Good afternoon - it’s great to be here at BlueScope. It has been such a fantastic tour and I thank you so much for showing us how steel is made. I’m here with Josh Frydenberg, the Energy Minister and of course, Paul O’Malley, the Chief Executive and his shortly to be successor, Mark Vassella.
Energy is the second largest overhead cost for this business.
Paul, just tell us how important energy is to you and the thousands of jobs that depend on BlueScope?
PAUL O’MALLEY - CHIEF EXECUTIVE OFFICER, BLUESCOPE STEEL:
Thank you Prime Minister.
Without energy, you can’t make steel, and that doesn’t mean, whether that’s here in Australia or anywhere around the world.
Port Kembla Steelworks where we are today, the World Health Organisation said that Wollongong is the cleanest city in Australia and in the top three per cent of clean cities in the world.
So firstly, we have a steelworks here that is incredibly environmentally efficient. We spent $600 million in the last 20 years on environmental improvement projects and you can see from the air quality today just how good that is.
From an energy perspective, whether it’s coking coal, natural gas or electricity, we cannot survive and continue to be internationally competitive, without efficient energy.
We need baseload energy, whether that’s coal, gas, pumped hydro, but we need competitive energy. Our energy costs have gone up 93 per cent in the last two years and since the gas market intervention which I think was absolutely essential and the NEG which in ten years as CEO, is the first time I have seen a sensible strategy that addresses the transition to a clean energy future, and if we don’t address the transition – and I’d like to thank the Prime Minister and the Energy Minister for doing that – we will not have a steelworks here in Australia. Australians will continue to consume steel and from my perspective it is much better that it’s made by Australians in a very environmentally friendly manner, here in Australia.
Well, thanks Paul. You know, just a few days ago, we announced the prime contractor for the construction of the Offshore Patrol Vessels. It’s going to be Australian naval vessels, built in Australia, by Australians, with Australian steel.
But to have Australian steel, you have to make steel in Australia. What Paul has been able to do, is improve the efficiency of this business, despite rising energy costs. What he’s welcoming now, is our initiative, our leadership, delivering the National Energy Guarantee because as he says, that is going to bring together the three objectives of affordable, reliable energy and meet those emissions reduction targets - that is our commitment - and it will result in lower energy prices.
We’ve already seen the benefits of the intervention in the east-coast gas market. It was pretty dramatic stuff, Paul, I think you’d say for a Liberal Prime Minister to be canvassing export restrictions but it had to be done. We had the desired effect.
There is more gas coming into the east-coast market, but we need to have a long-term energy plan and that is what we’ve delivered.
Josh has been able at the last COAG meeting to secure the support of the states to the further development of the National Energy Guarantee. So by the time you meet in April, Josh, we expect to have the National Energy Guarantee fully fleshed out and in a position where it can then take Australia, take our energy market into a new world where you have reliable, affordable energy, meet your emissions reduction targets.
No more picking winners. No more subsidies.
Just a focus on ensuring that we maintain Australian jobs right here in Australia.
What we need is Australian steel made in Australia and that requires affordable energy.
Families need affordable energy.
Small businesses need affordable energy.
Everything we are doing is designed to put more money into the pockets of hard-working Australian families, give Australian businesses - big ones like Paul’s, small ones like thousands of mum and dad businesses – give them the incentive to invest more and employ more.
That is why we have seen the strong growth in jobs over the last year. Nearly 1,000 a day. 355,000 jobs - 84 per cent of them full time.
That’s because we are backing business with lower taxes for small and medium businesses.
We’ve already cut taxes in the middle income brackets to ensure half a million people don’t go into the second highest tax bracket and there’s more to be done.
We are determined to do everything we can, every lever we can pull on energy, on the economy, that will put more money into the pockets of hard-working Australian families and businesses, we will.
That’s the big difference between us and the Labor Party.
Bill Shorten has a plan for higher taxes, much higher taxes.
He has a plan for higher energy costs, much higher energy costs.
You don’t have to speculate about that. Just look at what Labor did in South Australia if you want a perfect case study of where their ideology and idiocy leaves you on energy costs.
And of course, we know what his plans are on border protection. He’s selected a candidate in Bennelong, Kristina Keneally, who is on the record as wanting to bring all the people on Manus, to Australia. That would be the biggest marketing opportunity for the people smugglers you could imagine.
So when he’s not jacking up the cost of living for Australian families and businesses, Bill Shorten wants to roll out the welcome mat to the people smugglers.
We’re standing for Australian families, Australian businesses and we’re keeping our borders secure. And we’re not going to outsource our immigration policy to people smugglers and criminals.
I’ll ask Josh to say a bit more about the big savings that the National Energy Guarantee is going to deliver to families and businesses right across the country.
THE HON. JOSH FRYDENBERG MP – MINISTER FOR THE ENVIRONMENT AND ENERGY:
Thank you Prime Minister.
More than 30 years ago Jimmy Barnes came to Port Kembla to make the film clip for Working Class Man. Today the Prime Minister has come to Port Kembla to create jobs for Australia’s working class men and women. The way we will do that, is by driving power prices lower. Already, with the support of big manufacturers, indeed the biggest manufacturer in Australia, BlueScope Steel, we have got together with the LNG suppliers and ensured that Australians will get access to gas before it is exported overseas.
Now, when it comes to power prices, the National Energy Guarantee is the only game in town. That was the unequivocal message from the COAG Energy Ministers meeting last Friday.
