The Crest of the Commonwealth of Australia Treasury Portfolio Ministers
Picture of Wayne Swan

Wayne Swan

Deputy Prime Minister and Treasurer

3 December 2007 - 27 June 2013

19 July 2011

Joint Press Conference with
Leo Zussino
Gladstone Ports Corporation

Doorstop Interview

Gladstone

19 July 2011

SUBJECTS: Coal and LNG investment under a carbon price; Gladstone infrastructure investments; Tony Abbott's scare campaigns; energy security; ABC TV; MRRT investments in mining towns that the Coalition are blocking

TREASURER:

Well it's great to be here with Leo Zussino this morning, the CEO of the Gladstone Port Authority.  It's been fantastic to see what's going on at the port and to also look at the Gladstone LNG project this morning because as you go through the port you get an understanding  of the scale of the industrial expansion which is taking place in Gladstone and Central Queensland region.  This port will export an additional 100 million tonnes of coal and gas by 2020, such is the scale of the investment boom in this region.  Already $32 billion worth of announced investments into LNG and more to come. 

So what these investments show is that investors will invest and will continue to invest with a carbon price.  These investments have been made in the full knowledge of and the full acknowledgement of a carbon price.  A carbon price is essential to Australia's long-term sustainable growth, particularly for industries like coal and LNG.  We can grow our economy strongly, and we can at the same time reduce our carbon pollution.  We can do both of those things.  So with a carbon price our economy will continue to grow strongly,  incomes will grow. 

Our economy will generate more jobs.  Just take this port, another 400 jobs to come here in the years ahead with the expansion of the port.  Thousands more jobs to come with the investment, further investment in coal, further investment in LNG.  These investments give lie to Mr Abbott's scare campaign about a carbon price.  Investors are investing in Australia because it's a great place to invest.  They need the certainty of a carbon price to continue to invest.  So Australia can grow strongly with a carbon price, generate jobs, generate good incomes.

Now can I just say a couple of things about the local region as well because the Federal Government is a partner here in this region with the business community, with the State Government, with local councils investing in some vital infrastructure in the region.  We're investing in roads, the Port Access Road – very important. We've invested in the Kirkwood Road here which is very important to the quality of life of people living in the city of Gladstone. 

The Calliope Crossroad – where there has been tragic loss of life over time.  This Government, after many years of neglect by the previous government, has invested in Calliope Crossroad.  We understand in these growing regions such as Gladstone and Central Queensland the Federal Government has to be there working with the local community.

(Inaudible)  You can feel the energy (inaudible) and you can see the optimism and that's why I'm so disappointed Mr Abbott has been talking down the Australian economy and talking down great regions like this which contribute so much to our national prosperity.  Mr Abbott should come here and climb that coal loader and see what the investment is doing and get briefed on the investment that is coming so he can stop his dangerous scare campaign which is talking down the Australian economy.

JOURNALIST:

(Inaudible) carbon tax can generate jobs (inaudible)?

TREASURER:

Well, you shouldn't believe all that silly scare campaign that is being run by Mr Abbott and some people associated with him.  Our modelling shows that output in the coal industry with a carbon price will double.  You see, these investments are going ahead.  This facility, the investments in this region give lie to Mr Abbott's scare campaign.  He goes out there and makes it up, takes bodgy modelling, scares people in the community. 

This port proves the expansion's going on.  The money's on the table in investments here and the investments are being made here because the investment's continuing and the investment is continuing in full knowledge of a carbon price.  Many of the investments that have been made in this great region have had carbon prices factored into them for some years because the investment community knows the carbon price is coming.  What they want is the certainty and that's what we're giving them.

JOURNALIST:

(Inaudible)

TREASURER:

No they weren't.  Sorry they were not.  There was some modelling that was put out which was commissioned by the mining industry which they ran away from when all the holes were punched in it.  The fact is there isn't credible modelling out there showing what you're saying, but what I can say to you is believe what you see with your eyes.  The investment is happening here.  Go into the hinterland.  Go into the Bowen Basin.  Go into any part of this region, the investments are being made. 

Look at the takeovers that have been going on in the past fortnight.  Premium prices are being paid to take over coal companies.  Pick up the financial pages and read what they're saying.  They're all talking about the fact that more investment is going into coal but not just into coal, it's going into LNG and this is what is really exciting, because LNG is a cleaner fuel.  So investors are investing in coal and they're investing in LNG.  They know we have to change our energy mix internationally and nationally.  It will move away from coal but coal will still keep growing because energy demand is growing. 

We live in the Asia Pacific.  This is the Asian Century.  The middle classes in Asia are growing.  Industry is growing.  They are making more steel.  They need energy.  So they will need more coal and they will need more LNG and it's all happening here.

JOURNALIST:

Do you agree there's some way to go though to sell the carbon tax message here in Gladstone because (inaudible) and householders that are concerned about the tax?

