Source: Australian Parliamentary Secretary to the Minister for Industry
Nicola Willis:
Good afternoon. It’s great to be here with you today alongside Treasurer Chalmers and Minister Bowen and Minister Watts for this Climate and Finance 2+2. We are delighted to be welcoming our Australian friends here today in recognition of what is one of the closest economic relationships in the world.
The discussion that we have had today was about taking that platform and making it work even harder to drive investment, lift regional resilience, build long‑term productivity across both of our economies and our Pacific region, and to work together on our climate goals.
Our focus is on reducing friction, lowering costs, unlocking capital and strengthening our ability to grow and to do so with less emissions intensity into the future. And so for each of us here today this is about delivering for New Zealanders and Australians at home.
I want to acknowledge that Treasurer Chalmers has already made the most of Auckland this morning – he has joined the 445 Run Club, I am told. He’s been for a run and even dipped his feet into the viaduct this morning. So he is experiencing some of what Auckland has to offer, and we look forward to a subsequent discussion after this press conference.
At its most basic level New Zealand and Australia’s economic strength comes from the trade investment that is between us and the people‑to‑people relationships we share. And as we look to the future – excuse me everyone – there is real value in working closely together to channel investment into high‑productivity sectors, including digital services, advanced industries, energy, data, logistics. We wish to work together as nations that share insights, lower barriers and align regulations to encourage that investment.
If our finance and climate settings line up across the Tasman, then banks, exporters and fund managers don’t need to build 2 systems. That means lower costs, greater certainty and more capital flowing into the investments and adaptations that will keep our economies strong for the next decade and allow us to achieve our climate goals.
Investment and regulatory assignment help build supply chain resilience, skilled employment and regional security. Our 2 economies have many shared challenges and opportunities. We both have a focus on energy security and affordability, on ensuring that we can address the cost of living for our citizens and encouraging investment from around the world.
As we look further into the future, emissions reduction, productivity and the challenges of ageing populations are issues which we share discussion on. It is in our interests to work together. And when we do so we push one another and we back one another. Competition between us makes us sharper, collaboration makes us stronger, and our businesses and our people benefit from both.
So, today’s 2+2 discussion was about acceleration, and I look forward to building on this momentum and continuing to create the conditions for investment, productivity and resilience across our region.
And I now want to hand to you, Treasurer Chalmers, to make some remarks.
Jim Chalmers:
Thanks very much, Nicola. Thanks, Simon, as well, for hosting us so generously and for the discussions that we’ve been able to have this morning, Chris and I, with the both of you. Thanks for shouting out the 445 Run Club as well. Jess and Sarah and Caleb and about 90 or a hundred New Zealand friends running along that beautiful part of the foreshore there in Auckland was really the perfect way to start a really important day. So thanks for shouting them out as well.
These discussions bring together 2 countries, but they also bring together, we think, 2 really important sets of opportunities in our economy – the opportunities which come from cleaner and cheaper energy and the opportunities which come from a more productive, more dynamic economy on both sides of the Tasman as well. And today we made some really useful progress on both fronts simultaneously.
Simon in a minute will run through some of the detail of what we agreed and progressed today in these 2+2 discussions. But what we’ve been able to do today is to make meaningful progress when it comes to aligning standards, taking steps to boost investment in our economies and also cooperation on regulation and competition policy as well. So 3 really important areas which have been progressed because of the partnership, the friendship, between our 2 countries and the ways that we will rise or fall together when it comes to the sorts of economic growth that we want to see at a time when the global economic environment is really uncertain.
This is all about unlocking and unblocking the potential of our economies and doing that in partnership, doing that together. It’s all about attracting more investment to our part of the world. Right around the world right now, big investors are making different decisions about where they send their capital, and our part of the world – Australia and New Zealand – is becoming more and more attractive as the big investors work out where to invest their money.
For example, we had a good discussion today about AI and data centres. In Australia today there’s been announced a $7 billion infrastructure partnership between OpenAI and NEXTDC. And we had a good discussion about making sure that not just Australia, but Australia and New Zealand, benefit from this absolute explosion in interest and investment in the future economy, which will be powered by cleaner and cheaper energy but also transformed, turbo charged, by artificial intelligence and the data and digital economy in particular. And so that’s a good example of where our interests in productivity and dynamism and competition cross over with our interests in cleaner and cheaper energy, aided by the technological transformation that we’re seeing in all of our economies.
