MATTHEW HALLIDAY:
Good morning, everyone, and welcome to the Lytton Refinery here in Brisbane. It’s a real honour for us to host the members of Australia and New Zealand 2 + 2. So, the Finance, Energy and Climate Change Ministers from the 2 countries. So, welcome to Jim Chalmers. Welcome to Nicola Willis, Chris Bowen, and Simon Watts, the Honourable members for Finance, Treasury and Climate Change.
Before I go any further, I’d like to acknowledge the first Australians of this land on which we work, live and gather here at Lytton. That’s the Quandamooka people and I’d like to pay my respects to elders past, present and emerging.
So, before I hand over to the ministers to take the press conference forward, I wanted to also acknowledge some of my counterparts that are here today. And that’s Robert Spurway, the CEO of GrainCorp, and Danny Elia, the head of asset management for IFM. And you might have seen that the 3 Australian partners signed an MOU earlier today that is about pursuing the establishment of renewable fuel supply chain here in Australia. It’s a complex supply chain that needs Australian companies working together and both countries working together. The initial stages of that MOU will entail IFM and Ampol working on a study to evaluate the development of a renewable fuels refining facility alongside our traditional refinery here at Lytton and working very closely with GrainCorp on the supply of home grown feedstocks for that plant, including the development of additional crushing capacity that will supply canola oil into the potential plant.
So, it’s a really exciting step forward. I think this is a significant opportunity for both countries and in our view, renewable fuels are going to play a critical role in the decarbonisation of heavy transport, be that aviation and other forms of heavy trucking and transport. And our customers are really looking for that pathway forward. And the benefits extend beyond decarbonisation. So, in terms of energy security, there’s a real benefit. In terms of regional and rural development and development of manufacturing jobs, there are significant benefits associated with being able to find a pathway for renewable fuels domestically. Now that momentum is reliant on the right policy settings being put in place, they’re increasingly being put in place internationally. And we certainly welcome the steps the governments have been taking in the budget recently to start to advance this in industry.
So, I’m sure you’ll have plenty of questions for the ministers before I hand over – to the extent you do have any questions on the announcements specifically – I’d be happy to take them after I hand over to the Honourable Jim Chalmers.
JIM CHALMERS:
Can I say thanks very much, Matt, to you and your team for the announcement today, also for hosting us, and to Danny and Rob as well for being part of what is a really important announcement about fuels out of Lytton, here at the Ampol refinery. Also wanted to acknowledge all the workers here: the leaders, Paul, Stacy and everybody who makes this such an important part of our local economy, but also our national economy as well. And I wanted to acknowledge my counterpart from New Zealand, Nicola Willis, and Chris’s counterpart as well from New Zealand, Simon Watts, and Chris himself. We’ve had a really productive meeting today which recognises that the global energy transformation is a big opportunity for Australia and New Zealand, and for the Australia‑New Zealand economic partnership as well. Today has been all about collaboration, better regulation, and decarbonisation. It recognises that this is a golden opportunity for both countries to create jobs and prosperity from Queensland to Queenstown, from Wellington to Western Australia. The global net zero transformation is a big chance for Australia and New Zealand, and that’s why the 2 + 2 Climate and Finance talks that we had today here in Brisbane have been so important.
And a big part of that was our discussions around sustainable aviation fuels and low-carbon liquid fuels in particular. And in that context, this announcement today from Ampol, GrainCorp and IFM Investors is just such a terrific development. We know that there are issues around supply of sustainable aviation fuels. We know that sustainable aviation fuels can be good for workers, good for airlines, good for the economy and good for the environment at the same time. But we’ve got to get these supply issues sorted out. And for Australia there’s a big chance for us to be part of this really important growing global supply chain.
It should not be beyond us to add much more value when it comes to our agriculture sector and also aviation as part of this global net zero transformation. That’s what this announcement is all about. That’s what the government is all about as well. Chris and I work closely with Catherine King and with other colleagues from the Prime Minister right through the Cabinet and right through the government to make sure that we can grab the opportunities presented to us and presented to our friends across the Tasman when it comes to this net zero transformation. And we intend to make the most of that opportunity, and today’s discussions were very useful and very productive in that regard.
