Speech to the Business Western Sydney Luncheon

Thank you, Andrew, and I also want to celebrate the fact that we meet today on Darug land and pay my respects, as I know we all do, to their elders, past, present and emerging.

And of course, in this area, we're very proud of our history in Western Sydney and Parramatta, Australia's second city; there's much to be proud of, but we also need to be honest about our history, and when we talk about the frontier wars, we're talking about things which happened right around us here.

This was a contested history. And just as we need to be honest about it, we can also draw on some inspiration from those times, something which connects our communities, Parramatta, and my community, which is about 20 minutes' drive south of here, of Fairfield and Cumberland, it is the fact that as those wars waged there was a peace or an act of reconciliation.

On 3 May 1805 Darug elders, female elders, sent a message to Samuel Marsden, who resided here in Parramatta, that they wanted to talk. There was a meeting at the foot of Prospect Hill, which is now regarded as the first act of reconciliation in Australian history, and Marsden met with female Darug elders and negotiated an end to the frontier wars which had seen far too much bloodshed.

And of course later this year, we have the chance of the most important act of reconciliation ever in our history, perhaps drawing on that Western Sydney inspiration. And you'll have some people tell you it's a big change, which we shouldn’t risk.

I simply make this point: New Zealand have reached a constitutional settlement with their first peoples in 1840. They guaranteed a voice for the Maori people to their Parliament in 1867. Canada recognised their first peoples in their Constitution in 1982, and not only have those two democracies continued to flourish, I would argue those democracies have been enhanced by their settlement with their first peoples. And 2023 is our year, an opportunity, I believe we can and will take as a nation.

I also want to acknowledge my friend Andrew. Andrew and I have been friends for a long, long time, and we now get to spend more time together. We'd go to a big boarding school about three hours south of here, spend six month of the year there, but in all seriousness, in Andrew's relatively short time in Federal Parliament, he's made a huge difference already; he's already, I know, embedded himself deeply in this community as Mr Parramatta, which is a wonderful thing to see; and he's got a very, very big and important future in our Federal Government and a very fine representative of this important community.

Now, I've been talking a lot about the Budget of course. There's much in the document; we've already heard some things about it, and obviously I'll talk a little bit about the energy and climate elements of the Budget, which are very, very significant indeed.

But simply to say at the outset, we've heard, as we all know, some presentations earlier today, thank you, about disadvantage, about place based disadvantage, about the challenges faced by the people that Andrew and I represent, and that we all live amongst here in Western Sydney.

We make no apologies in this Budget. This is a Labor Budget built on Labor values. It's our second budget, but to be honest, it's probably the first budget in which we've been able to really imprint our values. The October budget was a bit of a fiscal update; this is a change in course for our country.

And we believe that strengthening our economy and strengthening our society are one in the same thing. There is no economic future in consigning people to live permanently in poverty. It's bad for our society, bad for our economy. And so things like the increase in JobSeeker, things like improving support for single parents, things like, that we have done in this Budget are, of course, yes, social measures, these are important measures to alleviate poverty, but they are also important economic investments in our future.

As Jim put it in his budget conclusion of his budget speech, building a Commonwealth for common purpose, strengthening the ties in our community, providing more support for those who will repay it in kind and many times over if we help them respond and react and contribute to society in way which helps them through difficult times. That is a Labor budget, and we make no apologies for it. Building that economic strength, building those ties that bind, which is so important to Andrew and I and the communities we represent. And maximising economic growth through investment.

And maximising economic growth through investment is nowhere more important than in my portfolio reports, and again, we've taken the approach of dealing with short term challenges, the impacts of the energy crisis last year, helping families and businesses through that, or making important investments for the future. And this is at the core of the Budget.

So I'm glad to back for this lunch, and I used to do it when I was Treasurer and Shadow Treasurer, handed it over to Jim for a few years, and I'm sure he treated you very well, but here I am back this year, which is sort of appropriate, given the importance of energy and climate to our agenda; central to our economic agenda, our governing agenda, is central to this Budget.

In the short term, of course, looking at the challenges facing families and businesses as a result of the absolutely massive spikes in energy prices all around the world this year, we've acted in terms of support: 322,000 businesses in New South Wales receiving short term support for their energy bills; 5 million people across the country receiving that short term support.

And we said, when we were putting this package together in December, which we then finally implemented in tranches with the final tranche delivered in the budget as a direct relief to people who need it the most, we would take the sting out of the increases in electricity prices, that we will take the edge off the large increases.

Treasury analysis now shows us that we actually have done a bit better than that. People in New South Wales were facing energy price rises of 40 per cent. We knew that was unacceptable. We knew that, but we just said we couldn't see that happen. We knew we couldn't see that flow through businesses, because we would actually lose businesses, and that people just simply would not be able to tolerate that sort of increase.

The coal and gas caps that we implemented in December saw those price rises in effect halved in the draft   in the forward market offer that was released earlier this year.

And then Treasury analysis shows that for those households which received rebates correcting their bills, 5 million people across the country, in New South Wales, that actually means the electricity bill rise has moved from 40 per cent to a decrease of 5 per cent, a cut of 5 per cent for those families who received the rebates.