We got a lot done today, but we know that there is more work to do. Primarily that will happen bilaterally from here, but will take the opportunity in the future to convene this group if and when we need to. But a sign of the work that we will do together in our own portfolio is I’ve invited Nicola to take part next year in a discussion of the state and territory treasurers in Australia. That’s called the Council of Federal Financial Relations. And Nicola has accepted our invitation to be part of those discussions, because the economic challenges that we are grappling with and the sorts of solutions that we are pursuing are very familiar and common across both countries and, indeed, across our federation. So I’m very pleased that Nicola will be part of those discussions next year as well.
In order to make our economies more productive we need to take many meaningful steps. And those steps are best taken together across all of the areas that we talked about today. We strengthen our economies by making sure that this really important partnership is stronger as well, and that’s what today is all about. This partnership between us as ministers but also between our countries means a great deal to us in Australia. It means a great deal to our economy. It matters a great deal to our people as well, and so we thank you again for the opportunity to confer with you.
Simon Watts:
Well, tēnā koutou katoa, everyone and a very good morning. I want to acknowledge Treasurer Chalmers and Minister Chris Bowen on behalf of Minister Willis and I. It’s great to have you both here in Auckland.
And I firstly want to start by recognising Australia, in particular, Minister Bowen’s leadership in partnership with the Pacific to reach an historical mutual agreement with Turkiye for the hosting of COP next year. Australia has ensured a resolution that ensures a substantive Pacific focus for COP31. New Zealand was a proud supporter and is a proud supporter of Australia’s bid, and New Zealand’s priority, like Australia, will remain to amplify the voices of the Pacific and ensure the prominence of Pacific voices to drive outcomes in our region.
Today, again, we discussed the need for Australia and New Zealand to continue to work on initiatives to support the Pacific, particularly around climate action and energy resilience. Our joint statement commitments including working together to support the Pacific ambitions to accelerate renewable energy generation. Our joint statement includes 3 themed areas: energy affordability and security and regulatory alignment; economic growth and productivity; and Pacific partnership.
In detail we agreed 12 specific items within those groupings. We agreed to co‑invest funding to upgrade energy product registration systems and regulatory regimes to accelerate the adoption of energy‑efficient technologies. We agreed to further align regulatory settings for consumer energy technologies towards a joint approach for enabling electric vehicle – EV – chargers that have smart functionality. We’re looking to develop together vehicle‑to‑grid – V2G – standards for EVs to ensure that our markets are aligned in this area, including also adoption of international communication protocols. We are looking to pursue regulatory alignment and market opportunities on solar and battery systems. We’ve acknowledged and will be developing a Trans‑Tasman sustainable finance fuel strategy. Scaling a competitive regional SAF industry is important for both countries to attract investment and strengthen regional fuel security.
We look to expand technical collaboration and information sharing on livestock emissions reduction. And we’re going to continue bilateral and international engagement to develop interoperable and comparable sustainable finance frameworks. We will establish a working group of government and industry to share information and collaborate on solutions to help ensure that insurance remains accessible. We’ll continue to explore opportunities for closer alignment as we progress development of our countries’ payments system, licensing and digital asset reforms. We’ve agreed on benefits of aligning our building codes and standards and tasked officials to take this work forward. We’ve agreed to work together on the future of an aligned product safety standards. And, lastly, Australia and New Zealand have agreed on co‑hosting a targeted technical assistance and training initiative with the Pacific in regards to Pacific energy regulators in 2026.
So as you can see, a comprehensive list of agreements between our 2 jurisdictions. We look forward to continuing to work closely together with Australia. The strength of our relationship between our 2 countries is and will remain vital to achieving the goals in our regions. With that, I’ll hand over to Minister Bowen.
Chris Bowen:
Thanks very much, Simon. And as the Treasurer said, thank you to both of you for hosting us so warmly today, particularly your home town, Simon, but also Nicola thank you for your very typical generous hospitality.