We also understand our responsibilities to our brothers and sisters in the Pacific. And later this week I’ll be travelling to Suva to meet with my counterparts and my colleagues from the Pacific Islands Forum, the Economic Ministers meeting being held in Suva. Climate change and energy and the transformation and collaboration between countries like Australia and New Zealand and our friends in the Pacific will be absolutely central to the future of our region and the future of our economies, our neighbours and our own economies alike. And so that will be another important opportunity as well. All about collaboration, all about creating jobs and opportunities for more people in our part of the world. And I wanted to thank our New Zealand friends for being such constructive partners when it comes to the opportunities that we are trying to capitalise on.
I’m going to throw to Chris Bowen and then no doubt you’ll have some questions, which we’ll take in a moment.
CHRIS BOWEN:
Well, thanks very much, Jim. I also want to welcome Nicola and Simon to Australia for our second 2 + 2 Climate and Finance ministerial meeting. Both countries, both governments know that the key to our economic prosperity into the future is getting the transition right. Getting this massive challenge right is also a very significant economic opportunity for our countries. And both governments are working closely together to ensure we maximise those opportunities.
Today we’re focused on really 2 things. Regulatory harmony when it comes to things around batteries and EV charging, comparing notes, building on the work of the Australian Energy Ministers last week who unanimously endorsed the Consumer Energy Roadmap and embarked on reform of regulation of those things, ensuring that we’re sharing knowledge and information and wherever possible and prudent, ensuring that our regulatory arrangements are as harmonious and aligned as possible to make it easier to do business in our 2 countries.
And also as the Treasurer said, importantly, sustainable aviation fuel and low-carbon liquid fuels. We are both trading maritime nations, heavily reliant on aviation. This is key for both of us. We know there are challenges there. We see those challenges playing out all the time, including today. But we know the opportunities are enormous for Australia and New Zealand to be key parts of the supply chain for sustainable aviation fuel across not just our region but the world.
As Jim and I have both said, for Australia and, indeed, New Zealand, to become the indispensable nations when it comes to people’s efforts to decarbonise. That’s at the centre of our Future Made in Australia agenda, which we also spent a lot of time talking about today, and how we can ensure that it works in the best interests of both countries.
So, we’ve invited New Zealand aviation companies and associated companies to join Australia’s Jet Zero Council under the stewardship of our friend and colleague, Catherine King. And I’m sure that companies will take that opportunity up. We’re already working closely together. This is the next step.
Also, we’ve commissioned a review of the regulatory framework to ensure as much interoperability as possible under an eminent expert to help us ensure that our regulatory regimes are fit for purpose for both countries and working together to be as harmonious as possible.
So this has been, I would say, a productive working meeting. We haven’t solved all the world’s problems, nor were we ever going to – that’s next week – but we’ve taken a step forward in our normal productive, harmonious fashion. I’ve been working closely with Simon since he’s been in the office; I know Jim and Nicola work closely together as well. So this is taking that to the next step. The best we can tell, this is the only finance and climate 2 + 2 anywhere in the world, so it’s good to be at the forefront of leading the discussion. There’ll be G20 finance and climate meetings later this year, so we’ve had a discussion about some of those things.
And finally, I just want to again thank New Zealand for its ongoing, steadfast support for Australia’s bid to host COP31. New Zealand was the first country to back us – not the last as we’ve since been backed by many other countries. But New Zealand’s support was absolutely essential to get us off the ground, and it’s been a bipartisan support in New Zealand, I do want to very much recognise that and thank New Zealand for that support. It’s a great opportunity to elevate the issues of the Pacific in the world stage if we host COP31 in 2026, which we’re very keen to do, and to use it also as an opportunity to talk about the economic opportunities in both our countries on decarbonisation.
At that, I’ll hand back to Jim and we’ll take questions and suggestions.
JOURNALIST:
Minister Bowen, is there an agreement coming and if there is an agreement to be signed, what will be in the agreement?
BOWEN:
Agreement about what, sorry?
JOURNALIST:
An agreement on this? You were talking about a memorandum of understanding but what’s the next step between Australia and New Zealand in signing?
BOWEN:
Well, well, I mean, we’ve taken steps today. We’ve agreed to review the regulatory frameworks around EV charging and batteries. We’ve agreed to basically incorporate and invite New Zealand’s very strong involvement in our Jet Zero Council. These are building on what we did last year. We’ve said that we have more to do and that we’re looking forward to report when we reconvene in New Zealand next year. But the agreements have been reached, but we are not saying that this is the end of the road; it’s a waypoint on the journey.