TREASURER:

Well you know, when Mr Abbott runs around and tries to scare the pants off everybody – yes, there's more explaining to do, it's a complex policy but it's one that goes to the core of our future prosperity.  We've got to do this so great industries like coal and LNG have a bright future.  We've got to get a cleaner energy mix.  We've got to get the investment into carbon capture and storage so that the coal industry has a bright future.  A price on carbon does that.  A price on carbon is what is encouraging all that new investment in LNG because it's a cleaner fuel.

Yes, there's a lot more explaining to do. That's what I'm here for and activity at this port proves conclusively that jobs are going to grow, wealth is going to be created.  We're going to be exporting more coal and we're going to be exporting more LNG.  But I might just throw to Leo to say a couple of things.

LEO ZUSSINO:

First, the Ports Corporation is projecting that trade in the port will grow by over 100 million tonnes per annum by the end of the decade and that's primarily 25 million tonnes of LNG and a significant increase in coal, the Wiggins Island Coal Terminal and the expansion to the Gladstone LNG coal terminal here.  So, given that factor, what we're seeing is that we see at least three decades of growth basically prompted by India and China because they are expanding dramatically.

China has gone from 60 million tonnes of steel production in 1990 to over 600 million tonnes today.  They're going to 900 million tonnes.  India was only at 60 million tonnes.  They're going to over 200 million tonnes within a decade.  And 1 million tonnes of steel is equivalent to 1 million tonnes of coking coal and will be primarily exported out of the Bowen Basin in Central Queensland.  It controls 65 per cent of the world trade of market of coking coal.  So this is the region that stands to get significant investment because those countries need that energy to create the fuel they need to put in the infrastructure that they need

JOURNALIST:

Mr Swan, will there be compensation for coal-fired power stations here (inaudible)?

TREASURER:

Well, we've said we've announced an energy security package.  There will be one or two power stations that may receive some assistance.  We're talking to state government about these issues and the private sector. 

JOURNALIST:

Mr Swan, the biggest concern perhaps for industries in Gladstone is around the alumina and aluminium industries here...(inaudible).

TREASURER:

I absolutely do.  That's why we've got an energy-intensive trade-exposed assistance package and that goes to those industries.  It recognises their special circumstances and it does that I think in a very appropriate way.

JOURNALIST:

(Inaudible)

TREASURER:

No look I don't necessarily accept that characterisation.  They are special industries because they are trade exposed and for that reason we do provide special assistance through our EITE's assistance in the package and we're discussing all that with the industry.

JOURNALIST:

Now that the Prime Minister has been parodied about private relations with her partner, the ABC's planning a sitcom about Julia Gillard and her partner Tim Matheson.  Julia Gillard's support is down in low territory, struggling to gain support for her policy.  Do you think it's a problem for the Government that the ABC is now planning to make a joke about the PM in a sitcom? 

TREASURER:

Well, I wouldn't take this as seriously as you apparently do.  You know, we in public life are all subjected to various parodies.  I, myself, and many others have been in the Chaser on numerous occasions and you know we all have a good laugh about that.  I'm not too worked up about it and I don't think that Julia Gillard will be too worked up about it either.

JOURNALIST:

But it hasn't happened to a sitting PM before, is that a concern?

TREASURER:

Well, I don't think that's true either.  I think we can all have a good laugh at ourselves from time to time – even journalists.

JOURNALIST:

Why shouldn't overseas investors lose confidence (inaudible)?

TREASURER:

Well, overseas investors have great confidence.  They're investing in Australia now in record amounts.  The amount of investment that is going into resources this year is something like $80 billion – a very substantial increase on the year before.  So, overseas investors are investing in Australia.  Look at the stock market in the last couple of weeks.  Look at the takeovers.  That's what tells the story about what investors think about LNG and coal and the future of this great region.  You can see it there, it's happening right now.

JOURNALIST:

Mr Swan, the funding for the Port Access Road is directly tied to the MRRT.  How confident are you that that will get through the legislative process?

TREASURER:

Well, I'm very confident it will get through, but of course it won't get through with the support of a Liberal and National Parties who are opposing it.  We have put the MRRT there recognising the very special circumstances of regions like Gladstone, Central Queensland, Mackay, the Pilbara and so on.  We've put it there because we think these communities should get some return from the economic activity that is going on in their region and causing pressures in their communities, which is why we're committed to road works here including the Port Access Road.  But apparently Mr O'Dowd doesn't support the funding for the Port Access Road and is going to oppose it in the Parliament.  Well he just doesn't get it.

JOURNALIST:

How much will (inaudible)?

TREASURER:

We've said we'll put out a tender for 2,000 megawatts.  That's a commercial process and we'll leave it to the commercial process.  Thanks very much.