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Transcript of doorstop interview: Sydney: 7 December 2016: small business innovation; National Innovation and Science Agenda; economy; emissions intensity scheme; climate policy review; Josh Frydenberg; electricity prices

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7 December 2016





This is the real talent here, the entrepreneurs. Greg and I are delighted to be here in front of one of the small businesses that our Innovation Agenda has been able to help through its support, which is being delivered to YourGrocer.

Nick, who owns this business, made the point that in business, you innovate or you die. Innovation is the key. There he is. Come on Nick, you said it so well. He said: “innovate or die”. What he is doing is he is building the security of his business by innovation and by finding new avenues to sell his wonderful produce, his wonderful food that we see behind us.

What is interesting about this, is that these big internet platforms - online retail platforms - are often seen, I think with some justification, as being a big challenge to small businesses. There is apprehension about Amazon coming here. What is that going to do to Australian retailers? What Morgan and Francisco have done, is they have a platform which empowers small businesses like this. So it enables them, while they're not of a scale to compete with Coles or Woolies or Amazon but when aggregated with the YourGrocer application, they are able to join one of 150 businesses - right? 150? - and provide that personalised service, that special relationship of trust we were just talking about with Joe. An 82-year-old greengrocery business here, started by his grandfather, a special relationship of trust. He is able to deliver that through the technology of the 21st century.

All of this is creating great opportunities for Australian jobs, for Australian producers. Nick has here, produce that you wouldn't find in a big supermarket, isn't that right?


Australian produce and the best that the world has to offer. It is the best that anyone can find.


So what this is doing is not just creating opportunities and growth and jobs for the retailers, and all of the people involved in the supply chain and the logistics chain, but also opening greater opportunities for Australian producers. They are part of our export agenda as well.

So, right across the board. We saw yesterday the importance of coding in schools and how we support coding out at Croydon Public. Today we are looking at e-commerce retailing, small business, entrepreneurship and how that has been driven by our Innovation and Science agenda. Do you want to say more about it, Greg?


Thanks to the Prime Minister, to Nick, to Morgan, Francisco. Innovation is about jobs. This is the proof in the pudding. What you see with real innovation is young guys like Morgan and Francisco who are making use of the National Innovation and Science Agenda, in particular, they were able to raise funds using one of the early stage venture capital limited partnerships. Through that, they were able to expand their business, create jobs and give people like Nick the chance to take on the big guys. Innovation is actually the chance for the little guy to take on the big guys. To create jobs in packing, in driving, where the fruiterer, the deli, the seafood marketer, they have got a chance to take on the big supermarkets and beat them at their own game and give Australian families low cost, high quality options.

It is a year now since the Prime Minister launched the National Innovation and Science Agenda. It has been about science and things such as our great researchers being able to have better access to machinery and tools that will help them deal with leukaemia and other great research tasks. It is about bringing young people into science, as we saw yesterday, and it is about ensuring that we get the investment to help people like Morgan and Francisco create the jobs and to give the suppliers, and firms such as those that Nick has, the opportunity to compete. So it is a revolution, but it is a revolution that protects jobs and creates jobs.


Morgan, perhaps tell us how the Innovation and Science Agenda has enabled you to get your business funded and enable you to do the great work you are doing for Nick and many other retailers.


From our perspective, Australia is a conservative country when it comes to starting businesses and investing. But the Innovation Agenda has definitely made it easier to raise funds. It’s given investors some tax offsets for taking bigger risks, which is important in the future. It has helped us expand the business. The capital to grow is one of the biggest bottlenecks and having access to that is good. It’s helped us create jobs, so we’re proud of that and we’re proud to support guys like Nick and thousands of small brands across the country compete with the big two and eventually Amazon.


Very good, well that’s great. Well done guys. So any questions?


Prime Minister the GDP figures out today, economists believe will show the economy went backwards in the September quarter. Given you campaigned heavily on jobs and growth, you mention it again today, is this a failure on your part?


Well, you know we have sluggish growth across the world at the moment. That is one of the reasons why everything we do, every element of our policy, has to promote economic growth. There are big headwinds out there at the moment. We know that. That was the focus of the discussion at the G20 and at APEC. Our Innovation and Science Agenda is all about promoting economic growth.

On the subject of economic growth, there is a big question today for Bill Shorten. We have seen in South Australia what happens when the lights go out, when you lose power. We have seen what that does to jobs, to economic growth, to productivity in that State. Bill Shorten has got to explain why he is proposing to increase the price of electricity. Why he is proposing to undermine employment and undermine growth.

