SENATOR THE HON. ZED SESELJA, SENATOR FOR ACT AND ASSISTANT MINISTER FOR SOCIAL SERVICES AND MULTICULTURAL AFFAIRS:
Welcome to Hume in the ACT - it’s great to be here.
And thank you to Rob and Peter and Graham and all of the team here at Viridian here in the south of Canberra for the tour. Great to be seeing really thriving business here doing some great stuff.
Great to have our Prime Minister here, great to have the Minister for Energy, Josh Frydenberg who is doing such a sensational job. I’ll hand over to the PM.
Thank you very much Zed, it is good to be here.
Now, we’re here at Viridian Glass, which is part of CSR and Rob Sindel is the Managing Director of CSR and Peter Moeller is in charge of the glass business, and Graeme here has hosted us here at this plant, all of us here.
Energy is all about jobs.
The National Energy Guarantee drives down wholesale energy costs, as the Energy Security Board has told us.
It delivers reliable power and it ensures we meet our international obligations.
So, affordability, reliability, responsibility.
Now, Rob, just tell us how big CSR's energy bill is.
MR ROB SINDEL - MANAGING DIRECTOR & CEO, CSR:
It's about $110 million a year. So, $60 million of that goes to gas-
Come a little bit closer.
MR ROB SINDEL:
$60 million of that’s gas and about $50 million of that is electricity.
Right. Now, as you know, we've taken some strong action on gas recently to ensure there's enough gas for the east coast market. What have you seen that’s – what has that done to the gas suppliers and gas market?
MR ROB SINDEL:
So we're a big gas user, obviously, in our glass business and bricks business.
We've had to enter the wholesale market for gas to ensure we have supply. So we've sort of cut the retailers out of that in certain parts of our business.
What we've also seen is the spot price come down, which is very beneficial.
The work you and the Energy Minister have done to guarantee the supply has meant spot prices have come down, and that's great for us as an organisation.
It's great for the people, actually. 4,200 employees. Our objective every day is to keep those people in work.
That's our objective too. That's what the National Energy Guarantee is about. That's what all of our energy policies are about, that Josh and I have been developing and rolling out.
It's about ensuring Australians have affordable and reliable power - vitally important for households and families, but vitally important for jobs. These jobs depend on affordable energy.
Peter, how important is energy, the cost of energy, to making glass? Just talk a bit about that, and the jobs that you support at Dandenong where we were in February, and then at all of your plants around the country.
MR PETER MOELLER - EXECUTIVE GENERAL MANAGER, CSR:
Energy is probably the most important cost factor in the manufacturing of raw glass.
Yep. Come a little bit closer. Energy is the most important factor?
MR PETER MOELLER:
Energy is the most important factor in the production of raw glass. It represents about 16 to 17 per cent of the total cost and we're paying about $20 million of energy costs totally - a big majority of that is paid in Dandenong, predominantly for gas.
Okay, so bringing that spot price of gas down, as we've seen, as Rob was saying - that improves your business and it makes the jobs more secure?
MR PETER MOELLER:
It's very important to us because we are in a global competition, and we need to be able to be competitive in that market.
MR PETER MOELLER - EXECUTIVE GENERAL MANAGER, CSR:
And with the increase in energy costs, if that continues and all of a sudden we have to put a question mark on the sustainability of our competitiveness. So that's very important.
Right. Yeah. Peter and Rob, tell me - the Energy Security Board have said to us - they are the experts in this area, and we're relying on their advice. They've said to us that the National Energy Guarantee that they've recommended, that policy they've recommended - will provide greater investment certainty and will result - they estimate - in wholesale energy costs coming down by 20 to 25 per cent over the period through to 2030.
What's that going to mean for your businesses here, CSR overall, and of course for the glass business?
MR ROB SINDEL:
I think the most important part for us, and what we liked about the National Energy Guarantee, was the reliability and certainty. Because the rule number one is, if this factory or any of our factories don't have power, they don't operate.
You can't have people standing around. So reliability - we like the fact that you’ve put reliability and also the affordability at the top of the list.
MR ROB SINDEL:
To continue to subsidise one source of energy over the other, we don't think is sensible because we want secure, affordable power. That's what we liked about the plan.
Well thank you very much. And thank you for hosting us here.
So, Josh, we're now at the stage with the National Energy Guarantee where we've had it recommended to us by the Energy Security Board - they are the five most experienced people in the electricity and energy business.
So we've got that advice. We're adopting it. We're taking it on to COAG. So the next step now is to present it to the - to persuade COAG to go ahead with it.
