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Transcript of joint press conference: Sydney: 23 March 2016: $1 billion Clean Energy Innovation Fund; Brussels attacks

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23 March 2016



Joint Press Conference Sydney

I am here with Greg Hunt, the Environment Minister to talk about innovation.

The key to Australia remaining a prosperous, high wage, first world economy with a generous social welfare safety net in these, the most exciting and competitive times in human history, is to be more innovative.

To be more competitive, more productive and every angle of government policy is focused on that. So too it is with the environment and climate change.

Now, as I said at the Climate Change Conference in Paris, the key to ensuring that the world is able to meet the deep cuts in emissions that we need to achieve in order to keep t growth in global temperatures, warming to 2° C or below, the key that is innovation. It's science, it's technology. So, we are focused on that here, Greg and I, and the whole government - on innovation in climate change technology.

What what we're announcing today is that we are retaining the Clean Energy Finance Corporation and ARENA, the Australian Renewable Energy Agency, we're attaining both of those agencies.

And we are establishing a new $1 billion Clean Energy Innovation Fund and what that is going to do is every year invest $100 million in the smartest, most cutting edge Australian clean-energy technologies and businesses to ensure that we not only drive jobs and innovation in Australia but also play our part in cracking the very hard problems, the challenging technical difficulties that we face in terms of reducing emissions.

This challenge of global warming, this challenge of climate change, we will beat - we'll beat that but we'll beat that by being really smart, by being technically, technologically, scientifically sophisticated and innovative.

And this is another measure which will not only achieve that, but of course drive our overall transition from an economy fuelled by a mining construction boom to the new economy, much more diverse, much more innovative.

So this is a very good day for innovation, it is a very good day for technology and for taking on the big challenge of global warming.

Now, Greg, over to you.


Thanks very much, Prime Minister.

I'm delighted with this announcement today. There are really two fundamental parts - one is the retention and repurposing of the Clean Energy Finance Corporation and ARENA, the Australian Renewable Energy Agency.

That is an important sign, an important symbol and an important practical step in terms of adding to our action on climate change and then the second thing is the creation of, as the Prime Minister says, a billion-dollar Clean Energy Innovation Fund.

This will be investing in storage, in new battery technology, in smart grids, in some of the exciting solar visions that people have hoped for and imagined for Australia but which are only now really becoming reality.

We've just opened, in Nyngan, a 100 megawatt solar plant, the largest of its kind in the southern hemisphere, but we can do more, we can be better and we can achieve this great vision of progressively bringing Australia to lower emissions and zero emissions energy, to making our part as part of a global challenge in reducing emissions.

We'll meet and beat our 2020 targets. We are on track - and this will make it easier for us - to meet the very ambitious 2030 targets and I want to thank the Prime Minister for his leadership in this space and his support for this initiative.


Mr Hunt, you have repeatedly trashed the CEFC in the past, like, in the past you have repeatedly trashed it and now you're saying you're delighted they're retaining it. Which Mr Hunt do we have to believe?


Oh no, I think the point is very clear that as it was originally constructed, I was critical. We have made some very significant changes, in particular projects such as investing in existing wind farms to me - made absolutely no sense. What we're doing now is precisely as the Prime Minister has said, repurpose them to focus on the emerging technologies, energy efficiency is fundamental to families,

to buildings such as this. We are in one of Australia's most energy-efficient buildings, and to making sure that the cost of living is less so this is quite a dramatic change. We have already changed its mandate with the Finance Minister for the CEFC, now we're moving, as the Prime Minister has said, to commercialising emerging technologies with ARENA. That is an exciting change.


How many - of that $1 billion of loans, how much do you expect to get back?


Our goal is to receive all of it back. The overview here is that the Clean Energy Finance Corporation will lend and receive returns of what's called bond rate or cost of funds plus 4 per cent. The Clean Energy Innovation Fund will lend and receive returns at cost of funding plus 1 per cent. We hope that they do better but that's their target so instead of giving 100 per cent of the taxpayers' money away, our goal is to receive 100 per cent of the taxpayers' money back but with an additional return which is something that the Prime Minister has set out as a fundamental change on his watch since he came in.


