TRANSCRIPT - SKY FIRST EDITION 28 MARCH

E&OE

Subject/s: Safeguard Mechanisms, Labor’s Deal with the Greens

PETER STEFANOVIC: Let's go to Canberra now. Joining us, the Manager of Opposition Business, Paul Fletcher. Paul, good to see you. Your response this morning. Having a night to think about it over the Government's deal with Greens, over safeguard mechanisms?

PAUL FLETCHER: Well, good morning Pete. Good to be with you. This deal will impose a hard cap on the 215 largest emitters. And perhaps the most troubling aspect of it is the impact it will have on the gas sector. Adam Bandt described it as a big hit on coal and gas. Now, what does this matter? It matters because of the transition that we need to make. We need to get our emissions reductions down and natural gas is a key transition fuel, including for electricity generation. We know we've got a liquid gas supply problem in Australia. Even the Government has admitted that and has talked about the role of natural gas as a key transition fuel. But because Mr. Bowen, I should say, has been so keen to do a deal with Mr. Bandt, has agreed to this hard cap, a series of other detailed requirements in relation to gas, and there's a whole range of major gas projects. Barossa, Beetaloo, Browse, Scarborough. The question is what impact this will have on gas supply. Already we've got AEMO our energy market operator warning about gas shortfalls in Victoria over winter. And as we look out over coming years, this is a very significant concern . So we're absolutely committed to net zero by 2050. But the key issue is whether the impact of this deal on jobs or whether it will push Australian manufacturing activity offshore to countries that don't have the same high standards as us. And in particular the impact on natural gas and in turn therefore on electricity, on the transition we have to make is something that is very concerning.

STEFANOVIC: The safeguard mechanism is supported by industry though the Business Council as well as the industry group. Plus it's just your policy with teeth, is it not?

FLETCHER: Well, no, that's not right at all. That's some of the spin we've been hearing from Labor from Mr. Albanese and Mr. Bowen. If I can just take it to this point about for example, the hard cap. The consequence of that is that the 215 major emitters will no longer be able to meet their abatement targets by acquiring offset certificates. Now it's been a well-accepted feature of policy design in this area for quite a few years that you can either about yourself or you can acquire certificates from others who've abated on ordinary market principles. But because the Greens are such zealots and because Mr. Bowen and Mr. Albanese have been ready to do a deal with them, you've now got this hard cap which greatly reduces flexibility. So, I think that's just one of the…

STEFANOVIC: …But it's supported by the BCA and the AIG though.

FLETCHER: Look, this is materially different from the policy framework that we took and we look at these issues in their totality. We're very committed to net zero by 2050 we delivered a 20% reduction on emissions, 2005 emission levels during a time and government well on track to continue that. But the concern here is the nature of the deal that has been done with the Greens specifically described by Mr. Bandt is a big hit on coal and gas. You know, these are major employers, major contributors to Australia's prosperity. Once new projects start and natural gas is so critical. The issue is what impact does it have on investment certainty and on decisions that investors will make and if we see a loss of new supply coming in to the domestic natural gas market, then what that means is that we face real problems in an electricity generation sector.

STEFANOVIC: But it won’t stop new projects though.

FLETCHER: Well, what this has done is send a very clear message to investors, and in particular the kind of language that we're seeing from the Greens about gas in particular. And of course the real risk is that businesses might simply decide that the rational decision for them is to move offshore to other countries which don't have the same.

STEFANOVIC: Yeah, I got, I got that point. So just, just a final one here. Just so your old government, it signalled gas would lead the economic recovery, so why not just do a deal with Labor and at least do your best to protect the gas industry by passing legislate you unamended?

FLETCHER: Well, look, we've been pretty clear as to the reasons why we did not support the safeguard mechanism, despite the claims from Mr. Albanese and Mr. Bowen. This was a pretty fundamental change to the framework that we had operated under and I'd point you to the track record. What we achieved was a 20% reduction in emissions. But what we also achieved during that time, during the time in government was a material increase in the size of Australia's economy. That means more jobs, more prosperity and also paying for schools, roads, hospitals, all the essentials of a civilised society.

STEFANOVIC: Okay, Paul Fletcher, we will talk to you soon.

Further information: Jack Abadee 0403 440 099