Senator the Hon Mathias Cormann
Minister for Finance
Deputy Leader of the Government in the Senate
Senator for Western Australia
DANNY KENNEDY: There has been an increased pollie presence in the west of late. The latest visit was yesterday from Federal Finance Minister Mathias Cormann. Minister Cormann’s visit was sparked by a request from Australian Stockman Hall of Fame Board Members who he met in Darwin recently. He is speaking here with Russell Varley about the purpose of his visit and what he thought of the west.
RUSSELL VARLEY: You would notice how dry it is out here, obviously drought is a big challenge.
MATHIAS CORMANN: We understand this is an area in which really captures the spirit of Australia in dealing with tough challenges from time to time. We have gone here through a period of very difficult drought. From the Government’s point of view, we do provide significant support in the form of drought assistance. We have also been working with the regional council here on initiatives like the wild dog exclusion fences and the like. Which are all designed to strengthen the economic base in this region, bring back a stronger opportunity for the sheep industry in particular as part of a broader diversification of the economic base here in this part of the world.
RUSSELL VARLEY: The situation with the wild dog fencing, one of the wild dog commissioners has mentioned that federal funding is obviously welcome, but perhaps more could be given. He made the point that producers have said to him, the fences have prevented them going into drought for two years. So, it is saving money in drought assistance.
MATHIAS CORMANN: We believe that the exclusion fencing initiative has been a great success. It is clear that there is an immediate return on investment. Part of the reason of why I am here is to talk to the local regional council, talk to community members to I guess see firsthand on how it has all worked. If something works, then I think there is a good argument that you should do more of it for sure. That is one of the considerations now for us into the future.
RUSSELL VARLEY: The other issue which other people raise here and everywhere else, is electricity prices. The Government has just secured gas supplies. Will that bring prices down?
MATHIAS CORMANN: That is our objective. We want to put downward pressure on the price of electricity. We want to ensure that there is a reliable, secure supply of energy. There clearly was a very serious challenge because there was a shortage of gas suppliers into the national electricity market in particular. The Prime Minister’s leadership has secured a commitment from east coast gas producers to meet the identified shortfall in domestic gas supply for 2018. Which means that we will not have to take the next step of imposing export controls at this point. That is still an option that is available to us, our preference always is to secure commitments from relevant exporting businesses on a voluntary basis and that is something the Prime Minister has been able to secure. I might say that in Queensland, here in Queensland, there is still exploration and gas development activity, which is a great thing. We would like to see states like New South Wales and Victoria follow the lead of Queensland in also continuing to explore and allow the exploration and development of their gas reserves because that would certainly help ease the pressure on electricity prices for the whole eastern states electricity market.
RUSSELL VARLEY: Is that where we see though, that tension between primary production and the need for gas exploration?
MATHIAS CORMANN: Well here in Queensland, you have been able to resolve that tension and you have been able to resolve it in a way that advances the public interest. Here in Queensland primary production and gas exploration and production has been able to deliver a win win and we would like to see that happen in New South Wales, in Victoria and in the Northern Territory as well. In the end if we want to continue to have access to affordable and reliable energy supply and we must, if want families and businesses to be able access an affordable and reliable energy supply, then we have got to continue to develop our resources. In Queensland, you are doing that and that is great, we would like other states to do the same.
RUSSELL VARLEY: AGL I notice it talking about importing gas from Qatar. Are we going from one extreme to the other?
MATHIAS CORMANN: I really how that given the abundance of energy reserves that we have here domestically in Australia, that we never end up in a situation where we have to import gas from Qatar. That would just be ludicrous. We have an abundance of resources here in Australia and we should explore and develop them. We should not only supply the necessary gas to our domestic market, we should continue to build our export capacity as well.
RUSSELL VARLEY: These are short-term measures, what can be done for the long term?
MATHIAS CORMANN: We are working to implement the recommendations of the Finkel Review. All but one of them have already been adopted by the Australian Government and we are getting on with implementing those. They are all designed to help ensure over the medium to long term reliable and affordable energy supplies. There is one recommendations in particular that we are doing some more work on and that relates to the sole issue of the Clean Energy Target and that work will continue for a little while to ensure we get the policy settings right.
RUSSELL VARLEY: We have seen an improvement in the Budget outlook this week. How much does drought and power prices, how much do they factor in to the sorts of things you do when you put a Budget together?
MATHIAS CORMANN: Our focus is on making sure that Australia is on the strongest possible economic foundation and trajectory for the future. Drought is a particular challenge for the agricultural sector. Affordable and reliable energy is a very important part of our general international competitiveness. It is important for our manufacturing sector, it is important for our agricultural sector, it is important for consumers across Australia. These are all things, cost of living and the like, these are all things we take into account. In the end, we need to ensure that as a Government we can live within our means. What the outcome from the 2016-17 Budget has shown is that we are now on track to get our Budget back into surplus by 2020-21, so that we do not have burden future generations of Australians with paying for our living standards today.
DANNY KENNEDY: Mathias Cormann the Federal Finance Minister there.