JOURNALIST:
It’s an embarrassing day today though with Air New Zealand saying it can’t meet that 2030 target. I mean how do you feel about that? And can Australia meet that target when it comes to aviation?
BOWEN:
I wouldn’t share your characterisation. I think it’s a reminder of the challenges and a reminder of the need to lean in and help companies do it. I mean, we know it’s hard for Air New Zealand. Nobody ever suggested it was easy. What it does do is underline the need for governments to be involved. Both governments are involved in developing the sustainable aviation fuel sector. So I think it is a reminder of the importance of the task, a reminder of overcoming the challenges.
Let me say this: nobody should think the Australian Government isn’t committed to the development of a sustainable aviation fuel industry. I know New Zealand has similar interests. We said in the Future Made in Australia package in the Budget that it was a key area. It remains a key area, and it will continue to be a focus for us.
JOURNALIST:
Treasurer, are the 2 countries moving in the same direction? There’s some conjecture that New Zealand is pleased to be moving away from direct industry policy and you don’t have as much in common anymore on achieving these targets.
CHALMERS:
Well, I think what our discussions have shown today is we have a lot in common. You know, every government in every part of the world has slightly different emphases, but overall I think there’s a lot of common interest in making sure that our workers, our businesses, our investors and our economies are the big beneficiaries of the global shift to net zero.
And what I heard from Nicola and Simon today was a lot of shared commitment. Every country has its own set of policies to get to the destination that we all seek. But I think as Chris reminded us a moment ago, across all of the 9 different areas where we’ve agreed either an outcome or to do further work, there is tremendous opportunity here. And when you think about our role, making ourselves indispensable to the net zero transformation, there’s so much work that we can do together with our friends from New Zealand – friends of either political persuasion, there’s a lot of bipartisanship when it comes to COP hosting, and in other areas as well.
And just to add to Chris said about sustainable aviation fuels and today being a reminder of the challenge ahead of us, we know that there’s an issue around supply of sustainable aviation fuel. That’s why we’re here. You know, this is what a Future Made in Australia looks like, working closely with our friends across the Tasman and around the world. It’s working out where there’s going to be a demand and a need for low-carbon liquid fuels and working with industry to fill that need.
And that’s why we’re absolutely delighted with the announcement made today by Ampol, GrainCorp and IFM investors because they see the challenges and the opportunities ahead, just like both governments do. We’re not pretending there aren’t challenges in some of these industries, but it’s not beyond us to work closely together with industry and with other countries to supply the kind of sustainable aviation fuel that’s needed in a global economy which is transforming.
JOURNALIST:
[INAUDIBLE]
CHALMERS:
We’re obviously aware of developments when it comes to Rex today. These are clearly very concerning developments. As I understand it, the company will have more to say around the middle of the week. I know that our ministerial colleague Catherine King is engaged via her department with any developments as they relate to Rex. I don’t want to pre‑empt or presume what they might say on Wednesday.
It’s a concerning development because we want there to be good regional air routes, and we want people to be able to move easily and cheaply in regional Australia. And our own interests closely align with people who recognise that the regions have a big role to play in our economy, and we need to make sure that they’re well served and well serviced. And so in that context the pause announced by Rex today is very concerning, but they will have more to say later in the week. And when the government has more to say we’ll do that via our ministerial colleague Catherine King.
JOURNALIST:
Minister Watts, can I just ask you for the ABC, thank you, what is your view with New Zealand allegedly moving away industry policy towards, you know, trading of offsets and climate targets? What do you have in common, Australia and New Zealand? Are you moving away from that?
SIMON WATTS:
I refute that, the aspect around we’re moving away, we’ve actually in the last 2 weeks released our emission production pathway, which puts us on target to hit our domestic targets both in 2025 and 2030. We have a significant amount of joint area of collaboration and opportunity, between both New Zealand and Australia about some of those areas in particular, when we’re looking around decarbonisation opportunities in terms of aviation, it’s a sensible area. Australia has a number of significant opportunities and benefits in terms of production. New Zealand has requirements in regards to that. What a great way to be able to work together to realise some of that benefit more broadly in the Pacific. Our relationship is very strong and very deep. We play a key role in terms of working with our Pacific neighbours in terms of building resilience and energy security in that region, and we’ll continue to do that and work together. I’ve been really impressed by the degree of appetite by our Australian colleagues today in terms of working with us around what are very difficult and challenging topics. We must deal with the impacts of climate change; we must prepare for the future impacts of climate change and that’s what appears today from both governments are very much on their path.
