Source: Australian Parliamentary Secretary to the Minister for Industry
Jim Chalmers:
It was a real buzz to be presenting to this big investor conference here on stage at the Sydney Opera House. I want to pay tribute to Sohn Hearts & Minds for the work that they’ve been doing for 10 years now in the investor community to raise money for a very good cause.
This was a welcome opportunity for me to pitch Australia’s positives. Australia has good economic fundamentals. We’re in the right place of the world at the right time. We’ve got a massive opportunity when it comes to clean energy and technology set against the backdrop of geography, demography and difficult geopolitics playing out around the world.
Our future lies at the intersection of cleaner, cheaper, more reliable energy and accelerating technological change here in Asia. That is the future of this country. And sensible, objective experts all agree that the future of our energy system is increasingly renewable energy with battery storage and firmed by gas. That is the mainstream view of sensible, rational, considered organisations and people when it comes to this energy transformation. And that’s the Albanese Labor government’s approach to this really key energy transformation.
Investors know, and I think Australians know, that the net‑zero transformation is a golden opportunity for Australia. This was the point made very clearly by the Treasury modelling that said it’s in Australia’s interests to have an orderly transition to net zero. That is the best way to strengthen our economy, to do the right thing by electricity prices, to attract the investment that flows when you provide clarity and certainty about the decade and decades ahead. So that’s what we are doing.
What the Coalition is proposing is to take Australia backwards down the least responsible economic path. What they are proposing is an act of economic self‑sabotage. What they are proposing is a recipe for a weaker economy, higher electricity prices, less investment certainty and a weaker future for this country.
And, again, the Treasury modelling and the document and the commentary around the Treasury modelling is instructive. Treasury makes it really clear that the best outcome for our economy is an orderly transition. A disorderly transition would cost our economy jobs, investment, push up energy prices and weaken our economy overall. The only thing worse than a disorderly transition to net zero is to abandon net zero completely. That’s the point that the Treasury has made. And that is the proposal that Sussan Ley and the Coalition are now taking forward.
Australians are being asked to pay a very hefty price to buy Sussan Ley more time. Sussan Ley would destroy our economy to save her leadership. Sussan Ley has caved to the smirking crackpots and cookers in her own party.
Now, this is not some temporary phase that they’re going through. This is not some temporary lurch to the right. Over recent years this Coalition has become a party of extremists, and Australians would pay a very hefty price for that extremism.
We have a lot going for us as a country. We’ve got a lot coming at us from around the world. But Australians have made a lot of progress together in our economy in recent years. We’ve got inflation down to around half what we inherited. We’ve kept unemployment low. The strongest real wages growth in 5 years. We’ve delivered 2 surplus budgets, got the deficit down this year, much less debt, which means much less interest on the debt. We’ve got a lot of going for us, but we’ve got a lot coming at us from around the world. We’ve made good progress, but we know that there’s more work to do.
The key to strengthening our economy in the longer term is investment. And the worst thing you can do for investment is to provide the lack of certainty which is at the very core of what the Coalition is proposing. At a time of heightened global economic uncertainty, the Coalition would make things worse, not better. At a time where cost of living pressures are hanging around, the Coalition would push energy prices up, not down. That’s what their announcement yesterday is all about.
This Albanese Labor government has a plan for an orderly transition to a clean energy economy where energy is cleaner and cheaper and more reliable, where we attract the investment that we desperately need to rise to our potential as an economy, to attract the investment that we need to create the good, well‑paid jobs that we want for every Australian and to lift living standards in the process. What the Coalition is proposing would take Australia backwards down the least responsible path for our economy. And that’s why it’s such a desperately dangerous proposition that they’ve put forward this week.
Happy to take a couple of questions.
Journalist:
Treasurer, when under Labor’s plan will we see household power bills actually come down?
Chalmers:
What’s very clear is that the upward pressure on electricity prices doesn’t come from the new, renewable, reliable, cleaner and cheaper energy. It comes overwhelmingly – as the experts have pointed out – from the fact that the ageing power assets are becoming less reliable and they’re coming out of the system. That’s what puts upward pressure on prices. So whether it’s the CSIRO or other organisations, they’ve made it really clear that the cheapest form of new energy is renewable energy backed up by batteries, firmed by gas. That is the mainstream proposition and that is the Albanese Labor government’s policies.
Now, the wholesale electricity price has come down substantially since we came to office. And we’ll hear more about the wholesale price when the new default market offer comes out and AEMO does its work. But it’s very, very clear that the Coalition’s proposal would push electricity prices up, not down. The best way to get electricity prices down over the medium term is to invest in that cleaner, cheaper, more reliable, increasingly renewable energy – and that’s our policy.
Journalist:
Can you actually provide a time for it, though? Because one of the journalists kept on pressing Sussan Ley yesterday saying when, when, when. When?
Chalmers:
I saw that exchange with the journalist – between Sussan Ley and the journalist yesterday. And the point that the Coalition seems to be denying is the point made by every sensible analyst and observer, which is the best way to get downward pressure on electricity prices is to invest in that cleaner, cheaper, more renewable, more reliable energy. That’s what we are doing.
I’ll leave the energy forecasting to others. We’ve made it very clear that we will give Australia the best chance of getting those electricity prices over time if we continue down the responsible path that we’ve set out.
Journalist:
The Coalition are obviously basing their policy around higher energy prices. Now, if you extend energy bill relief, is that potentially a sign that the government are worried about that angle of attack?