I can say this to you; we are committed to doing everything we can to put downward pressure, maintain downward pressure on electricity prices. Now we don't control them at the Federal Government. This is an area that is largely within the responsibility of state governments, as you know. But we will not do anything, take any steps that puts upward pressure on energy prices. Now more than ever, with Australian households and businesses already paying prices for energy that are high enough - too high, we would say - we will be ensuring that everything we do for our part puts downward pressure, to try to restrain growth in energy prices.

The three things we have to achieve are one, energy security. Gotta keep the lights on. The Labor Party has shown they're not very good at that in South Australia. Two, we’ve got to make sure energy is affordable. You know it’s got to be affordable, affordable for businesses like the businesses here and for households. That is why we will not be imposing a carbon tax or an emissions trading scheme, whatever it is called. We are committed to achieving the reductions and emissions that we agreed to in Paris, 26-28% by 2030. We are committed to achieving that, at the same time as maintaining energy security and energy affordability. That is our commitment.

So far, we are doing very well. Greg used to be the Environment Minister, as you know. We beat our Kyoto target very handsomely. We are on track to beat our 2020 target and we are also committed and we will meet our 2030 target.


Prime Minister, your energy minister, on Monday morning, on the emissions intensity scheme, he said that “we will take a look at that” as part of the climate review. 33 hours later he said: "No, I never even mentioned an emissions intensity scheme". What changed or has Mr Frydenberg been caught out lying when it comes to this statement.


Let me just say, there is there is no reference to a scheme of that kind in the terms of reference for the review. I mean Greg's standing with me, he remembers it very well. It has always been the

Coalition's policy, right back to 2010, that there would be a review of our climate policies after the Emissions Reduction Fund which has been very successful. It’s achieved now 178 million tonnes of abatement at $11.83 a tonne. So it is a successful scheme. There were many sceptics about it but it has done well.

We have always been planning to have a review there. As recently as August last year, after the Cabinet agreed to commit to the 26-28% cut in emissions for Paris, this is what is our committed target, after that meeting it was Greg, Tony Abbott who was then the Prime Minister, and Julie Bishop, announced that target and repeated the commitment to having a review of our climate policies in 2017.


Why did the minister say those words on Monday morning and were those words approved by your office?


I can tell you the position is very clear. It is absolutely clear, this review is business as usual, it has been part of our policy for the best part of seven years. But the one thing I want to be very clear about, we are not going to take any steps that will increase the already too high cost of energy for Australian families and businesses. We will not be imposing a carbon tax and we will not be imposing an emissions trading scheme, however it is called. An emissions intensity scheme is an emissions trading scheme, that’s just another name for it. That has been our policy for many years now.

If you vote Labor at the next election and Labor wins, you will pay more for electricity. You will pay more for energy, because they will introduce an emissions trading scheme. That is their policy. So Australians will have a choice. They can either vote for a government at the next election which will impose higher costs on their households, higher costs for energy and electricity, we think they are too high already. We will do everything we can to restrain that growth in electricity costs. But the Labor Party has a policy that is absolutely committed to higher prices, whether it is by imposing an emissions trading scheme or, of course, by their utterly un-costed, utterly unrealistic renewable targets.

We are governed in our approach to this area, meeting those three targets by economics, by engineering, by science, by technology. We are being practical about it.

Labor is driven by ideology. It is all about ideology and they do not care about the cost of living pressures on Australian households. We do. This is about the cost of living. Energy prices are high enough already and we should not be doing anything - and we will not be doing anything - that increases them in the future.


Prime Minister why won’t you answer a very basic question about Josh Frydenberg? You’ve twice been asked the question.


What is your question?


Why did Josh Frydenberg -


You will have to ask Josh Frydenberg that. I can tell you, the Government's policy is very clear. It is absolutely clear. We will not be doing anything, taking any measures which will increase, add to the already high prices of electricity.


Has your minister made a mistake?


I know you are all more interested in the politics than the substance. The fact is our policy is very clear and it has been very clear for many years now. We are focused on meeting those three goals; energy security, energy affordability and meeting our emissions targets, our reduction targets. We are doing so in a way that will not put upward pressure on energy prices. They are high enough already.

The fundamental question is do you want to pay more for electricity? Do you want to pay more for energy? Do you want to pay a lot more for electricity and energy? Well, Bill Shorten is your man if you want to do that. Because what he is doing is promising a much more expensive energy future for Australians and I might say a much less secure one. Labor - you have to hand it to them - they are managing to achieve two things; they are going to make energy less reliable and more expensive. They can't keep the lights on when the lights are on and you will have to pay more to keep them on.


