Senator Canavan discusses energy prices and coal-fired power stations

LEIGH SALES:

I was joined earlier from Tokyo by the Resources Minister, Matt Canavan. Minister, the next election in Australia will be the Queensland state election. Given what we’ve seen in Western Australia, should the LNP do a preference deal with One Nation in Queensland?

 

MINISTER CANAVAN:

I think Leigh what the Western Australian situation tells us is that the more you focus on preferences and not on policy, the worse you will go with the electorate. We should focus on what we're going to deliver to Queenslanders. Yes, at some point, the LNP will have to produce a how-to-vote card because the Labor Party re-introduced compulsory preferential voting. But it should not be at the forefront of what we are considering right now. There is still some time to go until the election. And I know the LNP has strong policies to build dams in North Queensland, build a coal-fired power station, bring back jobs to industry. That's what people want to hear from us, not about any of these deals that might have to be done as part of an electorate and polling booth process.

 

LEIGH SALES:

You focus on policy but Senator Mathias Cormann was one of the architects of that West Australian deal and he points out that to maximise the chances of holding of seats you have to be able to secure preferences. What do you say to that?

 

MINISTER CANAVAN:

I don't know all the details of how it came together, of course, not being a West Australian. All I’d say is I don't think the deal was a good one. I think it has turned out to be a proven mistake. I think the electorate sees these kinds of things as tricky. You’ve got to the electorate saying, "This is what we’re going to do if you elect us. This is what we're about." You have to fill out the rest of the boxes. People really only care about their no. 1 vote. They don't care really that much about their third vote, their fourth vote or their 18^th. They care about what their number one vote is. And that's what we should be going to an election with.

 

LEIGH SALES:

You talked about policy issues before. When you look at the sorts of policy issues that cause people to be fed up with government, you take, for example, on 7.30 last week we had a story about farmers and businesses in Bundaberg, in Queensland, who had such expensive power bills that they had turned to diesel as their primary power source. How is it that for years now successive governments have allowed power prices to rise and rise and rise?

 

MINISTER CANAVAN:

Well, look, I'm not trying to make it partisan, Leigh, but when the Liberal National Party was last in power in Queensland, they reduced power bills. They went to the election with a policy to yes, sell or lease public assets, but return some of that to lower power bills further. That was rejected.

 

LEIGH SALES:

Let’s not be tricky about it, when you look at power prices, they have gone up and up and up.

 

MINISTER CANAVAN:

They have gone up, but I reject the fact that various governments have done nothing about it. At the Federal Government level of course we got rid of the carbon tax and that was the biggest reduction in power prices in recorded history. So we have a proven record of focussing on these things. Some of the reasons why power bills have gone up have been unavoidable in terms of needing to re-invest in the network. But the response now should not be to add insult to injury just because power bills went up for those reasons – they needed investment et cetera. That does not mean we should further increase them again by turning our backs on technologies like coal which can deliver cheap and affordable power.

 

LEIGH SALES:

You're in Japan to tour coal-fired power stations. You've recently floated the idea of taxpayer money being used to build a coal-fired power station in Queensland. Given that business leaders have said that there’s no private sector appetite for investment in coal, why would that be a sound investment for taxpayer funds?

 

MINISTER CANAVAN:

First of all, I don't accept the characterisation there that business don’t think there’s a case here. There’s many that I have spoken to with a different view. Often, the people saying we shouldn't invest in coal have themselves coal-fired power assets. And I’ve said before, Leigh, I don't think we'd ask Coles and Woolies whether it’s a good idea to bring ALDI to Australia, they’ve obviously got vested interests, as there are interests in this space.  What I’m focussed on as a Minister of the Crown is the Australian people and the national interest, not sectional business interests. I think it’s clearly in the national interest that we want to continue to provide cheap and affordable power.  That’s done in many other countries of the world using our coal and new coal-fired power techniques, like here in Japan but not only here in Japan. Hundreds of ultra super critical coal-fired power stations are being built right around the world. They operate at higher efficiencies, can cut carbon emission by up to 30 per cent. They make sense.  Now whether or not a specific one in Australia would be of use is something we’ve clearly got to look at further. I'm very interested in northern Australia to make sure we encourage industrial development and new energy infrastructure is going to be important in that path.

 

LEIGH SALES:

In recent days we've had fresh warnings of a gas shortage in Australia. That's nothing new, the industry’s been warning of it as far back as 2012, 2013. There’ve been proposals that Australia should keep more of the gas it produces in Australia for domestic use instead of exporting it. You've said you oppose that sort of a quota. The Prime Minister says that that sort of option should be on the table. What, then, is the Government's official policy on this question of a domestic reservation?

 

MINISTER CANAVAN:

What I have said clearly, Leigh, is it is not the best outcome. I think we’ll have to consider all options now because various state and territory governments have unbelievably put restrictions on even conventional gas development, a type of gas production that’s been safely used for more than 100 years is now banned in Victoria. It’s remarkable, I think it was unpredictable. But we are where we are, and now I'm interested in finding solutions. That’s my focus, that’s the Government’s focus when we meet with gas producers on Wednesday, is try to find solutions. I don’t think a gas reservation policy is the best solution, clearly because it will reduce the economics of gas development and we need more gas development.

 

LEIGH SALES:

But it would be a ridiculous situation if Australia didn't have enough gas to meet its domestic needs at the same time that it was exporting gas?

 

MINISTER CANAVAN:

Clearly, that would be the case, if that was to eventuate. I don't think we're quite there yet. What we need to hear from the industry is how they are going respond to the higher market prices we’ve seen domestically  to fill that demand. I’ve already been communicating with gas producers about how we might achieve that, and hopefully we’ll progress those discussions further with the Prime Minister on Wednesday.

 

LEIGH SALES:

Minister, good to have you on the program, thank you for your time.