This reflects a very big change in the way the Government - the Federal Government, is now approaching this type of investment. Historically and you see across the board the Federal Government has been very much like an ATM, it's been making grants and the object has been to make the grant without, frankly, a lot of follow-up as to whether it's effective. We believe that in areas like this, and also as you've seen me say, in areas like urban infrastructure, the Government should seek to be a partner and investor, seek to get a return. It doesn't have to get the same high return that a private venture capital firm or a private bank would seek to get. It can get a very long- term return but in doing that, by ensuring that you take a more economic approach, you will ensure that you have a much more rigorous analysis and that you will get a better quality of investment and a better quality of project. It applies a financial discipline to the approach which is critically important, not just in terms of protecting taxpayers' money and the budget but also important in ensuring that you get the right quality of projects.


Mr Turnbull, can I ask about wind farms as well? Yesterday there was $3.3 million to find out if wind sickness exists. Do you think that's a good use of taxpayer money when it has not been proved anywhere in the world?


Well, I accept your scepticism on the matter but it is a matter of concern to a lot of people. You can't deny that and one of a reasonable exercise for the Government is to - as we have promised, has been promised last year - to investigate the matter and if the conclusion is as you suspect it will be, that will serve to allay lot of anxiety and that's a very important thing to do.


I'll add two points on that briefly. One is that the NH&MRC has made a preliminary finding and their preliminary finding was they had no evidence of health effects but they also recommended there should be further study and investigations. So we are following the advice of the National Health and Medical Research Council which is - no findings that they have and no concerns to this date but they also recommended additional research. The second thing is in good faith, when the renewable energy target 33,000 gigawatt hour limit and reform was set and passed, we made a commitment to pursue that additional research and I think it's the very important to uphold your promises.


So it’s $3.3 million at a syndrome that doesn't exist?


No, it is $3.3 million on the basis of the National Health and Medical Research Council’s own recommendation that there should be additional study.


The $1 billion in loan essentially is almost like a venture capital investment. I mean is that of all parties it the Liberal Party that should be doing that or should it be the private sector?


Well I've been involved in the venture capital business myself so I'm fully aware of the risks of it and quite often in a venture capital portfolio you would be very lucky if all of your investments proved to be successful. So the aim is to make money across the portfolio. Nonetheless, it is an important - it's critically important. You've got to have people taking risks and funding risky projects. We're providing real incentives for that. Look at what we’re doing with our Innovation Agenda, Innovation and Science Agenda, we’re providing tax rebates for investment in very early-stage start-ups and capital gains tax exemptions.

Again, I don't want to introduce an unduly partisan note into today's gathering but you should remember the Labor Party, by way of contrast, is actually increasing the tax on investments by putting up - proposing to put up capital gains tax by 50 per cent.

So at a time when we are encouraging investment, incentivising investment because we think it's pretty obvious that's what Australia needs more of, the Labor Party presumably wants to have less investment because they're increasing the tax on investment gains by 50 per cent.

But yes, you're right, there is, the innovative technologies do carry with them risk of investment and I have to say Oliver Yates and the Clean Energy Finance Corporation have had a very good track record to date. We're confident they'll do very well in the future, but the objective will be to secure a return across the portfolio and I'm very confident they can achieve that.


Prime Minister, can I also ask about Cory Bernardi who is your Government colleague.

He is personally emailing people on Safe Schools and attacking their views. Do you think that's appropriate?


I'm not on his email list so I can't comment on that.

So, thank you all very much indeed.


Mr Turnbull, just a quick question on Brussels, please. You were critical of the lack of internal borders in Europe. Are you advocating an end to the Schengen agreement? And how do you think Europe can better secure its borders like Australia?


Thank you and I will have more to say about the dreadful crimes in Brussels later today. But as far as the Schengen - it's obviously the Europeans have got to determine how they are manage their own security.

I was simply making the point that because of the Schengen arrangements, as you describe, people are able to freely travel across borders within Europe, that poses security challenges. Coupled with clearly very porous external borders as we've seen plenty of evidence of that and my point really was to say that those arrangements have security consequences.

In Australia, we are favoured by geography, that is an advantage, but we have very, very strong border protection arrangements and that is a critical element in ensuring that we do our job of protecting Australians and keeping Australia and our nation safe.

So thank you very much indeed.