Both Coalition and Labor ministers sent a message that the National Energy Guarantee can lower power bills and create a more reliable system.
It is time Bill Shorten got that message and dropped his emissions intensity scheme which will see Australian households more than $300 worse off every year under Labor’s proposal.
And big manufacturers like BlueScope will not get a 23 per cent reduction in wholesale prices that has been modelled under the National Energy Guarantee.
So for an employer like BlueScope, where more than 6,000 people here alone are employed, you will see a $13 million a year energy bill saving under the Guarantee. That means more, hundreds of more jobs, that means international competitiveness is maintained and that means a better Australia.
Thanks Josh. Have we got any questions?
Prime Minister, with the demerger of the LNP in Queensland, will the Nationals strike a different course?
The LNP has been a great success as merging the Liberal and National Party’s in Queensland and I don’t think there is any initiative to change that.
The election was fought, very much as we know, on state issues, as state elections always are, by the way, but this one was particularly so.
We will wait to see the results of the final count.
Prime Minister, speaking about coal obviously and now the election as well, with Labor and pro-Labor independents winning seats in Rockhampton and Townsville – does that make your government reconsider its support for the Adani coalmine?
Let me be very clear about this - the Adani coal project has had the support of both the Queensland Labor Government and, indeed, federal Labor and, indeed, of course, our government.
They've got all their environmental approvals.
Coal is one of our biggest exports, I will just remind you of that. Tens of thousands of jobs in Australia depend on the coal industry.
The question as to whether a loan would be available to the Adani, the rail part of the project from the Northern Australia Infrastructure Fund, that's a matter that will be, if an application is made and lodged and assessed, that will be made by the board of the Northern Australia infrastructure Fund and they'll provide that independent advice to the government.
Further from that Prime Minister, is this just another measure to prop up ageing coal fire plants?
Sorry – what measure are you talking about?
The National Energy Guarantee? Sorry.
Listen – can I just be very clear about this - the great thing about the National Energy Guarantee is that it is exactly what I said our energy policy should be at the beginning of the year when I spoke at the Press Club.
I said it had to be technology agnostic. It had to based on engineering and economics. We had to get all the ideology and idiocy out of it.
And what it does is it focuses on reliability, so you've got to have the right percentage of reliable or baseload power, as Paul has described, you've got to be able to keep the lights on.
You know, you can't run a steel mill from the wind farm because the wind doesn't blow all the time, the sun doesn't shine all the time.
If you are going to have a lot of variable renewables in your energy mix, as we have now and we will have more in the future, you've got to be able to back it up. That is engineering. That is physics. You've got to recognise that reality.
There is too much ideology and wishful thinking in the energy debate, so-called.
And, of course, you have to make sure it is affordable. If Paul doesn't have affordable energy, he can't compete and all of these jobs go. All of these jobs will go and thousands more that depend on it.
Are we seriously going to de-industrialise Australia because of some Green-left ideological crusade for wind farms and solar panels?
Of course renewables have a big future, of course they do, but you've got to do it in a smart way and the National Energy Guarantee delivers that.
So you get your emissions reduction compliance, you get your reliability and, of course, it means things like pumped hydro become more important than ever.
I know, I read and I see it sometimes in the media saying that my government is hostile to renewables. What utter rubbish.
We are embarking on the single largest hydro project in the country's history since Snowy 1. That's Snowy 2. It is going to be the biggest battery by far in the Southern Hemisphere. What does that do? It makes renewables reliable. It makes the wind farms and solar panels reliable because when they're producing more than is needed, you store it, and then when they are not producing, because the sun’s not shining or the wind is not blowing, you open the gate valve, the turbines run and you generate electricity.
This is just basic common-sense. The National Energy Guarantee, for all the reasons Paul said, brings this together.
It is good news for energy sources that are reliable and affordable and, of course, are able to contribute to meeting the emissions reduction obligation.
So, believe me, this is just being smart and hard-headed about energy. It's been a long time since we've had that in Australian energy policy and it's a great credit to Josh, great credit to the Energy Security Board and I want to thank the energy sector, the manufacturing sector, industry that have got behind us.
Josh even got the ACTU and the World Wildlife Foundation on board. Josh, that was very good going. He is not just persuasive - he has a very good product to sell.
The National Energy Guarantee is the future for a rational energy policy that takes us on an affordable and reliable transition to a lower emissions energy future.
Back to the Queensland election result-
Do you think its fuelled demand for an inquiry into the banks?
That was not even remotely an issue in the Queensland election. So, no. I think the election was fought very much on state issues between state leaders and state parties.
Was it a toxic decision to preference One Nation?
Look, I want to say this, that for whatever reasons, I mean everyone is entitled to cast their vote as they see fit but the voting for One Nation in the Queensland election has only assisted the Labor Party. Let's be very clear about that.
The One Nation voters, I want to say to them that your votes for One Nation have assisted Annastacia Palaszczuk.
Now, when we come to the federal election, we will be making that point very, very strongly.
If you want to have a Coalition government, then you should vote for the Coalition, vote for the LNP in Queensland, the Liberal Party or National Party elsewhere. That is the only way to be sure you get and keep a Coalition government.
Voting for One Nation, as we've seen in the Queensland election, has only benefitted Annastacia Palaszczuk and the Labor Party.
Thank you all very much.