TRANSCRIPT: ABC National Wrap with Greg Jennett

Subjects: National Energy Guarantee, Senator Barry O’Sullivan, LNP Convention


If the Turnbull Government is to solve the decade-long conundrum of climate and energy policy, keeping The Nationals on side will be a must, because many in its ranks want coal-fired power generators to feature in the national energy mix, at least for the next decade or so.

The Deputy Prime Minister Michael McCormack is leading negotiations on that subject and we caught up with him on the sidelines of the Liberal National state conference in Brisbane.

Michael McCormack welcome to National Wrap. Now you spent the weekend at the LNP Council meeting there in Queensland where pressure has mounted from members over the National Energy Guarantee; so what is it that you’re discussing to reach some sort of compromise with the Prime Minister at present?


I’ll leave those discussions with the Prime Minister between the Prime Minister and I, Greg, but certainly there’s been a lot of discussion about the National Energy Guarantee at the convention and a very good motion put forward to make sure that there is affordability and reliability using the NEG, that’s been put through the Convention.

It’s a 10 year celebration of the LNP at this particular convention in Brisbane and with energy certainly front and centre.

Affordability and reliability are very much part of the discussions, and making sure the National Energy Guarantee is part of what we are talking about because that is going to provide a way forward with the States.

I know Josh Frydenberg is going to the States in August to try to get that forward and then of course it becomes a policy discussion, but any policy discussion with the Prime Minister about any proposals will remain between the Prime Minister and myself at this stage.


Fair enough but what’s your general disposition and those of your members, particularly there in Queensland, about the role for coal in that transitional period, possibly extending the life of existing plants or even subsidising them in an interim period. Are you open to that suggestion?


Absolutely there is a way forward and certainly coal has got to be part of that way forward. Coal has got to be very much part of the mix into the future. It provides cheap baseload power to make sure that we have the reliability and affordability in the energy space.

As part of the Northern Australia Infrastructure Facility there is the ability now for an investor to say to the Government look, we want to build a coal fired power station in the Top End, in the north of Australia – there is that ability now and for an investor, and coal is there and the price of coal is very good at the moment, it’s one of our strongest export sectors, but also want it to be part of our domestic energy supply going forward, and the NAIF provides that opportunity for an investor to say: We want to build a coal-fired power station.

You mention refurbishing coal-fired power stations and there’s the ability to be able to do that too. We want coal to be part of the mix. LNP members are very much pro-coal. That sits in stark contrast with Bill Shorten and Labor; they do not want coal to be part of the mix, they want to say to those hi-vis vest wearing workers, thousands of them right through Central and Northern Queensland and indeed throughout NSW that they do not want them to be working, they do not want them digging up the coal. They do not want them to be sure they are making a living in the future. That’s where we stand directly opposite Labor. Labor wants 50 per cent renewables.

We want to make sure renewables are very much part of the mix but we’re very much technology-agnostic. We’re very much, as part of the National Energy Guarantee going forward, putting reliability and affordability front and centre of what we’re saying and doing.


OK so you say there is an ability there to extend the life of existing coal-fired plants but via what funding mechanism? Surely that’s not the Northern Australia Infrastructure Facility? Would it entail a separate pot of either Commonwealth or State Government money to make those power plants last longer in their current lives?


In Queensland at the moment we’ve got the Queensland Government which actually owns the poles and wires and runs the generators, they could sort the situation out as far as prices are concerned for their customers tomorrow.

But very much as part of Federal Government funding and what we do, it’s all part of the policy mix.

We need to be having those discussions, we are having those discussions and at the end of the day we are technology-agnostic.

We want to make sure that we have the baseload power, that we don’t have the situation that unfolded in South Australia not that long ago, and thank goodness Steven Marshall has taken over and his Liberal Government has taken over from that very sorry state that they picked up with Jay Weatherill and the blackouts. That was absolutely diabolical where South Australia was plunged into darkness, plunged into economic uncertainty just because they had this ideological drive towards a renewable target that just was never going to be met by their policy position.

