FRAN KELLY: A new recovery agency will be set up to develop a long-term plan to rebuild the shattered industry, and beef producers will be offered cheaper loans, under a $2 billion plan to subsidise their debt. Scott Morrison is about to fly north to Townsville for this announcement. Before he takes up, he joins us this morning. Prime Minister, welcome back to breakfast.
PRIME MINISTER: Good to be there Fran, good to be here.
KELLY: This is about rebuilding and reconstruction. Despite all this help though, do you think the North Queensland cattle industry will ever be the same?
PRIME MINISTER: Well I believe it will, but it’s going to take a lot of work to get there. And as you rightly said, we’ve got to do this station by station, farm by farm. I was up there a few weeks ago and talked to a lot of farmers and all of their properties are different. The way they raise their herd genetically, what markets they play to. It’s going to require a business plan for each and every, single farm and station and the support we’re providing to them will enable them to realise those plans. So for some, they’ll be able to get up on their feet much sooner. For others it’ll take much longer. And for some, I mean, to rebuild their herds genetically to where they’ve been, that will take a generation. But in all cases, I know that they’ll all be working very hard to rebuild not just the businesses, very successful businesses that they were running in their farms, but the livestock that is so central, I think, to Australia’s identity.
KELLY: You’re doing it through something you’re establishing called the North Queensland Livestock Industry Recovery Agency. Its job is to help rebuild farm infrastructure, restock the herds as you’ve just been saying. Do we have a final price tag for how much this is going to cost, or the government’s prepared to spend?
PRIME MINISTER: No we don’t, because we really still don’t even know the full extent of the losses. I mean, there’s been estimates of half a million stock lost, but I’ve heard higher than that. And you know, the water is still draining. I mean, when I was up there a little while ago stock was still dying from pneumonia…
KELLY: So this comes without a budget allocation yet?
PRIME MINISTER: No, we will do what is necessary. There are three tools particularly when it comes to the livestock industry. The first one is to be able to restructure their existing loans, so we can take some of the immediate pressure off the debt that they have. And some of them are quite extensive. Not all of them. But that will be either done through their bank - and many will want to do it through their bank, because they have so many other relationships that will have an arrangement to ensure that they can get payment holidays, and all of these things for some years - to ensure that they get back on their feet. But when it comes to restocking the herd, there will be two components. There will be grants to support restocking. And there will be loans, which again can be done either by the bank or through the regional investment corporation. Where those loans for those stock can be secured against stock, not against their properties, and this is incredibly important. This is one of the key pieces of feedback I got from the farmers. When we restock, we need to be able to secure the loans against the stock. So we’re helping in two ways, (a) by putting, effectively putting equity into that stock through the grants and that means the banks and the regional investment corporation can loan the balance. And for every property, those restocking programs will be different. And they’ll have their plans for doing that based on their country.
KELLY: Ok, according to your announcement there’s $2 billion there for loans by the government being offered through the banks - that’s how I understand it - at a lower interest rate. How cheap will these loans be? Are you fixing an interest rate and how can you be sure the lower rates will be passed onto the farmers. How do you monitor that?
PRIME MINISTER: Well there’s two things. And look, the overall estimate there is an estimate so whether it’s that much… I mean already we’ve put $110 million out since the floods both in Townsville and across North Queensland…
KELLY: This is different though, through the banks isn’t it? Isn’t it banks are being... you’re essentially under-writing these bank loans.
PRIME MINISTER: That’s basically… it’s a form of guarantee and which will reduce the costs to farms which means all of that cost of funds, will be passed on to each of the farmers in their restructuring of their existing debts and that is the same for the restocking loans as well. But the backstop on all this, is we can do it through the Regional Investment Corporation. So you know … what is effectively the government’s bank.
PRIME MINISTER: And so, if there’s not a better deal coming from the bank, then we can offer that directly through the regional investment corporation.
KELLY: And how good is that deal? What’s the rate?