I've got to tell you, that isn't done easily. That isn't something which is achieved without a great deal of design and effort, and government investment. I'm not going to say we're proud of it, because it's a difficult environment for people still, but we're pleased that we've been able to provide that relief, including for businesses.

But then, also, of course we've got to help people through this massive transition which is occurring in our economy, called the response to climate change, which I have previously said is the biggest economic change our country's seen, and the world has seen since the Industrial Revolution, but I've reflected on that, and prepared to concede that I was incorrect about that. It is bigger than the Industrial Revolution.

This is a massive change in our economy on a very short timeframe. The key to holding the world as close as possible, to 1.5 degrees is the next seven years, a shorter timeframe than it took for the Industrial Revolution to roll out across the world. We have seven years to reduce emissions very, very substantially, to hold the world as close as possible to 1.5 degrees, which is very important for our country.

I don't think I, these days, in 2023 need to belabour that point. I'll simply make this point: we all remember the bushfires of 2019, we all lived through them; 2019/2020. We all lived through them. Some of us, including my family, was evacuated from where we were at that point. Many Australians lost their lives, far too many million Australian animals lost their lives, great swathes of our country were destroyed.

If we don't hold the world as close as possible to 1.5 degrees of warming, those climactic conditions that led to that conflagration across our country, will be the average by the 2040s, it will be average climactic conditions that our country will face every year, year after year by the 2040s, and will be regarded as a good year by the 2060s. We can't let that happen to our country, hence the need to act.

But we also see this as a massive economic opportunity. Yes, a challenge to be navigated for businesses and for the country, but also a vital economic opportunity.

In terms of businesses, I'm pleased that we have a $1.6 billion package to help households and businesses electrify and make their operations more energy efficient if they choose to. A billion dollars to the CEFC to provide low interest loans, for people who want to make the investment, but have trouble making the sums add up in the short term, this is more important now that interest rates are rising, concessional loans were of less value when interest rates were pretty close to zero, it didn't make much difference or move the dial, and increasingly, concessional loans make a difference.

Also 300 million of support for social housing. Social housing is widespread in Andrew's electorate and in mine. Social housing stock is very old in Australia, and it's highly energy inefficient. People who are living in social housing who can least afford it are paying far too much for electricity, because they're using electricity they don't really need because their house is highly inefficient. And we need to fix that. Just because you live in social housing does not mean you should be left behind in this enormous revolution.

So $300 million which we're now entering into negotiations with the states to match and to augment to see massive uplifts in the energy efficiency in electrification of social housing, making sure that no one's left behind.

And of course a bit more than $300 million in tax concessions for small or medium enterprises to make similar choices, to electrify, where they can and where it assists their business needs; to switch their storage into batteries and other methods; to do what it takes to save money, save bills and to reduce emissions. That's real support for businesses. 1.2 million businesses eligible in New South Wales, many of them will be here, in the great business and industrial heartland of Western Sydney.

So to the organisations represented here, I know that I may not need to encourage you to assist businesses, to work out how that works. I just say this as a word of warning:  It's here for 12 months. Don't muck around. That's deliberate, to encourage urgent behaviour. This tax concession is on the books for 12 months. We've done that for a reason. Please don't wait until next July, and think, "Oh, I'd like to apply for that tax concession" because the time to act is now.

And then of course in the even longer term to build our country as a renewable energy superpower.  Now, there's been some mention about Hydrogen Head Start Program, and I'm glad there was, because it's important, a $2 billion investment.

Now, I've got to tell you, I'll give you a little tip. We're not allowed to talk about what happens in Cabinet, or in the Expenditure Review Committee at Cabinet. But just amongst friends. The Expenditure Review of the Cabinet, which is affectionally known by all members of the Cabinet who are not on it, as the Star Chamber. And we have to go before the Expenditure Review Committee of the Cabinet, which is the Treasurer, the Prime Minister, the Finance Minister and a few others, and we have to just ourselves; we have to justify why we're not cutting, what we're not cutting. If we want more money, we have to argue for it.

I tell you, you better have your wits about you; you better have your arguments all lined up, particularly in a tight budget, where we're trying to get back to surplus, there’s funding election commitments. You don't walk into that room and not have your arguments in good order, or you won't walk out a happy camper. They're not backwards in telling you what they think of your presentation.

So in an environment where ministers have to go in and either justify not cutting something, or ask politely for $100,000 for this, or a couple of million dollars for that, Muggins here walks in and says "I need $2 billion for green hydrogen."  And I did not get a standing ovation in the first outing, let me tell you. But here we are with $2 billion for green hydrogen, and I'm glad, and I thank my colleagues for the support, because it is so vital for our country.

You hear a lot of hype about hydrogen, a lot of people talk about it. And so we should. It does have a lot of hype. What it is ultimately is a form of storing energy; it's simply a way of taking energy and saving it for when you need it. Much like batteries, except a battery can only last a few hours. Great, we need many more of them, but it's not the answer to the storage conundrum for our country.