Well, I also want to begin by acknowledging New Zealand’s strong cooperation and support for Australia’s role internationally at COP30 recently where we negotiated a successful result for Australia and the Pacific to chair the negotiations at COP31. New Zealand’s support for Australia in that process has been unstinting from day one, from when we first announced our bid. New Zealand was the first country to support it. And New Zealand through Simon was there all the way through the negotiations.
And we discussed today making sure that this is a COP which is meaningful, generational for the Pacific, making sure that the pre COP which will be held in the Pacific is an important event, and Australia and New Zealand will be working closely together in planning the pre COP together with, of course, our Pacific family. And, of course, the negotiations themselves at COP31 to ensure that Pacific voices which have been ignored for so long actually get a good and solid and strong hearing in the important climate negotiations.
More practically, as Simon indicated, we’ve agreed on regulatory cooperation on important matters like vehicle recharging, which has such potential for both our countries, to stabilise our energy grids, to ensure that consumers become more in charge of their own energy. They move from being consumers to prosumers with solar panels on their roofs and batteries in their garage and on their driveway. Putting them in charge. But there’s a big regulatory task to ensure that those regulations are fit for purpose and the best interests of consumers. And the more they can be aligned the better for both countries and the easier it is to attract investment into those revolutions.
And I’m so glad that we’re working so closely together on those very practical outcomes. Not front page news in terms of regulatory settings of consumer‑owned energy resources, but very important news and something that we’ll continue to work together on and build on the success today. So, every 2+2 has been beneficial, and the ongoing work will be beneficial for both our countries and our pathway to net zero. So, thank you.
Willis:
Thank you, Minister Bowen. We’re happy to open for questions. I’m going to ask that we have a couple of questions for the New Zealand ministers and at least a couple of questions for our Australian friends before we open more widely.
Journalist:
Minister Chalmers, the New Zealand government says it won’t be sending billions of dollars overseas buying carbon credits to meet our Paris obligations. What does Australia make of that? And will Australia be using offshore [inaudible]?
Chalmers:
I’ll ask Chris to add to that in a moment, but from my point of view we welcome the fact that our New Zealand friends are an important part of global action on climate change. They’ve committed to net zero, committed to Paris, they’re playing more than a helpful role in the Pacific making sure that the voices of our sisters and brothers in the Pacific are heard in the global forums around climate change.
Now, every country makes its own decisions about the best way to meet its targets. We’ve got a lot to focus on at home, and we’re focused on our work at home. We recognise that different countries go about it different ways.
Bowen:
Absolutely. Broadly we’re both committed to net zero, but we have different pathways to get there because we have different economies. You know, agriculture is not as big an emitter in Australia as a proportion as it is in New Zealand, for example. And that provides different challenges for our New Zealand friends than us.
On your specific question, we don’t use international credits or allow them in our country. We believe in domestic abatement. We don’t count international credits in our system either.
Journalist:
Can I just build on that, please, [inaudible] to both you, Treasurer, and Minister – does Australia have any concerns about the rollback of New Zealand climate policy – so the reversal of the oil and gas exploration ban, funding the gas companies, our reduction of the methane target? Is this something you’re concerned about?
Bowen:
Well, every – gas is essential for the transition. We’re looking at gas policies at the moment ourselves in relation to a review that Minister Madeleine King and I have underway. Gas is a flexible fuel which supports renewables. A gas‑fired power station can be essential in supporting the rollout of renewables, for example.
Green hydrogen has a great future, but it’s not here yet. Big industrial users need gas in the meantime. So every country will find their own way of navigating the gas journey. But we can’t pretend that we don’t need gas for the foreseeable future to support the renewables transition. That’s the way we see it in Australia. Every country will come up with their own pathway, but that’s our approach.
Journalist:
Treasurer Chalmers, there have been several UK ministers who have raised concerns about the rollback of New Zealand’s climate policies and the impact that that might have on our free‑trade agreements. Is that something you’re aware of or that’s come across your desk?
Chalmers:
I’d say that even countries as close as ours don’t have identical policies across a whole range of policy areas, including this one. But we do have the same objective, which is to try and make sure that we’re maximising the industrial, the economic, the environmental benefits of cleaner and cheaper, more renewable, more reliable energy.