PRIME MINISTER: Well, it’s going to depend on people’s holding. But it’s going to be a hell of a lot lower than they’re paying right now. Basically what the cost of funds is for what the government gets. So at the moment that’s around 2.7-3, but in some cases you can structure the debt so it could be as low as 1 per cent. Depending on how you, you know, work through the programme and this is why the authority is so important Fran. Because this has to be worked out, farm by farm, station by station. So this is why we’re appointing this authority to work with every single station, on their business plan. Because one of the things that was said to me by a very canny farmer up in Julia Creek, in the pub, was we don’t want compensation, we want reconstruction. And so we’re going to partner with them in that reconstruction. Beast by beast, on every property.
KELLY: You’re listening to RN Breakfast, our guest is the Prime Minister Scott Morrison on his way to Townsville to offer this reconstruction package for farmers. On other issues Prime Minister, Queensland floods, which due to unprecedented rainfall takes us to climate. According to the weather bureau our country has just endured its hottest summer on record. We’ve also seen just this week the government’s most up-to-date figures on emissions levels show that carbon output continues to rise…
PRIME MINISTER: Well actually, we’re down on the last one Fran.
KELLY: No, that last… to the year to the…
PRIME MINISTER: On the quarterly result actually went down, look we should point that out.
KELLY: Yeah, but over the year to September 2018, emissions were up 0.9%.
PRIME MINISTER: I’m not disputing that, I’m just saying it actually went down in the last quarter. These numbers do jump around a bit.
KELLY: Ok, but the government keeps telling us emissions are falling. Your own data shows that over the past year, up to September 2018, they didn’t fall, they went up.
PRIME MINISTER: Well emissions fell 1.4% relative to the June quarter. That’s actually what happened. That’s driven by the lowest quarterly emissions from the electricity sector in more than a decade. So these numbers do jump about but our emissions reductions targets are actually based on a rebate are to 2030 and I set that out very clearly on Monday as to how we’re going to meet that commitment. Now, what? It’s been five days now, and the Labour party still hasn’t told us how they’re going to meet their commitment. I mean people can criticise my target. They’re welcome to do that. But I’ve laid out very clearly how I’m going to meet it. Bill Shorten has not done that, he’s talking around a 45% emissions reduction target when it costs people 9000 bucks a year, and he’s not actually telling them how he’s actually going to meet the target. So at least I’m telling people and being transparent and up front about it.
KELLY: Well, your figures show the emissions are going up but let’s put that aside because what has happened this week is you’ve really emerged I think as almost an evangelical supporter of pumped hydro. There’s really been no mention of coal this week. Will all this pumped hydro into the system, will this dispatchable baseload power… we won’t need new coal to provide the same will we?
PRIME MINISTER: Well, look they’re decisions that’ll be made by investors and suppliers, and energy companies and others in terms of how they’re meeting supply to the market. What I’m saying is that is a key part of our emissions abatement. Because remember, let’s be clear, the 2030 target is based on a budget for carbon abatement. So you have to meet a tonnage level of abatement over that period. Now for us that means we’ve got to find 320 million tonnes of abatement and we’re on track to achieve that, certainly on track to hit 2020. In fact, beat it by 367 million tonnes. Now Labour’s plan of 45 per cent would require, on the same accounting basis, three times the amount of abatement by 2030. I’m simply saying, Bill, how are you going to get there? I’ve told the Australian people how I’m going to get there, and he should tell them how they’re going to get there. Because, you know, is he going to borrow foreign carbon credits? We’re not doing that. We’re not buying any foreign carbon credits under our plan.
KELLY: Well you are using 328 million tonnes of Kyoto credits.
PRIME MINISTER: No, they’re Australia’s credits because we achieved them. We actually will over perform on the 2020 targets.
PRIME MINISTER: And when Kyoto was set Fran, it was set on the basis that you could carry over credits.
PRIME MINISTER: Why? Because they wanted to encourage countries to overachieve…
KELLY: But what I’m asking you… what I’m asking you is in the government underwriting process that’s underway. You’ve already named one program today... this week that’s in Tasmania with pumped hydro. Does that mean with all this pumped hydro, the government won’t be needing to underwrite new coal?