Pumped hydro is another form of storage, which we are and will continue to embrace and expand, but that's hard work too; building a pumped hydro facility is a very big operation, and it's very hard work.

Green hydrogen is simply a way of storing renewable energy, and it's a way in due course of replacing natural gas for industrial purposes. So this is really important again for areas we represent, and frankly, most particularly I represent as the representative of the largest industrial State in the southern hemisphere in Smithfield Wetherill Park. This is really vital for businesses that rely on gas and other forms of energy to give them alternatives going forward.

And it's also vital for our export future. We've always been an energy exporting country. I'm here to tell you, in my view, and this Government we'll continue to be, but that energy mix will change. The time will come when the world, and it's already happened, where it's less interested in buying our coal and our gas and is very interested in buying our renewable energy.

We have for more than 200 years been in search of comparative advantage for our country, looking for things that we can do better in terms of comparative advantage, and it has not always been obvious to us what that is. Renewable energy is the greatest comparative advantage we have ever been gifted   ever been gifted. More sunlight hits our land mass than any other country in the world. We have above average wind, onshore, and off our coast as well, which is now more full, and we're proceeding with it at a rapid pace to get offshore wind in Australia.

This is a massive opportunity. Put those two things together, our best solar resources in the world, and an above average wind, we have the best renewable energy resources in the world.

Australia's worst region for renewable energy resources, our least performing region   and I do love them, they’re wonderful people   but the worst performing region in Australia is Northwest Tasmania. It's the cloudiest, coldest area of Australia. It has better solar resources than Germany. The worst in Australia has better solar resources than the best solar resources in Germany. This is the sort of opportunity we have as a country.

But we need to harness that opportunity, not just with solar panels, not just with batteries and all the other parts of the renewable energy supply chain, but with a way of storing it and a way of exporting it. And green hydrogen is not yet exportable. But it will be. It will be. And when you think about us as an energy exporter, increasingly, that will be green hydrogen.

There's only two ways really, that I can think of, of exporting renewable energy. Some are in cable, so we can do that, but not to Europe   it would be a very long cable   or green hydrogen.

When I was in Germany in January this year, I could not get out of a room without being berated by German businesspeople asking me when our green hydrogen will be ready and how much they could buy. They are the industrial powerhouse of Europe, they know they need green hydrogen, and they know they can't make anywhere near as much as they need, and we are their preferred partner. So we have to deliver.

Now, a couple of weeks ago, I released the State of Hydrogen Report, which showed we have the largest pipeline of potential green hydrogen investments in the world: $300 billion. That's a reasonable amount of money.

Also, we know from the International Energy Agency that a quarter of all potential hydrogen projects in the world are here in Australia. These are the sorts of opportunities we have before us, but I also have to be frank with you; we were about to lose it. Those opportunities were about to go through our fingers, as the United States in a very welcome development implements the Inflation Reduction Act, it's wonderful to have the United States back to the climate table, but it was going to see a loud sucking sound of investment from Australia to the United States on green hydrogen, and regardless of the natural advantages that we have in our country, when you've got a tax concession uncapped, like that of the United States, business people are going to make rational investment decisions, and they were going to ones that I and you would not like.

So we want to make sure that this Inflation Reduction Act creates new green hydrogen, creates additional abatement, creates new economic activity, not distorted, from Australia. Does it match the Inflation Reduction Act? It doesn't need to. It needs to keep us in the game. With our massive natural advantages, we needed enough of a tax concession or a support to keep us in the game.

So how it will work, is simply, $2 billion provided through ARENA, the best hydrogen proposals, and they will be open to competitive process, and we will break down the difference between the strike price and the market price and make renewable green hydrogen projects in Australia competitive and viable compared to the United States and else.

And again, that might sound like some high principle, or something that's not going to happen around here, and in terms of the actual hydrogen production, it won't happen around here. It will happen in Australia's regions; it will happen in Illawarra and Newcastle and Central Queensland and Portland. That's where it will happen. But it will also get used here, in the great industrial and business conservations of Australia, and it will create economic activity through export.

As I said, Australia will continue to be an energy powerhouse. I regard us as an energy powerhouse forever. You've all heard of a Kodak moment, Kodak forgetting that it was an image company, a memory company, and thinking they were a film company, and they no longer exist. And if we think we're a coal and gas country, we're not an energy country, we'll make that Kodak mistake. We are an energy country, that makes energy, that energy is changing, the demand is changing, and we need to seize that opportunity, not squander is, and that's exactly what this budget does, with more to come. I've said that $2 billion in the green hydrogen head start is a down payment on our response to the Inflation Reduction Act. As down payments go, 2 billion isn't bad, I'm quite pleased with it, but it is a down payment, in terms of what else we need to do later in the year, and beyond, to respond.

So this is very much a budget focussed on our economic future, focussed on strengthening the ties that bind us in communities like the ones that Andrew and I represent, and seizing the opportunities that Australia has been looking for, for several centuries, and now has before us, which is a great opportunity for our country, for Australian businesses and Australian households. We don't intend to squander it. Thanks for your time today.