And that means from country to country – whether it’s our countries or, indeed, around the world – they go about this in different ways. But overwhelmingly the tenor of our discussions today is about how we work more closely together to maximise this golden economic opportunity, which is cleaner and cheaper energy. And that’s certainly the Australian approach to this – to see this as a golden economic opportunity. That’s the overwhelming conclusion of our own Treasury modelling that we released not that long ago. Australia’s economic interests are best served by an orderly transition to net zero, and we engage with our close friends here in New Zealand and around the world on that basis.
Journalist:
Given that desire for alignment, wouldn’t you have wanted, surely, to have seen New Zealand be more ambitious with that 2035 target?
Chalmers:
Look, first of all, I don’t give our friends free advice about the best policy mix to meet our shared objectives –
Journalist:
[inaudible]?
Chalmers:
But I’ve known Nicola for a little while now and known Simon, and Chris and Simon work very closely together. I am really confident that New Zealand and Australia are both trying to find the best ways that we can to maximise this economic opportunity. No 2 countries do things exactly the same, and that’s all we’re seeing here.
Journalist:
Minister Willis and Minister Watts, officials warned New Zealand ministers that a lower methane target was inconsistent with the main Paris goals. Why did cabinet go ahead anyway, and why did Minister Watts then 2 weeks later tell countries at COP30 that we must keep 1.5 alive?
Watts:
Well, first and foremost, that’s not actually the reality of what the advice was given. The target set that we have reset in regards to methane is based on a scientific independent review which we commissioned and provided feedback into cabinet for consideration. The band in terms of 14 to 24, the 24 aspect is aligned with 1.5. That was the baseline band of the pre‑target.
At the end of the day, we are a major exporting nation of primary goods. We need to ensure that we are balancing the reality of how we derive revenue in this country through exports in the primary sector and not put in place policies that are going to drive that export and that food production to other countries that have a higher emissions profile.
It’s critically important for our sustainability and our financial sustainability as a country that we have targets that are realistic and practical for our farmers. And New Zealand farmers, with respect to every other farmer in the world, are some of the most carbon efficient farmers in the world. We are hugely proud of that. And as we’ve noted and discussed today, there are opportunities where New Zealand agritech can work in conjunction to support Australia and other countries in the world in order to bring benefits not only to our 2 jurisdictions but actually to the globe.
Willis:
Put simply, Paris is a global agreement. It’s about reducing global emissions. And New Zealand wouldn’t be doing much for the world if we shut down our carbon‑efficient farmers so that that farming could occur in a less carbon‑efficient way elsewhere. As a country we are committing hundreds of millions of dollars into research and work to come up with breakthrough science that will ensure that we can reduce emissions from livestock in the future.
That investment is critical because that is allowing us to potentially export not only something of value to our own economy but something that could reduce global emissions from agriculture. And on the way through it is essential that we are also supporting our people here at home who rely on our ability as an export nation to sell food around the world. And our government is committed to backing our farmers to keep doing just that.
Journalist:
If I can just – sorry, just briefly – why should New Zealand households bear an extra $270 a year in energy and fuel prices because the burden of reducing emissions has been shifted further on to the other sectors?
Watts:
Well, firstly, I don’t agree with that premise in terms of costings. You know, the reality is that we do have challenges within our energy sector. Actually, every country in the world has challenges in regards to the need to increase energy generation and the affordability and the abundance of that. New Zealand is well placed. I think today we’re sitting at 98 per cent renewable. Don’t beat us up for that. That’s pretty good on the world stage. And in the context in terms of what we’re doing – we’re seeing more renewable generation in the last 18 months than the last 15 years combined.
I want to acknowledge Australia and the work that they’re doing around their battery program. It has been phenomenally successful, and we are taking learnings in regards to what they are doing, acknowledging that our 2 energy markets are very different. Peaks in Australia are during the day, peaks in New Zealand are in the evening. So solar has different plays between the 2 jurisdictions. But what brings us together and what unites us is the fact that renewable energy is the pathway to economic prosperity, and it will drive economic growth in both of our countries and actually the broader economy.
And New Zealand and Australia both have at its basis critical ability to be able to leverage that better than probably any other countries in the world because of our location, our climate and our positioning in regards to that. Our role is to work together to maximise that benefit for New Zealanders and Australians. That’s what we’re doing, and that’s why we’re announcing regulatory alignment on these factors today.