So was Josh Frydenberg sent out on Monday morning, your Minister for Environment, was he sent out with the instruction of telling the Australian people that an emissions intensity scheme was on the table? Because that is what he said to the ABC. Did the PMO approve that message?


I have told you what our policy is. If you want to ask questions about what another minister said, you should address them to him. I will tell you what our position is. It is exactly the same as it was as you and Tony and Julia outlined in August last year. We are having a review. We have always been going to have a review. It has been part of the policy for many years. But we will not be taking any steps that will increase the cost of energy. We don't control the cost of energy, you understand that, the responsibility is largely with state governments. We won't be taking any new steps or new initiatives that will put further upward pressure on energy prices. We believe electricity, energy generally is costly enough as it is. Our job is to do everything we can to ensure that Australian households are not continuing to pay higher and higher costs for electricity and energy.

Again, I want to stress we don't control the price of electricity but we can do everything we can to ensure that energy is secure, it is reliable, keep the lights on, that it is affordable, you can afford to pay for it and that we meet our climate change targets and, to date, we have met them and beaten them. Do you want to add to that, Greg?


Sure. Right now we are fighting for the jobs of steel workers in Whyalla. We are fighting for the jobs of aluminium workers in Portland. Electricity and energy costs are fundamental to keeping and to growing those jobs in each of those towns. Labor’s policy will destroy manufacturing jobs in Australia and drive up the cost of living for Australian families. It is absolutely right, in 2010, along with the then leader, I put down a review for five years afterwards and then in 2013, when we came in we made it 2017. That is something we set down over six years ago on the 2nd of February 2010. Right now, the point that the Prime Minister makes is absolutely clear and it is the point that the Cabinet is making and Josh and myself, we are the party of lower electricity prices. We are the party of more supply in terms of natural gas and we are the party of making sure that there is access to energy. We won't let anybody misinterpret the distinction between somebody saying that people can put in their submissions but that our policy is absolutely clear and has always been absolutely clear - no new increases in electricity prices on our watch.

The question today is will Bill Shorten rule out a new hit to electricity in energy prices for the workers of Whyalla and the people of Portland.


Mr Hunt, in your review that you’re talking about now, you’re claiming credit for it -


No, I am just saying it is a fact of history.


I know, I know, you introduced it, this aspect of a review in 2017 - the very, very clear point now is did it include an emissions intensive scheme? Was that back on the table? Because that is what your successor has [inaudible] on Monday.


With respect, you are misrepresenting. It was about the distinction between people putting in their views and our policy, which has been continuous through different administrations, of we are committed to no increase in electricity or gas prices as a result of our policies and as the Prime Minister said, lowering them. That has been consistent across all ministers, across administrations. We will fight Labor against their plans for higher energy and gas prices. Thank you.


I just want to be very, very clear about this. This is a cost of living issue. This is a jobs issue. We are facing, in the world today, slowing economic growth, slowing levels of trade, it is a matter of great

concern that impacts on Australia as well. You have got to ask yourself, do Australian households, do Australian businesses need to pay higher costs for energy and electricity? Of course they don't want that. Households are struggling to pay the bills as they are. Businesses are struggling to compete as they are. We are committed to doing everything we can to ensure that we have strong economic growth in Australia and strong jobs growth. We are facing a very challenging global environment. Everyone understands that. We don't want to be putting brakes on the Australian economy. Electricity prices have been going up for some years in large part because of the very large investment in the distribution and transmission networks. That has been the major contributor.

If we were to adopt policies of the kind the Labor Party is proposing, that would supercharge that increase in energy costs. What is that going to do to businesses that are struggling to compete? What is that going to do to entrepreneurs who want to start new businesses, to companies that are considering getting started in Australia? Is that going to add any jobs? Of course not. What is it going to do to households that are struggling to pay the bills as they are today? It is very clear - we are for jobs, we are for economic growth and we are for responsible management of those three goals - energy security, energy affordability and meeting our climate change targets. We have demonstrated we can do all three. The threat to that is the Labor Party. They offer a future of less reliable energy and we know - we can see what that has done in South Australia and much more expensive energy. The real question for Bill Shorten is how can he justify jacking up the cost of electricity because that is what he is promising. That is his policy. We are very happy to give the Australian people their choice on that. They will have their choice. We are happy to have that debate at the next election. We will be for security, affordability and responsibly meeting our climate change targets. Shorten will be for less secure energy, he won't be able to guarantee he can keep the lights on and the one thing you can absolutely be sure, a vote for Labor is a vote for higher energy costs.

Thanks very much.