How important do you think it is for the other jurisdictions, the states and the territories, to support this?
Just talk to us about the critical importance of getting energy policies right, and delivering the affordability and the reliability that Rob and Peter and Graeme need to secure the jobs here and around Australia.
THE HON. JOSH FRYDENBERG MP, MINISTER FOR THE ENVIRONMENT AND ENERGY:
Thanks, PM, and thanks to Zed for having us here, and thank you to Viridian Energy.
The Turnbull Government has created 371,500 jobs in the last 12 months. And we're hungry for more.
And as the Prime Minister says, lowering power bills is the key to job creation.
Now Dr Finkel made it very clear that we needed a national approach to emissions reduction and to energy policy. All the states within COAG signed on to that recommendation, now here’s their chance - with the National Energy Guarantee, a recommendation by the experts - to live up to that commitment that they have made.
It's a credible, workable, pro-market policy that delivers lower prices and a more reliable system. No subsidies, no taxes, no trading schemes.
What we've heard from the company here, just as we've heard from manufacturers in Australia - the BCA, the Ai Group, ACCI, BlueScope, BHP, Grocers Association, Irrigators Council - the list goes on - have overwhelmingly endorsed the National Energy Guarantee as the way to take Australia forward, with a comprehensive policy that focuses on reducing prices, creating a more reliable system, and staying true to our international commitments.
Great. Thanks very much, Josh. Thank you.
Prime Minister, as you say the most important thing is getting states on board. So have you been in conversation with the state premiers and what are they telling you?
Well, I've had conversations with several of them. I know Josh has been talking to the energy ministers. But I think the next step is the energy ministers' meeting in November?
MINISTER FOR THE ENVIRONMENT AND ENERGY:
Late November, and obviously there is modelling underway now, as you know, so that'll be - that's the next step.
Are they receptive, PM?
Well, the conversations I've had, they've been very receptive. But there's often, as you know, a mismatch between the private conversations and the public rhetoric. But there it is.
Prime Minister, just on another issue, you're due to meet the-
Sorry, hang on, go to you first.
Thank you. You're due to meet the Israeli Prime Minister next week. What will you say to him about the stalled extradition of the Melbourne school principal Malka Leifer on alleged sex offences?
What I'll say is that justice demands that she be brought back to Australia to answer the charges.
Prime Minister, why has the government been so apprehensive about joining China's Belt and Road Initiative? Are national security concerns-
Can we just focus on energy for a little bit more just before we move on to foreign policy?
This links in with energy - there's $300,000 being spent every minute on welfare. Would you like to see the welfare bill come down? How can we make that happen?
Well, what we need to do is ensure that the welfare dollar is spent effectively in a way that – spent on those who need it, spent most effectively. Obviously, particularly with working-age benefits, the object is, wherever possible, to ensure that people are able to return to work.
The best form of welfare, as we all know, is a job and so that's why we have so many programs that are designed to ensure that people are able to return to the workforce because that clearly is the best for them and for their families.
But, you know, Australia, as the AIHW report observed last week, as Zed was reminding us earlier, Australia has by world standards a very targeted welfare system. It's means-tested, as you know and that's one of the reasons why it is more effective than in many other places.
Deloitte says that we could be at a turning point and see wage growth very soon. Is that welcome news for you?
I am thrilled to see it, delighted to see it. Look, as the Treasurer has said, there are better days ahead.
We've seen very strong jobs growth - 371,000 in the last year. 85 per cent of them full-time. "Jobs and growth" is not just a slogan - it's an outcome.
What we are now looking to see is growth in wages because they have been, wages growth has been slow by historic standards. So we want to see wages growth and I'm very pleased to see Chris Richardson's forecast that we're going to see strong wages growth. That's good news.
PM, will the NBN ever deliver a commercial rate of return when it now has to compete against 4G and 5G?
Well, look, the NBN was a calamitous train wreck of a project when we came into government in 2013. Billions and billions of dollars were wasted by Labor, and there was no way to get them back, okay?
So, as Communications Minister, I had to play the hand of cards I was dealt - as I often used to say, you know, in the words of the Irish barman when asked for directions to Dublin: "If I were you, I wouldn't be starting from here." No one would have wanted to start from where Labor left us.
So, we have done the best we can getting that project on track.
Now, it is on track in terms of the rollout. They are activating many more households and premises a fortnight than Labor did in six years, but there have been real problems - both with the installation experience and with people not getting the speeds that they believe they're paying for, or that they have paid for.
We are very, very focused on improving on both of those counts.