Journalist:
Minister Watts, you talked about attracting investment supporting decarbonisation and amplifying Pacific voices at your last 2+2. What sort of progress have you made in terms of cooperation in the past year? Can you give some examples, please?
Watts:
Well, we just highlighted that we’ve got the negotiation mandate for COP31. That’s going to be managed and led by Minister Bowen for Australia on behalf of the Pacific. That is a fundamental and critical step in terms of putting the decision‑making for decisions that will derive benefit to the Pacific region in the hands of the Pacific. And that has not been the case to date – actually quite the opposite. So the leadership of Australia in regards to that is a fundamental step.
And now the action is required in regards to putting those steps in play to ensure that when we do have COP later next year and the pre‑COP in the Pacific that we maximise that opportunity for the Pacific not only to demonstrate and show how the impacts of climate change are hammering and hitting the Pacific probably more than any part of the world but how can we also look to try and drive more investment and support a funding and finance so that we have a sustainable mechanism in investment in renewable energy and other aspects of climate adaptation. I think that’s the real opportunity in front of us, and that is a massive step forwards from where we were 12 months ago.
Journalist:
In terms of investment and decarbonisation?
Watts:
Well, in the context of decarbonisation, we’ve adjusted talked about renewable energy and the renewable energy play that’s across both of our countries but also in the Pacific. That is one of the most significant ways in which we can decarbonise and then the benefits of more renewable energy allow us to flow through in terms of decarbonisation in transport and other areas.
We are work very closely together. And I think when Minister Bowen and I are on the world stage and reflect on where we are on the curve versus other countries, we are humbled and proud of the work that we are doing in that space and we are continuing to learn, but we are as 2 countries at the bottom of the South Pacific doing pretty well on the world stage in regards to our trajectory of making ourselves more renewable and getting to our net zero targets.
Journalist:
Minister Willis, can I ask you a quick off‑topic question: do you agree with Chris Bishop that tenants – given that rents have gone down – should renegotiate their rent down with their landlords?
Willis:
Absolutely, give it a go. We are in an environment where there is more housing supply and more downward pressure on rents than there’s ever been thanks to some great policies that have been delivered by Minister Bishop and this cabinet. And, of course, not every landlord will welcome that, but you as a tenant have rights. And actually you’re in a market where rents for properties are coming down across the board. That makes it a tenants’ market. So have that conversation with your landlord.
Journalist:
Why should the onus be on tenants? Why shouldn’t you put out a decree to landlords saying, ‘Hey, guys, why don’t you think about lowering the rents?’
Willis:
Because evidence around the world suggests that that would lead to a drying up of housing supply overnight which would lead to more housing unaffordability issues and higher rents for all of us. But what we are seeing the real signs of after decades in which we’ve had huge imbalances in our housing system, we are now seeing that supply is starting to catch up with demand. And that’s good news for renters.
It’s good news for first home buyers, of whom we have the largest number in the market in many, many years. And it’s good news for any New Zealander who aspires to own their own home in the future, because when you’re paying less rent, you’re more able to save for a mortgage, and when houses are more affordable, you’re more able to get that mortgage in the first place. So we are making good progress and, yes, have that discussion with your landlord. I can’t guarantee it will always be successful, but it’s a conversation worth having.
Journalist:
Just going back to the dialogue and the mention of insurance and making it more accessible, could you please talk more to that and provide more detail given that it is quite a pressure on the cost of living?
Watts:
Yes, absolutely. So one of the areas – and we see this playing through with the significant impacts of weather events that both our countries face – is that the area of insurance and the role in which insurance plays is critical in terms of, you know, the impacts of climate change. There is a real opportunity for us to continue to work and strengthen the relationships in terms of the way in which those markets operate between our 2 countries. That is important. We need our citizens to ensure that they have insurance cover to deal with the impacts of climate change, and that’s one of the areas that we’re looking to continue to explore.
Willis:
Yes, and the simple reality is there are a number of insurance firms that operate on both sides of the Tasman, and to the extent that we can share lessons and align, we can ensure that we are supporting more affordable insurance into the future.
Thank you for your questions.