What we want to do is we want to have coal very much part of the mix. Whether that’s refurbishing existing coal-fired power stations, whether that’s part of the NAIF building new ones, for an investor to come forward and put their hand up and say ‘we want to be part of this’ - the NEG is going to provide reliability and affordability and we need to make that process work.

I have every faith that Josh Frydenberg will do just that in conjunction with the States at the COAG meeting next month.


But outside of Qld where it’s a little more vertically integrated in its energy system there, in a lot of other states trying to prolong the life of existing coal-fired plants is essentially a market intervention by the Commonwealth or perhaps even by the States – how does that sit with your free marketeering principles in The Nationals?


I know when we took over Government in 2013, Qantas were having difficulties, a situation where their profits just weren’t there. They were suffering huge economic losses. There was a call then for the Federal Government to nationalise the Qantas airline.

There were worries about affordability of ticket pricing if Qantas fell over. There was all sorts of drama and controversy about that and a lot of pressure from commentators and experts in the aviation industry for the Federal Government to come in and nationalise and take over Qantas…


…which it refused to do at the time back then, citing….


…which we refused to do and look at the situation now. Qantas is taking on new routes; the Perth to London direct route has taken off just in recent times. Qantas is enjoying very good profits and the airline is going very nicely, thank you very much.

Sometimes you need to exercise a bit of calm. Of course we don’t want to see the situation where people are turning off their power simply because they can’t afford it.

We don’t want to see people shivering in winter and sweltering in summer because they can’t turn on their heaters and air conditioners and the like because they simply can’t afford it.

That’s why we’ve got the National Energy Guarantee. That’s why we’ve said we’re looking at various policy proposals and making sure we do what’s right for the people who matter, but we also need the States to come on board, we also need the States to help us with this, and that’s why I’ve got every faith in Josh Frydenberg being able to deliver just that.


Alright, well also floating around the conference this weekend was a suggestion of some sort of royal commission into the energy sector or into energy companies. What’s your attitude towards that? I don’t even know if it is a proposal at present but what do you think of that idea?


It’s just talk at the moment, it’s simply that, talk and speculation. Let one royal commission go on at a time; we’ve got that into banking and that’s shining a light on some of the shoddy practices in the finance sector. As far as a royal commission in the energy sector, that’s just talk at the moment.


So no merit to it that you see at this stage, anyway


Not at this stage.


And finally The Nationals’ family will lose Barry O’Sullivan, its Queensland Senator Barry O’Sullivan at the next election; he’s been the casualty of a preselection process there over the weekend. You lose something of a character in the party room at that point. What’s your assessmen, Michael McCormack, of that decision taken by the LNP?


That’s democracy at work. Barry put up his credentials against Susan McDonald and we had Paul Scarr come in as number one on the LNP Senate ticket as well.

Susan McDonald will be very very good for our party. She’s in that number two spot. She’s a Cloncurry girl, she’s a butcher, she’s a businessperson, she understands how regional Australia works.

We’ve lost a warrior in Barry, no question about that. He’s been a true fighter for farmers’ rights, he’s been advocating against the native vegetation management here in Queensland which – if Bill Shorten ever wins the Prime Minister’s job will go national and that will be disastrous for our farmers.

Barry understands that farmers are our very best environmentalists. Barry understands telecommunications in the bush and he fought very hard for those. He fought very hard for farmers facing crippling drought. He has been an absolute warrior for regional Queensland, indeed for all people who live in the regions.

I have every faith going forward that we won’t and haven’t seen the last of Barry O’Sullivan, just like we haven’t seen the last of Ron Boswell – he got up on the convention floor today and made a few pertinent points. They are great people for regional Australia.

Well done to Susan too – she’s going to be a really good breath of fresh air in our party; another woman; she’ll be there with Michelle Landry and Bridget McKenzie, adding a really good perspective on regional Australia and regional Queensland.


Yes, well change is coming and you seem to be in the thick of a lot of it right now with a lot on your plate, Michael McCormack, but for joining National Wrap tonight, thanks so much.


Thanks Greg


Sam Edwards