JOURNALIST:
And just on the Air New Zealand news. Were you surprised about that today or you knew that that was coming, you know, dropping the targets. It is obviously a tough job.
WATTS:
It’s an operational matter for Air New Zealand, they cited, in terms of the challenges around procurement, around fleet, that is not a new issue in terms of the aviation sector. But again, the conversations in regards to Air New Zealand is, they remain committed in terms of their broader challenges. But aviation is a tough sector. I think we all accept that.
JOURNALIST:
Thank you, Minister. There’s just one more question. Just looking tomorrow, how concerned are you about the inflation figures coming out tomorrow, if it does indeed go up? And do you think the RBA, what, what will they be doing? No crystal ball.
CHALMERS:
Well, inflation in this country has moderated substantially from its peaks in 2022. We expect inflation in tomorrow’s CPI numbers to be more persistent than we would like. We’ve said that earlier in the week.
Inflation has come off substantially, but we need it to moderate further and faster. We’re confident that it will moderate further, but in the numbers tomorrow, we’re expecting inflation to be pretty persistent. And in that, the shape of our inflation challenge has been more or less what we’ve seen around the world. We know from the US, Canada and elsewhere, that most countries have experienced a substantial moderation in inflation, and that the last mile is the most difficult. Now, we know that inflation doesn’t moderate in a straight line. It zigs and zags on the way down, and we expect to see that in one way or another here in our own economy.
The decisions about interest rates are a matter for the independent Reserve Bank. But the government’s doing its bit. We’ve turned 2 big Liberal deficits into 2 big Labour surpluses and we’re providing meaningful and substantial cost‑of‑living relief in the most responsible way.
We know that people are under pressure. That’s why we’re providing a tax cut for every taxpayer, energy bill relief for every household, cheaper medicines, a pay rise for millions of workers. This is all about ensuring that we don’t just recognise the pressures that people are under, we’re actually doing something about it. But we’re doing it in the responsible way, which will put downward pressure on inflation. The combination of the design of our cost‑of‑living package and the 2 surpluses that we have delivered already, they are important parts of the fight against inflation. They show that we’re doing our bit, and the Governor of the Reserve Bank has made it very clear that she considers our 2 surpluses to be helping in that fight against inflation. But as I said, we’ve seen around the world inflation doesn’t moderate in a straight line. It zigs and zags on the way down. We expect our inflation to be relatively persistent in the June quarter, and those are the numbers we’ll get tomorrow. We’ll have more to say about it then.
The other thing which is really clear, if you look at the drivers of inflation in our economy: petrol, rent, insurance, temporary issues when it comes to fruit and vegetables, absolutely none of those are about government spending. Now, our political opponents want to pretend that prices in the economy are determined wholly and solely by government spending. That is frankly ridiculous. Our spending in the last year was a tiny, tiny sliver of a $2.6 trillion economy. We are experiencing inflationary pressures from around the world, and here at home, we’re very focused on that. That’s why we’re fixing the absolute mess that we inherited when we got the budget, and it’s why we’re delivering the cost‑of‑living relief in the way that we are.
JOURNALIST:
If you had to put some money on it tomorrow, steady as she goes, or do you think it will be a higher figure than you hoped?
CHALMERS:
Well, I think the market expects that inflation will be persistent in the numbers that we’ll see tomorrow. I see no reason to make a prediction. We’ll see these numbers at 11:30 tomorrow. The market expects that it will be a challenging number for inflation in the June quarter. But what we also know is that there is an expectation and a level of confidence that inflation will moderate after that. And we’ve seen that around the world. We’ve seen in other countries, inflation in the last mile, the last percentage point or so before we get back to the target range is often the most difficult, stickiest part of the inflation challenge. We expect to see that here, but we’ll see what the numbers say at 11:30 tomorrow. Thanks very much.