Chalmers:
Well, 2 things about that. One of the reasons why the Coalition’s proposal is economic insanity is because it will push energy prices up, not down. That’s what every sensible observer and analyst of our energy market has concluded. And by turning our back on renewable, reliable, cleaner and cheaper energy the Coalition will make electricity more expensive in this country. That’s very clear.
When it comes to the electricity bill rebates, we’ve made it very clear as well. They are an important part of our budget but they’re not a permanent feature in our budget. They were always designed to taper away. We will evaluate them before each budget update, including the budget update later this year. We’ve said that on a number of occasions already, the Prime Minister and I. They are an important way to provide some cost‑of‑living relief but not the only way we’re providing cost‑of‑living relief. We’ve got 2 more tax cuts coming. We’ve got other cost of living rolling out in the form of cheaper medicines, history‑making investments in bulk billing because more bulk billing means less pressure on families.
So there’s cost‑of‑living relief rolling out over the coming year and years. We will re‑evaluate the electricity bill rebates from budget update to budget update. They’re an important part of our budget, but not a permanent feature of our budget.
Journalist:
When did you find out that Treasury breached the constitution by not seeking your approval for those rebates? And did that happen on Steven Kennedy’s watch when he was the secretary?
Chalmers:
I don’t like to point the finger at specific secretaries of the department or to try and apportion blame. I think the important thing here is that the Treasury discovered this error, they self‑identified it, they reported it and they fixed it. And there’s no ongoing issue when it comes to this matter. I’ve seen it reported. I understand that it is a matter of interest to people. But I think the most important thing – and the only thing I’ll say about it – is that they found it, they reported it and they fixed it. And that’s what matters.
Journalist:
Treasurer, on the ongoing deal to acquire Mayne Pharma by Cosette Pharmaceuticals, your preliminary decision seems to block that deal because you’re worried that the facility might shut down. Are you concerned that this will set a precedent for future reluctant investors to use FIRB to get out of deals, potentially shaking deal certainty?
Chalmers:
I don’t detect any reluctance in the investor community investing in Australia, and why not? As I said to our friends in here in the investor conference, Australia is the best opportunity when it comes to investment. Australia is an island of opportunity and reliability in a sea of global economic uncertainty and risk. And that’s why we see so much appetite, whether it’s in clean energy, whether it’s in artificial intelligence and data centres, whether it’s in critical minerals or in other parts of our economy. So there’s lots of appetite to invest in Australia. My job is to make sure that we make it most of that.
The Foreign Investment Review Board regime is an important way for us to make sure that investments which are proposed in Australia are in Australia’s national interest. And in that case I’ve made it clear that jobs and the security of our supply chains, especially in critical sectors like that one, are important considerations when I weigh up the national economic interest.
Overwhelmingly, these proposals are approved. It’s very rare that one is knocked back or is given a preliminary sense that it might be knocked back or will be knocked back. But there are good reasons to do that in this case. I’ve made a preliminary decision. I try not to engage in a running commentary about those preliminary decisions. We’ll make a final decision in due course.
Journalist:
Are you considering passing it on the condition that it remains open or [indistinct]?
Chalmers:
I’m not prepared to sort of float conditions publicly. I have made it clear in coming to that preliminary decision that I care about jobs in South Australia and I care about the security of these critical supply chains in critical industries like that one. I’ve made that clear to the company in the course of making and taking my preliminary decision. But beyond that, I’m not prepared to engage in a running commentary about what happens between a preliminary decision and a final decision.
Journalist:
Are you able to put a timeline on when your final decision might be, given that the deal is set to expire on the 20th of November?
Chalmers:
Look, as soon as I can, but there’s a lot of considerations to weigh up in some of these complex foreign investment cases. And so my job is to be as quick as I can but as thorough as I can. And I take those responsibilities seriously.
This is the last one.
Journalist:
Treasurer, we have MYEFO coming up.
Chalmers:
I noticed that, too, yeah.
Journalist:
Yes, I’m sure you have. The Financial Review reported last month that Labor has breached its own fiscal strategy rule to return the majority of tax receipt upgrades to the Budget for the last 3 individual budget updates in a row. Will the government introduce more strict or rigorous fiscal rules in MYEFO, and will you follow them?
Chalmers:
We have fiscal rules in our budget and we’ve been complying with our fiscal rules. If you look at the totality of our time in office – about 3 and a half years now – we’ve delivered 2 surpluses, a much smaller deficit in the third year, we’ve got the debt down by $188 billion, we’re saving $60 billion in debt interest, and we have banked most of the upward revisions to revenue. And across all of those considerations we’ve done a much better job than our predecessors.
Our predecessors had fiscal rules and then didn’t comply with them at all. They failed on every front. They promised a surplus in their first year and every year thereafter, and they went none for 9. We’re 2 for 3. And so I’ll stack up my fiscal strategy and my fiscal record against our predecessors any day. From budget to budget we make sure that we are weighing up all the relevant considerations. But budget repair is always very high on our list. That’s why we found $100 billion in savings. Our predecessors had no savings in their last budget while we banked –
Journalist:
– in the last 3 budget updates, Treasurer that rule has been –
Chalmers:
I understood your question. I understood your question. I’m asking you to look across the 3 and a half years in office and compare that with our predecessors. It’s been night and day. Surplus budgets, multiple surplus budgets, for the first time in almost 2 decades. A much smaller deficit in the year just finished. Much less debt than the trajectory that we inherited. $100 billion in savings, banking most of the upward revisions to revenue. All of these things represent a much more responsible approach to the Budget and to the economy than under our predecessors. So, I welcome the question about our fiscal record.
I’ve got to go. Thanks very much.