that.
MATHIAS CORMANN: We are at the beginning of an internal conversation. Dr Finkel released his report on Friday. It was a report that was commissioned by the Council of Australian Governments after the blackouts in South Australia, given the policy failure in particular in that State. When it comes to the energy policy framework, clearly in South Australia, the State Government there decided to excessively pursue renewable energy targets without actually thinking about things like the need for storage and the need to deal with some of the stability implications for our energy system. These are all issues that Dr Finkel has addressed in his report. These are all issues that the Government now will have to seriously consider.
QUESTION: You say it is an internal discussion, but it is being played out very publicly. Is that frustrating? Should people talk within the party room before going out to the media?
MATHIAS CORMANN: This is very much an issue of public interest. Dr Finkel released this report on Friday. The report is now public. These are now matters that will inevitably be part of a public conversation. What I would say to all of my colleagues though is that Australia does need a consensus around our energy policy framework. The status quo is not an option. If we continue as we are, we will force consumers across Australia to pay more for their electricity than they should. If we continue as we are we would force business across Australia to pay more for their electricity than they should. It would undermine our international competitiveness as a manufacturing country. That is not something that we want.
QUESTION: Senator Cormann, today Senator Xenophon said that he was disappointed that Finkel review didn’t look into gas prices. And he is suggesting that unless something is done about gas prices, Australia could be facing a recession. They are the words that he used. Because gas contracts are coming up in the next six months or so, they have got to be negotiated by business and unless there is some sort of certainty around gas prices then businesses might decide to shut down or scale down.
MATHIAS CORMANN: The Prime Minister has already taken initiatives when it comes to increasing the supply of gas into the National Electricity Market. What we have said in a general sense is that we want to pursue an energy policy framework which is technology agnostic. We need to bring down the cost of electricity generation overall. That is what Dr Finkel has looked at. It is what his blueprint is focused on. Improving energy security, reliability and putting downward pressure on electricity prices while also focusing on our emissions reduction targets.
QUESTION: So do you think it is reckless of Nick Xenophon to be using words such as recession on this issue of gas prices?
MATHIAS CORMANN: I am not a commentator on colleagues. He can explain his own comments.
QUESTION: But could there be job losses if there could be a lack of economic activity?
MATHIAS CORMANN: The whole point of the exercise that we are going through now is to improve energy security, improve energy reliability, bring down the cost of electricity, so improve the investment climate, improve our international competitiveness, improve the economic growth prospects, as well as doing so in a way that helps us meet our emissions reduction targets. The whole focus is on making sure that one of the key factors in our future economic success can be properly dealt with, that is making sure that we have reliable, secure energy supplies, which are as affordable as possible and in a way that is environmentally efficient.
QUESTION: Just on another matter, senior Ministers, including Cabinet Minister Greg Hunt have launched an attack against the Victorian judiciary. It is claiming that they are advocating lighter sentences for terrorists as part of ideological experiments. Are their criticisms warranted?
MATHIAS CORMANN: All of us, in our different jobs, need to carefully consider the consequences of the decisions we make. That applies to the judiciary as well.