Of course, as the network expands, you will always get more complaints because if you've got 3 million customers, you'll get more than if you've got 50,000. Plainly. But one complaint is one complaint too many.
So I am determined to ensure that we address those issues, and that people get the speeds they have paid for.
It was supposed to be a commercial enterprise, so can you ever see that money being returned to the taxpayer?
Well, Chris, I think there's a reasonable question mark over that.
I mean, when it was started under Rudd, you may remember, Kevin Rudd said this was going to be fantastically commercial and that the public would be lining up to invest in it. Well, that's nonsense.
If we had gone down Labor's route of fibre to the premises, it would have taken, say, another eight years to complete and another $30 billion.
So if you think the commercial criteria are challenging now, imagine what they would be if you loaded another $30 billion of cost onto it.
Now, it is challenging. At the moment, it is estimated to deliver a return of around 3 per cent, which is not - it is enough to keep it on the government's balance sheet, as a government asset, but it certainly is not a commercial return that the stock market would expect.
It was supposed to be 6 per cent.
Well, there's no way it would reach that.
Look, it is, again, we were dealt a very, very bad hand of cards by Labor and we are doing the best with it to get it rolled out. But I have to say this is the fastest rollout of any telecom service in the country's history.
One final point on this because it is the issue-du-jour-
Sure. The only risk you have is that I will give you more detail than you want.
Too much detail is never enough on this, Prime Minister. Could you tell us, in hindsight, was the project a mistake?
Has it been a massive waste of money?
Well, it was a mistake to go about it the way they did - setting up a new government company to do it was a big mistake. If you want to look at a country that did this exercise much better, it's New Zealand, and what they did there was they basically ensured the incumbent telco, the Telstra equivalent, split its network operations away from retail operations and then that network company which is called Chorus became, in effect, the NBN.
The virtue of that was you had a business that knew what it was doing, that was up and running, that had 100 years of experience getting on with the job and the Kiwis have done this at much less cost.
So the way Labor set it up was hugely expensive and there are many billions of dollars wasted - and I've said this many times, it's a fact of life - that we can't recover.
So having been left in a bad place by Labor, what we are doing is ensuring that we deliver it as quickly and cost effectively as possible but I have to say to you, again, one complaint is one complaint too many.
I know that a lot of people are not getting the deals they paid their retail service providers for. I have been talking to the chief executive of NBN about it frequently and talking to the ACCC about it. I was talking to Rod Sims on the way here. As you know, ACCC has got a whole exercise and inquiry into this and they will be making those retailers be very upfront about what speeds they're offering, how that compares, you know, are they able to deliver them and they'll be ensuring that everything is being monitored.
There will be 4,000 monitors put in place by the ACCC around the country to monitor broadband performance.
I am relentless in my efforts, as is the minister, in ensuring people get the best experience, the best deal from the NBN possible. The management is doing a good job too but again, it was not a great hand of cards to be dealt but that’s alright, we'll play them the best we can.
Prime Minister, could it be good for Australian jobs to sign up to the Belt and Road Initiative? Are national security concerns there legitimate?
The reality is we have a very constructive investment relationship with China. There is massive Chinese investment in Australia and considerable Australian investment in China too, I might add.
In terms of Belt and Road, it is an initiative, an objective, an agenda is possibly the best way to describe it of the Chinese Government and we obviously welcome Chinese investment that meets our foreign investment guidelines. But we prefer to focus on specifics, on specific projects and investments.
So there's, you know, rather than engaging in generalities - and perhaps I'm betraying my past business experience - I prefer to focus on specifics and there is no shortage of Chinese investment and opportunities for that in Australia and indeed of course Australian firms invest in China too.
Can you guarantee that mobile data users won't be penalised in any way to pay for the NBN?
Well, there is no plan to impose any restriction on, you know, mobile data.
Can I just make a point about mobile data? The latest figures I have show that the average use of data on a mobile plan is around 15 gigs a month. For NBN customers, fixed line or indeed wireless, fixed wireless customers, it's around 150. So, you can see the advantage of the fixed-line network is that it provides enormous capacity.
What Bill Morrow is talking about in terms of wireless is more enhanced antenna services, you know, in large multi-dwelling buildings, you know, apartment buildings.
Look, it is a competitive environment, but I just want to repeat we are doing everything we can to ensure the NBN delivers a great service. We're doing everything we can to ensure that the telcos, the retail service providers, deliver to their customers what they promise.
And one complaint is one complaint too many. So we are not going to be satisfied with anything other than 100%. I know it can't be achieved, but that's the goal.
Thanks a lot.