PRIME MINISTER: Well, I’m not making any statements on that…
KELLY: Well why would we need to with all this pumped hydro.
PRIME MINISTER: Well, they are decisions that’ll be made within the energy market. And what we’re doing outside…
KELLY: Well no this is a government decision I’m talking about, underwriting the government, taxpayer’s money.
PRIME MINISTER: Well, we have a process in place for that. We’ve made no announcements on that process Fran, so I’m not going to pre-judge that. The role that the pumped hydro plays… we’ve got record investment already coming in the renewable sector. And if you don’t have the storage capacity, which we are building in both in Snowy 2.0 and the pumped hydro project in Tasmania, you basically have to dump that renewable power. What this does is provide the firming opportunity, through pumped hydro, which means you don’t have to dump that, which means lower electricity prices. So pumped hydro has been a missing piece of our energy puzzle. And if we’re going to meet our obligations to future generations, just like all of those hydro developers back in Tasmania did 50 years ago, and people railed against them at the time and eventually stopped them from doing it. I mean that has turned out to be the thing that actually makes renewables work and make them reliable for the future. So that’s why we’re supporting it, it just makes a lot of sense.
KELLY: You’re listening to breakfast, its fourteen to eight, our guest is the Prime Minister. Prime Minister, also this week the government hailed the departure of the last children off Nauru as a big achievement, which it undoubtedly was. There are still about 1000 adults there on Nauru and Manus Island. US resettlement program won’t cater for all of them. What happens to them? Are they just going to be left indefinitely on Nauru and Manus?
PRIME MINISTER: Well, in both countries where they’ve been found refugees, they’re living in countries that have signed the refugee convention. The refugee convention…
KELLY: So that’s the plan they just stay on Nauru and Manus.
PRIME MINISTER: Well that’s exactly what Labour set out when they announced that they were going there in the first place. That they said they’d never be resettled in Australia. So we…
KELLY: So that is our government… the Australian government’s plan?
PRIME MINISTER: I haven’t changed the policy on that. The Labour party have sought to change it by effectively abolishing offshore processing by what they did in the Parliament. And to provide a loophole to allow people to come to Australia from both of those countries simply for the purpose of the medical assessment, which they can get quite ably on Manus and Nauru, particularly Nauru, where there’s 60 medical professionals… 1 for every 7 people.
KELLY: Well just on that… just on that and you know there’s hundreds doctors who argue with you on that but your Minister Peter Dutton this week has warned that Australians will be kicked off waiting lists for hospitals and public housing by an influx of transferees under that legislation. There’s so far only about 70 refugees and asylum seekers requiring medical evacuation. Even if that number was in the hundreds, given they’re going to Christmas Island, not the mainland. Isn’t this just scaremongering from your Minister?
PRIME MINISTER: If someone needs… this is what currently happens. If someone needs very serious medical attention. They’ve always been getting it, they’ve always been brought to Australia for it and some of them have gone to Port Moresby, some have gone to Taiwan! To receive … to be treated….
KELLY: And 900 have come to Australia and that hasn’t seemed to undermine the border protection policy.
PRIME MINISTER: Well, we didn’t change the border policy. What Labour did in the Parliament was change the policy and the setting. And…
KELLY: Isn’t it scaremongering to say this will keep people off the public waiting list?
PRIME MINISTER: No, it’s not Fran. It’s just a simple fact. If we’re going to treat more people in Australia then obviously they’re going to take the place of people who were getting that treatment anyway. It’s just simple math.
KELLY: Prime Minister, thank you very much for joining us.
PRIME MINISTER: Well thanks Fran, one last thing before I go. The other thing we’re announcing in Townsville today, is the small business assistance. So this is for flood-affected small businesses in Townsville. That assistance will go from $25,000 to $50,000 today under the Category D announcement, that the Premier and I have agreed this week. So, one of the reasons I’m going to Townsville is that we’re delivering additional support to Townsville small business that have obviously been devastated by those floods as well.
KELLY: Prime Minister, thank you very much.
PRIME MINISTER: Thanks Fran. Bye.